Estate Tax Exemption Rises to $15 Million Under New Federal Law, Changing Planning Strategies
The One Big Beautiful Bill Act raised the federal estate tax exemption to $15 million per individual, or $30 million for married couples, effective in 2026. The change reduces the need for complex estate planning for most families. Financial advisors say the higher threshold shifts focus toward updating basic documents like wills and powers of attorney.
The federal estate tax exemption rose to $15 million per individual, or $30 million for married couples, under the One Big Beautiful Bill Act signed in 2025 and now in effect for 2026.
The increase is the largest single jump in the exemption in decades. Under prior law, the exemption was set to drop sharply after 2025 when temporary provisions from the 2017 Tax Cuts and Jobs Act expired. The new legislation made a higher threshold permanent.
For most American families, the change means estate taxes are no longer a concern. Only estates worth more than $15 million per person will owe federal estate tax. That threshold covers a small fraction of the population.
Financial advisors say the higher exemption shifts the focus of estate planning away from tax minimization and toward other priorities. They are encouraging clients to update foundational documents, including wills, trusts, powers of attorney, and healthcare directives, to ensure assets are distributed according to their wishes.
The law also introduced new rules on charitable giving that affect high-income earners. Itemized deductions for charitable contributions are now subject to new caps for those in the top income brackets, making strategic giving more complex. Advisors say donors who give large amounts should consult a tax professional before year-end.
The estate tax changes interact with other provisions of the law, including new savings vehicles for children and changes to retirement account rules. Advisors say families with significant assets should review their entire financial plan in light of the new law, not just the estate tax piece.
The exemption is not indexed for inflation under the new law, meaning its real value will erode over time if prices continue to rise.
