The Estate Tax Exemption Just Got Bigger — And This Time It's Permanent

What changed

For years, estate planning conversations were dominated by one looming deadline: the scheduled 2026 sunset of the elevated Tax Cuts and Jobs Act exemption. Under prior law, the exemption was set to drop from roughly $13-14 million back to approximately $7 million per person at the end of 2025. That date came and went — but the sunset didn't happen.

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, permanently raised the federal estate and gift tax exemption to $15 million per individual ($30 million for married couples), indexed for inflation going forward. The sunset provision has been repealed entirely.

What this means for 2026 estates

For decedents dying in 2026, the basic exclusion amount is $15 million. This is the threshold below which no federal estate tax is owed. Estates below this amount owe nothing in federal estate tax — though state-level estate taxes may still apply, and many states have much lower thresholds.

For married couples, the portability election remains critically important. If the first spouse to die has an estate below $15 million, the unused exemption can be transferred to the surviving spouse — but only if a timely Form 706 is filed. That filing deadline is nine months from the date of death.

What this doesn't change

A larger exemption doesn't eliminate the need for careful planning. State estate taxes still apply in many states. Income taxes on inherited IRAs still apply. The fiduciary obligations of executors and trustees haven't changed. And the portability election is still a filing requirement — it doesn't happen automatically.

The annual gift tax exclusion

The annual gift tax exclusion remains at $19,000 per recipient for 2026 (unchanged from 2025). The lifetime exemption for gifts and estates is unified at $15 million.

Bottom line

If you were delaying estate planning decisions because of the scheduled sunset, that pressure is gone. But the fundamentals of fiduciary tax compliance — filing deadlines, portability elections, income tax on inherited assets — remain as important as ever.