Estate Tax Law Changes for 2026

Estate and gift tax laws help determine how much wealth can pass to the next generation without triggering federal tax. For high-net-worth and ultra-high-net-worth families, even small shifts in exemption amounts can translate to meaningful differences in how assets are transferred and how estates are structured.

Beginning in 2026, key estate tax thresholds are changing. These estate tax law changes affect how much individuals and married couples can transfer tax-free during life or at death, and they may influence whether certain planning strategies — like gifting, trust structures, or beneficiary updates — should be revisited in the near term.

This article outlines what estate tax law changes are expected in 2026, what assets are considered part of the taxable estate, and what planning adjustments are worth evaluating before the new law takes effect. While the rules themselves can seem technical, the implications are practical: the earlier you understand how these changes interact with your estate plan, the more options you preserve.

If you’d like to walk through how the 2026 rules apply specifically to your family’s assets and goals, get in touch with Avidian Wealth Solutions. We can offer essential guidance and coordination alongside your current tax and legal advisors.

Are estate taxes changing in 2026?

Yes: beginning January 1, 2026, the federal estate, gift, and generation-skipping transfer (GST) tax basic exclusion amount is set at $15 million per individual, indexed for inflation. That is a significant increase compared with the exclusion that applied in 2025. The IRS has published the 2026 exclusion and accompanying inflation adjustments.

Why this matters

The exclusion is the amount you can transfer during life or at death free of federal gift/estate tax. A $15 million exclusion means, on a federal level, a married couple could transfer roughly $30 million tax-free (using portability or spousal strategies) beginning in 2026 — a material change for many families.

The larger exclusion in recent years stemmed from earlier tax changes that were scheduled to “sunset” at the end of 2025. Congress passed new legislation in 2025 that set the new baseline exemption at $15 million for 2026 (and indexed it), removing the prior cliff many expected. Still, the law environment can shift; staying engaged with advisors is prudent.

What is the new law for estate tax exemption? The specifics you should know.

The 2026 basic exclusion amount, as stated above, is $15 million per individual, adjusted annually for inflation as the IRS publishes. For 2026, the IRS formally announced that number alongside other inflation adjustments. This is the amount applied to both estate and lifetime gift tax computations.

Annual gift exclusion and other numbers: the annual gift tax exclusion (the amount you can give per person each year without using your lifetime exclusion) has remained in the high-teens in recent years, but for planning purposes, high-net-worth individuals should continue to track the IRS announcements (the annual exclusion remains an important, safe, tax-free transfer tool).

State taxes still matter: even if the federal exemption rises, several states impose their own estate or inheritance taxes with much lower thresholds. Your federal shelter may not protect you from state-level exposures — a classic example where concierge coordination (e.g., tax and trust counsel and state counsel) matters.

What assets are exempt from estate tax?

Before answering this question, it’s important to understand your “gross estate”. For federal estate tax purposes, the gross estate includes the fair market value of property the decedent owned or controlled at death — cash, securities, retirement accounts, closely held business interests, real estate, and certain transfers made shortly before death. The IRS explains what is included and what deductions are allowed when looking at the taxable estate.

Commonly exempted or deductible items (examples):

• Transfers to a surviving spouse: Transfers between U.S. citizen spouses are generally eligible for the unlimited marital deduction (they defer tax until the surviving spouse’s death). For non-citizen spouses, special planning (QDOTs) is required. 
• Charitable gifts: Charitable bequests are typically deductible from the estate.
• Certain debts, funeral and administration expenses: these reduce the taxable estate.
• Property owned solely by someone else or lifetime gifts that were complete and without retained control are not included in the gross estate (though large taxable gifts can reduce your remaining lifetime exclusion).

Special note on retirement accounts and beneficiary designations

Retirement accounts (IRAs, 401(k)s) are includible in the gross estate but pass by beneficiary designation — which means the estate-tax and income-tax outcomes depend on account titling, beneficiary choices, and trust design. That makes beneficiary review a critical item on your estate planning checklist.

Should I update my will before 2026?

Short answer: yes — and not only your will. Here’s a practical checklist of actions individuals and families who want to be proactive:

1. Review your will and beneficiary designations now

If your estate plan was designed around a lower or different exclusion amount, the increase to $15 million may change priorities. For example, funding a credit shelter trust may be less urgent for some clients; for others, it still makes sense for creditor protection, state tax planning, or spouse protection. Also, check beneficiaries on IRAs, retirement plans, life insurance, and payable-on-death accounts.

2. Lock in gifting (if it makes sense)

If you expect future political change, some families still accelerate large gifts to use current lifetime exemption amounts. That choice depends on your goals, tax posture, and liquidity. Work with your advisor to model scenarios. 

3. Consider trust structures for control and protection

Irrevocable life insurance trusts (ILITs), dynasty trusts, and grantor retained annuity trusts (GRATs) remain powerful tools for shifting value outside the taxable estate, protecting assets from creditors, and preserving family governance — even with a larger federal exemption. Valuation and timing matter. 

4. Review your state-level planning

If you live (or own property) in a state with a low estate or inheritance tax threshold, state planning — which can include domicile planning, state-level trusts, and other measures — can still be necessary irrespective of federal changes. 

5. Coordinate income-tax and estate-tax effects

Some strategies (e.g., Roth conversions, life insurance purchases, business succession moves) change both income tax and estate tax exposures. Integrated planning prevents surprises.

Looking for advanced estate tax guidance? Let’s talk.

The 2026 estate tax law changes can bring welcome breathing room at the federal level for high-net-worth families, but it does not remove the need for thoughtful, integrated planning. Higher exemptions change priorities — but they also may create opportunities to fine-tune governance, asset protection, charitable plans, and multigenerational strategies.

If you want a tailored review of how the 2026 rules affect your balance sheet, Avidian offers concierge estate and tax planning: we’ll run the numbers, draft recommended actions, and coordinate with your legal team. Reach out to us in Houston, Austin, Sugar Land, or The Woodlands to schedule a conversation.

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• Should I Take Social Security Early?
• How to Leverage Key-Person Insurance for Succession Planning
• The Role of Charitable LLCs in Legacy and Wealth Preservation
• What Does “Buy the Rumor, Sell the News” Mean?

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