Introduction

When Congress passed the Tax Cuts and Jobs Act (TCJA) of 2017, one of the most significant changes for families with substantial assets was the temporary doubling of the estate tax exemption. This created unprecedented flexibility for wealth transfer.

For 2025, the estate tax exemption is set at $13.99 million per individual or $27.98 million per married couple, adjusted for inflation. Beginning in 2026, that exemption will change again — a shift that affects families at many different stages of their financial journey.

Understanding how these changes impact you, your family, and your charitable goals is essential to making thoughtful, proactive decisions.

What Is the Estate Tax Exemption?

An estate tax exemption is the amount of wealth you can transfer at death before federal estate taxes apply. Anything above the exemption may be subject to estate tax.

For example:

• In 2025, if your estate is valued at $15.99 million, only the $2 million above the $13.99 million exemption is subject to estate tax.
• The tax does not apply to the entire estate, only the amount above the exemption.

This distinction matters. It allows families to make strategic choices about wealth transfer, minimizing tax exposure while aligning with their legacy goals.

Looking Back: The Temporary TCJA Expansion

The 2017 legislation temporarily doubled the exemption, creating an opportunity for families to pass on more wealth without incurring estate tax.

• Before 2017: Lower exemption (roughly $5.5 million per individual).
• 2017–2025: Doubled exemption, adjusted for inflation, reaching today’s $13.99 million.
• Concern: The law was set to “sunset” after 2025, potentially cutting the exemption in half.

This uncertainty led many families to consider gifting strategies, irrevocable trusts, and charitable giving to take advantage of the higher exemption before it potentially expired.

2026 and Beyond: What Has Changed

At the start of this year, there was speculation: would Congress make the higher exemption permanent, or let it revert?

We now have clarity:

• In 2026, the exemption will be $15 million per individual, $30 million per married couple.
• The exemption will continue to be adjusted for inflation in future years.

This permanence was established through the One Big Beautiful Bill Act (OBBBA), which removed the sunset provision from the 2017 legislation and locked in the higher exemption levels.

This is a meaningful shift. For families, it represents not just an opportunity, but also a renewed call to revisit financial plans and estate strategies.

Practical Planning Opportunities

Whether your estate is near the exemption threshold or well below it, planning today can help position your wealth for future generations.

1. Strategic Gifting

• Gifting assets to children, grandchildren, or charities before death allows you to reduce the size of your taxable estate.
• You can make use of the annual gift tax exclusion (currently $19,000 per recipient in 2025).
• Larger lifetime gifts can also be made, using up part of your exemption during life.

2. Trusts as Planning Tools

• Irrevocable trusts can lock in today’s higher exemption and transfer assets outside your taxable estate.
• Spousal Lifetime Access Trusts (SLATs) allow one spouse to benefit while still removing assets from the estate.
• Charitable remainder trusts can balance tax efficiency with philanthropic goals.

3. Married Couples and Portability

• Married couples can effectively double their exemption by combining planning techniques.
• The portability provision allows a surviving spouse to use the unused portion of a deceased spouse’s exemption.

4. Charitable Giving

• Gifts to qualified charities are fully deductible for estate tax purposes.
• Including charities in your estate plan may allow you to further reduce taxable wealth while supporting causes that matter to you.

A Real-World Example

Consider a business owner with an estate valued at $25 million in 2025.

• Under the 2025 exemption, about $11 million would be subject to estate tax.
• Starting in 2026, with the exemption rising to $15 million, only $10 million would be taxable.

That $1 million difference in taxable estate could mean hundreds of thousands of dollars saved in estate tax liability, simply due to the timing of legislation.

Why Planning Still Matters

While the higher exemption provides flexibility, estate planning is about much more than tax efficiency. It’s about ensuring that your wealth is used in ways that reflect your values, your family’s needs, and your legacy goals.

At Gatewood, we often remind families:

• Estate planning is not just for the wealthy. Even if your estate is below the exemption, planning ensures clarity around healthcare, guardianship, and wealth transfer.
• Tax law can shift again in the future. A thoughtful plan provides adaptability.
• Legacy decisions are deeply personal — tax strategy is just one part of a bigger picture.

Next Steps for Families

If you haven’t reviewed your estate plan recently, now is the time. Key steps include:

• Reviewing your current estate plan with your advisory team.
• Considering whether trusts, gifting, or charitable strategies align with your goals.
• Coordinating with estate planning attorneys to ensure legal documents match your intentions.
• Updating beneficiaries on retirement accounts, insurance, and other assets.

