Estate Planning in 2026: Stability and Opportunity

For several years, the estate planning community and financial advisors looked toward 2026 with a great deal of trepidation, bracing for the scheduled end or “sunset” of the 2017 Tax Cuts and Jobs Act (TCJA) that would have slashed the federal estate/gift tax exemption by half. However, with the passage of the One Big Beautiful Bill Act (OBBBA) in July of 2025, the "use-it-or-lose-it" alarm that was blaring as the TCJA sunset grew closer was silenced and has been replaced by a new, “permanent” (subject to the whims of future administrations) period of calm and historically high exemptions that offer great potential for strategic wealth growth and preservation.
 

The New Exemption Reality

The most significant update for 2026 in the realm of estate planning is the stabilization of the federal estate and gift tax exemption. Rather than dropping to the $7 million range as scheduled under the TCJA, the OBBBA has increased the federal estate/gift tax exemption to $15 million per individual, with future increases based on inflation. For married couples, this translates to a combined $30 million that can be shielded in 2026 from federal estate and gift taxes.

While this higher ceiling offers complete freedom from estate and gift taxes for most taxpayers, it changes the fundamental objective of estate planning for families that have substantial holdings but are still below the current exemption (those presently with estates between $5 million and $15 million). For these individuals, the focus has shifted from avoiding immediate federal estate and gift taxes to protecting assets from state and federal income taxes, ensuring liquidity, and optimizing the step-up in cost basis afforded under current tax law.

Key 2026 Planning Figures
 

Strategic Gifting and Trusts

Despite the higher exemption, proactive gifting remains a cornerstone of sophisticated planning. The annual gift tax exclusion remains at $19,000 per recipient for 2026. For example, a couple with three children and six grandchildren could move up to $342,000 out of their estate annually without touching their combined $30 million lifetime limit. Similarly, strategic planning for education or healthcare - by paying educational or medical expenses directly to the provider - continues to offer opportunities for individuals to provide for their families without impacting their lifetime exemption from estate/gift tax. 

For those with assets expected to appreciate rapidly, planning that utilizes irrevocable trusts continue to be the gold standard:

SLATs (Spousal Lifetime Access Trusts): These remain popular for couples who want to utilize their exemptions now while maintaining indirect access to the funds through a spouse.

Dynasty Trusts: More families are establishing multi-generational trusts to protect wealth from future legislative shifts and creditors for decades to come.
 

Summary

The 2026 landscape offers a rare, and perhaps temporary, window of certainty and opportunity. The “permanent” $15 million exemption allows families to plan without the present specter of a sunset, but the historically high personal exemption does not eliminate the need for diligence and planning. If anything, it is now more important than ever to talk with your tax, legal, and SYB advisors to ensure that your beneficiary designations are reviewed, powers of attorney are updated, and the language of existing and new trust structures be aligned with the provisions of OBBBA in the creation and maintenance of a robust plan. 

We provide the information in this newsletter for general guidance only. It does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, investment, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, expressed or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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