2025 Federal Estate and Gift Tax Exemptions
For 2025, the federal lifetime estate and gift tax exemption is $13.99 million per individual. Married couples can combine their exemptions for a total of $27.98 million, allowing significant wealth to pass to heirs without federal estate or gift tax.
This exemption covers both lifetime gifts and the value of an estate at death. Any taxable gifts made during life count toward the lifetime exemption total.
Annual Gift Tax Exclusion
In addition to the lifetime exemption, individuals can make tax-free gifts each year up to a certain limit. For 2025, the annual gift tax exclusion is $19,000 per recipient. Married couples who elect to “split” gifts can give $38,000 per recipient without reducing their lifetime exemption.
These annual gifts are a powerful way to gradually transfer wealth and reduce the size of an estate over time.
Future Changes to the Exemption
On July 4, 2025, Congress passed and the President signed the One Big Beautiful Bill Act (OBBBA). Under this law the lifetime estate and gift tax exemption is now made permanent and will increase to $15 million per individual (and $30 million for married couples) starting January 1, 2026. Going forward the exemption will be indexed for inflation.
This means that the previously scheduled drop at the end of 2025—from the $13.99 million level to much lower amounts—is no longer set to occur.
Texas Estate Taxes
Texas does not have a state estate or inheritance tax. Only the federal estate tax applies to Texas residents. However, estate planning remains essential to ensure assets transfer smoothly, minimize taxes, and protect beneficiaries from unnecessary costs or delays.
Plan Ahead with Expert Guidance
Estate and tax laws change frequently and timing can make a significant difference. A proactive estate plan can help ensure your family receives the maximum benefit from your hard work while minimizing potential tax exposure.
At the Ashmore Law Firm our Dallas estate planning attorneys stay up to date on all federal and state developments, helping families protect what matters most and plan confidently for the future.
