When Congress passed the Tax Cuts and Jobs Act (TCJA) of 2017, one of the most significant changes for families with substantial assets was the temporary doubling of the estate tax exemption. This created unprecedented flexibility for wealth transfer.
For 2025, the estate tax exemption is set at $13.99 million per individual or $27.98 million per married couple, adjusted for inflation. Beginning in 2026, that exemption will change again — a shift that affects families at many different stages of their financial journey.
Understanding how these changes impact you, your family, and your charitable goals is essential to making thoughtful, proactive decisions.
An estate tax exemption is the amount of wealth you can transfer at death before federal estate taxes apply. Anything above the exemption may be subject to estate tax.
For example:
This distinction matters. It allows families to make strategic choices about wealth transfer, minimizing tax exposure while aligning with their legacy goals.
The 2017 legislation temporarily doubled the exemption, creating an opportunity for families to pass on more wealth without incurring estate tax.
This uncertainty led many families to consider gifting strategies, irrevocable trusts, and charitable giving to take advantage of the higher exemption before it potentially expired.
At the start of this year, there was speculation: would Congress make the higher exemption permanent, or let it revert?
We now have clarity:
This permanence was established through the One Big Beautiful Bill Act (OBBBA), which removed the sunset provision from the 2017 legislation and locked in the higher exemption levels.
This is a meaningful shift. For families, it represents not just an opportunity, but also a renewed call to revisit financial plans and estate strategies.
Whether your estate is near the exemption threshold or well below it, planning today can help position your wealth for future generations.
Consider a business owner with an estate valued at $25 million in 2025.
That $1 million difference in taxable estate could mean hundreds of thousands of dollars saved in estate tax liability, simply due to the timing of legislation.
While the higher exemption provides flexibility, estate planning is about much more than tax efficiency. It’s about ensuring that your wealth is used in ways that reflect your values, your family’s needs, and your legacy goals.
At Gatewood, we often remind families:
If you haven’t reviewed your estate plan recently, now is the time. Key steps include:
The 2026 estate tax exemption update offers an expanded opportunity to transfer wealth on your terms. Whether you are focused on retirement readiness, business succession, or family legacy, planning today can help you pursue your goals with clarity.
At Gatewood, our advisors work closely with clients and their attorneys to design strategies tailored to life stage and family priorities.
Schedule a conversation with our team today to explore how these changes may apply to your financial plan.
Important Disclosures:
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.