Insights from Jennifer Alfieri, SVP, Chief Fiduciary Officer for Tompkins Financial Advisors
I started the New Year by attending the Heckerling Institute on Estate Planning, the largest and most influential estate planning conference in the country. This annual gathering brings together the top professionals in the field: tax and estate planning attorneys, trust officers, CPAs, financial planners, and even experts from the Treasury and IRS.
Every year, these specialists meet to discuss new laws affecting estates, taxes, and retirement accounts; planning strategies for high-net-worth families; updates from courts, Congress, and the IRS; and real-world case studies and emerging planning opportunities.
Why do I attend? Because my priority and the priority of everyone at Tompkins, is your peace of mind. Staying on top of the most current laws and planning techniques allows me to give you the best, most informed guidance possible.
In this blog, I'm sharing what I learned so you can understand how these developments may affect your estate plan and what opportunities may benefit you and your family in the coming year.
Estate planning has changed significantly for 2026. Recent legislation, most notably the One Big Beautiful Bill (OB3) Act, set new tax rules and created opportunities to strengthen your long-term financial plan. Here are the key changes:
1. Higher Federal Estate & Gift Tax Exemption
You can now transfer up to $15 million per person (or $30 million for married couples) without owing federal estate or gift tax. This amount will increase over time with inflation.
2. Don't Forget State-Level Taxes
Your federal exemption may be high, but state rules differ:
Why this matters: Even if you are not subject to federal estate tax, your state residency and property ownership may still create a tax impact for your family.
3. Income Tax Updates
The current income tax brackets and deductions have been made permanent, including:
4. A More Generous SALT Deduction
The cap on state and local tax deductions increased to $40,000, although higher-income taxpayers may see this phased out.
5. Improvements to ABLE Accounts
ABLE accounts are special tax-advantaged savings accounts designed to help individuals with disabilities save money without losing important government benefits like SSI or Medicaid. OB3 has made several improvements:
6. New "Trump Accounts" for Children
This is a new type of long-term savings account for children under age 18. Think of it as a child-focused retirement-style account that encourages families to start saving early for a child's future. Contributions can begin July 4, 2026. Details are still coming, but this may be a helpful long-term savings tool for families.
Gifting Strategies
While the high exemption reduces urgency, gifting can still be beneficial:
Trusts That Offer Flexibility and Protection
Even with higher exemptions, trusts remain key planning tools. Here are a few options to consider:
Spousal Lifetime Access Trust (SLAT)
Allows one spouse to make a gift into a trust that benefits the other spouse, while keeping the assets out of your taxable estate.
Irrevocable Life Insurance Trust (ILIT)
Keeps life insurance proceeds out of your estate and can provide liquidity for estate taxes or equalizing inheritances.
Charitable Trusts
Offer income to you or your family while supporting charities later, or vice versa.
Credit Shelter or Disclaimer Trusts
Provide flexibility and ensure that both spouses' tax exemptions are properly used.
Retirement Accounts: A New Reality
Most beneficiaries must empty inherited IRAs within 10 years. If you had already begun taking required minimum distributions (RMDs), your beneficiaries may also need to take annual withdrawals during the 10-year window.
Some beneficiaries can still "stretch" distributions, including:
Why this matters for you: Your beneficiary designations may need updating to ensure the right people inherit the right way. These designations override your will so they must be coordinated carefully.
Roth Conversions May Be Worth Reconsidering
Converting some of your traditional IRA to a Roth can:
Do Your Documents Still Match Your Wishes?
Life changes. And laws do too. It may be time to review your:
If you have existing irrevocable trusts, make sure they are being properly administered and that tax filings are up to date.
If You Face Potential Liability
Irrevocable trusts and the right insurance coverage can help protect assets from future claims or lawsuits
If You Become Incapacitated
Well-prepared powers of attorney and revocable trusts help ensure that your financial life remains manageable and your family stays protected.
If You Have Vulnerable Family Members
Special needs trusts, ABLE accounts, and trust provisions designed for asset protection can help protect beneficiaries without compromising their eligibility for benefits
Estate planning doesn't need to be complicated. Use the breakdown below to take manageable steps towards protecting your family's future.
Start Here
Next Steps
Ongoing
Estate planning can feel overwhelming, but you don't have to navigate it alone. I'm here to help you understand these changes and take the right steps for your family. Please reach out if you have questions or would like to schedule a review of your estate plan.
https://www.tompkinsfinancialadvisors.com/about-us/contact-us
Investments and insurance products are not insured by the FDIC, not deposits of, obligations of, or guaranteed by the bank or its affiliates, and are subject to investment risk including possible loss of principal. The opinions voiced in this material are for general information only and are not intended to provide specific tax or accounting advice or recommendations for any individual. Please consult your tax and accounting advisors before engaging in any transaction.