Estate Planning Update

July 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.
  3. Marital Deduction for Transfers to U.S. Spouse: remains unlimited.
  4. 2026 Generation Skipping Tax Exemption: increased to $15,000,000 per person.
  5. Top rate for Federal Estate, Gift and Generation Skipping Taxes: 40%.
  6. National Topics:
    a. The permanent increase in the estate and lifetime gift tax exemption to an inflation-indexed $15,000,000 per person beginning January 1, 2026 caused two positive impacts on estate plans. The first is greater simplicity for those estates under $15,000,000 and the second is an increase in lifetime gifts to family members, outright and in trust, taking advantage of the increased exemption amounts.
    b. It is important to review your trust’s formula allocation to ensure it does not create an unintended result. In addition, the terms of the trust 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 us today to schedule your trust review.
  7.  Arizona Topics:
    a. Arizona officially established legal rules for postnuptial agreements (contracts to divide or control property married couples make after they are wed). The law requires these agreements to be written, signed, and fair. These agreements are now authorized by statute with the following key rules: the agreement cannot involve fraud, pressure, or be completely unfair to one person; spouses cannot sign away or reduce a child’s right to financial support; and if a spouse wants to challenge the agreement, they must prove it is invalid with “clear and convincing” evidence. Note premarital agreements (contracts entered into before marriage) were previously authorized under Arizona law and have wider degree of enforceability.
    b. 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 functional. The new system should reduce fraud and unauthorized filings.
  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.