Yes, as of July 4, 2025, President Trump signed the "One Big Beautiful Bill" into law, which permanently increases the federal estate tax exemption, preventing the projected drop in 2026. Starting January 1, 2026, the exemption rises to $15 million per individual ($30 million per married couple), with annual inflation adjustments.
Starting Jan. 1, 2026, the basic exemption amount increases to $15 million per person. Any remaining unused exclusion amount upon a married person's death is portable and transferred to the surviving spouse, effectively sheltering $30 million from federal estate and gift tax for a married couple.
The increase in the United States gift, estate and GST exemption does not have an expiration date. The United States gift tax annual exemption amount will remain at $19,000 per donee ($38,000 for gifts by a married couple) for 2026.
At the end of 2025, the historically high gift, estate, and generation-skipping exemption levels of $13.99 million per person (as of 2025), were slated to revert to the pre-2017 Tax Cuts and Jobs Act levels (TCJA) of $5 million per person (plus annual inflation adjustments) due to the sunset provisions of the TCJA.
Recent legislative efforts, such as the Death Tax Repeal Act of 2025, aim to end the estate tax for good. Republicans are once again pushing to do away with the federal estate tax, which many of them have branded a “death tax” in their efforts to overturn something that, on paper, is relevant to few Americans.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
1. Transfers and Gifts
Rather than facing the sunset decrease noted above, the new law raises the estate and gift tax exemption to a baseline of $15 million per person starting on Jan. 1, 2026. Unlike the TCJA increase, there is no sunset provision. Starting in 2027, the exemption amount will be indexed for inflation.
You can typically inherit a very large amount from your parents before hitting federal estate tax thresholds, which are around $15 million per individual in 2026, meaning most heirs receive tax-free inheritances because estates rarely exceed this limit; however, some states have their own estate or inheritance taxes, and income from inherited assets (like IRAs or rental income) is usually taxable, according to this U.S. Bank article, this Fidelity article, this Domain Money article, and this Tax Foundation article.
Yes, in 2024, each parent could gift $18,000 to a child (totaling $36,000 per child for the couple) without tax implications, and for 2025, that amount increased to $19,000 per parent ($38,000 per child) because the annual gift tax exclusion is adjusted for inflation, requiring separate checks for each parent to utilize the full amount, according to TurboTax, Yahoo Finance, Guardian Life, IRS (.gov), and Mercer Advisors.
The Big Beautiful Bill resolves that uncertainty: beginning Jan. 1, 2026, the Act permanently increases the federal estate, gift and GST tax exemptions to $15 million per individual ($30 million per married couple). This amount also applies to the Generation Skipping Transfer Tax (GSTT).
You can typically inherit a large amount without federal taxes because the tax applies to the deceased's estate, not the recipient, and the exemption is very high: $13.99 million in 2025 and $15 million in 2026 per person, meaning most inheritances fall below this threshold. The key is that the estate's total value must exceed these limits for any tax to be owed by the estate. Inheritances themselves (cash, property) are generally not income, but earnings on them (like interest/dividends) or pre-tax retirement funds (like IRAs) are taxable.
Yes, many individual provisions of the Trump-era Tax Cuts and Jobs Act (TCJA) from 2017 are set to expire at the end of 2025, reverting tax law to pre-2017 levels unless Congress acts, with key changes including the standard deduction, SALT deduction cap, and estate tax rules set to change, although legislation like the "One Big Beautiful Bill Act" (OBBBA) has since extended some of these cuts into the future, changing the original expiration cliff.
Under a recent Trump-backed law, the federal estate tax exemption is set to increase significantly to $15 million per individual (and $30 million per couple) starting in 2026, with inflation adjustments, effectively making it a permanent, higher exemption for many wealthy families by extending provisions from the 2017 Tax Cuts and Jobs Act (TCJA) and making them law. While this doesn't eliminate the estate tax, it drastically reduces the number of estates subject to it, maintaining the 40% rate for amounts above the exemption, with potential for even more wealth-transfer benefits through lifetime gifting before the new rules fully kick in, though planning is still crucial.
As of January 1, 2026, the federal gift and estate tax exemption amount, as well as the exemption from the generation-skipping transfer (GST) tax (collectively referred to as the “lifetime exemption amounts”), have increased from $13,990,000 to $15,000,000 per person, an increase of $1,010,000 per person.
But entering 2026 with a clear, updated estate plan can bring clarity, control, and a sense of readiness for whatever the coming years hold. Whether an estate plan is brand new or years old, revisiting it with intention can help ensure that it still reflects personal goals, family needs, and current laws.
Yes, you can give your daughter $100,000 to buy a house, but you'll need proper documentation for her mortgage lender and you'll likely need to file a gift tax return (IRS Form 709) because the amount exceeds the annual exclusion, though it won't usually result in taxes unless you've used up your large lifetime exemption. Lenders require gift letters proving the funds aren't a loan, and you can avoid gift tax impact by gifting up to the annual limit ($19,000 per person in 2025) each year or by using your substantial lifetime exemption.
There's no limit on how much money you can give or receive as a gift! However, there are some occasions where tax may be payable, or capital gains tax (CGT) may apply. For example, in some instances when gifting property, shares or crypto assets, or when receiving money or an asset from a non-resident trust.
Give more money away
Lifetime gifting is a straightforward way to begin reducing your IHT bill. By gifting money during lifetime, that would have been part of an inheritance anyway, you reduce the size of your estate so that there is smaller amount subject to IHT on your death.