The Internal Revenue Service's announcement of a higher federal 'basic exclusion amount' for estate and gift taxes to $15.48 million per person for 2027 marks an important shift in tax policy. This increase from $15 million in 2026 is part of broader inflation adjustments that also affect federal income tax brackets and capital gains tax brackets.
The adjustments come at a time when many Americans are facing rising living costs, making tax planning more critical for wealthy families. The previous legislation, influenced by President Donald Trump's tax reforms, prevented the exemption from reverting to the significantly lower 2017 level of $5 million plus inflation after 2025.
As a result, proactive estate planning has become essential for ultra-wealthy families to maximize their tax benefits. According to the Tax Policy Center, only about 3,900 of the estimated 6,890 federal estate tax returns filed in 2026 will be taxable, indicating that the majority of families will not be affected by federal estate taxes under the current law