One of the biggest provisions from the Tax Cuts and Jobs Act (TCJA) back in 2017 was its doubling of the gift and estate tax exemption for 2018 from $5.6 million to $11.2 million per person. This has since grown to $13.99 million in 2025 – meaning that a couple with up to $27.98 million of assets between them could pass away without being subject to federal estate tax.
However, with TCJA’s sunset, that gift and estate tax exemption was set to decrease again by 50% back closer to its pre-TCJA amount. This created a lot of concern for families that would be impacted.
With the recent passing of the OBBBA, that scheduled reduction has been stopped and instead a slight increase in the exemption to $15 million per person ($30 million per couple) starting in 2026 will be in place – plus future inflation adjustments for subsequent years.
This is a very welcome aspect of OBBBA for families with estates over $15 million who would have otherwise been facing estate tax rates of up to 40% on the excess above the threshold. This is also a welcome change if you fall somewhere within the old limit of $5.6 million and the new limit of $15 million as you now have some more clarity for your planning.
Regardless of whether you are above or below that exemption amount, estate planning is a crucial aspect of your financial plan. Even with this higher exemption, estate planning isn’t just about taxes. It’s about ensuring your wealth passes according to your wishes, protecting loved ones, and reducing complexity for your heirs.
It’s also worth remembering that some states impose their own estate or inheritance taxes at much lower thresholds. And while OBBBA raises the federal exemption, a future administration could always make changes again.