How much can I give to my kids or grandkids each year without triggering gift taxes?

The estate tax cutoff has been on a roller coaster. Here is the recent history:

• Before 2018: The cutoff was about $5.49 million per person
• 2018 to 2025: The Tax Cuts and Jobs Act (TCJA) roughly doubled the cutoff. By 2025, it reached $13.99 million
• The original sunset: The TCJA increase was set to expire on December 31, 2025. Without action, the cutoff would have dropped back to roughly $7 million
• What actually happened: The One Big Beautiful Bill Act, signed on July 4, 2025, made the higher cutoff permanent. It raised it to $15 million starting January 1, 2026

This matters for families who were rushing to make large gifts before the expected drop. They can now plan at a more relaxed pace. The cutoff is here to stay under current law.

If one spouse dies and does not use their full $15 million cutoff, the surviving spouse can claim the unused portion. This is called portability. A couple can shield up to $30 million from estate taxes.

There is one key step. The estate of the first spouse to die must file a federal estate tax return (IRS Form 706). This is true even if no tax is owed. Skipping this filing means the unused amount is lost. This is one of the most common tax benefits that families miss.

No. Arizona has no state estate or inheritance tax. There is no gift tax either. There are no added taxes in Arizona on transfers at death. The federal cutoff is the only number you need to think about. This makes Arizona one of the best states for estate transfers. Arizona residents benefit from one of the lowest overall tax burdens on inherited wealth in the country.

Very few people. With a $15 million cutoff, fewer than 1% of estates nationwide owe federal estate tax. The tax only applies to estates above the cutoff. If your taxable estate is worth $16 million, only $1 million is taxed at rates from 18 to 40 percent. That results in a $400,000 tax bill.

For most Arizona families, the estate tax is not a direct concern. The planning focus is usually avoiding probate, protecting assets if you become unable to make decisions, and making sure beneficiary choices and trust funding are current.

Even if your estate falls below the federal cutoff, other taxes can affect what your family receives:

• Income tax on retirement accounts. Heirs who inherit IRAs, 401(k)s, and other retirement accounts owe income tax on withdrawals. This can add up fast, especially under the 10-year payout rule.
• Capital gains tax. Most inherited assets get a stepped-up basis at death. But some assets, like retirement accounts, do not. Knowing which assets trigger capital gains tax helps families plan better.
• Taxable income from trusts. Some trust payouts carry taxable income to the heir. The trust setup controls whether the trust or the heir pays the tax.

Yes. Estate planning is about far more than taxes. A solid plan covers who manages your affairs if you cannot. It covers how assets pass to your family without probate delays. It covers how to protect heirs who may need special terms. Lifetime gifting can also shrink the size of your estate and offer tax benefits now. The tax cutoff removes one concern. But it does not replace the need for a plan.

For families pairing annual exclusion gifts with longer-term wealth transfer (SLATs, ILITs, or other irrevocable vehicles to keep large gifts out of the taxable estate), see our complete guide to revocable vs. irrevocable trusts in Arizona for how each trust type fits with a gifting strategy.

For the full Arizona walkthrough of federal estate, gift, and GST tax planning, including portability, the lifetime exemption, and annual exclusion gifts, read our pillar guide: Estate, Gift & GST Tax in Arizona: The Complete Guide.