Estate planning in 2026 is more critical than ever as rising exemption limits, evolving tax rules, and shifting family dynamics reshape wealth transfer strategies. With the federal estate and gift tax exemption now at $15 million per individual, families have unprecedented opportunities to preserve and pass on wealth. At the same time, new charitable deduction floors, updated IRA distribution rules, and digital asset considerations demand a fresh look at existing plans. The new year is the perfect time to review trusts, beneficiary designations, and gifting strategies to ensure they align with current laws and long-term goals.
There have been significant federal tax updates for the new year. The lifetime federal estate and gift tax exemption was raised to $15 million per individual/$30 million for married couples, indexed for inflation each year starting in 2027.1
Aligned with the estate tax exemption at $15 million, there is a Generation-Skipping Transfer (GST) Exemption allowing tax-free transfers to grandchildren or later generations. Portability remains the same allowing spouses to transfer any unused exemption upon death via portability by filing a return within five years.1
There are a few more key changes to be aware of:
Gift, estate, and GST taxes are capped at 40%
New charitable deduction floor – only donations exceeding 0.5% of AGI are deductible for itemizers
Beneficiaries may need to begin RMDs in 2026 or face penalties
Qualified Charitable Distributions (QCD) limit is increased to $111,000, which applies toward RMDs if you’re over the age of 73
Now is the time to be strategic. With the increased lifetime and GST exemptions, there are significant opportunities for gifting strategies. It’s also a good time to update early trust drafts. Older plans built around lower exemptions may now yield unintended distributions. Clients should review trust language and enabling provisions.2
Here is a quick checklist for families to review in 2026:
Update or Fund Living Trusts - Revise beneficiary designations, ensure proper titling (“funding”), and review powers of attorney and healthcare directives.
Refresh for Modern Family Dynamics - Account for blended families, long-distance guardians, adult children support—ensure clarity in roles, responsibilities, and decision-making.
Digital Estate Readiness - Establish digital asset directives and nominate “digital executors” to manage online accounts and cryptocurrencies.3
2026 presents a rare convergence: expanded exemptions, enduring portability, new charitable and IRA rules, and shifting family structures. Whether reminding clients to revamp legacy plans, retitle assets, align trust structures, or optimize tax strategies, estate planning in the new year is as much about thoughtful execution as it is about legal compliance. Consult your advisor and tax and accounting professionals when considering your Estate Planning options.
