Estate Planning Guide, Updated October 2026
Federal Estate Tax Exemption in 2026: What the $15 Million Threshold Means for Colorado Families
The estate tax exemption for 2026 sets the starting point for how much a family may transfer without federal estate or gift tax. It is one point of light in a much larger plan. This guide explains the current figures, how portability and lifetime gifting work, and what Colorado families may want to review before year-end.
The Short Answer
What Is the Estate Tax Exemption for 2026?
For 2026, the federal estate tax basic exclusion amount is $15 million per individual, and the annual gift tax exclusion is $19,000 per recipient, according to the IRS. Colorado has no state estate tax and does not levy an inheritance tax. For most Colorado residents, that makes the federal exemption the main estate tax threshold to understand.
Public Law 119-21, the One Big Beautiful Bill Act, raised the basic exclusion amount to $15 million for estates of people who die, and gifts made, after December 31, 2025. For years after 2026, the amount is adjusted for inflation (Public Law 119-21, § 70106). Congress can still change tax law in the future, so it makes sense to revisit any plan from time to time.
2025 vs. 2026 Federal Estate and Gift Tax Amounts
| Item | 2025 | 2026 |
|---|---|---|
| Basic exclusion amount (per individual) | $13,990,000 | $15,000,000 |
| Annual gift tax exclusion (per recipient) | $19,000 | $19,000 |
| Combined exclusion for a married couple (approximate, if both exclusions are fully available) | About $27.98 million | About $30 million |
| Colorado state estate tax | None | None |
Sources: IRS, "What's New, Estate and Gift Tax" (page reviewed July 23, 2026; accessed October 5, 2026); Colorado General Assembly, "Estate Tax" (updated August 29, 2025). The married-couple figures double the individual amount and assume portability or full use of both exclusions. Gifts of future interests do not qualify for the annual exclusion.
2026 at a Glance
Key Figures for Colorado Families
$15M
Federal basic exclusion per individual in 2026, according to the IRS
$19,000
Annual gift exclusion per recipient in 2026, according to the IRS
2004
Colorado estate tax effectively eliminated for deaths after Dec. 31, 2004, per the Colorado General Assembly
The Colorado Angle
How the Federal Exemption Works for Colorado Residents
The basic exclusion amount is a unified figure. It covers taxable gifts made during life and the taxable estate at death together. Lifetime gifts above the annual exclusion generally use up part of the exemption before any federal gift tax is owed.
According to the Colorado General Assembly, Colorado's estate tax was tied to a federal state death tax credit. When that credit ended, the state tax was effectively eliminated for deaths after December 31, 2004, and no Colorado estate tax filing is required. If your family owns property in another state, such as a vacation home or rental, that state's own rules may still apply. Your estate attorney can confirm this.
Questions Worth Asking
- 1 Could our combined estate, including life insurance death benefits, retirement accounts, and business interests, approach the federal threshold?
- 2 Do we own real estate outside Colorado that may fall under another state's estate or inheritance tax?
- 3 Have we made past taxable gifts that already reduced our remaining exemption?
- 4 Do our wills, trusts, and beneficiary designations still match our intentions?
Married Couples
Portability: Carrying a Spouse's Unused Exemption Forward
Portability lets a surviving spouse use the part of the first spouse's exemption that went unused, called the deceased spousal unused exclusion (DSUE). With portability, a married couple may be able to shelter roughly $30 million combined from federal estate tax at 2026 levels. That depends on how assets are titled and on whether the election is made correctly.
Portability is not automatic. The executor generally has to file a federal estate tax return to elect it, even if no tax is owed. It also has limits. It does not shelter growth on assets after the first death the way some trust-based approaches are designed to, and it may not suit blended families. Our Colorado will vs. trust guide explains how different structures can work alongside portability.
- A Potential benefit: It may preserve exemption that would otherwise go unused. Limitation: It requires a timely, complete estate tax filing, which takes time and has a cost.
- B Potential benefit: Assets left outright to a spouse may get a basis adjustment at the second death. Limitation: The DSUE amount generally does not grow with inflation or investment returns.
- C Consideration: Remarriage and changes in family structure can affect which DSUE amount is available. Review these situations with your estate attorney.
Giving During Life
Lifetime Gifting and the 2026 Exemption
Lifetime gifting can help families shift assets to the next generation while they are still here to see it. Each approach has trade-offs, and the right mix depends on cash-flow needs, family dynamics, and tax circumstances.
