Estate and Tax Strategy
2026 Estate Tax Exemption: What High-Net-Worth Families Need to Know
The federal estate tax exemption for 2026 is $15 million per individual and $30 million per married couple under the One Big Beautiful Bill Act. This guide explains what changed, what it means for founders and affluent families, and how to use trust strategies while the exemption remains at this level.
The Definition
What Is the Estate Tax Exemption for 2026?
The 2026 federal estate and gift tax exemption is $15 million per individual and $30 million per married couple using portability. The One Big Beautiful Bill Act (OBBBA, P.L. 119-21), signed into law on July 4, 2025, eliminated the scheduled sunset that would have reduced the exemption to approximately $7 million per person. The top federal estate and gift tax rate remains 40% on amounts exceeding the exemption.
In practical terms, an individual can transfer up to $15 million, and a married couple up to $30 million, through lifetime gifts or at death without triggering federal estate or gift tax. Amounts above those thresholds are taxed at 40%. This represents an increase from the 2025 exemption of $13.99 million per individual, which was approximately $27.98 million per married couple with portability.
2025 vs 2026
Estate Tax Exemption Comparison Table
The table below compares the federal estate and gift tax exemption before and after the OBBBA.
| Provision | 2025 (Pre-OBBBA, TCJA Era) | 2026 (Under OBBBA) |
|---|---|---|
| Exemption per individual | $13.99 million | $15 million |
| Exemption per married couple (with portability) | ~$27.98 million | $30 million |
| Top estate and gift tax rate | 40% | 40% |
| Sunset scheduled? | Yes, after Dec. 31, 2025 (to ~$7M) | No, sunset eliminated by OBBBA |
| Inflation indexing | Yes, under TCJA | Yes, $15M baseline indexed starting 2027 |
| Annual gift exclusion (separate) | $19,000 per recipient | $19,000 per recipient |
Sources: IRS Estate and Gift Tax (irs.gov); OBBBA (P.L. 119-21). Figures as of July 31, 2026. Future legislation may alter these amounts.
The Legislative Change
How the OBBBA Changed the Estate Tax Exemption Sunset
The Tax Cuts and Jobs Act of 2017 doubled the estate tax exemption but included a sunset provision: after December 31, 2025, the exemption was scheduled to revert to approximately $7 million per individual, adjusted for inflation. For years, estate planning attorneys and advisors urged high-net-worth families to act before the sunset, creating urgency around lifetime gifting and trust funding.
The One Big Beautiful Bill Act, signed July 4, 2025, eliminated that sunset entirely. Instead of reverting, the exemption increased to $15 million per individual effective January 1, 2026, and the $15 million baseline is indexed for inflation beginning in 2027. This means the higher exemption is now permanent under current law, though future legislation could change it.
Defiant Capital Group has been actively helping founders and affluent families in Pittsburgh and across the country adjust their estate plans in light of the new law.
What Changed
- 1 The TCJA sunset that would have cut the exemption to ~$7M per person was eliminated
- 2 The exemption increased to $15M per individual, up from $13.99M in 2025
- 3 Married couples can shield up to $30M using portability
- 4 The $15M baseline is indexed for inflation starting in 2027
As Featured in Barron's
Jonathan Dane, CFA, CFP, was quoted in Barron's on how the One Big Beautiful Bill Act's provisions are reshaping client strategy, including the impact on charitable giving rules and estate planning decisions for high-net-worth families.
Jonathan Dane, CFA, CFP, Founder and CIO, Defiant Capital Group
Who This Affects
What the 2026 Exemption Means for Founders and HNW Families
More Room Before Federal Estate Tax
With $15M per individual, families that were previously at the edge of the exemption threshold now have additional capacity. A married couple with $28M in assets, for example, would have been close to the 2025 limit but now has $2M of headroom under the 2026 exemption.
Reduced Urgency, But Not No Urgency
The elimination of the sunset removed the cliff that drove emergency gifting in 2024 and 2025. However, families with estates exceeding $30M per couple still face federal estate tax exposure, and the exemption could be changed by future legislation. Planning remains relevant, but the timeline is less compressed.
Founders With Pre-Liquidity Equity
Founders holding qualified small business stock or significant equity in a private company may see their net worth increase dramatically at exit. The $15M exemption provides a larger window to transfer appreciation out of the estate before a liquidity event, though QSBS and trust strategies may offer additional benefits beyond the exemption itself.
Tax outcomes depend on individual circumstances. Trust structures involve irrevocability, loss of control, and legal costs that should be weighed against potential tax benefits. Future legislation may alter exemption amounts.
