The 2027 Estate and Gift Tax Exemption: What to Do Before December 31

A year ago, the year-end advice for wealthy families was urgent. Under the law at the time, the federal estate and gift tax exemption was scheduled to drop to roughly half its level on January 1, 2026, and families were told to use it before it disappeared.

That cut never happened. The One Big Beautiful Bill Act, signed on July 4, 2025, raised the exemption to $15 million per person for 2026, indexed it for inflation and removed the sunset. For 2027, the IRS has set it at $15.48 million. The deadline that drove so much planning last December is gone.

So does anything still need to happen before December 31? For many families, yes. The lifetime exemption no longer has an expiration date, but several other limits reset when the calendar turns, and some plans signed in 2024 and 2025 were written for a law that never took effect. And if you aren’t a U.S. citizen, the $15 million figure may not apply to you at all.

Below are the current numbers, a short list of what to handle before year-end, and a separate section for international families.

The 2027 Estate and Gift Tax Exemption at a Glance

The IRS published its 2027 figures on November 5, 2026, in Revenue Procedure 2026-35. Here’s how they compare with 2026:

• Lifetime estate and gift tax exemption: $15,000,000 per person for 2026 ($30 million for a married couple), rising to $15,480,000 for 2027 ($30.96 million for a couple).
• Annual gift exclusion: $19,000 per recipient for 2026 ($38,000 when spouses give together), rising to $20,000 for 2027 ($40,000 for spouses).
• Annual exclusion for gifts to a spouse who isn’t a U.S. citizen: $194,000 for 2026, rising to $201,000 for 2027.
• Top federal estate tax rate: 40% on amounts above the exemption.

The lifetime exemption is one shared amount. Taxable gifts you make during your life use part of it, and whatever is left shelters your estate at death. Gifts that fit within the annual exclusion don’t touch it.

“Permanent” here means the law has no built-in end date. Congress can still change the exemption in the future, but it would take new legislation to do it.

If you live in Florida, the federal numbers are the whole picture. According to the Florida Department of Revenue, Florida doesn’t impose an inheritance tax or a gift tax, and Florida has no separate state estate tax.

What Still Resets on December 31

The lifetime exemption carries over from year to year. These don’t.

Annual exclusion gifts. You can give up to $19,000 to as many people as you like in 2026 without filing a gift tax return or using any of your lifetime exemption. Married couples can give $38,000 per recipient by splitting gifts. A couple with three children and four grandchildren could move $266,000 out of their estate this year this way. If you don’t use your 2026 exclusion by December 31, it’s gone, and it doesn’t roll into 2027. Starting January 1, the exclusion rises to $20,000, or $40,000 for couples, so the same family could give $280,000 in 2027.

Tuition and medical payments. Paying someone’s tuition or medical bills isn’t treated as a gift, with no dollar limit, and it doesn’t count against your annual exclusion. The catch is how you pay. Under the IRS instructions for Form 709, the payment must go directly to the school or the care provider. A check written to your grandchild, even one meant for tuition, is a regular gift.

529 plan front-loading. If you’re funding education savings, you can contribute up to $95,000 to a 529 plan for one beneficiary in 2026 and elect to treat it as if you made it over five years. That uses five years of annual exclusions at once. With the higher 2027 exclusion, the same election covers up to $100,000 next year. The election is made on a gift tax return, so plan on filing one.

Gifts to a spouse who isn’t a U.S. citizen. Gifts to a U.S. citizen spouse are unlimited. Gifts to a non-citizen spouse aren’t: the annual exclusion is $194,000 for 2026 and $201,000 for 2027. For couples who want to rebalance assets between spouses, this limit resets each year too.

One filing note: if you give anyone more than the annual exclusion in 2026, you’ll generally need to file Form 709 by April 15, 2027, even when no tax is due. An automatic six-month extension is available on Form 8892.

The Lifetime Exemption Has No Deadline. Should You Still Use It?

Without a sunset, there’s no “use it or lose it” pressure on the lifetime exemption, which rises to $15.48 million in 2027. You can make large gifts in 2027, 2028 or later, and the exemption will still be there.