Conclusion 

The 2026 estate tax exemption update offers an expanded opportunity to transfer wealth on your terms. Whether you are focused on retirement readiness, business succession, or family legacy, planning today can help you pursue your goals with clarity.

At Gatewood, our advisors work closely with clients and their attorneys to design strategies tailored to life stage and family priorities.

Schedule a conversation with our team today to explore how these changes may apply to your financial plan.

Important Disclosures

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.  No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

As Americans live longer, more adult children are stepping into a new and emotionally complex role: caregiver for aging parents. While this caregiving journey is often rooted in love and duty, it comes with significant financial, legal, and emotional challenges—many of which families are unprepared to navigate.

At Gatewood Wealth Solutions, we help families prepare for life’s key moments. Becoming a caregiver is one of those moments, and having the right plan in place can help you support your parents without jeopardizing your own financial well-being or confidence.

The Situation Many Couples Face

The typical scenario starts subtly. One parent begins needing help with errands, then medications, then transportation. Eventually, the need grows to include daily support—bathing, dressing, managing bills—or even full-time care.

For couples in their 40s, 50s, or 60s, this can be a difficult balancing act. They may still be working full-time, saving for retirement, or even supporting children in college. When caregiving duties grow, it creates stress, financial strain, and difficult decisions:

• Should one spouse reduce hours or leave work entirely?
• How do we pay for in-home care or assisted living?
• Are we prepared for the legal and medical decisions ahead?
• Will this derail our own retirement?

These are deeply personal—and deeply financial—questions.

Financial Considerations for Caregiving

Caring for a parent can quickly become a financial responsibility. Common costs include:

• Home modifications (ramps, walk-in tubs)
• In-home caregivers or visiting nurses
• Adult daycare programs or respite care
• Transportation services
• Medications, co-pays, or specialized therapies
• Long-term care or assisted living facilities

Medicare Vs. Medicaid: What They Cover (and what they don’t)

Medicare is health insurance primarily for those 65 and older. It covers hospital care, doctor visits, and short-term rehabilitation—but NOT long-term custodial care such as help with bathing, dressing, or eating.

Medicaid, on the other hand, is a needs-based program that can cover long-term care in a facility or at home—but only for individuals with very limited income and assets.

Coordination Between the Two:

In some cases, individuals can qualify for both Medicare and Medicaid (known as “dual eligibility”), but coordinating these benefits is complex and often requires professional guidance. Timing, asset structuring, and proper documentation are key to avoiding disqualification or delays in coverage.

Legal and Estate Planning Issues to Address

When you step into a caregiving role, you also step into a world of legal responsibilities. The following should be reviewed or created:

• Powers of Attorney (Financial & Medical): Ensure someone has legal authority to act on your parent’s behalf.
• Living Will/Advance Directive: Clarifies wishes regarding life-sustaining treatment.
• HIPAA Authorizations: Grants access to medical records.
• Updated Wills and Trusts: Review beneficiary designations, successor trustees, and asset titling.
• Asset Protection Planning: If long-term care may be needed, there are legal strategies to protect family assets within Medicaid’s lookback rules.

Gatewood can work alongside estate attorneys to help ensure the proper legal structures are in place and coordinate with elder law specialists when necessary.

Emotional and Lifestyle Strain

Many caregivers experience:

• Guilt over not doing enough
• Burnout from juggling work, children, and caregiving
• Conflict with siblings or spouses over roles and responsibilities
• Grief as they watch a parent’s health decline

We often remind families: you cannot pour from an empty cup. Planning ahead financially and legally can ease the stress and allow more energy for the emotional and relational aspects of caregiving.

Resources for Caregivers

You’re not alone in this journey. Here are a few reputable resources:

• Area Agencies on Aging (AAA): Local support and information services
  n4a.org
• Eldercare Locator: A free service to connect caregivers with local help
  eldercare.acl.gov
• Family Caregiver Alliance: Tools, education, and support groups
  caregiver.org
• Medicare.gov: Coverage information, providers, and cost estimators
  www.medicare.gov
• Medicaid Planning Resources: State-specific resources available through local elder law attorneys or planning professionals

How Gatewood Can Help

At Gatewood, we guide families through the complexities of caregiving—from financial planning to legal coordination to emotional support strategies. We:

• Model the impact of caregiving expenses on your own retirement plan
• Coordinate with estate attorneys and elder law professionals
• Identify insurance and long-term care funding options
• Help facilitate family conversations and clarify roles
• Help ensure planning stays aligned across generations

A Final Thought

You may never feel fully ready to become a caregiver—but with thoughtful preparation and the right support, you can approach it with confidence, clarity, and compassion.

