As 2026 begins, attention is on markets, interest rates, and the economy. Equally important are tax law changes that may affect how you save, invest, give, and transfer wealth.
Recent tax legislation modified or extended several provisions that were scheduled to change after 2025, including creating a new, permanently higher federal estate and gift tax exemption. Although income tax brackets remain indexed for inflation, many households will see more of their income taxed at higher marginal rates. How is that, you might ask? Real (inflation‑adjusted) household income and median family net worth have risen meaningfully over time, supported by higher home values, strong equity markets, and ongoing savings, which makes proactive planning even more important.
In light of these changes, our advisory team is monitoring developments and helping families adjust as needed. Here are a few areas that may deserve a fresh look this year.
Income taxes and portfolio decisions
When more income is taxed at higher rates, tax efficiency becomes more important. Instead of thinking about taxes only at filing time, build tax awareness into your portfolio decisions. For example:
- Being thoughtful about which investments you hold in taxable, tax‑deferred, and Roth accounts.
- Rebalancing in ways that consider the timing and amount of realized gains and losses.
- Planning ahead for large capital gains, instead of letting them catch you by surprise.
Small adjustments can provide big benefits over time.
Estate planning in a higher‑exemption world
The new law raised the federal estate and gift tax exemption to $15 million per person starting in 2026, indexed for inflation, and made this level permanent unless changed by a future Congress. Despite this high exemption, estate planning remains critical.
It may be a good time to:
- Confirm that your wills and trusts still reflect your goals and family circumstances.
- Review beneficiaries on retirement accounts, life insurance, and transfer-on-death bank/investment accounts.
- Revisit lifetime gifting strategies in light of the higher exemption and your own cash‑flow needs.
Your goal is to pass your wealth in a tax-efficient way that aligns with your values.
Charitable giving and retirement decisions
Charitable giving and retirement planning are also shaped by current tax rules. Many families can support organizations they care about while managing taxes.
Depending on your needs, consider donor-advised funds, qualified charitable distributions from IRAs, or gifting appreciated securities.
Roth conversions can help if you expect higher future tax rates or want flexibility with required minimum distributions.
Planning is a process, not an event
Financial planning is not static. Tax law, markets, and family situations change, so your plan should too.