A New Chapter in Trump’s Tax Legacy
Former President Donald Trump is backing a new tax proposal that would permanently raise the federal estate tax exemption to $15 million per individual—or $30 million for married couples—starting in 2026. The measure is included in the House GOP’s sweeping “One Big Beautiful Bill Act,” which has already passed the House and is now being considered by the Senate. If enacted, it would cement one of the largest estate tax breaks in U.S. history and remove much of the uncertainty surrounding long-term estate planning.
The estate tax exemption is currently $13.99 million but is scheduled to drop by about half in 2026 when key parts of Trump’s original 2017 Tax Cuts and Jobs Act are set to expire. The new plan would not only prevent that rollback but raise the exemption even higher, with annual adjustments for inflation and no expiration date.
The proposed change would eliminate federal estate taxes for thousands of wealthy individuals and families who are currently preparing for the exemption to shrink. Under current law, an individual who dies in 2026 with a $15 million estate could owe around $3.14 million in federal estate taxes. Under Trump’s plan, that same estate would owe nothing.
The result is a massive savings for high-net-worth families. A married couple worth $30 million could avoid around $6 million in estate taxes compared to what they would pay under existing law.
According to tax lawyer Matthew Widmyer, this kind of permanent change is a “game changer” for wealth planning. “The permanence is a big deal for our family businesses, so they can do more long-term succession planning,” said Palmer Schoening, chair of the Family Business Coalition.
Trump has long called for the elimination of the estate tax, often referring to it as a “death tax” that unfairly punishes successful families. While his 2017 tax law temporarily doubled the exemption, budget restrictions meant that increase was never permanent. Now, Trump and Republican allies in Congress are trying to make it stick for good—and even raise it slightly higher.
This move fits into a broader $4 trillion tax plan that also includes changes to the Alternative Minimum Tax and other personal and corporate tax rules. The estate tax provision alone would cost an estimated $212 billion over the next 10 years, according to the Joint Committee on Taxation.
Supporters argue that the higher exemption offers predictability and relief to small business owners, farmers, and multigenerational families. Opponents, however, say the proposal is a giveaway to the wealthy at a time when many lower-income provisions are either temporary or being cut altogether.
“This is one baby step away from eliminating the estate tax altogether,” said the Center on Budget and Policy Priorities, which estimates that the change would amount to a $5.7 million tax cut per couple in the highest income bracket.
Samantha Jacoby, deputy director of federal tax policy at the same organization, noted the imbalance: “They went out of their way to expand tax cuts for the wealthy on a permanent basis, but some new tax cuts for modest income people are temporary.”
Others point out that only a tiny fraction of estates pay the tax anyway. Fewer than one in 1,000 estates were subject to federal estate tax last year. Before the 2017 exemption increase, it was just over two in 1,000. Critics say reducing this further does little to benefit the general public and adds to the deficit.
What It Means for Estate Planning
Estate lawyers say the proposed change will significantly reduce the need for complex tax strategies for individuals with assets between $7 million and $15 million. “If the new, higher exemption amount is permanent, most individuals with estates under $15 million probably don’t have to worry much about estate taxes,” said Widmyer.
People who previously transferred large gifts into trusts to reduce their taxable estates may now reconsider. Some may even regret acting early. “They could consider taking loans from the trusts or asking a spouse to take bigger distributions,” said estate lawyer Connie Tromble Eyster.
Still, those with estates exceeding the new thresholds will continue to rely on techniques like gifting strategies, charitable trusts, and life insurance policies to manage tax liabilities.
The State Tax Wild Card
Even if federal estate taxes are minimized or eliminated for many, state-level estate and inheritance taxes remain a concern. Some states have far lower exemption thresholds. Oregon, for example, taxes estates over $1 million, while Washington will soon have a top estate tax rate of 35% on estates over $3 million.
Estate planners in those states often use a trust structure that shields assets from taxation upon the first spouse’s death. Without that, the surviving spouse could be hit with a large tax bill despite the federal exemption.
In states like Nebraska and Kentucky, inheritance taxes can also apply to non-lineal heirs—such as nieces, nephews, or even adult children—depending on how the estate is structured.
With the current federal exemption set to expire at the end of 2025, many wealthy Americans are in a holding pattern. Some estate lawyers advise acting now to use the higher exemption while it still exists. Others believe the proposed $15 million exemption will ultimately pass, either this year or early next year, and are telling clients to wait.
“Although it appears that the proposal has some momentum, reports are that it would require the debt ceiling to be increased by trillions of dollars,” said estate lawyer Tasha Dickinson. “That said, the federal estate-tax component of this proposal is insignificant in the big scheme of the overall plan.”
Still, the uncertainty is forcing difficult choices. “You can take the bet that a new, higher exemption will pass by the end of the year and don’t maximize the current exemption,” Dickinson said, “or bet that it won’t and maximize it—maybe unnecessarily.”
Some advisors are preparing for both possibilities, while reminding clients that Congress could always change its mind. “A new Congress can make it un-permanent,” warned Widmyer.
The federal estate tax has been a political football for decades. Trump’s latest proposal would provide rare clarity and relief for wealthy families – at least for now. But as with many tax policies, permanence is only as solid as the next election.
