In recent months, there’s been renewed momentum in Washington around a bill that could drastically reshape the federal estate tax — commonly referred to as the “death tax.” For high-net-worth families, business owners, and those thinking about legacy planning, this potential legislation represents a pivotal shift in how wealth is transferred across generations.
What’s Changing?
Under current law, the federal estate tax exemption is $13.99 million per individual ($27.98 million for married couples) in 2025. However, that amount is scheduled to drop in 2026 to roughly $7 million per person, due to the expiration of provisions in the 2017 Tax Cuts and Jobs Act.
But that may be about to change.
A new GOP-backed proposal aims to increase the exemption to $15 million per person (or $30 million per couple) and, importantly, make that exemption permanent and indexed for inflation. This means the exemption would rise annually, likely by about $1 million per year.
Why This Matters
If passed, the bill would dramatically reduce the number of families subject to estate taxes. For context:
In the most recent reporting year, only about 4,000 estates paid the estate tax.
In 2007 — when the exemption was just $2 million — over 16,000 estates paid.
Today’s estate tax generates about $20 billion in federal revenue annually — a figure that has barely moved despite skyrocketing wealth among the top 1%.
This legislative move reflects what CNBC’s Robert Frank aptly called the “slow death of the death tax.”
Planning Opportunities and Pitfalls
For families who rushed to gift large portions of their estate before the 2026 sunset, this bill could shift the strategy yet again. Over the past two years, many high-net-worth individuals chose to front-load gifts to heirs to take advantage of the historically high exemption — often through irrevocable trusts or sophisticated estate vehicles.
If the new exemption becomes law, the pressure to “use it or lose it” may ease, but proactive planning will still be essential — especially for estates exceeding $30 million.
Additionally, the bill includes a philanthropy-related tax increase, proposing a jump in the tax on investment income for private foundations from 1% to 5%. This could reduce available funds for grantmaking and may require foundations — especially larger ones — to rethink investment strategies.
What Should You Do Now?
Even if you’re not currently exposed to the estate tax, here are three steps you can take:
Review your gifting strategies. If you’ve made large gifts or are considering them, this bill could impact your long-term plans.
Stay informed about legislative outcomes. This proposal still needs Senate approval, and the final bill could look different.
Meet with your advisory team. Coordinating with your financial planner, estate attorney, and tax advisor is key to ensuring your wealth transfer strategy is optimized for both flexibility and protection.
Our Take at Vintage Financial Partners
At Vintage, we believe in preparing our clients for both the known and the unknown. Whether this bill becomes law or not, the fundamentals remain the same: Legacy planning isn’t just about tax mitigation — it’s about making sure your wealth reflects your values.
If you have questions about how these changes could affect your estate or gifting strategies, we're here to help. Schedule a conversation with our team to explore your options in light of this evolving landscape.
Related Services:
Advanced Estate Planning
Intergenerational Wealth Transfer
Philanthropic Planning
Business Succession Strategies