There is still a reason some families make large lifetime gifts: growth. When you give an asset away, its future appreciation belongs to the person or trust that receives it, outside your taxable estate.

Here’s a hypothetical. Suppose you give $5 million of investments to a trust for your children, and over the next fifteen years those investments double. The $5 million gift used $5 million of your exemption. The additional $5 million of growth was never yours, so it doesn’t count against your exemption and isn’t part of your estate.

The common tools for this are spousal lifetime access trusts (SLATs), grantor retained annuity trusts (GRATs) and dynasty trusts that can benefit several generations. Our Wills & Trusts page explains how trusts fit into a plan.

The trade-off is real, though. Most of these gifts are irrevocable. Once the money is in the trust, you give up direct access and control. A sensible rule of thumb is that only money you’re confident you won’t need should go into a trust you can’t unwind. For some families, that’s a large share of their wealth. For others, it’s none of it.

Check Plans Written for a Sunset That Never Happened

If you updated your estate plan in 2024 or 2025, it may have been drafted with the expected drop in the exemption in mind. That’s worth a look now.

The main issue is formula clauses. Many wills and trusts divide assets at death using a formula tied to “the exemption amount.” One common version puts everything up to the exemption into a family or bypass trust and leaves the rest to the surviving spouse. At $15.48 million in 2027, and indexed for inflation after that, the formula can send far more into the family trust than you intended, sometimes leaving your spouse with less direct access to the assets than you meant to give them.

Other things to review before year-end:

• Gifts or trusts you rushed through in late 2025 to beat the deadline. They may still make sense, but confirm the plan around them still fits.
• Beneficiary designations on retirement accounts and life insurance, which pass outside your will and trust.
• New trusts that were signed but never funded. A trust can only do its job for assets titled in its name. Here’s what it means to fund a trust.

If it’s been a few years since your last review, our post on how often to update estate planning documents covers the life events that should trigger one.

If You’re Not a U.S. Citizen, the $15 Million Figure May Not Apply to You

Most articles about the estate tax exemption assume the reader is a U.S. citizen or resident. If you’re a foreign national who lives outside the United States, the numbers look very different.

For nonresidents who aren’t U.S. citizens, U.S. estate tax applies to assets considered situated in the United States, and the IRS requires an estate tax return (Form 706-NA) when those assets plus certain lifetime gifts exceed $60,000. For a foreign national with a Miami condo or a U.S. brokerage account, that threshold can be reached quickly.

According to the IRS, U.S.-situated assets include:

• U.S. real estate, such as a condominium in Miami or a rental property in Orlando.
• Tangible personal property located in the United States, such as art, furnishings or vehicles kept here.
• Certain intangible property, including U.S. marketable securities held in a brokerage account.

Some countries have an estate tax treaty with the United States that can change the result, so check whether yours does before assuming either outcome. Gift tax rules are different for nonresidents as well. Gifts of U.S. real estate and tangible property located here can be taxable, while gifts of intangible property are taxed only in limited circumstances. These rules are fact-specific, and getting them wrong can be expensive, so get advice before you move assets.

What to do before year-end: review how your U.S. property is held. Direct ownership in your own name, ownership through a company and ownership through a trust can produce very different results for your heirs. Our posts on estate planning for foreign nationals owning U.S. real estate and on beneficiaries who live outside the United States go into more detail, and the Foreign Grantor Trusts section of our Wills & Trusts page explains a structure many international families use when their children live in the U.S.

Before December 31

Last December, the calendar drove the conversation. This year it’s quieter, but the calendar still matters: annual exclusions expire on December 31, plans built for the old law may need adjusting, and if your family crosses borders, the rules that apply to you may not be the ones in the headlines.

If you’d like to use this year’s exclusions, check whether your plan still fits the new exemption, or find out how U.S. estate tax applies to your family’s U.S. assets, set up a consultation. One of our attorneys will walk you through your options before December 31. You can also learn more about our estate planning services or contact us directly.

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