With the federal estate tax exemption permanently set at $15 million per person — $30 million for couples — a significant portion of clients no longer have an estate tax problem. For those families, the conventional advice to gift assets aggressively may now be working against them.
The "use it or lose it" urgency that drove gifting strategies over the past several years was built around a specific threat: the TCJA exemption was set to sunset at the end of 2025, cutting the available exclusion roughly in half. That threat is gone. The One Big Beautiful Bill Act made the $15M exemption permanent, with inflation indexing from 2027. For estates under that threshold, gifting appreciated assets is no longer a race against an expiration date.
For an estate below $15 million, there is no federal estate tax being avoided by making that gift. You are transferring a tax burden, not eliminating one. One caveat: roughly a dozen states still impose their own estate tax, with exemptions as low as $1 million. For clients in those states, the calculus is different — but California is not one of them.
Gifting still makes sense in specific situations: estates well above the exemption, assets expected to appreciate dramatically before death, and cases where non-tax goals — creditor protection, family dynamics, charitable intent — drive the decision. For everyone else, the math deserves a fresh look before the next gift is made.
For educational purposes only. Not tax, legal, or investment advice.