The big news for estate planning in 2026 is that the higher estate tax exemption limits introduced by the 2017 Tax Cuts and Jobs Act did not sunset at the end of 2025, as they were originally scheduled to do. Not only did the higher limits not expire, the One Big Beautiful Bill Act (OBBBA) enacted in 2025 made the increases permanent.
This is good news for most families because the federal estate tax exemptions have remained high enough that most Americans will not incur estate taxes. It also reduces the potential for year-end panic planning, as has happened when the exemptions were scheduled to decrease significantly in the past.
Estate Tax Exemptions Increased for 2026
As is consistent with previous tax years, the Basic Exclusion Amount (BEA) and Generation Skipping Transfer (GST) tax exemptions for 2026 have increased and are indexed to increase in the future for inflation.
The BEA (also known as the Unified Gift and Estate Tax Exclusion Amount) for 2026 is now$15 million per person (up from $13.99 million for the 2025 tax year). This produces an effective exemption of $30 million for married couples (up from $27.98 million for 2025), if both spouses are U.S. citizens.
The GST tax exemption currently uses the same figures as the BEA amount: $15 million per person, which again provides married couples with an effective exemption of $30 million per married couple, if both members of the couple are U.S. citizens.
The BEA protects against both gift taxes and estate taxes. The current exemption limits translate into an opportunity to make large monetary gifts or large at-death transfers without incurring either gift or estate taxes.
Gift Tax Exemption Remains Level Except for Non-US-Citizen Spouses
The gift tax annual exclusion allows certain gifts to be made gift-tax- free without any effect on an individual’s BEA (and possibly GST tax exemption amount). For 2026, the gift tax annual exclusion amount remains $19,000 per individual recipient.
However, gifts to a non-US citizen spouse do not qualify for the standard gift tax annual exclusion. Instead, gifts to a non-US citizen spouse have their own special annual exclusion amounts because the unlimited marital deduction that normally applies to gifts to a spouse does not apply when the recipient spouse is not a U.S. citizen.
In 2025, a U.S. citizen or U.S. permanent resident (i.e., a green card holder) spouse could gift up to $190,000 to their non-U.S. citizen spouse each year without incurring gift taxes or having to file a gift tax return. For 2026, this exemption amount increases to $194,000.
Gifts to the non-US-citizen spouse that exceed the $194,000 annual exclusion amount are considered taxable gifts, and they will reduce the donor spouse’s lifetime BEA.
Revisiting Irrevocable Trusts and Other Long-Term Tax Planning Tools
In 2023, the IRS issued clarifying statements regarding the tax treatment of appreciated assets within Irrevocable Trusts. The IRS made it clear that assets in these Trusts maintain their original cost basis rather than receiving a step-up in basis when the grantor dies. Without the step-up, which is typically available in other estate planning tools like Wills and Revocable Trusts, beneficiaries could incur significant capital gains taxes on assets that have appreciated in value.
Given this recent change in tax treatment, now is the time to revisit Irrevocable Trusts that may be shielding assets from inclusion in a person’s estate. Given the newly permanent, very high BEA, it may now make sense to have low-basis assets included in your estate for estate tax purposes, to allow for a basis step up. Reviewing your estate plan in 2026 could also provide an opportunity to modify previous plans for better asset protection, to help them meeting multigenerational objectives, and to help ensure that beneficiaries with disabilities can enjoy the benefits of assets left to them while still qualifying for means-tested public benefits or needs-tested public benefits such as Medicaid and Supplemental Security Income (SSI).
Opportunities to Update Comprehensive Estate Tax Planning
With the estate tax exemptions firmly in place for the foreseeable future, only American families with significant wealth generally need to worry about estate tax liabilities within their estate plans. For high net worth clients who may exceed the BEA and GST exemption thresholds, planning is critical to address the tax efficiency of their estate plan and how future asset appreciation could affect their taxable estate.
Consulting with an experienced estate planning attorney can uncover ways to improve income tax outcomes, particularly when it comes to highly appreciated assets like real estate or closely held businesses. The Metro Atlanta-based estate planning attorneys at Morgan & DiSalvo would be pleased to meet with you to update your estate plan and discuss options for gifting, charitable contributions, and other strategies for optimizing your estate planning. Please call (678) 720-0750 or email info@morgandisalvo.com.
