Estate and Gift Tax Planning: Making the Most of the Remaining Year

As the end of 2026 approaches, high-net-worth families and business owners have an opportunity to revisit how they intend to transfer wealth to future generations. Estate planning often focuses on what happens after death, but thoughtful lifetime gifting can provide meaningful tax advantages while allowing families to support loved ones today.

The final months of the year offer an important window to evaluate gifting strategies, asset valuations and long-term estate planning objectives before December 31.

Take Advantage of Annual Gift Tax Exclusions

For 2026, individuals can gift up to $19,000 per recipient without using their lifetime federal gift and estate tax exemption. Married couples can potentially transfer $38,000 per recipient through combined gifts, subject to applicable rules.

These annual exclusions can create substantial wealth transfer opportunities over time, particularly for families with multiple children, grandchildren or other beneficiaries.

Certain payments made directly to qualifying educational institutions for tuition or to medical providers for eligible expenses may also be excluded from gift tax calculations, providing additional planning flexibility.

Evaluate Lifetime Exemptions and Trust Strategies

The federal estate and gift tax exemption increased to $15 million per individual in 2026, or potentially $30 million for married couples. While these higher thresholds provide greater flexibility, families with significant wealth should continue evaluating how future asset appreciation could affect their estates.

Trusts can play an important role in transferring assets while establishing guidelines for how wealth is managed and distributed. Depending on the structure, trusts may also provide opportunities to transfer future appreciation outside the taxable estate.

For entrepreneurs, transferring interests in a privately held business before a significant increase in valuation or anticipated sale may be worth exploring. However, these strategies require careful consideration of valuation requirements, ownership restrictions and tax consequences.

Consider Which Assets to Transfer

The type of asset being gifted can be just as important as its value. Appreciated securities, real estate and business interests may offer opportunities to transfer future growth, but lifetime gifts generally retain the donor’s cost basis.

Assets inherited at death may receive a basis adjustment, making it important to evaluate potential capital gains taxes alongside estate tax savings.

Liquidity, control and the recipient’s financial circumstances should also influence gifting decisions.

Make Year-End Planning Part of a Long-Term Strategy

Effective estate planning requires balancing tax efficiency with family priorities. Before making significant transfers, consider how gifting affects your own financial security, future liquidity needs and the responsibilities placed on beneficiaries.

At Illumination Wealth, we help families coordinate estate planning with investment management, tax strategies and long-term wealth objectives. Reviewing these opportunities before year-end can help ensure that wealth transfers are intentional, tax-conscious and aligned with the legacy you want to create. Contact us today to learn more about our wealth management services.