The year 2026 may seem far off, but in the world of estate and gift taxation, it’s closer than it appears. That’s when a major provision of the Tax Cuts and Jobs Act (TCJA) sunsets—leading to significant reductions in lifetime gift and estate tax exemptions. For high-net-worth individuals and families planning to transfer wealth, understanding these estate and gift tax changes in 2026 is critical to making informed financial decisions now, while the clock is still ticking.

Let’s explore what’s changing, what strategies can still be implemented, and why waiting could be costly.

A Quick Look at the Current Estate and Gift Tax Limits

Under the TCJA, the estate and gift tax exemption was nearly doubled, allowing individuals to transfer up to $13.61 million in 2024 ($27.22 million for married couples) without incurring federal estate or gift tax. These limits apply to both lifetime gifts and assets transferred at death.

However, this generous exemption won’t last forever.

Unless Congress takes new action, the higher exemption will revert back to pre-2018 levels—adjusted for inflation—on January 1, 2026. This could bring the individual exemption down to roughly $6–7 million, effectively slicing today’s tax shelter nearly in half.

What Changes in 2026?

Starting in 2026, the following key changes are expected to take place:

1. Reduced Lifetime Estate and Gift Tax Exemption

The most impactful shift will be the shrinking exemption amount, which will drastically affect how much wealthy individuals can transfer tax-free.

If you plan to gift or pass on significant wealth, it’s wise to take advantage of the current exemption before it contracts. Making large gifts now can lock in today’s higher limits—even if you pass away after 2026. The IRS has already clarified that there will be no clawback on gifts made under the higher exemption.

2. Revised Tax Rates Remain Unchanged—For Now

The top federal estate and gift tax rate remains 40%, and although the exemption amount will change, the rate itself is not currently scheduled to shift. Still, paying tax on an estate of $15 million under a lower exemption could easily result in a seven-figure tax bill.

Why Families Should Act Before 2026

For high-net-worth families, the window to leverage favorable tax treatment is narrowing. If no action is taken before the sunset provision takes effect, millions of dollars in potential tax savings may be lost.

Consider a couple with an estate worth $20 million. Today, they can shield nearly all of that from federal estate tax. But after 2025, up to $6–8 million could become taxable, exposing them to taxes approaching $2.5–3 million.

It’s also important to recognize that estate planning isn’t just about passing on wealth. It’s about maintaining control, reducing conflict, and ensuring your legacy is preserved.

What Is Gift Splitting? A Simple Strategy with Big Potential

One often-overlooked strategy that may help families maximize their giving before 2026 is gift splitting. Then, what is gift splitting?

Gift splitting allows a married couple to combine their annual gift tax exclusions—even if only one spouse provides the funds. For 2024, the IRS allows individuals to gift up to $18,000 per recipient per year without triggering the lifetime exemption. But with gift splitting, couples can gift $36,000 to as many individuals as they like—tax-free.

Here’s how it works:

• John gives $36,000 to his daughter, but the money comes solely from his account.
• His wife, Mary, consents to split the gift.
• Together, they file IRS Form 709, indicating the shared nature of the gift.

This simple move doubles the power of annual giving and helps families gradually transfer wealth without tapping into the lifetime exemption.

When used consistently over years—and especially when paired with larger strategic gifts—gift splitting can dramatically reduce estate size before 2026’s changes take hold.

Understanding 2026 Tax Brackets for Married Filing Jointly

While estate and gift taxes get much of the attention, income tax planning is another key piece of the puzzle—especially for couples considering timing strategies around retirement, investment withdrawals, or business sales.

The 2026 tax brackets married filing jointly are expected to revert to pre-TCJA levels. That means higher marginal tax rates on the same income.

Here’s a side-by-side comparison of what couples might face:

Tax Year	Top Marginal Rate	Income Level Where It Applies
2024	37%	$731,200+
2026*	39.6%	~$470,700+

Projected based on pre-TCJA rates with inflation adjustments.

This shift means couples may benefit from accelerating income into 2024–2025 (e.g., converting retirement funds, taking bonuses early, or selling appreciated assets now) to take advantage of lower rates while they’re still available.

Key Planning Strategies Before the Sunset

Here are several tactics wealth-conscious families should consider now:

Maximize Use of the Current Exemption

• Make large gifts before 2026 to “lock in” the exemption
• Use trusts (like Spousal Lifetime Access Trusts, or SLATs) to gift assets while maintaining some access

Leverage Annual Exclusions and Gift Splitting

• Maximize annual gifts to children and grandchildren
• Use 529 education accounts or irrevocable trusts for longer-term planning

Revisit Your Will and Estate Documents

• Update beneficiary designations and ensure your estate plan reflects current tax law
• Coordinate planning with both legal and tax professionals to avoid mismatches

Consider Timing for Realizing Income

• Evaluate Roth conversions, investment sales, or bonuses in the context of future brackets

Partner with the Right Advisors Before the 2026 Tax Shift

No one can predict exactly how Congress will respond between now and 2026. There’s always a possibility of last-minute extensions or new tax laws that shift the landscape once again. But what’s certain is this: the laws we have today are known, favorable, and offer a rare opportunity for proactive wealth transfer. Effective estate and gift tax planning requires more than awareness—it demands timely action and expert guidance. With 2026 on the horizon, now is the time to assess your financial strategies, minimize potential tax burdens, and create a long-term plan tailored to your family’s goals.

Wiss brings together decades of experience in tax advisory and wealth management, supporting high-net-worth individuals, families, and business owners as they navigate complex tax landscapes. Their integrated approach—combining financial, legal, and estate planning expertise—ensures that every decision is strategic, compliant, and aligned with your legacy.

Whether you’re exploring lifetime gifting, updating your estate plan, or evaluating your exposure under changing tax brackets, Wiss can help you move forward with clarity and confidence.