Is Your Estate Plan Over-Engineered? The 2026 Exemption Changes Everything

Effective January 1, 2026, the federal estate and gift tax exemption increased to $15 million per individual and $30 million per married couple—with no sunset provision.

This is a seismic shift for estate planning.

What Changed

For years, estate planners operated under the assumption that the 2017 Tax Cuts and Jobs Act exemption levels would sunset in 2026, reverting to roughly $6-7 million per person. Many clients implemented complex strategies—irrevocable trusts, generation-skipping structures, and aggressive gifting programs—to lock in higher exemptions before the deadline.

That deadline never came. Congress made the $15 million exemption permanent.

What This Means for Your Clients

For the vast majority of Americans, the federal estate tax is now irrelevant. An individual would need to transfer more than $15 million—or a couple more than $30 million—before owing a single dollar in federal estate tax.

The generation-skipping transfer (GST) tax exemption also increased to $15 million, and beginning in 2027, both exemptions will be indexed for inflation.

The Planning Implications

Many existing estate plans may now be over-engineered. Clients who implemented complex irrevocable structures primarily for estate tax avoidance may benefit from revisiting their plans. In some cases, simpler revocable trusts focused on probate avoidance and asset management may better serve their needs.

However, state estate taxes remain a concern. Several states maintain their own estate taxes with significantly lower thresholds. And non-tax benefits of trusts—creditor protection, privacy, incapacity planning—remain valuable regardless of exemption levels.

The Bottom Line

If you haven’t reviewed client estate plans in light of the 2026 changes, now is the time. What made sense under threat of a sunset may be unnecessarily complex in a world with a permanent $15 million exemption.