The $15 Million Federal Estate Tax Exemption Is Now Permanent: Does Your Colorado Estate Plan Still Work?

The federal estate tax exemption is $15 million per person in 2026, and the scheduled drop under the old law is gone. That gives many Colorado families more room to pass wealth to loved ones. A Colorado estate planning lawyer can help you decide whether your current plan still fits.

A higher exemption doesn’t take the place of a working estate plan. Your documents still need to reflect your family and your wishes. A tax change doesn’t fix an outdated beneficiary form or name someone to handle bills during an illness.

What does permanent mean?

Federal law now provides a $15 million basic exemption for U.S. citizens and residents in 2026. The law signed on July 4, 2025, removed the scheduled reduction that would otherwise have happened in 2026.

Permanent means there’s no scheduled expiration under current law. It doesn’t mean the amount stays at $15 million forever. Inflation adjustments begin in 2027, and Congress can change the law later.

Could your estate still face federal tax?

Your estate can include much more than money in bank accounts. Real estate and business interests can add substantial value. Life insurance proceeds may also count, depending on the policy’s ownership and other rules. Use current values rather than old purchase prices, especially if you own a ranch or family business that has grown in value.

Federal gift and estate taxes share one lifetime exemption. Taxable gifts that use part of that exemption generally leave less available at death. Bring past gift tax returns to your review so earlier gifts aren’t overlooked.

Do married couples automatically get $30 million?

Marriage alone doesn’t automatically let a surviving spouse use both spouses’ full exemptions. A couple may be able to shelter a combined $30 million under the 2026 amounts, but prior taxable gifts can reduce what’s available.

One option is portability, which lets a surviving spouse use a deceased spouse’s unused federal exemption. The deceased spouse’s estate generally must file a timely Form 706 to make that election, even when no tax is due. Ask about filing requirements after a spouse’s death so the available exemption isn’t lost.

Should you change an older trust?

Some older plans were built around much smaller exemptions. A trust may use a formula that directs assets into a separate trust after the first spouse dies. With today’s larger exemption, that formula could place more assets there than you intended.

That doesn’t mean the trust should be removed. It may still help provide for a surviving spouse while preserving an inheritance for children from an earlier relationship. A Colorado estate planning lawyer can explain how the formula works with your current assets and whether changes are appropriate.

Ask who can make decisions about the trust’s assets and when beneficiaries can receive funds. Those terms can affect your family even when federal estate tax isn’t owed.

What does your Colorado plan still need to do?

Colorado currently doesn’t impose a state estate or inheritance tax. That doesn’t remove the need to plan for who receives your property.

Review beneficiary forms for life insurance and retirement accounts. Those funds usually go to the people named on the beneficiary forms, even if your will gives different instructions. Check that they fit the rest of your plan.

Also review your financial and medical powers of attorney. Confirm that the people you’ve chosen are still able to help if you can’t act for yourself. Parents with minor children should review their choice of guardian, too.

When should you review your plan?

A marriage or divorce is a reason to revisit your documents. So is a death in the family or a large change in what you own. Update your asset information before the meeting so your review uses current values.

Bring your existing documents and notes about your goals. A higher exemption can give you breathing room, but your plan still needs to work for the people you want to protect.

Call Beyer & Associates, LLC at (970) 276-8036 or reach out online to discuss your plan with a Colorado estate planning lawyer. A review can help you understand what still fits and what needs attention.