Jennifer Raess JD, CFP®, CLU®

Mar 26, 2026

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Tax Season 2026: Why OBBBA Makes This April Different for Estate Planning

Most estate plans were written for a different world. A world where the federal exemption was heading back to $5 million, indexed for inflation, where the planning urgency was about beating a deadline, and where the core question was: how much can we shelter before the window closes?

That world no longer exists. The One Big Beautiful Bill Act (OBBBA) permanently extended the exemption, raising it to $15 million per individual in 2026, and indexed for inflation thereafter. This means no more sunset, no more deadline, no more countdown. For clients, that’s genuinely good news. For their estate plans, it may be time for a second look.

A significant number of plans written in the last several years were built around assumptions that are now obsolete. Tax season — when clients are already in a financial mindset, reviewing accounts, confronting what they own, and paying attention to details they usually defer — is the right moment to surface that gap. And in 2026, there’s more to discuss than usual.

What changed for 2026 and why plans should be revisited now

This year, there’s an additional and more urgent reason to have these conversations in April rather than December: the estate planning rules changed.

The One Big Beautiful Bill Act (OBBBA), signed into law in 2025, permanently raised the federal estate and gift tax exemption to $15 million per individual, or $30 million for married couples, in 2026 and indexed it for inflation going forward. The sunset that had defined estate planning urgency for years, the one that would have dropped exemptions back to $5 million, indexed for inflation, didn’t happen. Here’s what that means for your clients.

For many advisors and their clients, this is genuinely good news. And for some it also creates a planning opportunity — and tax season is a great time to address it : a significant number of existing estate plans were built around an anticipated sunset that never came. Trusts funded to capture the old exemption, bypass trust formula clauses tied to exemption thresholds, gifting strategies that front-loaded transfers to beat a deadline that passed — all of these may now be outdated, unnecessary, or in some cases counterproductive.

Waiting until year-end to surface this means leaving clients in plans that were designed for a world that no longer exists. Spring, when clients are already in a financial mindset, is the right time to identify what may need to be revisited before they drift another twelve months.

The income tax shift: A new planning conversation

Here’s what’s less widely understood: the OBBBA didn’t just raise the exemption. It changed the nature of the planning conversation itself.

With federal estate tax exposure reduced for many HNW clients, income tax efficiency has moved to center stage. For clients in high-income-tax states, strategies like SALT deduction maximization through non-grantor trusts and incomplete non-grantor (ING) trusts sited in no-income-tax jurisdictions are increasingly relevant planning tools, but most clients haven’t had these discussions yet.

Spring is the perfect time to have these conversations because tax season is when clients are most focused on what they owe, what they could have done differently, and what they should be doing for the rest of the year. It’s the window to introduce income tax-efficient estate planning strategies before clients lock in their approach for the year and move on.

Four questions to ask every HNW client this April

Not every conversation needs to be a comprehensive estate plan review. Sometimes the most valuable thing an advisor can do is ask the right questions at the right moment. Here are four worth raising with every HNW client this month:

1. When was your estate plan last reviewed? If the answer is “before 2025,” there’s a reasonable chance the plan was drafted around assumptions that have since changed, either due to the OBBBA or to life events the client hasn’t flagged. This question alone can open the door to a broader review. 
2. Have your beneficiary designations been updated? Beneficiary designations on retirement accounts and life insurance policies legally override whatever a will or trust says. Courts have repeatedly upheld transfers to ex-spouses, deceased relatives, and unintended heirs because designations were never updated. Tax season (when clients are already reviewing  the accounts they own) is the natural moment to check. 
3. Are you using your annual gift tax exclusion? The annual gift tax exclusion is $19,000 per recipient in 2026 and $38,000 for married couples. For clients with large estates, systematic gifting is one of the most straightforward ways to reduce taxable estate value over time, and it doesn’t touch the lifetime exemption. A consistent gifting plan built in April compounds meaningfully over the years. Waiting until December means missing nine months of potential transfers. 
4. Do you know your state estate tax exposure? The federal exemption is $15 million this year. But most states with estate taxes have exemptions far lower and the majority don’t offer portability between spouses. For clients in states like New York, Massachusetts, or Oregon, state estate tax planning may now matter more than federal planning. This is a conversation many advisors haven’t had because the federal picture dominated the discussion for years.

Show up before it’s urgent

The advisors who build lasting HNW practices don’t treat estate planning as a once-a-year conversation that happens in Q4 when everyone is busy. They treat it as an ongoing thread — one that gets picked up wherever clients are most financially engaged.

April is that moment. Clients are organized, they’re thinking about money, and the rules just changed in ways that affect nearly every plan written before 2025. The advisors who use this window well won’t just catch planning gaps, they’ll deepen the relationships that survive a wealth transfer. Estate planning has always been a long game. The advisors who win it are the ones who show up when the conversation is easy, not just when it’s urgent.

Want to go deeper on what changed in 2026 and what advisors should be doing about it right now? Join Jennifer Raess, JD, CFP®, CLU®, Associate General Counsel at Vanilla, for a live session on April 7 at 1pm CT.

Submitted for 1.0 CFP® CE credit.

Frequently Asked Questions

What is the estate tax exemption in 2026?

The federal estate and gift tax exemption in 2026 is $15 million per individual and $30 million for married couples, permanently established by the One Big Beautiful Bill Act (OBBBA) and indexed for inflation going forward. This is a significant increase from the $13.99 million exemption in 2025, and unlike previous increases, it has no scheduled expiration date.

When should financial advisors have estate planning conversations with clients?

While year-end is the most common time for estate planning conversations, April — during tax season — is often a more effective moment. Clients are already financially organized, reviewing accounts and beneficiaries, and thinking about where their money is going. That makes it one of the highest-leverage windows of the year to open or revisit estate planning discussions.

What changed in estate planning for 2026?

The OBBBA permanently raised the federal estate and gift tax exemption to $15 million per individual in 2026 and shifted the primary planning focus for many HNW clients toward income tax efficiency. Many estate plans drafted before 2025 were built around an anticipated exemption sunset that never occurred and may now need to be revisited.

What is the annual gift tax exclusion in 2026?

The annual gift tax exclusion in 2026 is $19,000 per recipient — $38,000 for married couples who elect gift splitting. Annual gifts within this exclusion don’t count against the lifetime exemption, making systematic gifting one of the most straightforward strategies for reducing a taxable estate over time.

What is a QCD and how does it help with estate planning?

A qualified charitable distribution (QCD) allows IRA owners over age 70½ to donate up to $111,000 directly to a qualifying charity in 2026. The amount is excluded from taxable income and counts toward the required minimum distribution (RMD) for those over age 73, making QCDs one of the most tax-efficient ways to give charitably while also reducing the size of a taxable estate.

Why do state estate taxes still matter if the federal exemption is $15 million?

Most states with estate taxes have exemptions far lower than the federal threshold — in some cases as low as $1–2 million — and the majority do not offer portability between spouses. For clients in states like New York, Massachusetts, or Oregon, state estate tax exposure may be a more immediate planning concern than federal estate tax, especially with the higher federal exemption now in place.