In 2017, the Tax Cuts and Jobs Act temporarily increased the federal estate and gift tax lifetime exemption. This is the amount you can gift throughout your life or at death without being subject to estate and gift taxes. The increase was scheduled to “sunset” in 2026, dropping back to roughly $7 million per person, but it has now been made permanent under the One Big Beautiful Bill Act (OBBBA).  Starting in 2026, the lifetime exemption will be $15 million per person; for married couples, the exemption will be $30 million.  This amount will be adjusted for inflation annually.

This permanent change means families can now plan with confidence knowing the higher levels will remain in place.  This larger exemption allows significantly more wealth to be transferred during life or at death without triggering federal estate or gift tax.

In addition, the annual exclusion for gift tax in 2025 is $19,000 ($38,000 for married couples).  This is the amount you can gift each year without using your lifetime exemption.

Please contact your tax advisor at BCS if you have any questions about the lifetime exemption or the annual gift tax exclusion.