Under current law, the federal estate tax exemption is set at $15 million per individual. Here is what that means for your family and the planning decisions worth making now.
For years, one of the most common conversations we had with clients went something like this: "Should I rush to make gifts before the exemption drops?" That sense of urgency shaped estate planning for nearly a decade. With the passage of the One Big Beautiful Bill Act, under current law (as of mid-2026), the federal estate and gift tax exemption is set at $15 million per individual, or $30 million for married couples. The sunset that kept everyone on edge is no longer looming.
So what does that actually mean for you and your family? It means the planning conversation has changed, and in some important ways, it has gotten more interesting.
What Changed and Why It Matters
Under the Tax Cuts and Jobs Act of 2017, the federal estate tax exemption was roughly doubled to about $13 million per person, but that increase was scheduled to expire at the end of 2025. For years, advisors and clients alike operated under the assumption that the exemption would revert to approximately $7 million per individual. That uncertainty drove a wave of accelerated gifting and trust creation.
The new law sets the $15 million per person exemption under current law, adjusted for inflation going forward. Under current law (as of mid-2026), the federal estate tax rate for amounts above that threshold remains at 40%. The annual gift tax exclusion holds at $19,000 per recipient (as of mid-2026), allowing married couples to transfer $38,000 per recipient each year without touching their lifetime exemption.
For families with estates under $30 million, this may feel like the pressure is off. And in some ways, it is. But "permanent" in Washington has always come with an asterisk. Future administrations and Congresses can, and often do, revisit tax policy. The families who benefit most from this environment are not the ones who relax; they are the ones who use this stability as a foundation for thoughtful, long term planning.
Planning With Confidence, Not Complacency
This exemption level creates a period of relative stability in tax law. Rather than scrambling to beat a deadline, you now have the space to make deliberate decisions about how and when to transfer wealth. Of course, every strategy involves tradeoffs, and what works well for one family may not suit another. These are conversations to have with your full advisory team, including your tax and legal counsel.
Here are several strategies worth exploring:
Lifetime gifting with appreciating assets. Gifting assets you expect to grow in value can be an effective way to move future appreciation outside your taxable estate. A $5 million interest in a business or real estate portfolio transferred today could appreciate significantly over time, with that growth occurring outside your estate. That said, gifting is irrevocable, and there are important considerations around control, liquidity, and the possibility that tax laws may change. The decision to gift should reflect your full financial picture, not just your tax picture.
Spousal Lifetime Access Trusts (SLATs). A SLAT allows one spouse to create an irrevocable trust for the benefit of the other spouse and descendants, using their lifetime exemption while maintaining indirect access to the trust assets. Each spouse can fund a SLAT for the other, effectively leveraging both exemptions while preserving some flexibility. However, SLATs are irrevocable, and the indirect access they provide depends on the marriage remaining intact. They also carry complexity in administration and potential IRS scrutiny, particularly when both spouses create reciprocal trusts.
Revisiting existing trusts. If you established irrevocable trusts in the years before 2026 to use your exemption before it expired, those structures may deserve a fresh look. The goals that drove those decisions may have shifted now that the exemption has been reset at this level. A periodic review ensures your trust structure still reflects your family's current priorities and circumstances.
Valuation discounts for family businesses. Transferring minority interests in a closely held business may qualify for valuation discounts, sometimes reducing the taxable value by 25% to 35% (actual discounts vary, are fact-specific, and may be challenged by the IRS). However, the IRS has increasingly scrutinized these discounts, and improper valuations can trigger penalties and audits. Working with a qualified appraiser is essential. For business owners considering a succession plan, combining gifting strategies with business succession planning could create a path that is both tax efficient and operationally sound.
What This Means for Business Owners
If you have built, grown, or recently sold a business, this exemption level has particular significance. Business owners often hold a substantial portion of their net worth in a single, illiquid asset. The $15 million exemption gives you more room to plan a transfer of ownership across generations, or to restructure holdings after a liquidity event, without feeling rushed by an expiring deadline.
For those who have already completed a sale, the combination of a higher exemption with thoughtful charitable planning (through donor advised funds, charitable remainder trusts, or private foundations) may help reduce the tax burden on your estate while supporting causes that matter to your family. Each of these vehicles carries its own rules and limitations, so they require careful structuring.
For those still building their business, this may be an opportunity to integrate estate planning with your growth strategy early, when the assets are smaller and the discounts may be larger.
At RBG Capital, many of our client relationships begin at exactly this intersection. Someone has spent decades building a company and is now thinking about what comes next, not just for the business but for the wealth it has created. Having an independent wealth advisory team that understands both sides of that equation makes a meaningful difference.
Do Not Overlook State Estate Taxes
The federal exemption may be $15 million, but not every state follows suit. States like Massachusetts, Oregon, and New York impose their own estate taxes with exemption thresholds well below the federal level. If you own property, a business, or have residency ties in a state with its own estate tax, your planning needs to account for both layers.
Even in states without a separate estate tax, such as Arizona, clients with multistate interests (a vacation home, rental properties, or a business operating in another jurisdiction) should coordinate their planning across state lines. This is one of those areas where a comprehensive advisory relationship pays for itself many times over.
The Real Opportunity Is Clarity
The most meaningful takeaway from the new exemption is not a number. It is the ability to plan with a steady horizon. For years, families put off decisions or made hurried ones because the rules felt temporary. Now there is room to be intentional: to align your estate plan with your values, your family dynamics, and your long term vision for the wealth you have built.
That kind of planning works best when it is coordinated. Your investments, your tax strategy, your estate documents, and your charitable giving should all be part of a single, coherent picture. If they are being managed in silos, or if your plan has not been reviewed since before the old sunset deadline, this is an ideal moment to bring it all together.
We invite you to schedule a confidential consultation with our team. The initial conversation is complimentary, and it is a chance to take stock of where you stand in light of the new rules. There is no obligation and no sales pitch; just a candid look at whether your plan is working as hard as your wealth.
This content is for informational purposes only and does not constitute investment, tax, or legal advice. Individual circumstances vary. Please consult a qualified advisor before making decisions about your business or financial situation.
