Short answer: The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, permanently set the federal estate and gift tax exemption at $15 million per individual and $30 million per married couple, effective January 1, 2026, with inflation indexing beginning in 2027. The long-anticipated "sunset," which would have cut the exemption roughly in half, is gone. For the overwhelming majority of Florida families, this means no federal estate tax exposure — but it does not mean estate planning is unnecessary. Probate avoidance, incapacity planning, guardianship prevention, blended-family control, and asset protection all exist independently of the federal tax threshold.
Key Takeaways
- The OBBBA permanently set the federal estate, gift, and GST tax exemption at $15 million per individual and $30 million per married couple, effective January 1, 2026, with inflation indexing beginning in 2027.
- The feared TCJA “sunset” that would have roughly halved the exemption is gone; there is no built-in expiration date, though a future Congress could still change it.
- Gifts made before 2026 are not clawed back, and families who gifted heavily in 2024-2025 simply have more exemption remaining today.
- Florida imposes no state estate or inheritance tax, so most Florida families now have no federal or state estate tax exposure.
- Estate planning still matters regardless of tax exposure: probate avoidance, incapacity planning, guardianship prevention, blended-family control, and asset protection are all independent of the exemption.
- Families near or above the $15-30 million range, and anyone owning property in one of the 12 states (plus D.C.) that levy their own estate tax, should continue active planning.
What the OBBBA Actually Changed
For years, estate planning was shadowed by a scheduled event: the Tax Cuts and Jobs Act's temporary doubling of the exemption was set to expire at the end of 2025, which would have dropped the exemption from roughly $14 million back to around $7 million per person. Families rushed to make large lifetime gifts before that deadline out of fear of losing the higher exemption.
The OBBBA eliminated that cliff entirely. Beginning January 1, 2026, the basic exclusion amount is $15 million per individual, or $30 million per married couple using portability. The increase applies to the estate tax, the gift tax, and the generation-skipping transfer (GST) tax alike, and — critically — it has no sunset provision. Starting in 2027, the figure will adjust annually for inflation rather than reverting to a lower baseline.
Federal Estate Tax Exemption by Year
- 2017 (pre-TCJA): $5.49 million per individual; $10.98 million per married couple with portability
- 2018 (TCJA enacted): $11.18 million per individual; $22.36 million per married couple with portability
- 2025 (final pre-OBBBA year): $13.99 million per individual; $27.98 million per married couple with portability
- 2026 (OBBBA, permanent): $15.00 million per individual; $30.00 million per married couple with portability
The top federal estate tax rate on amounts above the exemption remains 40%.
What Happens to Gifts Made Before 2026?
Nothing negative. The IRS's anti-clawback regulations mean that gifts made under a lower exemption amount don't get retroactively penalized now that the exemption is higher — if anything, families who gifted heavily in 2024 or 2025 out of sunset anxiety simply have more exemption remaining today than they expected. The exemption is unified across lifetime gifts and transfers at death: gifts made during life reduce what's left to shelter the estate, but the higher permanent number applies going forward regardless of what was used previously.
Why This Still Matters for "Non-Taxable" Florida Estates
Florida has no state estate tax or inheritance tax, which means most Florida families were never going to face a Florida-specific transfer tax to begin with. Combined with a $15 million federal threshold, the practical result is that federal estate tax is now a concern for a small fraction of households. That's genuinely good news, but it tends to produce a specific mistake: assuming that because there's no tax bill coming, there's nothing left to plan for.
Estate planning was never only about minimizing estate tax. The tax question is one input among several:
- Probate still happens without a plan. A $15 million exemption doesn't avoid a single day of court involvement. Wills still go through probate; only trust-based planning and proper titling avoid it.
- Incapacity planning is unrelated to estate size. A durable power of attorney and healthcare documents matter the same amount whether your estate is worth $200,000 or $20 million — the alternative is a guardianship proceeding, which has nothing to do with tax exposure.
- Blended families and control over distributions. Who inherits, when, and under what conditions is a drafting question, not a tax question. A $30 million exemption doesn't tell your estate plan how to treat a second spouse, minor children, or a beneficiary you'd rather not hand a lump sum.
- Asset protection is separate from tax planning. Trusts that shield assets from creditors, judgments, or a beneficiary's future divorce operate independently of the federal exemption amount.
- State-level exposure if you own property elsewhere. Twelve states and the District of Columbia impose their own estate tax, often at thresholds far below $15 million — Oregon taxes estates above $1 million and Massachusetts above $2 million, for example. A Florida resident who owns a second home in one of those states can still face state-level estate tax there regardless of the federal number.
Who Should Still Be Actively Planning Around the $15M Threshold
Families with combined estates approaching or exceeding $15–30 million, business owners with appreciating closely held companies, and anyone holding significant assets likely to grow substantially before death still benefit from lifetime gifting strategies, irrevocable trusts, and valuation planning — the exemption is generous, but it's not unlimited, and removing future appreciation from a taxable estate through structures like SLATs, GRATs, or ILITs remains a live strategy for that group.
The Bottom Line
The OBBBA removed a deadline that had been driving urgent, sometimes rushed estate planning decisions for years. That's a genuine relief for most families. But a permanent, generous federal exemption answers only the tax question — it says nothing about probate, incapacity, guardianship, blended-family dynamics, or asset protection. If your existing plan was built around the old sunset deadline, or built on the assumption that estate tax was the only reason to plan, it's worth a review under the current rules.
Frequently Asked Questions (FAQ)
What is the federal estate tax exemption for 2026?
$15 million per individual and $30 million per married couple using portability, set permanently by the One Big Beautiful Bill Act, effective January 1, 2026.
Did the estate tax exemption actually get cut in half like everyone expected?
No. The scheduled reduction under the Tax Cuts and Jobs Act sunset — which would have dropped the exemption to roughly $7 million per person — was prevented entirely by the OBBBA.
Is the $15 million exemption really permanent?
It has no built-in sunset provision, unlike the prior TCJA exemption. Congress could still change it through future legislation, but as tax law goes, it's about as permanent as these thresholds get.
Will the exemption increase over time?
Yes. Starting in 2027, the $15 million figure is indexed for inflation and will rise annually.
Does Florida have its own estate tax?
No. Florida has no state estate tax or inheritance tax, so Florida residents' only estate tax exposure is generally at the federal level — unless they own real property in a state that imposes its own estate tax.
If my estate is well under $15 million, do I still need an estate plan?
Yes. Estate tax exposure is only one of several reasons to plan. Probate avoidance, incapacity planning, guardianship prevention, and control over how and when beneficiaries inherit are all independent of your estate's tax status.
What happened to gifts I made in 2024 or 2025 before the exemption increased?
They remain valid, and there's no clawback penalty. In fact, the exemption used against a lower prior-year threshold effectively leaves more of the new, higher exemption available going forward.
Should high-net-worth families stop making lifetime gifts now that the exemption is permanent?
Not necessarily. For estates approaching or exceeding the threshold, lifetime gifting still removes future appreciation from the taxable estate — the urgency created by the old sunset deadline is gone, but the underlying strategy still applies for larger estates.
Protect Your Family's Future
A permanent $15 million exemption answers the tax question, but not the rest of your plan. The Hollywood estate planning lawyers at Kramer Green can review your estate plan under the current rules. Schedule a confidential consultation or call us at 954-966-2112 today.
This article is for general informational purposes and does not constitute legal advice. Estate planning decisions should be made in consultation with a licensed Florida attorney based on your specific circumstances.