Estate Planning in an Uncertain 2026

by Maria Tipton, J.D.

If the last 15 years have taught us anything, it’s that "certainty" in the realm of estate planning is a luxury rarely afforded. Just as we were bracing for the massive "sunset" of the 2017 tax cuts (a seeming reprise of 2012), 2025 brought us the One Big Beautiful Bill Act (OBBBA…read, “oh, bubba”), which offered the estate planning world a bit of elusive certainty by making the $15 million federal exemption permanent (for at least two years).

But as any seasoned individual knows, a high exemption doesn’t automatically mean a low-stress environment.  Between the "economic fog" left by the 2025 government shutdown, increased geopolitical strife in early 2026, and the stubborn persistence of inflation, among other issues, estate planning in 2026 isn't just about avoiding taxes—it’s about building a resilient structure.

So, with all of that going about, what are some steps to take to ensure your planning foundation and structure are strong?

1. Leverage the "New Normal" of High Exemptions

With the federal estate tax exemption now sitting at $15 million per individual ($30 million for married couples), the "tax man" is no longer the primary boogeyman for most families.  However, "permanent" is a funny word in Washington, the common translation of which in politicianspeak is “for now.” While the OBBBA provides a breather, savvy planners are treating this as a window of opportunity rather than a reason to procrastinate.

• Locking in Growth: If you have assets that are currently undervalued due to market volatility, gifting them now "uses" your exemption at a discount, and allows for market upswings and increases in value to happen outside of your taxable estate.
• The Generation-Skipping Transfer Tax (GSTT) Advantage: Don't forget the GSTT exemption, which mirrors the estate tax exemption. With GSTT exemption levels this high, it’s a prime time to fund "dynasty trusts" that protect wealth for grandchildren and beyond, shielding those assets from estate taxes for generations.

2. Strategic Gifting During Market Volatility

Uncertainty often leads to "down" markets, but in estate planning a down market is a gift-wrapped opportunity. When asset prices take a hit, your exemption dollar goes further in a transfer, which means that, in a volatile market, you can transfer more shares of a stock or interests in a family business for the same exemption "cost."

Consider tools such as these for 2026:

• GRATs (Grantor Retained Annuity Trusts): These are particularly effective when interest rates are easing but asset values are still depressed. You pass the "upside" of an asset to your beneficiaries while keeping the original value for yourself.
• Roth Conversions: With market values fluctuating, converting a traditional IRA to a Roth IRA allows you to pay the resulting income tax at a lower valuation. All future growth is then income tax-free for you and your beneficiaries—a massive win in an inflationary environment.

3. Flexibility in Trusts: The Antidote to "Foggy" Data

Fed Chair Jerome Powell recently described 2026 policymaking as "driving in fog." If you can't see the road, then your estate plan should be set with guardrails.

• Discretionary Trusts: Instead of mandating specific payouts at specific ages, give your trustees the power to adjust distributions based on the economic climate. If a beneficiary is facing a high-tax year or the markets are crashing, the trustee can "pause" or "pivot."
• Powers of Appointment: These allow a trusted beneficiary (like a spouse) to change the ultimate distribution of assets long after the trust is created, ensuring the plan stays relevant as family dynamics and laws evolve.

4. Don’t Ignore the State Level

While the federal landscape is currently generous, not all states followed suit. States like New York, with its $7.35 million "cliff," or states with high inheritance taxes, create a trap for the unwary. If you own property in multiple states, your 2026 review must account for these "hidden" liabilities that OBBBA didn't solve.

5. Fundamental Status Check & Routine Maintenance

Or “don’t lose sight of the forest because of the trees.” While much of the discussion surrounding estate planning in 2026 is on high exemptions from estate/gift tax and the various strategies that can be implemented, equally important are the terms of the basic or “core” estate planning documents. Often, these are drafted and filed away with decades passing before they are reviewed because focus shifts to tax planning (does your plan contain named guardians for children who are now well into adulthood??).  Think of your core estate planning documents as a snapshot of the family as it existed at the time. Like true family photos that look very different over time, the passage of time can impact plans such that terms that were perfect in a past moment, could quite problematic if implemented today.

So, it is advisable to take the time to review core planning documents (including powers of attorney and health-related directives) to ensure that the choices made years ago under those documents are still appropriate today.

6. The Human Element

Beyond the spreadsheets and tax codes, the most important part of planning in uncertain times is communication. High inflation and market swings can change the real value of a legacy.  Stated frankly, a gift of $1 million in 2026 doesn't provide the buying power of what that same gift would have provided in decades past.

Review your "fixed" distributions. Are you giving a specific dollar amount to one child and a percentage of the remainder to another? In a volatile market, the "remainder" could shrink while the fixed gift stays the same, inadvertently creating family friction.

In summary…

In 2026, the goal isn't just to pass on money; it's to build and pass on resilience. By taking advantage of high exemptions and building flexibility into your core documents, you ensure that no matter which way the economic wind blows, your family’s future remains on course.

2026 Strategic Moves

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