Gifting Under the New $15 Million Exemption: What OBBBA's Estate Tax Changes Mean for Your Plan
The federal gift and estate tax exemption rose to $15 million per person in 2026 under the One Big Beautiful Bill Act — a real number that changes real planning, even for families who assumed it didn't apply to them.
For most of the last decade, a lot of estate planning conversation was shadowed by a looming deadline: the higher exemption amounts created by the 2017 tax law were scheduled to roughly halve at the end of 2025. That sunset didn't happen.
The One Big Beautiful Bill Act, signed in 2025, made the higher exemption permanent and increased it further. For 2026, the federal estate and gift tax exemption is $15 million per individual — $30 million for a married couple — up from $13.99 million in 2025. It will continue to be adjusted for inflation each year going forward.
For families who assumed estate tax wasn't a planning concern for them, that's still likely true. But the increase matters for more than just the largest estates — it changes the calculus for anyone whose plan was built around the older, lower number.
What Actually Changed
The lifetime exemption is the total amount you can transfer — during your life or at death — without triggering federal gift or estate tax. It moved from $13.99 million to $15 million per person this year, a $1.01 million increase, and it's now indexed for inflation on a permanent basis rather than facing another scheduled reduction. The annual gift tax exclusion, a separate number, remains $19,000 per recipient in 2026 ($38,000 for a married couple gifting jointly) — the amount you can give to any number of people each year without touching your lifetime exemption at all.
If Your Estate Plan Assumed a Lower Exemption
Trusts and gifting strategies built several years ago were often designed around a smaller number — sometimes explicitly around the pre-2018 exemption level of roughly $5 million, sometimes around the assumption that the 2017 increase would sunset. If your documents reference a specific dollar figure or formula tied to “the exemption amount available at death,” it's worth confirming what that actually produces under today's $15 million number.
More Room for Lifetime Gifting
A higher lifetime exemption creates additional room to make larger gifts now — funding a trust, transferring a business interest, or making a significant gift to the next generation — without using up exemption you might have already assumed was spent. This is particularly relevant for families who made large gifts under the prior exemption level and want to know how much capacity remains.
The Annual Exclusion Still Does a Lot of Quiet Work
Outside of the lifetime exemption entirely, the $19,000 annual exclusion lets you gift that amount to as many people as you'd like each year with no filing requirement and no impact on your lifetime number. For a family gifting to children, their spouses, and grandchildren, that adds up — and it's easy to underuse simply because nobody revisits it annually.
The Windward Approach
Estate tax exposure is only one piece of why a plan gets reviewed — control, timing, and family dynamics usually matter more in practice. But a number this large moving this much is a legitimate reason to open the file again, particularly if it's been a few years since your last review.
If your plan predates this year's change, it's worth a conversation with your attorney and your Windward team together.
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