FEDERAL
Estate and Gift Tax Applicable Exclusion:
The amount that can be passed free of federal tax. Whatever amount is used during lifetime is no longer available for use to pass assets at death. The Estate and Gift Tax Applicable Exclusion is currently $13.61 million.
Annual Gift Tax Exclusion:
The amount that can be given to each person you want without using any Applicable Exclusion. The Annual Gift Tax Exclusion is currently $18,000.
Generation-Skipping Tax Exemption:
This allows for giving to people who are grandchildren or other “skip persons.” It may also be used as a sophisticated way of avoiding Federal estate tax at the death of a child. Each person currently has $13.61 million of Generation-Skipping Tax Exemption.
STATE
State Estate Tax:
In addition to the Federal Estate Tax, many states have a State Estate or Inheritance Tax. State Estate and Inheritance Tax may apply at a much lower level than the federal tax. It may apply when a person dies when resident in or owning property in any of the many states with such a tax.
Frequently Asked Questions
What is the federal estate tax exemption in 2026?
The federal estate tax exemption is $15 million per individual for 2026, or $30 million for a married couple. This was set by the One Big Beautiful Bill Act signed into law on July 4, 2025, which permanently raised and indexed the exemption for inflation going forward.
What is the annual gift tax exclusion for 2026?
The annual gift tax exclusion remains $19,000 per recipient in 2026. A married couple can give up to $38,000 per recipient by electing gift-splitting on IRS Form 709. Gifts within the annual exclusion do not count against the lifetime exemption.
Does Washington state have its own estate tax?
Yes. Washington state imposes its own estate tax with a much lower exemption than the federal threshold. The Washington estate tax exemption is $2.193 million per individual (adjusted periodically). Estates above that threshold may owe Washington state estate tax even if no federal estate tax is owed.
Does Utah have a state estate tax?
No. Utah does not impose a state estate tax or inheritance tax. Utah residents are only subject to the federal estate tax, making Utah favorable for estate planning compared to states like Washington that impose their own death tax.
What is the top federal estate tax rate in 2026?
The top federal estate tax rate remains 40% in 2026 on the value of a taxable estate above the $15 million exemption. This rate applies to both estate tax and gift tax and has not changed under the One Big Beautiful Bill Act.
Do these federal changes affect my existing estate plan?
Yes, potentially. The increase in the federal exemption may change whether trusts designed to capture the prior exemption amount still serve their intended purpose. Both Washington and Utah clients should review existing plans with an estate planning attorney to ensure they remain optimized under current law.
What is portability and how does it work in 2026?
Portability allows a surviving spouse to use the deceased spouse’s unused federal estate tax exemption by filing IRS Form 706 within the required deadline. In 2026 a couple can effectively shield up to $30 million from federal estate tax if the first spouse’s unused exemption is preserved through a timely portability election.
