No one knows what the lower exemption would be. We suggest an estate of $3-5 million would be as good a guess as any. So, if you believe you will die with over $3-5 million (double that if married), we suspect that your heirs are at risk.

Here is a list of steps you can take to reduce the potential estate tax. They may all feel uncomfortable. Giving away money, especially large amounts, is hard if you are worried you may run out before you die. But if you decide not to do anything, come to terms with the real risk your kids will owe estate tax when you die – potentially a lot.

• Annual gifting. In 2026, anyone can give another person up to $19,000 without reducing their lifetime estate and gift tax exemption. If you and your spouse have three children, two children-in-law and three grandchildren, you can give away $19,000 x 2 x 8 = $304,000 in 2026, free of estate tax exemption. If that money were subject to estate tax at the current 40% rate, your heirs have avoided almost $122,000 in tax.
• Paying for education or health care expenses for family members. Paying for education or health care expenses for someone does not impact your estate tax exemption. It is another way to reduce your taxable estate – and, obviously, appreciated by the beneficiary. The payment must be direct (not to the beneficiary).
• One-time, large gifts. Any gifts above $19,000 in 2026 will reduce the available estate tax exemption at your death. But it can still make sense, for two reasons:
  • If you make a gift today that is higher than whatever the exemption is when you die, you will have locked in that higher estate tax exemption. For example, if you give someone $5 mm in 2026 and the estate tax exemption is $3 mm when you die, you will have saved estate tax on $2 mm.
  • Giving away assets today also means the future growth of those assets is outside your estate. If you give someone $1 mm and they invest it so that it becomes $4 mm when you die, you have reduced your taxable estate by $3 mm.
• Charitable giving, especially from your retirement accounts. Charitable giving from any account you own reduces your taxable estate. But it is particularly effective from a retirement account. Here’s an example. Assume you are considering naming your favorite non-profit to receive your $1 mm retirement account when you die. If you do, your taxable estate is $1 mm less – which would save $400,000 in estate tax if you were subject. What if you leave it for the next generation and you owe estate tax? Not only will they owe the tax, but also, they will inherit an account subject to income tax as they take the money out over 10 years, as required by tax laws on inherited retirement accounts. That’s a double whammy. You would have had a more tax-efficient estate by leaving your kids after-tax money, not the retirement account.

As we wrote last week, we don’t have a crystal ball, especially when it comes to future tax law. Nor do we know when anyone will pass away. But we do know that assuming tax rates can’t go up – or assuming the estate tax exemption cannot be lowered – is an assumption that could backfire.