How Will 2026 Estate Tax Changes Impact You?

The 2026 estate tax changes increased the federal estate and gift tax exemption to $15 million per individual, and $30 million for married couples, with inflation adjustments scheduled in the years to come. This certainly means fewer households may be subject to federal estate taxes than in prior years.

However, while the higher exemption raises the threshold for what can be transferred to heirs estate tax free, it doesn’t eliminate the need for planning. If your family holds appreciated real estate or business interests, large retirement accounts, or concentrated investment positions, you may still face important decisions about how assets should be owned, when they should be transferred, or how and what other taxes apply over time.

Unfortunately, the changes do not eliminate complexities, especially for high-net-worth clients. Thoughtful and intentional legacy planning will remain a necessary component of your overall estate plan. 

What Do the 2026 Estate Planning Changes Actually Mean for Families Residing in the Boulder Area?

On paper, the increase in the exemption will reduce the number of households subject to federal estate taxes. However, for individuals or families with skyrocketing home values, equity compensation from tech employers with complex vesting schedules and related tax planning decisions, and overall long-term investment growth baked into brokerage account balances, net worth may continue to push higher, especially as it compounds over time. This results in other significant planning opportunities to consider.

For example:

• A primary residence you purchased years ago may now carry significant unrealized gains. What is the plan with this asset after retirement and beyond?
  
• Stock compensation from tech companies may represent a large portion of net worth. Is there concentration risk to consider? What are the tax ramifications of selling all or a portion of this position?
  
• Retirement accounts continue to grow and may be subject to income taxes when passed to heirs. Have the balances gotten so large that heirs will be hit with significant income tax when they are forced to withdrawal from an inherited account?
  

When you layer all of this compounding growth together, your total estate may look very different in 10-15 years than it does today. Is there planning to do now? Might planning done later be too late?

That’s why estate planning isn’t just about current numbers; it’s about how your balance sheet and total net worth evolves over time. The exemption may be higher now, but your assets may be growing alongside it. And what happens if Congress lowers the estate tax exemption amount in the future? Will it be too late to implement a strategy to save on estate tax then?

How Can Strategic Lifetime Gifting Fit into Your Legacy Plan Under the New Rules?

Gifting during your lifetime allows you to transfer assets out of your estate while still having a say in how those decisions are made. It gives you the ability to be more deliberate, not just about what you give, but when and why. It also allows you to benefit loved ones or charities while you are living, so you can observe and cherish the impact of your generosity.

This often becomes less about reducing the size of the estate and more about creating clarity and purpose around wealth transfers.

Here are a few tactics to consider: 

• Gifting appreciating assets earlier: Some families choose to transfer assets with long-term growth potential, such as equities or business interests, earlier in life. The idea is that future appreciation occurs outside of your estate to help manage the size and composition of the estate at death. This also can result in a shift of income and tax liabilities associated with these assets, so any plan to gift such wealth needs to be carefully planned. 
• Using annual exclusion gifts as a steady approach: Rather than making large, one-time transfers, a more gradual gifting strategy might be preferred. Annual gifting at the annual exclusion thresholds allows you to move assets over time in a structured way, without triggering additional reporting requirements. Currently an individual can gift $19,000 per year to another individual without using any available gifting exemption. A married couple can gift $38,000 combined. And a married couple can gift $76,000 to their son and daughter-in-law, for example, without having to file a gift tax return. It can create a rhythm of giving that aligns with family goals over time, and can systematically reduce the size of the estate.
• Supporting family decisions in real time: In many cases, gifting isn’t just about tax strategy—it’s about impact. This might include helping a child with a home purchase, funding education, or supporting a new business venture. Making these decisions during your lifetime allows you to be part of the process, rather than leaving everything to be handled later. This can also make the transfer of wealth more targeted and meaningful.

Why Does Timing Matter with Gifting?

As discussed earlier, one of the more overlooked aspects of gifting is timing. Waiting until later in life may feel simpler, but it can limit flexibility. By contrast, earlier gifting can create more opportunities to:

• observe how assets are used and managed
• adjust your approach over time
• align transfers with life events and family needs.
  

Think of it less like a single transaction and more like a series of decisions that evolve alongside your family. It allows your guidance and much needed input regarding the gift and how it might be incorporated into the recipient’s financial affairs, so your heirs can be good stewards of the wealth you have built.

How Do You Balance Gifting with Your Own Financial Needs?

Of course, gifting needs to be balanced with your own long-term financial plan. This is where coordination is critically important. Before making any decisions, it often makes sense to understand:

• how gifting impacts your retirement income needs
• whether your remaining assets can support your lifestyle, and any unforeseen circumstances, over time
• how taxes may apply to both you and the recipient.
  

Without this context, even well-intentioned gifts can create unintended consequences and pressure later.

Is there a Bigger Picture with Lifetime Gifting to Consider?

At its core, strategic gifting isn’t about giving assets away. It’s about being deliberate with how your wealth supports the people and priorities that matter most.

With the OBBBA passed and now in effect, a higher exemption has become a most welcome development for clients that have significant wealth. But for many, strategic gifting might now become less about reacting to higher tax-free exemption limits and more about designing outcomes. Because in many cases, the question is no longer:

“How do I avoid estate taxes?”

Instead, it becomes:

“How do I transfer wealth in a way that reflects what I actually want to accomplish?”

How Do Valuation Discounts and Family Entities Fit Into 2026 Estate Planning?

