The new tax cut and spending bill known as the “One Big Beautiful Bill Act,” which was signed into law on July 4, 2025, increases federal estate, gift, and generation-skipping transfer (“GST”) tax exemptions to $15 million for 2026, an increase from the current inflation-adjusted amount of $13.99 million applicable in 2025. Without this legislative change, such exemptions would have decreased to roughly $7 million in 2026. The $15 million is indexed for inflation for years after 2026, and unlike prior iterations of tax law, this increase does not expire or sunset. As such, it would require new law (rather than mere inaction) for federal wealth transfer tax exemptions to be decreased.
The new tax law includes other changes that may be relevant for income tax planning, including changes to the charitable deduction and changes to the law regarding the deductibility of state and local taxes.
Although the exemptions are no longer scheduled to decrease on January 1, 2026, many wealthy families will still want to engage in strategic wealth transfer planning and gifting or revisit their wills.
