Estate Tax Exemption 2026: The $7M Sunset Is Gone — But Your State May Still Tax Your Estate

# Estate Tax Exemption 2026: The $7M Sunset Is Gone — But Your State May Still Tax Your Estate

> **Quick answer:** The feared estate tax exemption sunset has been permanently cancelled. The One Big Beautiful Bill Act (signed July 4, 2025) raised the federal estate tax exemption to $15 million per person — up from $13.99 million — effective January 1, 2026, with no expiration date. However, 13 states and D.C. still impose estate taxes with exemptions as low as $1 million. If you live in Massachusetts, Oregon, Illinois, New York, or 10 other states, your family may owe substantial estate taxes even if you never touch the federal threshold. This guide explains what changed, who is still at risk, and the strategies estate planning attorneys are recommending right now.

Every financial news outlet spent 2024 and early 2025 warning high-net-worth families that the estate tax exemption would be cut nearly in half by January 2026. That deadline came and went — replaced by something nobody expected: a permanent, inflation-adjusted $15 million federal exemption. But the relief is not universal, and the planning window is narrower than most families realize.

## What Actually Happened to the Estate Tax Exemption in 2026

The Tax Cuts and Jobs Act of 2017 (TCJA) temporarily doubled the federal estate and gift tax exemption from roughly $5 million (inflation-adjusted) to $11.18 million per person. By 2025, that figure had grown to $13.99 million per individual, or $27.98 million for married couples using portability.

The TCJA contained a hard sunset clause: without congressional action, the exemption would revert to approximately $7 million per person on January 1, 2026. Estate planning attorneys, wealth managers, and financial advisors spent years warning clients to act before the drop. For families with estates between $7 million and $14 million, the stakes were enormous — potentially millions of dollars in federal estate taxes.