Estate and Gift Tax Exemptions Rise to 5 Million Per Person in 2026 Under New Law
The One Big Beautiful Bill Act made higher estate and gift tax exemptions permanent starting in 2026. Individuals can now transfer up to 5 million tax-free during their lifetime, and married couples can transfer up to 0 million.
Americans with significant assets have more room to transfer wealth to the next generation starting in 2026. The One Big Beautiful Bill Act made higher estate and gift tax exemptions permanent, raising the individual limit to 5 million and the married couple limit to 0 million.
The change is significant for estate planning. Under previous law, the higher exemptions introduced by the 2017 Tax Cuts and Jobs Act were set to expire, which would have cut the exemption roughly in half. The new legislation locks in the higher amounts permanently.
For 2026, individuals can give up to 9,000 per recipient per year as an annual gift without touching their lifetime exemption. Married couples can give up to 8,000 per recipient. These annual exclusion amounts are separate from the lifetime exemption.
Financial planners say the permanent exemptions create new opportunities for strategic wealth transfer. Gifting assets during one's lifetime, rather than passing them through an estate, can offer tax advantages and allow heirs to benefit sooner.
One approach gaining attention is portfolio-secured lending. Individuals with large investment portfolios can establish a line of credit against their assets at favorable rates, typically 5 to 6 percent, providing liquidity without selling investments and triggering capital gains taxes.
The legislation also introduced changes to charitable contribution deductions. Donor-advised funds remain a popular tool for strategic giving, allowing donors to contribute assets, receive an immediate tax deduction, and distribute grants to charities over time.
Estate planning attorneys and financial advisors are recommending that clients review their plans in light of the new rules. Wills, trusts, powers of attorney, and beneficiary designations should all be updated to reflect current law and personal circumstances.
The permanent exemptions reduce uncertainty that had complicated estate planning for years. Families can now make long-term decisions without worrying about the rules changing.