Annual Exclusion Gifts
In 2026, gifts of up to $19,000 per recipient generally do not use any lifetime exemption. If a married couple elects to split gifts, they can generally give up to $38,000 to each recipient. Gifts are irrevocable, so it's worth weighing how much flexibility you may need in the future.
Larger Gifts Using Exemption
Gifts above the annual exclusion generally require a gift tax return (Form 709) and reduce your remaining lifetime exemption. Future appreciation on the gifted asset may grow outside your estate. On the other hand, the recipient usually takes your original cost basis.
Charitable and Trust-Based Giving
Charitable trusts and donor-advised funds may support both your values and your tax planning. They also involve set-up costs, rules, and less control. See our legacy planning overview.
Beyond the Number
Why the Exemption Is Only One Input to a Multi-Generational Plan
Many families will never owe federal estate tax at 2026 levels. They still have estate planning to do. Who will manage assets for a young or vulnerable beneficiary, how a business will change hands, and how values carry from one generation to the next are questions no exemption amount answers. Our multi-generational wealth planning approach treats these as connected decisions, like stars that only make sense as a constellation.
Q4 Action Steps
A Year-End Estate Review in Five Steps
The annual exclusion is tied to the calendar year, so the last months of the year are a natural time to review your gifting. These steps pair well with our year-end tax planning checklist and our Denver estate planning guide.
Estimate Your Gross Estate
Include real estate, investment and retirement accounts, business interests, and life insurance death benefits.
Tally Prior Taxable Gifts
Gather any past Form 709 filings so you know how much exemption may remain.
Review 2026 Annual Exclusion Gifts
Decide whether any gifts fit your cash-flow needs before December 31.
Check Documents and Designations
Make sure wills, trusts, and beneficiary forms reflect current family circumstances.
Coordinate With Your Professionals
Bring your estate attorney, CPA, and financial advisor together before you make any changes.
How We Help
Coordinated Planning With Your Attorney and CPA
The Stellarix Group does not draft legal documents or provide tax or legal advice. We provide financial planning that coordinates investment management, risk management and insurance planning, and estate planning strategies. We work alongside your estate attorney and CPA, and we can also draw on the MassMutual Trust Company and partner law firms when appropriate.
Our team includes professionals with the CFP®, CFA, ChFC, CLU, CIMA®, AIF®, CLTC®, and ChSNC designations. Among them are Ryan Griffin, CFP®, Financial Planning Manager; Melissa Lang, CLU, ChSNC, CLTC, Financial Advisor; and Joy Avedesian, CLTC®, Managing Partner. We are based in Denver and serve families in all 50 states. Outcomes depend on individual circumstances.
"A universe of financial opportunities. One star to guide the way."
The Stellarix Group
Common Questions
Estate Tax Exemption 2026 FAQ
What Happens to the Federal Estate Tax Exemption in 2026?
For 2026, the basic exclusion amount is $15 million per individual, according to the IRS. Public Law 119-21 set this amount and adjusts it for inflation for years after 2026. Future legislation could change it, so it's worth reviewing your plan regularly.
How Much Can I Inherit Without Paying Federal Taxes?
The federal estate tax is generally paid by the estate, not the heir, and only on estates above the exemption. Some inherited assets, such as traditional retirement accounts, may still create income tax for the person who inherits them. A CPA can review your situation.
Can I Give Someone $100,000 Without Owing Gift Tax?
Often, yes. A gift above the $19,000 annual exclusion generally requires filing Form 709 and reduces your lifetime exemption. Gift tax is typically owed only after your lifetime exemption is used up. The same logic applies to a large gift toward a child's down payment.
Does Colorado Have an Estate or Inheritance Tax?
No. According to the Colorado General Assembly, Colorado's estate tax was effectively eliminated for deaths after December 31, 2004, and Colorado does not levy an inheritance tax. Property you own in other states may still be subject to those states' rules.
Is It Better to Inherit a House or Receive It as a Gift?
It depends. Inherited property may receive a basis adjustment to fair market value, which can reduce capital gains if the property is later sold. Gifted property usually carries over the giver's basis. Weigh this trade-off with your CPA and estate attorney.
Your Next Step
Chart Your Family's Path Forward
If the 2026 exemption has you rethinking your gifting, trusts, or legacy goals, we can help you organize the questions and coordinate with your attorney and CPA. Visit us at 2000 S Colorado Blvd, Tower 2, Ste 800, Denver, CO 80222, or meet virtually from anywhere in the country.
Figures as of October 5, 2026. Sources: IRS, Public Law 119-21, Colorado General Assembly.