For high-net-worth Americans, the window for tax-efficient wealth transfer is closing fast. The Tax Cuts and Jobs Act (TCJA) temporarily doubled the estate and gift tax exemption to USD 13.99 million per person in 2025, but that benefit will end after December 31, 2025, unless Congress acts. Starting January 1, 2026, the exemption is projected to drop to roughly USD 6.8 million, exposing many families to estate tax for the first time. Strategic planning, through lifetime gifting, trust structuring, and charitable or spousal transfers, can preserve millions in tax savings. Contact Bordera Tax and Immigration Law to review your estate plan and secure your exemption before the 2026 sunset takes effect.
For years, affluent Americans have benefited from historically high estate and gift tax exemptions introduced by the 2017 Tax Cuts and Jobs Act (TCJA). As of October 2025, the federal exclusion sits at USD 13.99 million per individual (USD 27.98 million for married couples).
Unless extended by Congress or modified through new legislation such as the proposed Big Beautiful Bill Act of 2025, the exemption will revert to roughly USD 6.8 million per person (indexed for inflation) on January 1, 2026.
The top federal estate tax rate remains 40%, and several states—including New York, Massachusetts, and Oregon—impose additional estate or inheritance taxes. For many business owners, real-estate investors, and professionals, this reversion could trigger significant tax liabilities on assets that were previously exempt.
Now is the time to evaluate gifting strategies, update trusts, and coordinate with your advisors before the exemption cuts in half.
The estate and gift tax exemption shields a lifetime total of USD 13.99 million from federal transfer tax. When it drops to around USD 6.8 million, estates exceeding that value will owe up to 40% tax on the excess. The reduction also affects:
The IRS has confirmed under T.D. 9884 that gifts made between 2018 and 2025 under the higher exemption will not be clawed back once the limit decreases. This makes 2025 a unique opportunity for proactive transfers.
Sources: IRS Rev. Proc. 2024-28; T.D. 9884 (Final Regulations – No Clawback Rule)
Make substantial gifts to family members or irrevocable trusts before year-end 2025. These can include interests in family businesses, investment portfolios, or real estate.
Irrevocable Life Insurance Trusts (ILITs), Spousal Lifetime Access Trusts (SLATs), and Dynasty Trusts can help move assets out of your taxable estate while retaining control or benefit for your family.
Transfers of minority interests in family partnerships or LLCs can qualify for valuation discounts under current rules—reducing the taxable gift amount.
Charitable Remainder Trusts (CRTs) and Donor-Advised Funds allow high-income individuals to meet philanthropic goals while reducing estate exposure.
States like New York, Massachusetts, and Oregon impose estate taxes with lower exemptions. Relocation or state-specific planning can significantly reduce exposure.
Each strategy must align with your broader financial plan and meet IRS documentation standards.
When the enhanced exemptions expire, the federal estate tax will affect far more families than at any point in the past decade. Acting before December 31, 2025 allows you to:
Lock in the higher exemption for lifetime transfers
Protect your heirs from unexpected estate taxes
Optimize business succession and wealth preservation
At Bordera Tax and Immigration Law, we help high-net-worth families and business owners design cross-border and domestic estate plans that protect assets and reduce future liabilities.
Contact Bordera Tax and Immigration Law today to schedule a confidential consultation and prepare your estate strategy before the 2026 sunset.
USD 13.99 million per individual (Rev. Proc. 2024-28).
Unless Congress acts, the exemption will revert to roughly USD 6.8 million on January 1, 2026, due to the TCJA sunset.
Non-U.S. residents are taxed on U.S.-situs property—such as real estate, shares, or tangible assets—at death.
Bordera Tax and Immigration Law is a premier firm with a focused approach to cross-border tax matters for individuals, corporations, partnerships, and trusts. With offices in Calgary and Edmonton, and in association with Kevin Kirkpatrick Professional Corporation, our team of US lawyers and accountants assists clients worldwide with renouncing US citizenship, securing US visas, and expanding Canadian businesses into the United States.
We specialize in voluntary disclosures, tax compliance, and resolving disputes with both US and Canadian tax authorities. Our deep experience with cross-border estates, trusts, and real estate investments allows us to optimize tax efficiency and safeguard client assets. We also provide expert guidance on Canadian departure tax planning.
Trusted by accounting firms, private wealth managers, and financial institutions, we are frequently invited to present on cross-border tax issues. Rely on Bordera Tax and Immigration Law for exceptional service and trusted cross-border expertise.
