What the New $15 Million Estate Tax Exemption Means for Your Family
If you've been putting off updating your estate plan, 2026 might be the wake-up call you need. A major federal law — the One Big Beautiful Bill Act — has significantly changed how much you can pass on to your loved ones without owing federal estate or gift taxes. Here's what you should know, in plain terms.
The Big Change: A Higher Exemption, Made Permanent
Starting January 1, 2026, the federal estate and gift tax exemption jumped to $15 million per individual — or $30 million for married couples. That's the total amount you can transfer to your heirs during your lifetime or at death without triggering federal estate or gift taxes.
Before this law, the exemption was $13.99 million per person in 2025, and it was set to be cut roughly in half at the end of that year under a "sunset" provision from the 2017 Tax Cuts and Jobs Act. Many families were scrambling to make large gifts before the deadline.
The good news? That deadline pressure is gone. Congress made the higher exemption permanent, with built-in inflation adjustments going forward. There's no sunset clause this time, so you can plan at your own pace rather than racing against the calendar.
Annual Gifts Still Work the Same Way
The annual gift tax exclusion — the amount you can give to any individual each year without it counting against your lifetime exemption — remains at $19,000 per recipient for 2026. That means you can still gift $19,000 to as many people as you'd like each year, completely tax-free and without any reporting requirements.
For grandparents, married couples, or anyone with a large family, this adds up quickly and remains one of the simplest estate planning tools available.
Don't Forget About the Generation-Skipping Transfer Tax
The generation-skipping transfer (GST) tax exemption now matches the estate tax exemption at $15 million per person. This is great news if you want to leave assets directly to grandchildren or set up trusts that benefit multiple generations. The aligned exemption amounts make planning much more straightforward than in years past.
One Important Caveat: State Taxes Still Apply
While the federal exemption is now quite generous, it's important to remember that state-level estate and inheritance taxes haven't changed. Several states impose their own estate or inheritance taxes, often with much lower exemption thresholds. Depending on where you live, your estate could still face a state tax bill even if it falls well below the federal limit.
This is one of the reasons it's so important to work with an attorney who understands both federal and state rules as they apply to your specific situation.
What Should You Do Now?
Even if you don't think your estate is large enough to be affected by these taxes, the new law is a good reason to review your plan. Here are a few steps worth considering:
- Review your existing estate plan. If your documents were drafted with the old exemption amounts or sunset deadlines in mind, they may need updating.
- Revisit your gifting strategy. With the higher permanent exemption, you have more flexibility in how and when you transfer wealth to your family.
- Check your state's rules. Make sure you understand whether your state imposes its own estate or inheritance taxes.
- Talk to your attorney. Estate planning is personal, and what works for one family may not work for another. A conversation with a knowledgeable attorney can help you make the most of the new rules.
We're Here to Help
At The Himmel Law Firm, we help families navigate estate planning with clarity and confidence — whether you're creating your first plan or updating one you've had for years. If you have questions about how the new exemption amounts affect your situation, we'd love to hear from you.
Schedule Your Consultation
If you have questions or need legal guidance, contact The Himmel Law Firm. Call (908) 671-1434 or visit himmellawfirm.com to schedule a consultation.
We serve clients throughout Central and Northern New Jersey and New York City.
The Himmel Law Firm | 277 N. Broad Street, Elizabeth, NJ 07208
Attorney Shlomo Himmel, RN, Esq. — Licensed in New Jersey and New York
This article is for informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult with an attorney.
