IRS Announces Higher Gift and Estate Tax Exemptions for 2026 — What Texas Families Need to Know

Every fall, the IRS releases updated numbers that quietly shape how families can pass wealth to the next generation. For 2026, the announcement brings significant good news — and an important change that makes this year's update especially notable.

The 2026 Numbers

The annual gift tax exclusion will remain at $19,000 per recipient in 2026, the same as 2025. The estate and gift tax exemption will be $15 million per individual — up from $13.99 million in 2025. A married couple can now shield a total of $30 million without paying any federal estate or gift tax. Morgan Lewis

Why the Exemption Jump Is Bigger Than Usual

This increase is not just an inflation adjustment. The federal estate tax exemption jumped to $15 million because of the passage of the One Big Beautiful Bill Act, signed into law on July 4, 2025. Southern Ag Today And critically, the previous provision that would have reduced the lifetime exemption to approximately $7 million per person in 2026 is no longer in effect. Federatedinsurance Many families had been anxiously watching that potential sunset — that concern is now resolved.

What This Means in Plain Language

The annual gift exclusion is the simpler of the two numbers. You can give up to $19,000 to any individual — a child, grandchild, friend — without filing a gift tax return or using any of your lifetime exemption. A married couple can give $38,000 per recipient per year. These annual gifts reduce the size of your taxable estate over time, one year at a time.

The lifetime exemption is the larger shield. It covers everything above those annual gifts — large transfers, assets passed at death, and wealth moved into trusts. At $15 million per person, the vast majority of Texas families will not owe federal estate tax. But for those with growing businesses, appreciating real estate, or investment portfolios, staying current on these numbers matters.

What Families Should Do Now

Even if federal estate tax doesn't currently apply to your estate, these updates are a good reason to review your plan. Beneficiary designations, trust structures, and gifting strategies should all reflect current law. And for families with larger estates, the now-permanent higher exemption opens planning opportunities that may not have seemed urgent before.

📌 Contact Fan Law Office to schedule a review of your estate plan in light of the 2026 changes.