For nearly eight years, a deadline of December 31, 2025 loomed for the expiration of several components of the 2017 Tax Cuts and Jobs Act, including the inflation-adjusted per-individual lifetime gift and estate exclusion of $13,990,000. If Congress had taken no action, the exclusion amount would have dropped by about half in 2026. Congress did act by passing the One Big Beautiful Bill Act, signed into law July 4, 2025. Under the Act, the federal gift and estate exclusion remains at $13,990,000 per individual through 2025, increases to $15,000,000 on January 1, 2026, and is adjusted annually for inflation in 2027 and beyond.
While the extension of the exclusion amount relieves some pressure to accelerate wealth transfer planning, taxpayers with growing assets and estate values likely to exceed the federal exclusion are well-advised to pursue such planning. Other taxpayers unlikely to reach the newly extended federal estate exclusion threshold might also consider planning that accounts for state estate tax exposure or that maximizes income tax cost basis adjustments.