When people ask what the estate tax exemption is in 2026, they usually want one clear number — and then a calm sense of whether it still matters for their family. Under the Working Families Tax Cuts (Public Law 119-21), the federal basic exclusion amount for 2026 is $15,000,000 per person. A married couple that uses portability can effectively shelter about $30 million. Those figures come from the IRS What’s new — estate and gift tax page and the Instructions for Form 706.
What that means in everyday words: many families have more room under the federal line than headlines from a few years ago suggested. The useful next question is still the same — if your estate is growing, illiquid, or spread across a business and real estate, how do you leave cash for heirs so they are not forced to sell what you built?
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You can also start with a rough picture using the Federal Estate Tax calculator on our estate planning page — then bring that sketch to a conversation about your goals.
This article is general education, not tax or legal advice. Pienza is not an RIA, CPA, or law firm. Your tax professional and estate counsel confirm how the rules apply to your facts. An illustration is not a contract.
What “exemption” means in plain English
The federal estate tax basic exclusion amount — often called the estate tax exemption — is the amount of estate value you can generally leave before federal estate tax may apply. For deaths in 2026, that amount is $15 million per person under the statute and IRS tables cited above.
Portability is the piece that turns one person’s unused exclusion into a gift for the surviving spouse. In plain English: if the first spouse to die does not use the full $15 million, the executor can elect on a timely Form 706 to transfer the unused amount — called the deceased spousal unused exclusion, or DSUE — to the survivor. Done correctly, that is how a married couple can effectively approach about $30 million of federal shelter. The election is a filing choice for the estate’s advisors; it is not automatic, and the details belong with counsel and the Form 706 instructions rather than a do-it-yourself form walkthrough.
A short related fact from the same IRS page: the annual gift tax exclusion for 2026 is $19,000 per recipient. That is a yearly gift-tax threshold for many ordinary gifts, separate from the lifetime estate-and-gift exclusion. Best practices typically include coordinating large gifts with your CPA so annual and lifetime rules stay aligned.
One calm note on the horizon: under the current statute, inflation indexing of the $15 million amount begins in 2027. The IRS publishes the indexed figure in its usual annual guidance when that year approaches. When the IRS publishes that figure, that is the number to plan with.
Who may still be close to the line
Fifteen million dollars is a large number. It is not a reason to ignore planning if your balance sheet is growing or hard to sell on a deadline.
Families who often take a calm second look include:
- Business owners whose company value, buy-sell needs, and personal assets add up faster than a bank statement suggests.
- Real estate owners with appreciated property, partnerships, or concentrated holdings.
- Growing estates where investments, life insurance you own on your own life, and other assets may climb over time.
- Households in states with their own estate or inheritance taxes, which can apply at lower thresholds than the federal line even when the federal exemption feels comfortable.
None of those patterns means you are “in trouble.” They mean the federal number is one input, and liquidity, ownership, and state rules are others. Depending on your goals, a rough net-worth sketch plus a look at the Federal Estate Tax calculator on estate planning is a useful starting point — then a specialist conversation turns the sketch into a plan that fits.
Business owners who want the insurance side of that conversation in one place can also skim business owner planning.
Where life insurance fits
Documents move title. They do not print cash on a known date. A life insurance death benefit can give heirs liquidity — cash for taxes, settlement costs, or fairness between heirs — so a trustee or family is not forced to sell a business, farm, or property under pressure.
That is the benefit many families underestimate. Equalizing an estate is a common job: one heir may keep the operating company or the home while others need a cash share. Replacement of capital the family still relies on is another. Using life insurance in your estate plan walks those jobs in more detail, including when trust ownership is part of the attorney’s outline.
Who owns the policy and who is named as beneficiary still matter. Best practices typically include lining owner and beneficiary designations up with the estate documents before you apply, and reviewing them after major life changes. Ownership planning is counsel work; sizing and placing the policy is the insurance conversation.
For couples focused on estate liquidity at the second death, second-to-die / survivorship life insurance is one optional chassis many estates discuss. Term versus permanent still frames the product choice for defined clocks versus lifelong jobs — see permanent vs term if you are mapping that fork. We will not invent a design that does not match the job your attorney and CPA described.
What to bring to a conversation
Bring a rough picture of net worth and how it is held — business interests, real estate, investments, and any policies you already own, with current beneficiaries. Note whether counsel has already mentioned federal or state estate tax, portability, or ownership of life insurance. If you have an in-force illustration or a recent policy review packet, bring that too.
Request a Consultation or call (858) 465-4366.
We will start with the 2026 exemption number and the job cash has to do for your heirs, then walk whether life insurance belongs beside the documents you already have. Your attorney and CPA own the filing and trust side. Pienza owns the insurance conversation — curiosity first, then a calm consult. For how we approach coverage more broadly, see life insurance.