In 2017, the enactment of The Tax Cuts and Jobs Act (TCJA) led to a significant increase in the federal estate and gift tax exemption. The exemption reached historical highs of $13.61M per taxpayer in 2024 ($27.22M for a married couple) and can be used to make gifts during life or to pass wealth estate tax free at death.
Absent further legislation, the TCJA will sunset on January 1, 2026, reverting to 2017 levels, adjusted for inflation, or approximately $7M per taxpayer. As a result, wealthy individuals and families will be subject to significantly more federal estate tax in 2026 than they are today.
And many taxpayers who do not have a taxable estate today will find themselves exposed to federal estate tax in 2026.