The changes to federal tax law effected by the 2025 One Big Beautiful Bill Act (OBBBA) have generally benefitted larger estates by making permanent the $15 million lifetime exemption from federal estate taxes (adjusted for inflation; $30 million for married couples filing jointly). Though it is possible that at some point in the future the exemption limits could be changed by new legislation (estate tax changes have occurred more than a dozen times in the past century), most estates can probably rely on the historically high level currently in place.
But that doesn’t mean that estate planning in 2026 should go on “autopilot.” With the new, higher exemption limits in place, persons with larger estates may need to turn their attention to other areas of focus to ensure that their wealth transfer plans take full advantage of existing law.
Family Trusts
One way that many larger estates are strategically leveraging the new, higher exemption is by the creative use of various family trusts. By shifting highly appreciating assets into arrangements such as grantor-retained annuity trusts (GRATs), intentionally defective grantor trusts (IDGTs), and others, they can effectively “freeze” the value of the assets at the time of transfer into the trust. The terms of the trust can then be devised so that all or most future appreciation may pass to heirs with little or no additional gift or estate tax, assuming the trust is properly structured and applicable tax rules are satisfied.
State Inheritance Laws
The State of Michigan imposes no taxes on estates or on those who inherit assets from an estate. However, twelve states and the District of Columbia have estate taxes, five additional states have inheritance taxes, and one state, Maryland, has both. Because these taxes are determined by the location of the asset or the decedent’s place of residence, those who expect to pass on assets to beneficiaries who reside in different states should review their estate plans with respect to local and state inheritance laws.
Digital Assets
Many assume that “digital assets” pertains only to cryptocurrency. While assets like Bitcoin, Ethereum, non-fungible tokens (NFTs), and other similar items are digital assets, they are not the only things in that category. Airline or credit card reward and loyalty points, email accounts and websites, and even login credentials for online accounts with banks, investment firms, and credit cards are also part of your digital estate.
It’s important for the beneficiaries of your estate to have the ability to effectively access and manage your digital assets. In 2015, the Uniform Law Commission established the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) as a reference for states to use in drawing the laws that govern access to a digital estate upon the death of the owner. Among other things, the RUFADAA provides guidelines for how and when a decedent’s digital assets may be accessed, and by whom. Because these guidelines have implications for wills, trusts, and other aspects of estate planning, it is wise to ensure that your estate plan includes stipulations for how you want your digital estate managed after your passing.
Up-to-Date Beneficiaries
Though this should go without saying, we’ll say it anyway: it is very important to periodically review the beneficiary designations on all life insurance policies, annuities, pensions, and retirement accounts to ensure that upon your passing, the assets governed by the various accounts and policies will go where you intend. Because beneficiary designations supersede the terms of wills and trusts, they pass outside of these arrangements and also outside the probate process.
It is fairly common to have an old IRA account or even an account with a former employer’s retirement plan that has been forgotten. If the beneficiary of an account like this is a former spouse, for example, then the proceeds of that account will go to the former spouse upon your death, even if you have remarried or would have wished for the funds to go elsewhere. So, to maintain consistency with your wishes for all your assets, make sure your beneficiary designations reflect your current life circumstances and intentions. This is a simple matter, but it is one that is often overlooked, to the dismay of heirs and others.
At GEM Asset Management, our fiduciary duty to clients obliges us to help them find solutions for estate planning and other important financial matters that keep the clients’ best interests foremost. If you are wondering whether your estate plan might benefit from review, or if you have questions about a crucial financial decision, please let us know.
