The 2026 Estate Tax Exemption: What It Means for Douglas County Families
The federal estate and gift tax exemption is $15M per person for 2026. What the cancelled TCJA sunset means for Colorado families and prior gifting.
For years, high-net-worth families planned around a looming deadline: the federal estate tax exemption was scheduled to roughly cut in half at the end of 2025. That deadline is gone. The 2025 federal tax law cancelled the scheduled reduction, and for 2026 the exemption sits at $15 million per person—$30 million for a married couple. Here is what that means for estate planning in Castle Pines, Sterling Ranch, and across Douglas County.
The Numbers for 2026
The federal estate and gift tax exemption for 2026 is $15 million per individual and, with portability between spouses, $30 million per married couple. The exemption is indexed for inflation starting in 2027. Estates below the exemption owe no federal estate tax.
Just as importantly, Colorado has no state estate tax or inheritance tax. So for Colorado residents, the only estate tax that can apply is the federal one—and at $15 million per person, the share of families actually exposed is small.
“Permanent” — With a Caveat
You will see the new exemption described as permanent. That is accurate in the sense that it no longer has a built-in sunset date. But a future Congress could still change estate tax law. Treat the $15 million/$30 million figure as durable and reliable for planning today, without assuming it can never change.
If You Did Sunset-Driven Gifting in 2024–2025
A lot of wealthy families rushed to make large gifts or establish trusts—spousal lifetime access trusts (SLATs), irrevocable life insurance trusts (ILITs), and other vehicles—specifically because they expected the exemption to drop. Now that it stayed high, those moves are not wrong, but they deserve a fresh review:
- Completed gifts generally should not (and often cannot) be undone, but they change your remaining strategy.
- Trust funding levels and future gifting plans can be recalibrated.
- Life insurance purchased to cover a projected estate tax bill may be worth re-evaluating if your exposure has dropped.
This is a coordination conversation between your estate attorney and your financial advisor—the legal documents and the investment/insurance strategy have to line up.
Estate Planning Still Matters Even If You Owe No Tax
The biggest misconception the higher exemption creates is that estate planning no longer matters. It does. Estate tax is only one reason to plan. Regardless of your net worth, most Douglas County families still need:
- A will and, in many cases, a revocable living trust to avoid probate.
- Durable financial and healthcare powers of attorney.
- Up-to-date beneficiary designations on retirement accounts and insurance.
- Planning to protect heirs, blended families, or a family business.
Whether your focus is minimizing a potential federal estate tax or simply making sure your affairs are in order, a local fiduciary advisor can help you coordinate the financial side with your estate attorney. Connect with a Castle Rock wealth management advisor or a planner in your community.
This guide is general educational information, not tax or legal advice. Estate tax figures are set by federal law and indexed annually; confirm current numbers and your specific situation with a qualified estate attorney and tax professional. Sources: IRS and published analysis of the 2025 federal tax law.
Frequently Asked Questions
What is the federal estate tax exemption for 2026?
For 2026, the federal estate and gift tax exemption is $15 million per individual and $30 million per married couple (using portability), indexed for inflation beginning in 2027. The scheduled 2025 reduction under the Tax Cuts and Jobs Act was cancelled by the 2025 tax law, so the exemption did not fall by half as previously expected.
Is the higher estate tax exemption permanent?
It is permanent in the sense that it no longer has a built-in expiration (sunset) date. However, any future Congress could still change it through new legislation, so it is best treated as durable but not guaranteed forever.
Does Colorado have its own estate or inheritance tax?
No. Colorado does not impose a state estate tax or inheritance tax. For Colorado families, only the federal estate tax is a concern, and with a $15 million per-person exemption, relatively few households are exposed to it.
I did aggressive gifting in 2024 or 2025 to beat the sunset. What now?
Many high-net-worth families made large gifts or set up trusts (such as SLATs) anticipating the exemption would drop at the end of 2025. Now that the exemption stayed high, some of those strategies may deserve a fresh look with your estate attorney and financial advisor. It rarely makes sense to undo a completed gift, but future plans can be adjusted.
If I am under the exemption, do I still need estate planning?
Yes. Estate tax is only one reason to plan. Wills, powers of attorney, healthcare directives, beneficiary designations, and trusts that avoid probate or protect heirs all matter regardless of the tax exemption. Most Douglas County families need estate planning documents even if they will never owe estate tax.
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