If you’re facing—or anticipating—the responsibility of caring for an aging parent, let’s have a conversation. We’re here to help you prepare financially and emotionally for one of life’s most important roles.

Important Disclosures:

This material was created for educational and informational purposes only and is not intended as tax, legal or investment advice.  For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither LPL Financial nor any of its representatives may give legal or tax advice.

The Unfinished Plan

David and Michelle are in their early 50’s, juggling successful careers, two teenagers, and aging parents who are starting to need more care. Like many, they meant to revisit their estate plan, but life got in the way. Their will is nearly a decade old. Their home is titled only in Michelle’s name. And their IRA beneficiaries haven’t been reviewed since David switched jobs.

They know planning is important. But between work and family, it’s hard to make the time.

Then imagine a sudden accident. Would Michelle be able to access David’s accounts or make medical decisions? Would their kids be placed with the right guardians? Without updated documents, their family could be left in legal limbo during one of the most difficult times.

What Is Estate Planning Really About?

Estate planning isn’t just for the wealthy. It’s for anyone who wants to protect the people they love and leave behind clarity instead of chaos. It involves deciding who will manage your assets, how they’ll be distributed, and who will make decisions if you can’t.

More than anything, it’s an act of care.

1. Understand Probate and How to Avoid It

Probate is a public, court-supervised process for settling estates. It can be expensive and slow. Tools like revocable trusts, joint account titling, and beneficiary designations can reduce or eliminate the need for probate.

2. Create or Update Your Will

Your will names guardians for minor children and explains how you want your assets distributed. While it doesn’t avoid probate, it gives clear instructions and can help reduce family conflict.

3. Check Your Beneficiaries and Account Titles

IRAs, 401(k)s, insurance policies, and even bank accounts can have named beneficiaries or be set up as transfer-on-death (TOD). Review these regularly—especially after marriage, divorce, or the birth of a child.

Gatewood Guidance: These designations often override your will. We help ensure your titling and beneficiaries reflect your current wishes.

4. Consider a Revocable Living Trust

A living trust can help manage assets during life and transfer them privately after death, avoiding probate. It’s ideal for blended families, out-of-state property, or complex estates.

5. Establish Powers of Attorney and Healthcare Directives

Appoint someone you trust to make financial and medical decisions if you’re incapacitated. Documents include:

• Durable Power of Attorney (for finances)
• Healthcare Power of Attorney
• Living Will (end-of-life preferences)

Don’t forget your family: If you have aging parents or unmarried adult children, help them get these documents in place. Without them, you may not have legal authority in an emergency.

6. Have the Conversation

Talking about your estate plan with family can feel awkward. But it’s one of the most valuable things you can do. It sets expectations, reduces conflict, and ensures your intentions are understood.

Tips for a Better Conversation:

• Start with your values, not your valuables
• Choose a relaxed setting
• Be open and invite questions

Gatewood Wisdom: A well-prepared family is the best legacy you can leave.

7. Be Strategic About Taxes

Smart estate planning can help reduce taxes and preserve wealth:

• Step-Up in Basis: Appreciated assets get a new cost basis when inherited, which may reduce capital gains taxes.
• Inherited IRAs: Understand the 10-year withdrawal rule under the SECURE Act.
• Charitable Giving: QCDs, donor-advised funds, and gifting appreciated assets can all help.

We collaborate with your CPA and estate attorney to build an integrated, tax-efficient strategy.

8. Keep It Current

Review your plan every three years or when life changes. New job? Move? Grandchild born? These events should prompt an update.

9. Get Organized

    

 

David & Michelle’s Confidence & Relief

Six months later, David and Michelle are finally caught up. Their wills are updated. A trust is in place. Healthcare documents signed. Guardians named. They’ve even had heartfelt conversations with their kids.

They feel confident and relieved. They know their family is protected, their wishes documented, and their legacy secured.

Let’s Start the Conversation

You’ve worked hard, made thoughtful decisions, and provided for the people you love. But when it comes to estate planning, even the most successful families can feel uncertain or overwhelmed.

At Gatewood Wealth Solutions, we believe estate planning isn’t just about documents—it’s about honoring your life, your values, and the people who matter most. Whether you’re starting fresh or updating an old plan, we walk beside you—coordinating with your attorney and tax team to bring everything into alignment.

It’s not just about avoiding problems. It’s about creating clarity, reducing burdens, and knowing your family will be cared for the way you intend.

Let’s build something lasting—together.

Reach out today to schedule your estate planning conversation.

 

 

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Important Disclosures:

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor