Glossary

Federal estate tax exemption

The amount a person can pass at death or give during life before federal estate and gift tax applies: $15 million per person for 2026, per the IRS.

Also called: estate tax exemption, basic exclusion amount, lifetime exemption, unified credit

The federal estate tax exemption, formally the basic exclusion amount, is the value of property a person can transfer during life or at death before federal estate or gift tax applies. It is a single, unified amount: taxable gifts above the annual exclusion use up part of it during life, and whatever remains shelters the estate at death.

According to the IRS, the basic exclusion amount is $15 million per person for 2026. Public Law 119-21, the 2025 tax law known as the One Big Beautiful Bill Act, set that figure with no expiration date, replacing a scheduled drop to roughly half the 2025 level, and it will be indexed for inflation starting in 2027. A surviving spouse can also use the deceased spouse's unused exclusion through portability by filing a timely estate tax return. Hypothetical example: a husband dies in 2026 having used none of his $15 million; his widow elects portability and can later shelter up to $30 million, plus any inflation increases to her own amount.

Many state estate taxes start far lower, and Congress can change the federal amount again. Life insurance owned by the insured counts toward the estate. See life insurance and the federal estate tax and the estate tax exposure check.

Last reviewed October 4, 2026

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Related terms

Estate tax A federal tax on the transfer of a deceased person's assets above an exemption amount, with a top rate of 40%; some states levy their own. Gift tax annual exclusion The amount you can give any one person each year without filing a gift tax return or using lifetime exemption: $19,000 per recipient in 2026, per the IRS. Estate Everything a person owns at death, from property and accounts to some life insurance, which is settled and distributed to heirs and creditors. Irrevocable life insurance trust (ILIT) A trust that owns life insurance and can't be changed or revoked by its creator, keeping the death benefit out of the insured's taxable estate. Crummey letter A written notice telling a trust beneficiary of a temporary right to withdraw a new contribution, so the gift qualifies for the annual gift tax exclusion.

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Related tools

Estate tax exposure check Estimates 2026 federal estate tax on your assets and life insurance, and shows how much of it comes from policies you own.