For the last several years, private wealth and UHNW teams built planning calendars around one dominant assumption: the federal estate exemption would “sunset” in 2026.
Many families moved quickly—SLATs, sales to trusts, freeze techniques, aggressive gifting—because the cliff felt real.
Then the rules shifted.
New 2025 legislation effectively reset the 2026 landscape: the federal basic exclusion amount is $15,000,000 per person for 2026, and the higher level is positioned to continue (with inflation adjustments thereafter).
So 2026 isn’t a “do the same thing faster” year.
It’s a re-diagnosis year.
1) Estate Plans Built for a Sunset That Didn’t Materialize
Situation
Many clients completed sophisticated estate strategies from roughly 2018 onward—built to use exemption while it was “use it or lose it.”
Complication
With the 2026 rules now more favorable than many plans assumed, the trade-offs look different:
- Estate tax exposure may be lower or eliminated for more families than expected.
- Appreciated assets may have been pushed into irrevocable structures that don’t receive a full step-up in basis at death—potentially converting what felt like an estate-tax “win” into a future income-tax friction point.
2026 opportunity
Make “sunset planning” a review category—not a one-time event:
- Re-inventory trusts and transfers implemented under sunset pressure.
- Quantify the trade: estate tax avoided vs. basis step-up given up (and the impact on heirs’ future capital gains).
- Explore ways to soften the step-up loss where appropriate—swap powers, restructuring ownership, or designing tax-free liquidity to mimic a step-up outcome without detonating the entire plan.
The message isn’t “the old plan was wrong.”
It’s: “The law changed. Let’s make sure the plan still matches reality.”
2) SECURE and Big Deductions Without the Year-End Panic
Situation
Closely held business owners still want meaningful deductions, and qualified plans remain a powerful lever.
Complication
Timing has changed. For many plans, the ability to adopt or treat a plan as adopted by the end of the prior taxable year can extend to the tax filing deadline (including extensions)—reducing the year-end scramble, but creating a new risk: treating deductions as a stand-alone transaction instead of part of the client’s long-term tax map.
2026 opportunity
Use flexibility strategically:
- Target unusually high-income years, volatile business years, or one-time liquidity events.
- Pair the deduction conversation with the bigger question:
Big deductions are still valuable. They just need to be positioned inside the full picture.
3) Large IRAs and the 10-Year Rule
From “Roth Conversion” to a Synthetic Mega-Roth Conversation
Situation
For most non-spouse beneficiaries, inherited IRA rules can compress taxation—often requiring the account to be emptied by the end of the 10th year.
Complication
The practical confusion is real, and the consequences can be expensive. In many cases—especially when the original owner died after beginning RMDs—beneficiaries may face annual distribution requirements during the 10-year period, with meaningful penalties for mistakes.
Default “solutions” often miss the mark:
- Large Roth conversions can simply move the tax bill from heirs to the client today.
- Backdoor Roth contributions are usually immaterial relative to UHNW balance sheets.
2026 opportunity
Reframe the problem: instead of “How do we survive the 10-year rule?” ask:
“How do we convert forced taxable distributions into a larger, flexible, tax-advantaged bucket?”
That’s where a “Synthetic Mega-Roth” conversation can live:
- Intentional, incremental distributions over time (not a single shock event).
- Redirected into a properly designed non-qualified tax-advantaged structure that can compound efficiently and offer tax-advantaged access.
4) Business Owners
Intangible Risk Management in Planned and Unplanned Transitions
Situation
For many UHNW families, the operating business remains the largest—and least “account-statement visible”—asset.
Complication
Even when the legal documents exist, the risk structure often doesn’t:
- Succession is vague.
- Buy-sells are outdated, unfunded, or misaligned with today’s valuations and triggering events.
- Key employees who drive enterprise value are one recruiter call away from leaving.
- The plan assumes a planned transition… while the real exposure is the unplanned one.
2026 opportunity
Treat the business as core to the risk review:
- Stress-test succession for planned and unplanned scenarios.
- Align buy-sell terms, valuation mechanics, and funding.
- Use selective retention structures for the few people who actually drive enterprise value.
- Reduce transferable risk so the business transfers on purpose, not by accident.
5) Existing Insurance as a “Lazy Asset”
Upgrading the Chassis
Situation
Many clients still have permanent coverage designed for a different interest-rate and product environment.
Complication
Some policies are underperforming, mis-owned, or missing modern living-benefit options—and they quietly consume capital without pulling their weight.
2026 opportunity
Treat in-force coverage like an asset class review, not a product discussion:
- Identify policies where benefits can be improved, costs reduced, or ownership aligned with the client’s current estate and income-tax landscape.
- Where it fits, integrate updated designs into broader “tax-free liquidity” planning.
2026: Make It a Diagnostic Year
The teams who win in 2026 won’t just talk about new rules. They’ll reopen the files—and quantify the new trade-offs around estate tax, basis, income tax, liquidity, and business risk—before a competitor uses those same ideas as a door-opener.
Seven Categories Before Your Next Review
To make this practical, I built a Pre-FLIGHT Review Checklist organized around seven categories you can scan quickly before a client meeting—designed to surface risks and opportunities that don’t show up on the account statement.
If you’d like a copy, email me:
