By Andy L. Gitkind | Gitkind Law Firm | Boulder County Estate Planning
If you’ve been following news about the federal estate tax exemption over the past few years, you know that a significant change appeared to be on the horizon. That change was avoided due to intervention in Washington. Just the same, whether federal estate tax affects your family depends on the size of your estate and whether your plan was built around the old rules.
Here’s a clear-eyed look at where things stand in 2026 and what Colorado families should be thinking about now.
What Is the Estate Tax Exemption?
The federal estate tax applies to the value of a person’s estate at death, above a certain threshold. Below that threshold—called the exemption—no federal estate tax is owed. Above it, the tax rate is 40%.
For many years, the exemption was relatively modest. The Tax Cuts and Jobs Act of 2017 roughly doubled it, bringing it to approximately $13.99 million per individual as of 2025—meaning the vast majority of American families owed no federal estate tax at all.
What Changed in 2026?
The Tax Cuts and Jobs Act included a sunset provision: the higher exemption was set to expire on December 31, 2025 and revert to its pre-2018 baseline, adjusted for inflation—projected at roughly $7 million per individual.
Prior to that sunset date, the federal government passed provisions that set the estate tax exemption for 2026 at a fixed $15 million per individual – $30 million for a married couple. Further, this amount will be inflation-adjusted each year.
Does This Affect Your Family?
For most Colorado families, the simple answer is no. The federal estate tax only applies to estates above the exemption threshold. That threshold remains well above what most families will ever accumulate.
What Should You Do If Your Plan Was Created Years Ago; when the Exemption was Significantly Smaller?
Many estate plans drafted prior to 2017, or earlier than that, were structured around a lower. If your plan includes credit shelter trust provisions, disclaimer funding formulas, or other mechanisms calibrated to the old rules, it’s worth having those documents reviewed. Provisions that made sense under one exemption amount can produce unintended and very problematic results under another.
This is particularly true for married couples whose plans were designed to maximize use of both spouses’ exemptions at the lower exemption amounts of years ago.
Gifting Strategies That Still Make Sense
Regardless of where the exemption lands, transferring wealth to the people you love during your lifetime remains one of the most effective estate planning tools available. Many clients like to see the application of such gifts to benefits they can observe during their lives. Strategies worth considering:
- Annual exclusion gifts: You can give up to $19,000 per recipient per year in 2026 without any gift tax implications – or need for filing a give tax return – and without touching your lifetime exemption. For families with multiple children and grandchildren, consistent annual giving compounds significantly over time.
- 529 education accounts: Contributing to a grandchild’s or child’s education is both meaningful and tax-efficient. You can superfund a 529 with five years’ worth of annual exclusion gifts at once—$95,000 per beneficiary in 2026.
- Direct payments for tuition and medical expenses: Payments made directly to an educational institution or medical provider are completely excluded from gift tax, with no dollar limit.
- Irrevocable trusts: For larger estates, trust-based gifting strategies can remove assets and their future appreciation from your taxable estate permanently.
The Bigger Picture
The estate tax exemption gets a lot of attention, but for most Boulder County families it isn’t the most important estate planning consideration. Whether or not your estate is large enough to be affected by the federal tax, the goals of a good estate plan remain the same: making sure your wishes are honored, your family is protected from unnecessary court involvement, and the people you love aren’t left sorting through confusion at an already difficult time.
Let’s Talk Through What This Means for Your Family
Estate tax planning doesn’t have to be complicated or anxiety-inducing. The goal is simply to make sure you understand your current situation and have the right structures in place.
Andy Gitkind has focused exclusively on wills, trusts, and estate planning in Boulder County since 2004. If you’d like to talk through how the current exemption affects your family’s plan, the first conversation is always complimentary.
Gitkind Law Firm, P.C. | 801 Main St., Suite 230, Louisville, CO 80027 | 303-960-6628 | gitkindlaw.com