Big Estate Tax Changes in 2026

In 2026, the federal estate tax exemption increased to $15 million per individual, up from $13.99 million in 2025. For married couples, that means up to $30 million can pass to heirs free of federal estate tax. If your estate is over the exemption, the amount over is subject to a 40% estate tax rate.

However, the federal estate tax exemption doesn’t tell the whole story. Many states impose their own estate or inheritance taxes, often with much lower exemption thresholds. Even if your estate falls below the federal limit, state taxes could still apply.

Gift Tax Rules for 2026

The annual gift tax exclusion remains at $19,000 per recipient in 2026. This allows an individual to give up to that amount to any number of individuals without filing a gift tax return.

The lifetime gift tax exemption increased to $15 million per individual.

Even if you aren’t subject to Estate Taxes

Estate planning is about more than minimizing taxes. A well-crafted plan ensures your assets are distributed according to your wishes, guardians are named for minor children, health care and financial decision-makers are clearly designated, and assets are protected. In America, more inheritances are lost to things like divorce, health events or lawsuits than to paying estate taxes to Uncle Sam, so make sure your planning protects the people you love.

Call today to schedule a free initial consultation to visit with an estate planning attorney at Legacy Law Firm, (605) 275-5665.