Congress enacted the One, Big, Beautiful Bill Act (OBBBA) in July 2025, and it reshaped the 2026 planning landscape. The most important takeaway is this: the large federal transfer tax exemption did not sunset at the end of 2025. Instead, it was preserved and reset higher. For many families, that shifts planning away from “use it now before it drops” and toward basis, 2026 income tax, and long-term trust design. As a Naperville estate planning lawyer, this is what I am talking about with my clients in Naperville, Plainfield, and beyond…
2026 Federal Estate and Gift Tax Numbers
Lifetime estate and gift exemption
For 2026, the federal basic exclusion amount is $15,000,000 per person (up from $13,990,000 in 2025). A married couple can potentially shield $30,000,000 with proper planning.
Transfer tax rate
The top federal estate, gift, and GST tax rate remains 40% on amounts above exemption.
Annual exclusion gifts
The annual exclusion remains $19,000 per recipient for 2026. Gift-splitting generally allows a married couple to transfer $38,000 per recipient without using lifetime exemption.
Gifts to a non-citizen spouse
The annual exclusion for gifts to a non-U.S.-citizen spouse increased to $194,000 for 2026.
2026 Federal Income Tax Snapshot
Marginal rates
The seven-bracket structure remains, with a top rate of 37%.
Standard deduction
For 2026, the standard deduction is:
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$16,100 (single; married filing separately)
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$32,200 (married filing jointly)
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$24,150 (head of household)
SALT deduction cap
The SALT cap increased to $40,000 beginning in 2025, with additional adjustments through 2029, and income-based phaseout mechanics apply for higher earners. This is a meaningful change for many high-tax-state households.
Charitable deduction changes
OBBBA materials describe a new threshold framework for itemized charitable deductions and a limited deduction opportunity for certain non-itemizers, making deduction timing and AGI management more important than before.
What This Means for Estate Planning in 2026
With a permanent, inflation-indexed high exemption, federal estate tax planning is now more selective. In many cases, I am focusing more heavily on the following:
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Basis planning and capital gains management
Holding appreciated assets until death may preserve a step-up in basis, which can reduce built-in gain for heirs. -
Trust design for flexibility, not just exemption use
SLATs and related irrevocable structures remain useful for the right household, especially where creditor protection, control, and multigenerational planning are priorities. -
Income tax efficiency inside trusts
Non-grantor trusts hit top federal brackets quickly, so distribution strategy, DNI planning, and trust-level deduction analysis are central. -
State-level transfer tax exposure
Even with a high federal exemption, state estate or inheritance tax rules can still create tax exposure at much lower thresholds in several jurisdictions.
Key Takeaways
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The federal exemption is $15 million per person in 2026.
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The top transfer tax rate remains 40%.
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Income tax brackets and deduction structure remain broadly familiar, but SALT and charitable rules changed planning math.
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For many families, 2026 planning is less about a federal sunset deadline and more about income tax basis, trust taxation, and state-level risk.