New Tax Law Raises Federal Estate Tax Exemption to 15 Million Dollars Per Person
The One Big Beautiful Bill Act, signed into law in 2026, raised the federal estate tax exemption to 15 million dollars per individual. The change affects wealth transfer planning for high-net-worth families. Financial advisers say the new threshold gives more families room to pass assets to heirs without a federal tax bill.
The federal estate tax exemption rose to 15 million dollars per individual under the One Big Beautiful Bill Act, signed into law in 2026. For married couples, the combined exemption reaches 30 million dollars.
The previous exemption was set at approximately 13.6 million dollars per person. The increase means fewer estates will owe federal estate taxes when a person dies.
Financial planners say the change is significant for families with substantial real estate holdings, business interests, or investment portfolios. Many families that previously needed complex trust structures to avoid estate taxes may now have more straightforward options.
The law also introduced mandatory Roth catch-up contributions for certain high-income earners over age 50. Workers earning more than 145,000 dollars annually must now make their catch-up contributions to Roth accounts rather than traditional pre-tax retirement accounts.
Wealth advisers recommend reviewing estate plans in light of the new exemption. Strategies like irrevocable life insurance trusts and grantor retained annuity trusts may still make sense for very large estates, but the calculus has changed for many families.
The law also created Trump Accounts, which provide 1,000 dollars in savings for children born between 2025 and 2028. The accounts are designed to encourage long-term financial planning from an early age.
