How Estate Taxes Might Change After 2026
Joseph Sims

Understanding What the 2026 Sunset Could Mean for Your Estate Plan

Why This Matters Now

 

Estate tax laws are set to shift in 2026, and for families with significant assets—or even just long-term plans—this change could impact how your estate is handled, taxed, and transferred. Here’s what you should know, in plain English.

 

 

 

What Is the 2026 Tax Sunset?

 

In 2017, Congress passed a temporary increase to the federal estate and gift tax exemption as part of the Tax Cuts and Jobs Act. That exemption is set to expire on January 1, 2026, unless new legislation is passed.

Right now, individuals can pass on up to $12.92 million tax-free, or $25.84 million for married couples. If the law sunsets as scheduled, that exemption could drop by about half, back to its 2017 level—adjusted for inflation.

 

 

 

What Does This Mean for You?

Most families won’t be affected by estate taxes under current thresholds. But starting in 2026, more estates—especially those with property, retirement accounts, and family businesses—may fall within taxable range.

Even if your estate doesn’t hit the limit now, smart planning today can help reduce the risk of future tax burdens for your heirs.

 

 

What You Can Do Now

 

You don’t need to overhaul your entire estate plan—but you may want to:

  • Review your current will & trust structure

  • Consider gifting strategies while the exemption is high

  • Evaluate if a revocable or irrevocable trust may be helpful

  • Speak with an attorney and financial professional who understand these shifts

 

 

What We Can Help With (Even If We’re Not Tax Attorneys)

 

While The Sims Law Firm doesn’t provide technical tax law advice, we work closely with CPAs and financial advisors to ensure your estate planning documents are structured with upcoming changes in mind. If needed, we can refer you to a tax professional and coordinate the legal side of your plan.

 

 

Looking Ahead with Clarity

 

The 2026 sunset might not affect everyone—but if it could affect your family, now is the time to start planning. Adjusting your will or trust today can save confusion, costs, and conflict later.

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