Congress allows $15M tax-free gifts until 2025

The clock is ticking on a once-in-a-generation chance to shrink a taxable estate before the federal gift and estate tax rules tighten after 2025.

Under current law, a single person can give away up to $15 million during life or at death without owing estate tax. After 2026, that exemption is scheduled to drop to roughly half that amount unless Congress acts. That leaves families with larger estates a narrow window to transfer wealth while the exemption is still high. Gifting is the simplest lever: any amount you give now can reduce the eventual estate tax bill if it stays within the annual and lifetime limits.

For 2026, the annual gift exclusion is $19,000 per recipient. A couple with four adult children and six grandchildren could hand out $304,000 every year—$19,000 to each of 16 people—without triggering gift-tax paperwork. Married couples can double those gifts by splitting the gift, so the same family could see $608,000 move out of the estate annually. The key is to use the annual exclusion first; it resets every January, so you can keep gifting year after year. Payments for medical or tuition bills sent directly to providers also bypass the gift tax entirely, giving another way to cut the taxable estate.

Estate planners warn that gifting only makes sense if you truly want to transfer wealth early. Once money leaves your control, you can’t get it back. Also, couples must file an estate-tax return (Form 706) at the first spouse’s death to claim “portability,” which lets the surviving spouse use any unused exemption. Without that filing, the first $15 million is lost. Tax experts say the next year-end offers a final chance to lock in the higher exemption; after that, the landscape may shift depending on election results and new legislation.