The 2026 exemption is $15 million per person and it no longer sunsets. That removed the reason most people were sold permanent coverage - and clarified the reasons that actually mattered.
For roughly a decade, the pitch to affluent families was a countdown. The estate tax exemption was temporarily doubled and scheduled to fall by half at the end of 2025, so buy permanent coverage now while the window is open. That countdown ended, and not the way anyone planned for.
The One Big Beautiful Bill Act, signed July 4, 2025, did two things. It raised the federal estate and gift tax exemption to $15 million per person - $30 million for a married couple using portability - effective January 1, 2026. And it removed the sunset entirely.
Figures reflect the OBBBA (P.L. 119-21) as of the review date. “Permanent” means no scheduled expiration, not that a future Congress could not change it. Confirm current figures with your CPA or attorney.
Fewer than 0.2% of estates owe any federal estate tax at this threshold. Combined with Texas having no state estate tax, the practical result for the overwhelming majority of Dallas households - including most families who would describe themselves as high net worth - is that federal estate tax is no longer the planning problem.
Here is what the estate tax debate always obscured. For most affluent Dallas families, the difficulty was never the tax bill. It was that the wealth is not in a form anyone can divide, spend or hold onto without selling something.
Look at what North Texas wealth actually consists of:
None of that pays a bill. And an estate composed of it faces a set of problems that a $15 million exemption does absolutely nothing to solve.
1. Equalising among heirs who want different things. One child works in the business and wants to run it. Two do not and want their share in cash. Without liquidity, the only mechanisms are selling the business or making the working child buy out the others - which usually means loading the business with debt at the worst possible moment. Insurance funds the difference so the outcome is a decision rather than a forced sale.
2. Funding a buy-sell agreement - and this got harder in 2024. In Connelly v. United States, a unanimous Supreme Court held that life insurance proceeds a company receives to fund a redemption are a corporate asset counted at date-of-death value, and that the obligation to redeem does not offset it. That can inflate the value of the very shares being redeemed. Entity-purchase arrangements written before 2024 frequently need restructuring, and that is attorney and CPA work.
3. Keeping the asset the family actually wants to keep. The ranch, the building, the business. An estate with no cash sells whichever asset is easiest to sell, which is rarely the one the family would have chosen. Liquidity is what converts “we had to sell it” into “we decided to keep it.”
4. Carrying costs during administration. Property taxes, insurance, debt service, payroll and maintenance continue while an estate is being administered. That period can run months. Illiquid estates frequently sell something early simply to fund the interim.
Given all that, permanent insurance is worth considering in a narrower set of situations than it is usually sold into:
General framework, not a recommendation. Which structure fits depends on your assets, your entity structure and your attorney's plan.
Most families do not. The federal estate and gift tax exemption is $15 million per person and $30 million for a married couple as of January 1, 2026, made permanent by the One Big Beautiful Bill Act, and Texas has no state estate tax. Fewer than 0.2% of estates owe any federal estate tax at that threshold. If the reason you were sold a permanent policy was an approaching sunset, that premise no longer holds and the policy deserves a fresh look.
$15 million per person, or $30 million for a married couple using portability, effective January 1, 2026. The One Big Beautiful Bill Act signed July 4, 2025 raised it from $13.99 million and removed the scheduled sunset that would have cut it to roughly $7 million. The rate above the exemption remains 40%, and the amount is indexed for inflation beginning in 2027. Permanent means no scheduled expiration, not that a future Congress could not change it.
Liquidity. Most affluent Dallas estates are concentrated in assets nobody can divide or spend - a closely held business, commercial real estate, mineral interests, ranch land, an appreciated home. That creates four problems a large exemption does not touch: equalising among heirs who want different things, funding a buy-sell obligation, keeping the asset the family actually wants to keep rather than selling whatever is easiest, and covering carrying costs during administration.
An irrevocable life insurance trust owns a policy so the death benefit sits outside your taxable estate. At a $15 million per person exemption this matters to considerably fewer families than it did when the exemption was half that. For families genuinely above the threshold, or those concerned a future Congress lowers it, the structure still does its job. Whether it is worth the cost and complexity in your case is a question for your estate attorney, not for me.
A survivorship or second-to-die policy insures two lives and pays at the second death, which is typically when estate liquidity is actually needed. It is usually less expensive than two individual policies covering the same total amount, and it can sometimes be issued where one spouse would be difficult to insure on their own. It fits estate liquidity and heir equalisation; it does not fit income replacement, since it pays nothing at the first death.
In 2024 a unanimous Supreme Court held that life insurance proceeds a company receives to fund a share redemption count as a corporate asset at date-of-death value, and that the obligation to redeem the shares does not offset that value. The practical effect is that the insurance can inflate the value of the very shares being redeemed. Entity-purchase agreements written before mid-2024 frequently need restructuring, and cross-purchase arrangements became more attractive for many small companies. This is attorney and CPA work.
Not without a written comparison, and not on my say-so. A policy bought under the old exemption rules may still be doing useful work - liquidity, equalisation and buy-sell needs did not change. What changed is the tax argument. The right step is a review of what the policy actually does, what it costs, and whether the need it was bought for still exists. Sometimes the answer is that it is fine. Replacement carries real costs including new contestability periods and surrender charges, and anyone recommending it without showing you those is not being straight with you.
Any presentation that leads with an illustration rather than a problem. Any structure you cannot explain back to your spouse in two sentences. Any recommendation to replace existing coverage without a written comparison of what you give up. And anyone still using the estate tax sunset argument in 2026 - either their material is out of date or they are counting on yours being.
Dev Gaymes is a licensed insurance broker, not an attorney or a tax advisor. General education, not advice about your situation, and not an offer of insurance or a quote. Policy provisions, riders, exclusions and tax treatment vary by carrier, product and state and change over time; figures cited are published values as of the review date. All coverage is subject to carrier underwriting approval, and policy terms, benefits, exclusions and limitations are governed solely by the issued policy contract. Always answer every application question completely and truthfully.