New Federal Estate Tax Exemption for 2026: Key Planning Implications

The recently enacted One Big Beautiful Bill Act (OBBBA) introduces major, permanent changes to the federal estate tax exemption beginning January 1, 2026. These updates, outlined in the OBBBA legislation, direcly affect estate, gift, and generation-skipping transfer (GST) tax planning.

Key Changes Effective January 1, 2026

• The federal estate, gift, and GST tax exemption will increase to $15 million per individual, with future annual adjustments for inflation.
• This represents a permanent step up from the 2025 exemption amount of $13.99 million, avoiding a scheduled reduction to pre-TCJA levels.
• The IRS will publish annual inflation-adjusted figures.
• Portability remains in effect, allowing a surviving spouse to utilise any unused exemption from a deceased spouse, provided a timely election is made on the estate tax return.

What This Means for Estate Planning

• The risk of the exemption reverting to lower levels after 2025 has been eliminated, providing long-term clarity.
• Fewer estates will be subject to federal estate tax, allowing for more flexible and tax-efficient wealth transfer strategies.
• The urgency to complete large gifts before the end of 2025 is reduced. Instead, individuals and families can take a more deliberate approach to lifetime gifting.

Why This Matters

These legislative changes create a more stable planning environment for high-net-worth individuals and families. The higher exemption, coupled with inflation adjustments, enables greater flexibility in structuring multigenerational wealth transfer, charitable giving, and advanced estate planning techniques.

For additional context on related strategies, you may also want to review our blog on Tax-Smart Charitable Giving and OBBBA’s impact on Social Security taxation.

Next Steps

Now is an opportune time to revisit your estate plan. Our team at GHPIA can help you assess how these changes may affect your long-term goals and whether your current strategy remains appropriate under the new exemption rules.

Contact us to schedule a conversation about your estate planning needs in light of the OBBBA legislation.

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