Here is the question most older Americans with any accumulated wealth should be asking in 2026: does my estate plan still reflect the tax law that actually applies to me? The Tax Cuts and Jobs Act of 2017 roughly doubled the federal estate tax exemption, and that change — combined with years of rising home values, growing retirement accounts, and life insurance policies accumulated over decades — means many families who assumed they had no estate tax exposure need to take another look. Whether the TCJA provisions were extended, allowed to expire, or modified by Congress, the right response is the same: a conversation with your estate attorney.
This article explains what changed under the TCJA, what the potential expiration means, and what older Americans should discuss with their advisors regardless of what Congress ultimately decides.
What the TCJA Changed for Estates
Before 2018, the federal estate tax exemption — the amount you can pass on to heirs free of federal estate tax — was approximately $5.5 million per person. The TCJA roughly doubled it, to approximately $12.9 million per person (adjusted for inflation each year). For a married couple with proper planning, that meant up to $27 million could pass to heirs estate-tax-free.
This change meant that the vast majority of Americans no longer had any federal estate tax exposure. The number of taxable estates filed per year dropped significantly after 2018.
The TCJA sunset clause meant these higher exemptions were scheduled to expire after 2025, reverting to roughly pre-2018 levels — approximately $7 million per person (inflation-adjusted). Whether that sunset took full effect, was extended, or was modified by legislation passed in 2025–2026, is something your estate attorney can confirm for your current situation.
What This Means in Practice
If the exemption did decline, some estates that previously had no federal estate tax exposure may now be partially exposed. This is not a large number of people — federal estate taxes have always applied to a small fraction of the population — but the group that's affected is exactly the audience that should be paying attention: older Americans who own homes, retirement accounts, life insurance policies, and other assets that have appreciated over decades.
The most important thing to understand about estate taxes is that the exposure often isn't obvious from looking at your bank account. Life insurance death benefits count toward the taxable estate if you own the policy. Retirement account balances count. Home equity counts. A couple who owns a paid-off home worth $600,000, has $1.5 million in retirement accounts, and carries $500,000 in life insurance has an estate worth $2.6 million — and many couples with that profile have never sat down and actually added the numbers up. Add the step-up in basis from appreciated assets, and the full picture requires a real accounting.
What Has NOT Changed
The annual gift exclusion — the amount you can give to any individual in a given year without using any of your lifetime exemption — has not been affected by the TCJA sunset. Adjusted for inflation, the 2026 annual exclusion is $18,000 per recipient. Married couples can combine their exclusions to give $36,000 per recipient per year. This is a meaningful tool for transferring wealth incrementally without any gift tax filing.
Step-up in cost basis at death — the provision that resets the taxable gain on assets inherited by heirs, effectively eliminating capital gains tax on appreciation during the owner's lifetime — has remained in place through multiple rounds of tax debate and is currently still the law.
Actions Worth Discussing With an Attorney
Review your current estate plan. If your documents were written before 2018 or haven't been reviewed since, your plan may be optimized for a tax environment that no longer exists — or may be missing strategies that are now important.
Understand your actual estate value. Many people significantly underestimate what they're worth on paper. A simple accounting of home value, retirement accounts, investment accounts, and life insurance face values often surprises people. If you own a life insurance policy, remember that the death benefit counts toward your taxable estate if you own the policy — this is one of the most commonly overlooked elements.
Consider whether gifting makes sense. Annual gifts to children and grandchildren — up to $18,000 per recipient in 2026 — reduce the taxable estate over time and provide family members with money when they may need it most. These gifts require no special paperwork and no gift tax filing.
Revisit beneficiary designations. Retirement accounts and life insurance pass directly to named beneficiaries and never go through your will. Outdated beneficiary designations — a former spouse, a deceased relative — can cause serious problems that no amount of estate planning will fix. This is one of the least expensive and most important maintenance tasks in any estate plan.
The National Academy of Elder Law Attorneys maintains a directory of attorneys who specialize in estate planning for older adults.