Annual Gift Tax and Estate Tax Exemptions for 2026

Takeaways

• The federal estate tax exemption for 2026 will increase to $15 million per individual, with married couples exempt up to $30 million.
• The annual gift tax exclusion will remain at $19,000 per individual for 2026, with a lifetime gift and estate tax exemption of $15 million.

Last month, the Internal Revenue Service (IRS) released the gift tax and estate tax exclusions for tax year 2026. These amounts are adjusted annually to account for changes in the cost of living. The updates become effective January 1, 2026.

2026 Federal Estate Tax Exemption

The federal estate tax exemption will increase to $15 million per individual in 2026. Married couples can exempt up to $30 million. This applies to people who die on or after January 1, 2026. It is an increase from $13.99 million for individuals dying in 2025.

Estates below this threshold generally will not owe federal estate tax. Depending on your state, however, you may also be subject to state estate or inheritance taxes.

2026 Gift Tax Exemption

The annual exclusion for federal gift tax will remain at $19,000 per recipient in 2026. This means an individual may give up to $19,000 to any one person during the year without filing a gift tax return (Form 709). Married couples may effectively give up to $38,000 per recipient using gift-splitting on Form 709. Coordination with a tax advisor is recommended.

The federal gift tax applies when you give money or property, including cash, real estate, stocks, crypto, and valuable personal property, to someone without receiving equal value in return. The tax is triggered only if the amount exceeds the annual exclusion. When owed, the donor, not the recipient, typically pays the tax.

Gifts between spouses who are both U.S. citizens are usually unlimited and do not trigger gift tax. If your spouse is not a U.S. citizen, the annual exclusion for gifts to that spouse is limited to $194,000 in 2026 (up from $190,000 in 2025).

The lifetime gift and estate tax exclusion will be $15 million per individual in 2026. Taxable gifts made during your lifetime reduce this total. You generally won’t owe gift tax until your cumulative taxable gifts exceed this lifetime exclusion. At that point, additional gifts or estate transfers may be subject to tax.

Review Your Estate Plan Despite the Increased Federal Estate Tax Exemption

Consider State Estate Taxes

Many states have their own estate or inheritance taxes. Their exemption levels may be much lower than the federal exemption. Updating your estate plan can help mitigate or avoid state-level taxes.

Address Non-Tax Objectives

Estate planning is not solely about minimizing taxes. It also ensures your assets are distributed according to your wishes, designates guardians for minor children, establishes trusts for beneficiaries with special needs, and outlines health care directives. These objectives require periodic review.

Adapt to Personal Circumstances

Life events such as marriage, divorce, birth or adoption of children, death of a beneficiary or executor, or significant changes in wealth may necessitate updates to your estate plan.

Update Beneficiaries and Inheritances

You may wish to change who inherits your assets or the specific assets they receive. Relationships with beneficiaries can change, or their financial needs may evolve.

Keep Up with Legal Changes

Other laws impacting estate planning, such as those regarding powers of attorney, health care proxies, or trust administration, can change over time.

Monitor Asset Growth and Composition

As your wealth grows or the nature of your assets changes—acquiring new property, starting a business, or investing in new asset classes—your estate plan should reflect these changes to ensure proper management and distribution.

Review Executor and Trustee Appointments

The individuals appointed as executors or trustees may no longer be suitable due to age, health, location, or changes in their circumstances.

Include Digital Assets

With the growing importance of digital assets—online accounts, cryptocurrency, intellectual property—it’s essential to include provisions for their management and transfer.

Update Health Care Directives and Power of Attorney

Regularly review your living will and durable power of attorney for health care. Make sure they still reflect your wishes and that your chosen agents are appropriate.

While the higher federal exemption might reduce the number of estates subject to federal tax, a comprehensive estate plan addresses far more than just tax liabilities. Regular review ensures your plan remains current, effective, and aligned with your evolving wishes and circumstances.

Protect Your Legacy Today.

Review your estate plan with an experienced elder law attorney to ensure your gifts and assets are handled wisely.