How the New $15 Million Estate Tax Exemption Changes What You Should Do in 2026

By Leo Sun – Mar 23, 2026 at 1:19PM ESTKey PointsTwo big tax changes over the past decade exempted most Americans from estate taxes.However, high-net-worth individuals should still be familiar with these new rules.Back in 2017, the Tax Cuts and Jobs Act increased the estate tax exemption from $5.5 million to $11.8 million per person. Since that figure was pegged to inflation, the exemption steadily rose to $13.99 million in 2025. That exemption made it much easier for wealthy individuals to pass their entire estate to their heirs upon death without incurring a tax. That exemption was originally set to expire this year and decline to about $7 million. However, the One Big Beautiful Bill Act set a new baseline exemption of $15 million for 2026 and beyond. It will also be adjusted for inflation every year, but it's a permanent change that won't expire. Image source: Getty Images. How will this change affect most Americans? According to the Federal Reserve, Americans aged 75 and older had a median net worth of $335,600 and an average net worth of $1,624,100 at the end of 2022. Therefore, most elderly Americans were already exempt from the estate tax. Only about 1% of American households have a net worth of over $15 million. Even if those individuals die with more than $15 million in assets, their estates won't be immediately taxed at the maximum 40% rate. Instead, it starts at 18% and goes up to 40% -- with an added "base tax" -- based on the amount by which the $15 million threshold was exceeded.

Taxable Amount Base Tax Estate Tax $1 – $10,000 $0 18% $10,001-$20,000 $1,800 20% $20,001-$40,000 $3,800 22% $40,001-$60,000 $8,200 24% $60,001-$80,000 $13,000 26% $80,001-$100,000 $18,200 28% $100,001-$150,000 $23,800 30% $150,001-$250,000 $38,800 32% $250,001-$500,000 $70,800 34% $500,001-$750,000 $155,800 37% $750,001-$1,000,000 $248,300 39% $1,000,001+ $345,800 40% Source: SmartAsset. For example, if a person dies with $17 million in assets, their beneficiaries would need to pay a $345,800 base tax plus $800,000 (40% of the $2 million above the $15 million threshold). Yet that $1.15 million would still be equivalent to less than 7% of the total estate. What should you do with your assets in 2026? If you don't own more than $15 million in assets, you don't need to fret over estate taxes at all. But if you exceed that threshold and are preparing to pass on your assets, then it might be smart to spread them out as gifts to reduce that tax burden while you're still here.Read NextMar 23, 2026 •By Marc GubertiThese Retirement Hot Spots Feel Like Vacation Towns -- Without the Tourist ChaosMar 23, 2026 •By Kailey Hagen, CFPHow Much Could a $1,000 401(k) Match Be Worth by Retirement?Mar 23, 2026 •By Dana GeorgeMedicare Is Denying More Claims Than Ever -- Here's How to Fight BackMar 23, 2026 •By Maurie BackmanWorried About Inflation? Here's How Retirees Can Stay Ahead.Mar 23, 2026 •By Kailey Hagen, CFPThe Divorced Spouse's Guide to Social Security Benefits in 2026Mar 23, 2026 •By Maurie BackmanRetiring in 2026? Do This to Protect Yourself From a Market Crash.About the AuthorLeo Sun is a contributing Motley Fool stock market analyst who has worked with the company since 2013, covering technology, consumer goods, industrial, and financial sectors. He became a self-made millionaire by age 40 through long-term investing, crediting lessons from Warren Buffett and Peter Lynch. Leo is a regular guest on CNBC Asia providing stock analysis on Chinese technology companies, including Tencent, Baidu, and Alibaba. He previously wrote for InvestorGuide and holds a bachelor’s degree in English from the University of Texas at Austin.TMFSunLionX@TMFSunLion