For years, families watched the “sunset” of the increased federal estate and gift tax exemption. While earlier versions of the law suggested the exemption would drop after 2025, the rules in effect for 2026 provide a larger exemption than 2025.

In 2026, the federal estate, gift, and generation-skipping transfer tax exemption is $15,000,000 per person. In 2025, it was $13,990,000 per person. This exemption is the amount you can transfer during life and at death before federal transfer taxes generally apply. If an estate exceeds the exemption, the excess may be taxed at rates up to 40%. IRS guidance on the current exemption is available here: https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax

So does a larger exemption mean you can ignore estate planning? For most families, no.

Even when federal estate tax is not an immediate concern, the most common problems we see have nothing to do with the exemption amount. They involve outdated documents, missing trust funding, inconsistent beneficiary designations, and plans that no longer fit the family's reality. These issues can lead to avoidable court involvement, conflict among beneficiaries, and expensive trust and probate disputes.

If your net worth is near the exemption, or you expect significant growth, planning is even more important. A well-structured plan can help transfer future appreciation efficiently, protect beneficiaries, and reduce the risk of litigation later. Depending on your goals, that may include updated gifting strategies, trusts designed for long-term protection, and succession planning for real estate or a closely held business.

The takeaway is simple: tax rules may change again, but good planning is not just about taxes. It is about control, protection, and keeping your family out of conflict and court whenever possible.

If you are unsure whether your plan is current or properly funded, we can help you review it and identify practical next steps. To discuss your situation, contact Westlake Law Group at (818) 444-2022. Our office is located at 30699 Russell Ranch Road, North Building, Suite 210, Westlake Village, California. Virtual consultations are available throughout Southern California.