Is the Exemption Going to Drop?
No. The high exemption began with the Tax Cuts and Jobs Act of 2017 and was set to be cut roughly in half after 2025. The One Big Beautiful Bill Act, signed July 4, 2025, removed that cliff and made the higher exemption permanent. Starting in 2026 the exemption is $15 million per person and rises with inflation in future years. The scheduled cut never took effect.
Arizona and State Estate Tax
Arizona does not have a state estate tax or inheritance tax. Arizona residents are only subject to the federal estate tax. However, if you own property in a state that does impose an estate tax, that state's rules may apply to property located there.
Planning Strategies
For estates that may exceed the exemption, strategies include lifetime gifting, irrevocable life insurance trusts (ILITs), charitable giving, and family limited partnerships. These strategies should be implemented with guidance from your estate planning and financial advisory team.
For the full Arizona walkthrough of how the exemption interacts with portability, the lifetime gift exemption, and the GST tax, read our pillar guide: Estate, Gift & GST Tax in Arizona: The Complete Guide.