Planning Strategies
Trust Strategies to Use the 2026 Exemption
Even with the higher exemption, trust strategies remain relevant for families whose wealth exceeds the $30M married-couple threshold, or who want to remove future appreciation from their taxable estate. Below are several structures our team works with, each carrying its own trade-offs.
Spousal Lifetime Access Trust (SLAT)
An irrevocable trust funded by one spouse for the benefit of the other. Removes assets and future appreciation from the grantor's estate while allowing the beneficiary spouse indirect access. Trade-off: once funded, the assets are irrevocably transferred, and the beneficiary's access is limited to trust distributions.
Grantor Retained Annuity Trust (GRAT)
A trust designed to transfer asset appreciation to beneficiaries with minimal gift tax cost. The grantor receives annuity payments for a set term, and appreciation above the IRS hurdle rate passes to beneficiaries. Trade-off: if the grantor dies during the term, the assets return to the estate.
Dynasty Trust
A long-term trust designed to benefit multiple generations while minimizing transfer taxes. May be structured under state laws that allow perpetual or long-duration trusts. Trade-off: involves ongoing administrative costs, trustee selection, and complexity that increases with each generation.
Pennsylvania Context
Pennsylvania Inheritance Tax: A Separate Layer
Pennsylvania does not impose a state-level estate tax. However, the state does levy an inheritance tax, which is assessed on the beneficiary receiving assets rather than on the estate as a whole. This is a separate calculation from the federal estate tax exemption, and it applies regardless of whether the estate owes federal estate tax.
The Pennsylvania inheritance tax rates depend on the relationship of the beneficiary to the deceased. Transfers to a surviving spouse are generally exempt. Transfers to lineal descendants (children, grandchildren) are taxed at 4.5%. Transfers to siblings are taxed at 12%. Transfers to all other beneficiaries are taxed at 15%.
For affluent families in Pittsburgh and across Pennsylvania, the federal exemption and the state inheritance tax operate as two distinct layers. A family that owes no federal estate tax because its estate is under $30M may still face a meaningful Pennsylvania inheritance tax bill, particularly if assets pass to non-spouse beneficiaries. (Learn more about Pennsylvania inheritance tax planning)
Pennsylvania Inheritance Tax Rates
Pennsylvania inheritance tax rates as of 2026. A 5% discount applies if payment is made within three months of death. Rates may be subject to change by state legislation.
Our Approach
Integrated Estate and Tax Strategy for Founders and Families
At Defiant Capital Group, we provide estate and tax planning as part of a comprehensive wealth management approach that coordinates investment strategy, tax planning, estate structures, and succession planning. Our team works with founders, business owners, and affluent families navigating complex financial transitions, including business sales, inheritance, and generational wealth transfer.
Jonathan Dane, CFA, CFP, serves as Founder and Chief Investment Officer. As an independent, fiduciary registered investment advisor, the firm operates without product sales incentives, which can reduce certain compensation-related conflicts. However, conflicts may still exist in any advisory relationship.
We coordinate with your attorneys, CPAs, and other advisors to implement estate structures, including trusts, gifting strategies, and ownership transitions. Our focus is on integrating estate planning with investment management and tax strategy so that each decision aligns with your family's long-term goals.
$15M
2026 exemption per individual
$30M
2026 exemption per married couple
40%
Top federal estate tax rate
0%
PA inheritance tax to spouse
Frequently Asked Questions
Estate Tax Exemption 2026: Common Questions
What Is the Estate Tax Exemption for 2026?
The federal estate and gift tax exemption for 2026 is $15 million per individual and $30 million per married couple using portability, under the One Big Beautiful Bill Act. This is an increase from $13.99 million per individual in 2025. The $15 million baseline is indexed for inflation beginning in 2027. (IRS; as of July 31, 2026.)
What Is the Estate Tax Exemption for 2026 for a Married Couple?
A married couple can shield up to $30 million from federal estate and gift tax in 2026 by combining each spouse's $15 million individual exemption through portability. Portability allows the surviving spouse to use any unused portion of the deceased spouse's exemption, provided an estate tax return is filed timely. The couple's combined exemption applies to lifetime gifts and transfers at death.
Did the Estate Tax Exemption Sunset in 2026?
No. The TCJA-era sunset, which would have reduced the exemption to approximately $7 million per individual after December 31, 2025, was eliminated by the One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025. Instead of sunsetting, the exemption increased to $15 million per individual effective January 1, 2026, and is indexed for inflation starting in 2027. Future legislation could still change these amounts.
Why Use a Spousal Lifetime Access Trust (SLAT)?
