The 2026 Tax Landscape
With the expiration and legislative updates surrounding the Tax Cuts and Jobs Act (TCJA), the rules for wealth preservation have permanently shifted. Understanding this new landscape provides a vital window for strategic wealth planning.
Federal Estate Tax Exemption
Current legislation sets the baseline exemption at approximately $15M per person (adjusted for inflation). Assets above this threshold face a steep 40% tax rate. We utilize this unified credit for strategic lifetime gifting and death transfers.
Income Tax Stability
The highest marginal rate holds at 37%, with updated brackets for high earners.
| Filing Status | Top Taxable Threshold |
|---|---|
| Single | Over $640,600 |
| Married (Joint) | Over $768,600 |
Capital Gains & Basis
Capital gains rates remain structured at 15% and 20% (plus the 3.8% Net Investment Income Tax for high earners).
Heirs receive assets with a "stepped-up" cost basis to current market value, potentially eliminating massive capital gains on inherited real estate or stocks.
Retirement accounts like 401(k)s and traditional IRAs do not receive a step-up in basis.
Creditor Shielding & Strategic Wealth Transfer
There are numerous ways using trusts to avoid estate taxes, shelter assets from creditors, and protect family. Most are specifically tailored to your needs and circumstances.
More typical assets to shelter are life insurance policies (remember the death benefit is part of your gross taxable estate subject to estate taxes), second homes, trusts for business interests, and family/dynasty trusts.
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