Legacy Planning 2.0: Navigating the $30M Estate Tax Exemption Before the 2026 Sunset

If your family's net worth exceeds $10 million, the next 12 months represent the most significant wealth transfer opportunity in modern tax history. The One Big Beautiful Bill Act (OBBBA) didn't just increase the federal estate tax exemption, it fundamentally changed the game for multi-generational wealth planning.

As of January 1, 2026, the lifetime estate and gift tax exemption stands at $15 million per individual and $30 million for married couples. While OBBBA technically made this permanent, anyone who's navigated federal tax policy knows that "permanent" lasts only until the next administration or economic crisis.

For families currently paying $50,000 or more annually in taxes, this isn't just a planning opportunity, it's a once-in-a-generation mandate to restructure your estate strategy before the political winds shift.

The $30 Million Reality Check

Let's put this in perspective. Before OBBBA, the exemption was scheduled to sunset back to approximately $7 million per person in 2026. That would have meant a married couple could only shield $14 million from the 40% federal estate tax. Anything above that threshold? The IRS gets nearly half.

Now, that same couple can transfer $30 million without triggering federal estate taxes. For a business owner with a $20 million company valuation or a family holding substantial real estate portfolios, this exemption increase represents millions in potential tax savings.

But here's the critical point most taxpayers miss: high exemption limits don't eliminate the need for strategic planning, they amplify it. The families who benefit most from this aren't the ones who simply file their returns and hope for the best. They're the ones working with tax planning professionals who understand how to leverage trusts, gifting strategies, and business structure to lock in these benefits before circumstances change.

Why "Permanent" Doesn't Mean Forever in Tax Law

The word "permanent" appears repeatedly in OBBBA's legislative language. In reality, it means "until Congress decides otherwise."

Consider the history: the estate tax exemption has fluctuated dramatically over the past two decades. In 2001, it was $675,000. By 2010, it was repealed entirely for one year before returning. The Tax Cuts and Jobs Act of 2017 doubled the exemption to approximately $11 million, but included that now-eliminated sunset provision.

OBBBA removed the sunset, but it didn't remove Congress's ability to change the law again. With federal deficits expanding and political priorities shifting, high-net-worth families face genuine risk that future legislation could:

• Reduce exemption amounts retroactively or prospectively

• Increase the estate tax rate beyond the current 40%

• Eliminate or restrict certain gifting and trust strategies

• Impose wealth taxes or other alternative wealth transfer mechanisms

The window of certainty exists right now. Families who act decisively in 2026 can transfer substantial assets under the current favorable rules, regardless of what happens legislatively in 2027, 2028, or beyond.

Strategic Gifting vs. Reactive Filing

There's a fundamental difference between tax preparation and tax planning, and nowhere is that distinction more critical than in estate planning.

Tax preparation means filing your estate tax return when you die and hoping your heirs can afford the bill. Tax planning means proactively structuring your wealth during your lifetime to minimize that bill or eliminate it entirely.

With the $30 million exemption, high-net-worth families should consider:

1. Lifetime Gifting Strategies

You can transfer up to $15 million individually ($30 million jointly) during your lifetime without using your estate tax exemption. This allows you to move appreciating assets, like business interests, real estate, or investment portfolios, out of your taxable estate now, shielding all future growth from estate taxes.

For a business valued at $10 million today that grows to $25 million over the next 15 years, gifting now means that $15 million in appreciation never enters your taxable estate.

2. Irrevocable Trust Structures

Grantor Retained Annuity Trusts (GRATs), Intentionally Defective Grantor Trusts (IDGTs), and other sophisticated structures allow you to transfer wealth while retaining certain benefits or income streams. These vehicles become exponentially more powerful when you have $30 million in exemption space to work with.

The key is establishing these trusts before any potential legislative changes restrict their use or reduce exemption amounts.

3. Business Succession Planning

For business owners, the $30 million exemption creates unprecedented opportunities to transfer company ownership to the next generation tax-free. Combined with valuation discounts for minority interests and lack of marketability, you can potentially transfer significantly more than $30 million in actual business value.

This is particularly relevant for family-owned enterprises where succession has been delayed due to tax concerns. OBBBA removes that barrier, but only if you act while the rules remain favorable.

