Updates to the Federal Estate Exemption Limit

Prior to the passage of the July Tax Bill, the One Big Beautiful Bill Act, the federal exemption amount for an estate was $10,000,000, as indexed to inflation, for an individual’s estate. After the passage of the tax bill, the exemption has increased to $15,000,000 ($30,000,000 for married couples).

The tax bill struck Internal Revenue Code § 2010(c)(3)(C), which provided for the exemption amount at $10M for only a temporary basis. Originally, the $10M exemption amount was to expire at the end of 2025. The tax bill then amended the basic exclusion to $15M, which is now the exemption amount that will apply indefinitely into the future. See IRC § 2010(c)(3)(A).

This $15M exemption will be inflation adjusted. See IRC § 2010(c)(3)(B).

The increase exemption amount offers a variety of planning mechanisms for persons and married couples who have assets in excess of this amount. Generally, people will ensure that the assets of their estate make full use of this exemption either upon death or earlier, through utilizing certain lifetime gifts and “locking in” the full value of the exemption.

If you have questions concerning the estate exemption limit and the recent updates that have come about because of the passing of the 2025 One Big Beautiful Bill, please consider reaching out to a lawyer at Estel Law today.