Big Increase in 2026 Federal Estate Exemption: What the New IRS Adjustments Mean for You

The IRS has released its 2026 inflation adjustments, and they bring notable changes across the federal tax landscape. These updates affect everything from the estate and gift tax exemption to income tax brackets and standard deductions. For individuals and families focused on long-term wealth transfer, the implications are especially significant.

Understanding the 2026 Estate and Gift Tax Exemption

The most substantial update for 2026 is the increase in the federal estate and gift tax exemption to $15,000,000 per individual, up from $13,990,000 in 2025, a jump of $1,010,000.

This means that individuals can transfer up to $15 million in assets during life or at death without incurring federal estate or gift tax. Married couples who plan strategically can combine their exemptions and transfer up to $30 million tax-free.

For high-net-worth individuals, this adjustment represents a powerful opportunity to reduce taxable estates. Many taxpayers may wish to take advantage of this increased limit through lifetime gifting, leveraging the higher exemption before potential legislative changes reduce it in future years.

Annual Gift Exclusion: Staying the Same, Still Powerful

The annual gift exclusion, the amount that can be gifted to any individual each year without using the lifetime exemption will remain at $19,000 in 2026.

That means:

• An individual can gift up to $19,000 per recipient without filing a gift tax return.

• Married couples who elect to split gifts can give $38,000 per recipient each year.

  
  

These annual gifts can add up meaningfully over time, especially when used to fund trusts, education savings plans, or life insurance policies held outside of the taxable estate.

What The Change Means for Estate Planning

While many of the 2026 updates are modest, the estate and gift tax exemption increase stands out as one of the most impactful in years.

Now is an ideal time to: 

• Review your estate plan to ensure your wills, trusts, and beneficiary designations align with the current exemption amounts. 

• Consider strategic gifting to take advantage of higher thresholds and move appreciating assets out of your estate while values are still low. 

• Prepare for potential future changes, since the estate tax exemption may decrease at a later date. Acting before then could secure substantial long-term benefits.

  
  

For high-net-worth individuals and families, 2026 may be a pivotal year for planning. Whether through lifetime gifting, trust structures, or charitable giving, now is the time to engage your estate planning advisor and make sure your strategy reflects both current and future tax realities.

 For personalized guidance, please contact Lara Sass & Associates PLLC to discuss how these changes may impact your estate plans.