Personal Finance & Estate › Income, gift, estate & real-estate taxes › Federal estate & gift tax (unified; California has none)
Estate & lifetime gift exemption ($15M in 2026)
$15M per person (2026)· Tax rule
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
The amount each person can give away during life or leave at death, combined, before the 40% federal estate and gift tax applies.
See it on the Personal Finance & Estate map →How it works
In 2026 it is $15 million per person, indexed for inflation afterward; a married couple can shelter $30 million. Lifetime gifts above the annual exclusion ($19,000 per recipient) use it up first; what remains covers the estate at death. A surviving spouse can keep the first spouse's unused amount ('portability'), but only by filing an estate tax return, Form 706, even when no tax is owed. California has no estate or inheritance tax. Common trap: skipping that filing.
Why it matters for you
Few estates now owe federal estate tax, so for most families the bigger issues are probate, liquidity and income-tax basis rather than the 40% tax.
Rules, limits and sources (2026)
IRC Sec. 2010, as amended by the 2025 OBBBA; IRS annual inflation adjustments. A 2019 Treasury regulation protects gifts made under higher exemptions from later 'clawback'.
Watch out for
Whether a future Congress lowers it again is unknown; values of illiquid assets such as LLC interests are often disputed with the IRS.
Inside this (1)
Connections (5)
▸Estate & lifetime gift exemption ($15M in 2026) shelters most estates from Federal estate & gift tax (unified; California has none)Law or rule (2026)
How they connect
The federal estate and gift tax charges 40% on transfers above the exemption. At $15 million per person, $30 million per couple, the exemption removes all but a tiny share of estates, so the tax mainly reaches large, often illiquid estates such as business or real-estate holdings.
When it applies
The exemption rose from $600,000 in the 1990s to $5 million in 2011, $11.18 million in 2018 and $15 million in 2026.
The rule
IRS Statistics of Income data show only a few thousand taxable estate returns a year, well under 1% of deaths.
Watch out for
The exemption has changed often; whether it stays at this level, and how heirs pay tax on illiquid assets, remain open questions.
▸Irrevocable trust can keep future growth from using up Estate & lifetime gift exemption ($15M in 2026)Depends on you
How they connect
Giving assets to an irrevocable trust uses exemption at today's value; all later growth happens outside the estate and never counts against it. The trade-offs: the giver gives up control, and heirs lose the step-up in basis at death, so built-in gains may be taxed later.
When it applies
Used by families with estates near or above the exemption, often through dynasty trusts, spousal lifetime access trusts (SLATs) and grantor trusts.
How sure?
IRC Secs. 2001, 2010 and 2511; Form 709 reports the gift; courts and the IRS have tested these structures for decades.
Watch out for
With a $15 million exemption, whether estate-tax savings beat losing the step-up is a case-by-case call for an estate attorney and CPA.
▸One Big Beautiful Bill Act (2025 tax law) raised and made permanent Estate & lifetime gift exemption ($15M in 2026)Law or rule (2026)
How they connect
The 2017 law had doubled the exemption only through 2025, and it was set to fall to roughly $7 million in 2026. The 2025 law instead set it at $15 million per person for 2026, indexed for inflation afterward, with no sunset date.
When it applies
Signed July 4, 2025; effective for deaths and gifts after December 31, 2025, and for the generation-skipping transfer tax exemption.
The rule
IRC Sec. 2010(c)(3) as amended; the IRS confirmed the $15 million figure in its 2026 inflation adjustments.
Watch out for
'Permanent' means no expiration date; a future Congress can still change it, as has happened repeatedly since 2001.
▸Generation-skipping transfer (GST) tax has an exemption equal to Estate & lifetime gift exemption ($15M in 2026)Law or rule (2026)
How they connect
By law, the GST exemption equals the estate and gift exemption: $15 million per person in 2026, rising with inflation. But it works separately: you allocate it to specific gifts and trusts, it isn't portable to a spouse, and any unused amount is auto-allocated at death under default rules.
When it applies
Linked since the 2001 tax law; the 2025 law set the shared $15 million figure for 2026.
The rule
IRC Sec. 2631(c) sets the GST exemption equal to the basic exclusion amount under Sec. 2010(c).
Watch out for
If a future law cut the exemption, how earlier GST allocations would be treated is unclear; IRS anti-clawback rules address estate tax, not GST.
▸Portability of a deceased spouse's unused exemption (DSUE) passes a late spouse's unused share of Estate & lifetime gift exemption ($15M in 2026)Law or rule (2026)
How they connect
Each spouse has an estate exemption, $15 million in 2026. If the first to die uses little of it, often because everything passes to the survivor under the marital deduction, portability transfers the unused amount to the survivor, who can use it for lifetime gifts or at death, up to $30 million combined.
When it applies
Created for deaths after 2010 by the 2010 Tax Relief Act and made permanent by the American Taxpayer Relief Act of 2012.
The rule
IRC Sec. 2010(c)(4)-(5); Treasury Reg. 20.2010-2 requires a timely, complete Form 706.
Watch out for
The DSUE isn't indexed, so decades later it may lag the survivor's growing exemption; planners weigh that against bypass trusts.