The most significant tax law changes in a decade are taking effect in 2026. Here is what is changing, what it means for your family, and what to do now.
The One Big Beautiful Bill Act (OBBBA) of 2026 included numerous provisions that are scheduled to expire ("sunset") on December 31, 2025. Unless Congress acts, the following changes take effect on January 1, 2026: the federal estate and gift tax exemption drops from $13.61 million to approximately $7 million per person; individual income tax rates increase; the standard deduction decreases; the SALT deduction cap reverts; and numerous other provisions change. Families must act now to take advantage of the current law before it expires.
The 2017 tax law was designed to expire after eight years. Congress set a "sunset date" of December 31, 2025 — after which most of the individual tax provisions revert to their pre-2018 levels. This is not a new tax law — it is the old tax law coming back.
For most families, the most significant change is the estate tax exemption dropping from $13.61 million to approximately $7 million per person. For families with estates in this range, the potential tax increase is enormous — and the window to act is closing.
Most families are unaware of the 2026 sunset. Their financial advisors and estate planning attorneys may not have alerted them to the urgency. The planning gap is enormous: millions of American families with estates between $7 million and $13.61 million need to implement strategies before December 31, 2025 — and most have not started.
Estate tax exemption drops from $13.61M to ~$7M per person — a married couple with a $20M estate could face an additional $2.4M in estate taxes.
Individual income tax rates increase — the top rate reverts from 37% to 39.6%.
The standard deduction decreases — from $29,200 (married filing jointly in 2024) to approximately $16,000.
The SALT deduction cap reverts — the $10,000 cap on state and local tax deductions expires, but the pre-2018 AMT rules return.
The child tax credit decreases — from $2,000 to $1,000 per child.
The pass-through deduction (IRC § 199A) expires — affecting business owners who benefit from the 20% deduction on qualified business income.
The Mini Family Office model treats the 2026 sunset as a planning emergency. The coordinated team — attorney, CPA, and financial advisor — is working with every client to identify and implement strategies before December 31, 2025. The most important strategies: using the current higher estate tax exemption through gifts to irrevocable trusts, accelerating income into 2025 to take advantage of current lower rates, and maximizing deductions before the standard deduction decreases.
The 2026 sunset creates a unique opportunity to combine estate tax planning with charitable giving. A large contribution to a private foundation or donor-advised fund in 2026 can use the current higher estate tax exemption, generate an income tax deduction at current lower rates, and avoid capital gains tax on appreciated assets. The Law & Tax Foundation model recommends that every family with a taxable estate consider a charitable giving component as part of their 2026 planning strategy.
Spousal Lifetime Access Trust (SLAT) — uses the current higher exemption while allowing the spouse to benefit
Grantor Retained Annuity Trust (GRAT) — transfers appreciation to heirs with minimal gift tax cost
Irrevocable Life Insurance Trust (ILIT) — removes life insurance proceeds from the taxable estate
Income Acceleration Strategies — accelerating income into 2025 to take advantage of current lower rates
Roth Conversion — converting traditional IRA assets to Roth while rates are lower
Charitable Contribution Bunching — accelerating multiple years of charitable contributions into 2025
Qualified Business Income (QBI) Deduction Planning — maximizing the § 199A deduction before it expires
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View ResearchTime is critical. Our free pro bono assessment will help you understand your exposure to the 2026 tax law changes and identify the strategies that are right for your situation. Do not wait — the window is closing rapidly.
Calculate your current estate value — if it exceeds $7 million per person, you need to act before December 31, 2025.
Consult an estate planning attorney and CPA immediately — the most effective strategies take time to implement.
Consider a Roth conversion in 2026 — converting traditional IRA assets to Roth while rates are lower.
Maximize your charitable contributions in 2026 — the standard deduction decrease in 2026 may make itemizing more valuable.
If you own a pass-through business, work with your CPA to maximize the § 199A deduction before it expires.
Do not wait for Congress to act — implement your plan now and adjust if the law changes.
Contact all clients with taxable estates immediately — the 2026 sunset requires urgent action.
Prioritize SLAT planning for married couples — it is one of the most effective strategies for using the current exemption.
Coordinate with the client's CPA on income acceleration and Roth conversion strategies.
Model the tax savings from charitable giving strategies — the 2026 sunset makes charitable planning especially compelling.
Document the planning rationale carefully — the IRS will scrutinize large pre-sunset gifts.
Stay current on legislative developments — Congress may extend some or all of the expiring provisions.
Estate Planning Hotline — c/o Estate Law Training Center / Law & Tax Foundation
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