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How 5 Trusts Can Help You Ahead of the 2026 Estate Tax Exemption Changes

How 5 Trusts Can Help You Ahead of the 2026 Estate Tax Exemption Changes - TAW Law TX

One or More of These Trusts Could Offer You Several Advantages, Especially by 2026. See What May Be Right for You.

The moves you make or don’t make in the next couple of years could critically change your estate tax liabilities. That’s because sunsetting tax laws are set to cut current estate tax exemptions roughly in half on January 1, 2026, assuming no new tax laws are passed first. 

If you think that’s a problem for your heirs to worry about, think again. 

The changing exclusions apply to federal estate taxes and gift taxes, meaning they could affect large gifts made during your lifetime and:

  1. They could subject you to much greater tax liabilities if you haven’t taken the right steps ahead of time.
  2. It’s not too late to get up to speed with what’s happening, figure out your options, and put some prudent strategies in place now.

To that end, let’s walk through five trusts that can offer powerful flexibility and solutions to prepare for the 2026 estate tax exemption change. Those trusts include: 

  1. Irrevocable Life Insurance Trusts (ILITs)
  2. Grantor Retained Annuity Trusts (GRATs)
  3. Intentionally Defective Grantor Trusts (IDGTs)
  4. Spousal Lifetime Access Trusts (SLATs)
  5. Family Limited Partnerships (FLPs)

Estate Tax Exemptions Set to Drop by 50% in 2026: Are You Ready?

Estate Tax Exemptions to Drop by 50% in 2026: Are You Ready? | Austin Estate Planning Attorney

Many More People Will Owe Estate Taxes Upon Death Without Appropriate Planning

Your estate plan may not be as buttoned up or airtight as you think. In fact, it could be vulnerable to greater estate tax liabilities than you thought IF you planned around certain exemptions that are set to expire in 2026. 

Those sunsetting laws will drastically change federal estate tax exemptions if no new legislation is passed between now and Jan. 1, 2026. 

Is your estate plan ready for these changes? 

Do you need to devise or revise an estate plan now in anticipation of the expiring estate tax exemptions?

Let’s start answering those questions by looking at: