Definition
The federal estate and gift tax exemption shelters a set amount of lifetime taxable transfers and estate value from federal transfer tax.
How It Works
For 2026, the federal estate and gift tax exemption is $15 million per individual, or $30 million for a married couple using portability, indexed for inflation.
Example
A married couple uses both spouses' exemptions through planning to shield a large combined estate from federal estate tax.
When It Works Best
Planning is most valuable when an estate approaches or exceeds the exemption, and when using exemption before scheduled reductions.
Who It Applies To
Individuals and families with estates near or above the exemption.
Watch-Outs
Portability, prior taxable gifts, state estate taxes, valuation discounts, trust design, and basis planning can materially change the outcome.
