In this video, Attorney Justin M. Kennedy explains the new 2026 estate tax exemption, why prior scare tactics were premature, and what this means for your estate planning going forward.
Estate tax laws can change over time, and these changes may affect how individuals and families approach their estate plans. The 2026 estate tax exemption update brought an important change by preventing the federal estate tax exemption from returning to the lower amount that was previously scheduled for 2026.
Understanding these changes can help you make informed decisions about your estate planning goals and whether your current plan still reflects your needs.
Understanding the Federal Estate Tax Exemption
The federal estate tax exemption determines how much a person can transfer at death before federal estate taxes may apply. In 2025, the exemption amount was $13.99 million per person, meaning a married couple could potentially have a combined exemption of $27.98 million.
Assets above the exemption amount may be subject to a 40% federal estate tax rate. Because of this, changes to the exemption amount can be an important consideration for individuals and families with larger estates.
2026 Estate Tax Exemption Update: What Changed?
The 2026 estate tax exemption update increased and extended the exemption amount.
Beginning in 2026, the federal estate tax exemption is set at:
- $15 million per person
- $30 million for a married couple
The exemption amount will also continue to be adjusted for inflation in future years.
Another important part of this update is that the new law does not include an expiration date. This means the previous concern about the exemption automatically returning to approximately $5 million is no longer present unless Congress passes new legislation in the future.
Why Estate Tax Planning Should Be Based on Current Laws
Changes in tax laws can create uncertainty, especially when future legislation is unknown. Before the 2026 changes were finalized, some individuals were concerned that they needed to immediately pursue complex estate planning strategies to reduce potential estate tax exposure.
However, estate planning decisions should be based on your specific circumstances, goals, and the laws currently in effect. Advanced planning strategies may be appropriate for some individuals, but they are not necessary for everyone.
A thoughtful estate plan should consider more than just estate taxes. Factors such as family circumstances, asset protection goals, charitable intentions, business ownership, and how you want your assets managed can all play a role in creating an effective plan.
How the 2026 Estate Tax Exemption Update May Affect Your Planning
Every estate plan is different, and tax considerations are only one part of a complete planning strategy. Understanding the current law and reviewing your goals with an experienced estate planning attorney can help you determine whether updates to your plan may be appropriate.
To learn more about how tax exemption laws may relate to your estate planning goals, visit Litherland, Kennedy & Associates or register for one of the firm’s upcoming estate planning presentations.
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