Estate Planning Update

January 2026

  1. 2026 Annual Gift Tax Exclusion: remains $19,000 per donor, per donee.
  2. 2026 Gift and Estate Tax Exemption: increased to $15,000,000 per person this year (an increase of $110,000 per individual or $220,000 for a married couple) and made permanent. See paragraph 6(a) below.
  3. Marital Deduction for Transfers to U.S. Spouse: remains unlimited.
  4. 2026 Generation Skipping Tax Exemption: increased to $15,000,000 per person this year. See paragraph 6(a) below.
  5. Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.
  6. National Topics:
    a. Finally! On July 4, 2025, the estate and trust industry celebrated the permanent increase in the estate and lifetime gift tax exemption to an inflation-indexed $15,000,000 per person beginning January 1, 2026. After years of uncertainty, the law will allow families to reasonably predict their estate tax liability. Even better is that the tax will apply only to very few Americans.
    b. As noted in our post on formula clauses, it is important to review your trust’s formula to ensure it does not create an unintended result. In addition, trust terms should be reviewed to determine whether the family or bypass trust qualifies for a QTIP election to receive a second step-up in basis on the surviving spouse’s death. Call is today to schedule your trust review.
  7.  Arizona Topics:
    a. The Arizona Corporation Commission completed the update to its systems on January 12, 2026. We have successfully used the system to create new entities and amend current entities, but it has been a learning curve. It also appears that there are some glitches in the system, so it may be a while before the promised features are functioning. The new system should reduce fraud and unauthorized filings.
    b. Beginning on September 26, 2025, Arizona increased the limits under which a party can collect assets by affidavit without the need for probate to $200,000 for personal property and $300,000 for real property. The increased limits will help facilitate the administration of assets held outside of a trust. We have already used the increased limits to avoid probate in a couple situations without any problems.
  8. Firm News: Yes, the search continues for another attorney that wants to work with great clients and in a fun, flexible environment. Any referral is welcome. Speaking of fun, Renae is headed to Australia for an extended trip in March and Quinn is set to cross the South Pacific in April. Madison is jealous and welcomes any input on where she should go.