As 2026 approaches, it’s a good time to review your documents, make strategic updates, and lock in opportunities.
This guide is designed for New York families, professionals, and business owners who want to stay ahead of the curve. You’ll learn what to review, how to adapt, and what steps can help safeguard your estate plan for the year ahead.
1. Review and Organize Your Core Estate Documents
Before any tax change takes effect, start with your foundation—your legal documents. Take time to confirm they reflect your current wishes and relationships:
- Will: Review executors, guardians, and beneficiaries to ensure they’re still appropriate.
- Trusts: Confirm they align with your current family, asset structure, and goals.
- Powers of Attorney and Health Care Proxies: Replace anyone who’s moved, changed contact information, or can no longer serve.
- Deeds, titles, and business agreements: Make sure all ownership and beneficiary designations match your estate plan.
This “document refresh” is one of the easiest ways to catch outdated information that could cause confusion or conflict later.
2. Audit Beneficiary Designations
Beneficiary designations on life insurance, IRAs, and brokerage accounts override your will—so they deserve a close look.
Remove former spouses or deceased relatives, add missing contingent beneficiaries, and make sure percentages align with your overall plan.
A good rule of thumb: conduct a full beneficiary audit every three years or after any major life event such as marriage, divorce, or a new child. Neglecting this step is one of the most common reasons assets end up in unintended hands.
(Related reading: Five Pitfalls of Beneficiary Designations: An Often Overlooked Yet Critical Part of Your Estate Plan)
3. Update Financial and Digital Asset Inventories
Your executor and loved ones will need to know what you own—and where to find it. Create or update a secure inventory that includes:
- Financial accounts (banks, investment firms, account numbers)
- Real estate holdings (addresses and ownership type)
- Online and digital assets (logins, cryptocurrency, cloud storage)
Keep this list in a protected location and ensure at least one trusted person knows how to access it. Including digital access instructions in your estate plan is now essential under New York’s RUFADAA (Revised Uniform Fiduciary Access to Digital Assets Act).
4. Evaluate Life Insurance and Retirement Accounts
Life insurance policies and retirement plans often evolve with your financial life—but the structure behind them doesn’t always keep up.
- Check beneficiaries and coverage levels: Make sure they reflect your family’s current needs.
- Assess 401(k) and IRA contributions: Adjust based on income changes and future tax expectations.
- Consider a trust: For some families, placing a policy in an Irrevocable Life Insurance Trust (ILIT) before 2026 can reduce taxable estate value.
Regular reviews ensure your policies are coordinated with your estate goals—not working against them.
5. Make Strategic Gifts
The annual gift tax exclusion allows you to gift up to $19,000 per year per beneficiary without affecting your lifetime gift and estate tax exemption. This opportunity expires at the end of each year, so use it, or lose it.
The end of year is also a good time to consider charitable donations, which can offset your income when you file your taxes.
6. Understand What’s Changing in 2026
Federal Estate Tax
- Current exemption (2025): $13.61 million per person
- Expected 2026 exemption: $15 million per person
- Top tax rate: 40%
New York Estate Tax “Cliff”
- 2025 exemption: approximately $6.94 million (adjusted annually)
- If an estate exceeds 105% of that limit, the entire exemption is lost—a harsh penalty unique to New York.
- No portability between spouses, meaning each must plan separately.
Medicaid and Long-Term Care
New York’s 30-month look-back period for home care may phase in, so proactive asset protection via Medicaid trusts or transfers is becoming increasingly urgent.
Business and Real Estate Considerations
Rising property values and potential capital gains changes may further increase estate exposure. Business owners and investors should review entity structures and succession plans before 2026.
7. Future-Proof Your Estate Plan
Tax laws shift. Families evolve. The strongest plans anticipate both.
Here’s how to keep yours flexible and resilient:
- Build flexibility into trusts: Use discretionary provisions and trustee powers that allow adjustments to future tax rules.
- Add portability and disclaimer clauses: Give surviving spouses the ability to make tax elections later, when laws are clearer.
- Simplify ownership structures: Make sure homes, LLCs, and investment accounts are titled consistently with your plan.
- Include digital access language: Executors and trustees should have legal access to online accounts under New York law.
- Schedule reviews every 3–5 years: Laws and life change fast—your plan should too.
Bottom Line
Early preparation is the smartest move you can make. By reviewing your documents, aligning beneficiaries, and taking advantage of today’s generous exemptions, you can safeguard your family’s future and minimize uncertainty.
FAQs
How does the New York “cliff” differ from the federal system?
If your estate exceeds 105% of the New York exemption, you lose the entire benefit—resulting in significantly higher taxes than under federal rules.
Ready to Protect Your Family’s Future?
If you want peace of mind before the law changes, now is the time to act.
Contact The Village Law Firm to schedule a personalized estate plan review and ensure your strategy is ready for 2026.