A SLAT allows one spouse to transfer assets into an irrevocable trust for the benefit of the other spouse, removing those assets and their future appreciation from the grantor's taxable estate. The beneficiary spouse may receive distributions from the trust, providing a degree of indirect access to the transferred wealth. Trade-offs include irrevocability, loss of direct control by the grantor, and potential gift tax implications if the transfer exceeds the available exemption. SLATs are commonly used by couples whose combined estates approach or exceed the $30 million married-couple exemption.
Does Pennsylvania Have an Estate Tax?
Pennsylvania does not impose a state estate tax. However, Pennsylvania levies an inheritance tax on beneficiaries receiving assets from a deceased person's estate. The rate depends on the beneficiary's relationship to the deceased: 0% for a surviving spouse, 4.5% for lineal descendants, 12% for siblings, and 15% for other beneficiaries. This is separate from the federal estate tax and applies regardless of whether the estate exceeds the federal exemption.
Should I Still Gift Assets If the Exemption Increased?
For families whose estates are well below $30 million per couple, the urgency to gift before a sunset has diminished. However, gifting may still make sense for families whose wealth is growing rapidly, who hold concentrated positions in private companies, or whose estates may exceed the exemption at death. The decision depends on your specific balance sheet, liquidity needs, and tolerance for irrevocability. Results vary by individual circumstances and may involve trade-offs.
Will the $15 Million Estate Tax Exemption Last Forever?
No estate tax exemption is guaranteed to last indefinitely. The OBBBA eliminated the TCJA sunset and set the exemption at $15 million per individual, but Congress can change the amount, add new thresholds, or reinstate a sunset provision at any time through new legislation. A shift in political control of the White House, House, or Senate could lead to efforts to reduce the exemption as a revenue measure or as part of broader fiscal reform. The TCJA's original sunset provision, which would have cut the exemption roughly in half after 2025, is a recent reminder that exemptions written into law can come with expiration dates. Irrevocable transfers completed under today's rules are generally protected from future reductions, which is why some families choose to implement trusts now rather than wait. The right approach depends on individual circumstances, and outcomes may vary depending on future legislative and political developments that cannot be predicted.
Why Plan Now
The Exemption May Be Permanent in Law, But It Is Not Immune to Politics
The OBBBA eliminated the TCJA sunset and set the estate tax exemption at $15 million per individual, but that does not mean the amount is locked in forever. Congress can pass new legislation at any time to lower the exemption, introduce new thresholds, or reinstate a sunset provision. A future administration, or a shift in the composition of the House or Senate, could prioritize reducing the estate tax exemption as a revenue measure or as part of broader fiscal reform.
The TCJA's original sunset provision, which would have cut the exemption roughly in half after 2025, is a recent reminder that exemptions written into law can come with expiration dates. The OBBBA removed that particular sunset, but it did not create a structural barrier against future changes. Any estate plan built around today's $15 million figure should account for the possibility that the rules may look different in five, ten, or twenty years.
This is why many families choose to act now. Irrevocable transfers completed under current law, such as gifts to properly structured trusts, are generally protected from future reductions to the exemption. Once assets are transferred and the gift tax return is filed, the exemption used at the time of the transfer is locked in, even if Congress later lowers the exemption amount. Families who wait to plan may face a different set of rules when they finally act.
Jonathan Dane, CFA, CFP, and our team at Defiant Capital Group work with families to evaluate whether implementing trust structures now, while the $15 million exemption remains in effect, may be more advantageous than waiting for a future legislative environment that could be less favorable. The right approach depends on your specific balance sheet, liquidity needs, and risk tolerance. (Explore our estate and tax planning services)
Why Waiting Carries Risk
- 1 Congress can change the exemption amount, add thresholds, or reinstate a sunset at any time through new legislation
- 2 A shift in political control of the White House, House, or Senate could lead to efforts to reduce the exemption
- 3 The TCJA's sunset provision, which nearly cut the exemption in half, is a recent reminder that exemptions can expire
- 4 Irrevocable transfers completed under today's rules are generally protected from future reductions, which is why some families implement trusts now rather than waiting
Legislative outcomes are uncertain and depend on political dynamics that cannot be predicted. This content is educational and does not constitute legal or tax advice. Consult with a qualified attorney and tax advisor before implementing any estate planning strategy.
Take the Next Step
Review Your Estate Plan Against the 2026 Exemption
If your family's wealth, business interests, or equity holdings put you near or above the $15 million individual or $30 million married-couple exemption, the 2026 changes may create new planning opportunities or reduce the urgency of strategies you were considering. Our team can help you assess where you stand and what actions, if any, make sense for your situation.
Defiant Capital Group is an independent, fiduciary registered investment advisor based in Pittsburgh, PA, serving founders, business owners, and affluent families across the country.