Higher estate tax exemptions for 2026 and beyond gives business owners further opportunity to structure business and real estate interests more strategically for wealth transfer efficiencies and additional tax savings. Because this type of planning is multi-layered and can involve significant tradeoffs, it should be undertaken with the guidance of a seasoned professional.

Family entities like LLCs and FLPs can help organize ownership and create flexibility when passing wealth to the next generation. Business owners can put a transfer plan together spanning many years but still maintain control over the entity. This can be appealing for owners who want to start the transfer process but want (or need) to be involved for an extended period to make sure the business continues to operate optimally.

When transferring partial interests in these entities, valuing the entity subject to transfer may reflect factors such as a lack of control or marketability. In most cases, this can result in a lower transfer value than the full asset value. This means less of the available gifting exemption is used when transferring a percentage of the asset and can result in estate tax savings.

But because businesses can have a very low tax basis, a dilemma is created when transferring interests, especially if the overall estate may not rise to the level of a taxable estate. If transferred during life, the basis attached to partial interest transfers will carry over. Contrast this with a basis step-up that occurs if the business owner passes away with all or a portion of the business still in their name. The capital gains tax savings for heirs can be substantial. Balancing exposure to both capital gains tax and estate tax is no easy task, especially if there is uncertainty whether there will even be estate tax exposure. A careful analysis of the pros and cons is needed to make prudent decisions here.

With that said, family entities can provide structure resulting in rules of operation and fluidity that the business owner purposefully creates. They can help define decision-making, manage shared assets, and support multi-generational planning, so wealth isn’t just transferred without a plan, but is coordinated and well-organized over time.

Spousal Portability and Trust Coordination

For married couples, portability allows a surviving spouse to use any unused exemption left over from the first spouse. But relying solely on portability may not always provide the flexibility families expect.

A trust structure, such as a bypass or credit shelter trust, can still play a role in:

• preserving control over how assets are distributed
• protecting assets for future generations
• addressing blended family dynamics.
  

Strategically utilizing these structures within your broader financial and estate plan can still provide meaningful benefits, even when estate tax is a non-issue. How much management and control the individual wishes to have in place is often the operative question.

Which Charitable Strategies Help to Preserve Flexibility?

Charitable giving can play a meaningful role in estate and tax planning, especially if clients have a significant propensity to want to give to philanthropic causes important to them. Intentionally integrating charitable decisions into your overall estate, tax, and investment planning is critical to an efficient, holistic approach. 

Donor-Advised Funds for Ongoing Flexibility: A donor-advised fund (DAF) allows you to make a charitable contribution today, and then decide later how and when those funds are distributed to specific organizations. This can be useful if you want to: 

• take a current-year tax deduction
• contribute during a high-income year
• spread out giving over time rather than making one-time decisions
• create a centralized process to manage charitable giving as part of your overall financial plan.

Charitable Trusts that Balance Income and Giving: Charitable trusts can be structured to provide income to you or your family for a period, with the remaining assets going to charity after the last beneficiaries of the trust pass away. Depending on the structure, this may allow you to: 

• create a stream of income tied to the trust assets
• support charitable organizations in the future
• save capital gains tax if the transferred asset is sold within the trust
• coordinate giving with long-term estate and income planning decisions.
  

These strategies are sophisticated and can result in making your overall legacy plan more complex but can help balance personal financial needs with philanthropic goals. Your wealth management firm should be well versed in how these structures work and be able to incorporate them into your overall plan seamlessly.

Coordinating Giving with Appreciated Assets: Rather than donating cash, some families choose to gift appreciated assets, such as stocks, business interests, real estate or other investments. In certain cases, this can allow you to: 

• avoid realizing capital gains on the donated assets
• contribute the full market value to charity
• re-position your portfolio in a more tax-efficient way.
  

This approach can be especially relevant if you hold concentrated positions or assets with significant unrealized gains. This should be balanced against the step-up in basis that is available for highly appreciated assets discussed earlier. Thus, there is no one-strategy-fits-all approach. Each technique must be tailored to the specific facts and circumstances of the high-net-worth individual or family.

How Does Peak Asset Management Help Boulder Families Plan for These Changes?

At Peak Asset Management in Louisville, CO, our focus is on bringing these moving, complex pieces together.

Our advisors include CFP® practitioners and CFA® charterholders, and our Director of Wealth Strategies and Legacy Planning is a JD, an Accredited Estate Planner (AEP®) and has over 20 years of experience in estate, trust and tax planning. Our legacy planning approach centers on simplifying complicated, multi-faceted decisions while keeping your broader financial picture in focus.

That often includes:

• modeling different estate planning scenarios and gifting strategies based on current and projected values
• coordinating with your estate attorney and tax professionals to make sure everything is synchronized
• aligning investment strategy with legacy planning goals
• providing estate and capital gains tax mitigation techniques with tradeoffs to consider, so you can make informed choices
• helping you think through how decisions today may impact future generations.
  

Legacy planning should never be a standalone exercise. It’s a part of your entire financial life, and it needs to be considered within this context.

Ready to discuss your legacy planning needs with an experienced team of financial professionals?  Schedule a call today.

Advisory Services offered through Peak Asset Management, LLC, an SEC registered investment advisor. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. All strategies and services described involve risks, tax implications, and potential limitations, and may not be appropriate for every investor; clients should consider these factors carefully before making decisions. This content is developed from sources believed to be providing accurate information and may have been developed and produced by a third party to provide information on a topic that may be of interest. This third party is not affiliated with Peak Asset Management. It is not our intention to state or imply in any manner that past results are an indication of future performance. Copyright © 2026 Peak Asset Management