Estate & Gift Tax Exemption 2026: $15 Million Planning Guide for High-Net-Worth Families

Introduction: A New Era of Estate Planning Certainty

For years, wealthy families have operated under a cloud of uncertainty. The Tax Cuts and Jobs Act of 2017 temporarily doubled the federal estate and gift tax exemption, but it was scheduled to sunset after December 31, 2025. That meant the exemption was poised to drop from $13.99 million in 2025 to an estimated $7 million in 2026. Many families rushed to make large lifetime gifts to lock in the higher exemption before it expired .

That uncertainty disappeared on July 4, 2025, when President Trump signed the One Big Beautiful Bill Act (OBBBA) into law. The OBBBA permanently increases the federal estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual�effectively $30 million for married couples�starting January 1, 2026, with inflation adjustments in subsequent years . The widely feared sunset did not occur, and the elevated exemptions are now permanent .

This legislative shift has profound implications for estate planning, business succession, and multigenerational wealth transfer strategies. With the exemption now set at a historically high level and no sunset on the horizon, families can plan with greater confidence and longer time horizons. This guide breaks down the 2026 exemption levels, related provisions, and the strategic moves high-net-worth families should consider.

2026 Estate, Gift, and GST Tax Exemption Levels

The OBBBA permanently establishes the following exemption levels for 2026 :

These exemptions are now permanent and will be adjusted annually for inflation starting in 2027. The federal estate and GST tax rate remains at 40% for any transfers exceeding the exemption amount .

What Changed, and Why It Matters

Before the OBBBA, the TCJA exemptions were scheduled to sunset on January 1, 2026, reverting to an estimated $5 million per person ($10 million per married couple), indexed for inflation. That would have placed the 2026 exemption at roughly $7 million per individual�a devastating reduction for families with significant wealth .

The OBBBA not only prevents this sunset but also increases the exemption by more than $1 million from 2025 levels. The result is a stable, high exemption that ensures federal estate tax impacts only the wealthiest families . This permanence eliminates the need for accelerated gifting strategies that many families rushed to implement in 2024 and 2025 .

Annual Gift Tax Exclusion: Still $19,000 for 2026

While the lifetime exemption increased significantly, the annual gift tax exclusion remains unchanged at $19,000 per donee for 2026. This means individuals can give up to $19,000 to any number of recipients each year without consuming any of their lifetime exemption. Married couples can jointly gift up to $38,000 per donee per year .

For gifts to a non-citizen spouse, the annual exclusion increases to $194,000 in 2026, up from $190,000 in 2025 . This provision allows a donor to transfer the specified amount to a non-citizen spouse each year without consuming any of the donor's lifetime exemption .

Strategic Planning in the New Landscape

1. Review Existing Estate Plans

The removal of the sunset and the increased exemption mean that estate plans drafted around a perceived future cliff should be reviewed immediately . Many trusts established in recent years may now be overfunded or have formulas that restrict access to capital unnecessarily .

For example, many trusts drafted with formulas referencing the federal exemption may now allocate significantly more assets to bypass trusts than originally intended. Reviewing these provisions with your estate planning attorney ensures your plan reflects your current wishes and family circumstances .

2. Consider Lifetime Gifting

The urgency to make large gifts before a sunset has disappeared, but lifetime gifting remains a powerful strategy . Gifting assets during life removes future appreciation from your taxable estate, potentially saving significant estate taxes down the road .

For business owners, transferring business interests to future generations�whether outright or in trust�can preserve family wealth by removing future appreciation from estate tax exposure . Gifting minority interests or non-voting shares in illiquid assets may also be eligible for valuation discounts .

3. Leverage Dynasty Trusts and GST Planning

With the GST tax exemption now permanently set at $15 million per individual, dynasty trusts have become even more attractive. These trusts allow wealthy families to transfer assets across multiple generations free of estate, gift, and GST taxes .

With no sunset looming, families now have the flexibility to implement long-term transfer strategies with greater confidence, rather than rushed year-end planning to use up expiring exemption amounts .

4. Business Succession Planning

The OBBBA presents a significant opportunity for business owners. The ability to transfer up to $15 million (or $30 million per couple) free of gift and estate tax enables more effective business succession planning .

Key considerations for business owners include: gifting minority or non-voting shares to family members to leverage valuation discounts; structuring buy-sell agreements to align with the new exemption levels; and evaluating whether the OBBBA's permanence affects your planned business exit or succession timeline .

State-Level Considerations

While the federal exemption has increased, some states maintain their own estate or inheritance tax regimes. Connecticut has aligned its estate and gift tax exemption with the federal level, increasing to $15 million for 2026 (up from $13.99 million in 2025) .

However, New York's estate tax exemption remains at a lower threshold: $7,350,000 for decedents dying on or after January 1, 2026 (up from $7,160,000 in 2025) . Estates larger than the New York exemption amount are subject to a cliff, meaning estates between 100% and 105% of the exemption get a decreasing benefit, and estates larger than 105% receive no New York exemption . The highest New York estate tax rate is 16% .

Conclusion: Plan with Confidence in 2026 and Beyond

The OBBBA's permanent increase of the federal estate, gift, and GST tax exemption to $15 million per individual ($30 million per married couple) marks a watershed moment for wealth transfer planning. The dreaded sunset has been eliminated, providing families with the certainty needed to implement long-term strategies without fear of a looming deadline .

However, this stability does not mean inaction. High-net-worth families should review existing estate plans for overfunded trusts and outdated formulas, consider strategic lifetime gifting to remove future appreciation from their estates, and leverage dynasty trusts to preserve wealth across generations .

At CA-Sir Advisory, our wealth planning professionals can help you evaluate your estate plan in light of the new exemption levels, identify opportunities for tax-efficient wealth transfer, and implement strategies that protect and preserve your family's legacy. Contact us today to schedule a consultation.