The Annual Exclusion: Your Baseline Strategy

Beyond the lifetime exemption, the 2026 annual gift tax exclusion remains at $19,000 per recipient per individual ($38,000 for married couples utilizing gift-splitting). This amount doesn't count against your lifetime exemption, creating a "use it or lose it" opportunity each calendar year.

For a married couple with three adult children and six grandchildren, this means transferring $342,000 annually without touching the lifetime exemption at all. Over a decade, that's $3.42 million removed from your taxable estate, along with all future appreciation on those assets.

High-income families often overlook this strategy because it requires proactive planning and documentation. But when you're paying $50,000+ in annual taxes, systematic gifting becomes one of the highest-ROI planning activities available.

State-Level Complications

Federal exemptions tell only part of the story. Many states impose their own estate or inheritance taxes with significantly lower exemption thresholds:

• Massachusetts: $2 million state exemption

• New York: $7.35 million state exemption

• Oregon: $1 million state exemption

• Connecticut: $13.6 million state exemption

If you reside in or own property in multiple jurisdictions, your estate planning complexity multiplies exponentially. This is where nationwide tax services become essential. Smith Tax & Wealth Group provides virtual tax services that navigate multi-state tax issues, ensuring your estate plan accounts for all relevant jurisdictions regardless of where you live or where your assets are located.

The Business Consulting Dimension

For business owners specifically, estate planning intersects with business consulting in critical ways. The structure of your business, S-corp, C-corp, LLC, partnership, directly impacts estate planning options and tax efficiency.

Questions we address regularly:

• Should you reorganize your business structure before implementing gifting strategies?

• How do buy-sell agreements interact with estate tax exemptions?

• What valuation methodologies will withstand IRS scrutiny during estate planning transfers?

• How do you balance income needs in retirement with wealth transfer goals?

These aren't questions you answer in April while filing last year's return. They require ongoing strategic dialogue throughout the year, analyzing business performance, family dynamics, and changing tax law in real-time.

Why High-Net-Worth Families Need Specialized Tax Planning

If your annual tax bill exceeds $50,000, you're likely dealing with complexity that generic tax software can't handle: multiple business entities, investment properties across state lines, concentrated stock positions, trust distributions, partnership K-1s, and multi-jurisdictional income sources.

The families who consistently minimize their tax obligations share a common trait: they view tax planning as an ongoing strategic function, not an annual compliance burden.

Strategic tax planning for high-net-worth individuals includes:

• Year-round tax modeling to project estate tax exposure under various scenarios

• Entity structure optimization to maximize both income tax efficiency and estate planning flexibility

• Coordination between income tax and estate tax strategies to ensure short-term decisions don't create long-term problems

• Proactive communication with estate attorneys, financial advisors, and trustees to ensure everyone works from the same plan

The Multi-Generational Perspective

Legacy planning isn't just about minimizing taxes, it's about preserving wealth across generations while maintaining family harmony and values.

With $30 million in exemption space, you have the flexibility to:

• Establish education trusts for grandchildren

• Create charitable foundations that carry your family's philanthropic vision forward

• Fund business succession strategies that keep family enterprises intact

• Provide for special needs family members without jeopardizing government benefits

• Protect assets from creditors, divorces, and other risks facing the next generation

Each of these goals requires specific legal structures and tax planning to execute properly. The high exemption amount provides the "room" to implement sophisticated strategies that weren't economically viable when exemptions were lower.

Act Now While We Have Certainty

The most expensive words in tax planning are "I thought I had more time."

Yes, OBBBA made the $30 million exemption permanent. But tax law changes rapidly, and high exemptions make politically attractive targets during deficit discussions. By the time proposed legislation becomes public, your planning window has often already closed: new laws frequently include provisions preventing taxpayers from implementing strategies between proposal and enactment.

The families who protect their wealth most effectively are those who act during periods of certainty, not those who wait until change is imminent.

If your estate exceeds $10 million, or if your annual tax bill suggests you're accumulating wealth at that pace, now is the time for comprehensive estate planning analysis. Not next year. Not when the next election cycle begins. Now, while the rules are favorable and your planning options remain wide open.

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Smith Tax & Wealth Group specializes in helping high-net-worth families and business owners navigate complex tax and wealth planning challenges. Our nationwide tax services mean you get sophisticated planning regardless of where you live or where your assets are located.

Contact us to discuss how the 2026 exemption landscape impacts your specific situation: and what strategies make sense for your family before the next wave of tax legislation arrives.