Understanding the Upcoming Gift and Estate Exemption Reduction

With estate and gift tax policies continuously changing, we can help you understand the impact and implement strategies to preserve your wealth for future generations.

In 2026, the inflation-adjusted exemption is expected to return to its pre-2017 number, effectively reducing the limit by half.

As part of the 2017 Tax Cuts and Jobs Act, the lifetime estate and gift tax exemption was nearly doubled from $5.6 million to $11.18 million. Further indexed for inflation in 2023, the exemption rose to an all-time high of $12.92 million for individuals.

Starting January 1, 2026, the total exemption will reset to $7 million, forcing high net worth families and individuals to revisit estate planning. If you do nothing, your estate tax liability may be much higher than you expect if you pass away after this change.

The good news is, you still have time to utilize the current exemption amounts and opportunities—if you act quickly.

Estates grow over time, and the value of your estate today is not necessarily a good indicator of how these changes could impact gift and estate tax liability in the future. We can help you understand the value and potential of your estate and implement a range of strategies to prepare for the upcoming gift and estate tax sunset.

EisnerAmper’s gift and estate tax team has decades of experience in various strategies to maximize the wealth eligible to be transferred to your beneficiaries. We understand that everyone’s situation is unique, so whether it’s identifying creative and compliant ways to make annual taxable gifts, leverage lifetime exclusions, or establish trusts or other family entities—we have you covered.

Throughout the year-end tax planning season, many individuals are already working on estate planning with their tax and financial advisors. Generally, the main concern is how to take advantage of existing laws before making any substantial gifts to ensure that you have sufficient liquidity for future needs as well as receive the intended tax benefit.