Your Client's Estate Plan in 2026: Don't Miss These Key Reminders

According to experts, 2026 is a good year to revisit and reevaluate your estate plan. The federal landscape has stabilized and the planning tools available today offer more flexibility than ever (The Bonadio Group).

Every estate planner should keep in mind that a thoughtful update can help clients reduce taxes, keep their estate planning aligned with their current goals and better protect their families.

Are your clients aware that at the federal level, they can now pass up to $15 million per person tax-free through gifts or estates? This is a significant increase from previous years and makes it easier for families to share gifts during their lifetime. In addition, they will be able to lower future estate taxes. Remember: you can give unused estate or gift exemptions to a spouse, but you cannot transfer the GST exemption, so planning for future generations still requires careful attention and strategy.

As a quick refresher for estate planners: The passage of the One Big Beautiful Bill Act in 2025 made the previously doubled exemption permanent and slightly increased it. In 2025 the exemption was about $13.99 million per person (indexed for inflation), and in 2026 it goes up to $15 million per person, or $30 million for a married couple.

Why Trusts Still Matter

Another point to keep in mind is that trusts are still very useful. They help protect assets, plan for taxes, and control how money is passed down. Some families use grantor trusts – a type of trust in which the grantor serves as the owner of the trust for income and estate tax purposes and maintains some decision-making authority (Legal Zoom). Income, deductions, and credits from the trust are reported on the grantor’s personal tax return, which can accelerate trust growth.

Others use non‑grantor trusts for tax planning, state tax benefits, or charitable giving. This kind of trust does not provide any control or powers to the grantor, as stated by SmartAsset. It means that they are unable to revoke or change the terms of the trust or alter trust beneficiaries.

There’s no single best choice — the right trust depends on your clients’ goals and finances. It all sounds quite complicated; therefore, it is incumbent on a trust and estate planner to educate each client and share the details in layman’s terms.

Is Your Client’s Trust Fully Funded?

When does a trust actually work? When it owns assets – simple as that.

It’s common to see trusts that were carefully created but never fully funded. Bank accounts stay in individual names, homes aren’t retitled, and business ownership isn’t formally transferred.

When this happens, families face delays, court involvement, and confusion — exactly the problems the trust was supposed to prevent. Encourage clients to review all accounts, real estate and business holdings to ensure proper titling in the trust.

Important Reminder for Clients: Incapacity Vs. Death

It’s crucial to remind clients that incapacity planning is not any less significant than “death planning”. It sounds morbid, for sure, but needs to be addressed as soon as possible. A properly structured plan ensures that in the event your client loses the ability to manage his or her affairs (even temporarily), their family and business can continue to function without uncertainty or tedious court proceedings. In fact, this is about continuity and covering all bases, rather than pessimism. If you haven’t brought it up yet, it may be a great time to focus on this particular aspect and avoid potential challenges in the future.

Final Thoughts:

Whether it’s this year or any other year, it’s crucial to keep in mind that a solid plan should always foresee potential setbacks, issues and complications. As a savvy financial planner, you should keep track of changes in tax laws, divorce or creditor issues, business transitions or long-term care needs, among other things. The goal is to create a plan that works not only under ideal conditions but also in unexpected situations. In other words, your role as a trust and estate planner is to prepare clients to navigate this highly complicated and stressful process with confidence, clarity and peace of mind.

FREQUENTLY ASKED QUESTIONS

1. Why should estate plans be reviewed this year?

Because tax rules and planning tools have changed, and updates can help protect assets and align with client goals.

2. What role do trusts play in estate planning?

Trusts help protect assets, manage how money is passed down and provide tax and planning flexibility.

3. Why is incapacity planning important?

It ensures that if a client cannot manage their affairs, their family and business can continue smoothly without court delays.