Estate Tax 2026: 7 Steps Before Year-End for Florida

If you’ve been following the news around federal tax policy, you’ve likely heard that a major shift is on the horizon — and it could directly affect how much of your wealth passes to the next generation. The estate tax 2026 changes tied to the sunset of the Tax Cuts and Jobs Act (TCJA) represent one of the most significant estate planning deadlines in recent memory. For retirees and pre-retirees here on the Treasure Coast, the window to act is narrowing faster than many people realize. Whether your estate is worth $5 million or $15 million, understanding what’s coming — and what you can do about it before year-end — is essential. The good news is that with thoughtful planning, you can position yourself and your family to navigate these changes with confidence rather than anxiety.

What’s Changing With the Estate Tax in 2026

Back in 2017, the Tax Cuts and Jobs Act roughly doubled the federal estate tax exemption. For 2024, that exemption sits at approximately $13.61 million per individual, or $27.22 million for a married couple. That’s a historically generous threshold that has effectively removed estate tax concerns for the vast majority of American families. However, the TCJA provisions are set to expire — or “sunset” — at the end of 2025 unless Congress takes action to extend them. When people talk about estate tax 2026, they’re referring to this pivotal moment when the exemption is projected to be cut roughly in half.

According to the IRS estate tax guidance, once the sunset occurs, the exemption could drop to somewhere around $6 to $7 million per person, adjusted for inflation. That means estates that are currently well under the threshold could suddenly find themselves exposed to federal estate taxes of up to 40 percent on the amount exceeding the exemption. For families who have built wealth through real estate, retirement accounts, life insurance proceeds, and business interests, this reduction could come as a significant surprise if they haven’t been paying attention to the estate tax 2026 timeline.

It’s also important to note that while there is ongoing discussion in Washington about extending or modifying these provisions, no one can predict with certainty what Congress will ultimately do. Planning based on the assumption that the law will change in your favor is a risky strategy. The prudent approach — and the one most estate planning attorneys and financial professionals recommend — is to plan as though the sunset will happen on schedule, while building in flexibility to adjust if the law changes favorably.

Who on the Treasure Coast Is Affected

You might be thinking, “My estate isn’t worth $13 million, so this doesn’t apply to me.” And under current law, you’d be right. But the estate tax 2026 changes could bring that exemption down to roughly half its current level, and when you add up everything — your home in Stuart or Jensen Beach, your investment portfolio, retirement accounts, life insurance death benefits, and any other assets — you might be closer to that threshold than you think. Many Treasure Coast retirees are surprised when they sit down and calculate their total gross estate, especially if they’ve owned Florida real estate for decades and have seen significant appreciation.

This is particularly relevant for couples who have done well with their savings and investments over a lifetime of work. A married couple with a combined estate of $14 million might feel perfectly safe today, knowing they’re well under the current $27.22 million combined exemption. But after the estate tax 2026 sunset, their combined exemption could drop to approximately $13 to $14 million — putting them right at the edge or potentially over the line. Even a modest estate can generate a meaningful tax liability when the exemption is cut in half.

Beyond just the dollar figures, there’s a broader group of people who should be paying attention: anyone who hasn’t updated their estate plan in the last several years. Estate plans created before or during the early years of the TCJA may be built on assumptions about exemption levels that are about to change dramatically. If your documents reference specific dollar amounts or formulas tied to the federal exemption, those provisions could produce unintended results once the estate tax 2026 changes take effect.

7 Steps to Take Before Year-End for Estate Tax 2026

Step 1: Calculate Your Total Gross Estate. The first step in preparing for the estate tax 2026 sunset is getting an accurate picture of your total estate value. This means adding up everything: real property, investment accounts, retirement accounts (IRAs, 401(k)s), bank accounts, business interests, life insurance death benefits, personal property of significant value, and any other assets. Many people underestimate their estate’s value because they think in terms of liquid assets rather than the full picture. A comprehensive inventory is the foundation for all the planning steps that follow.

Step 2: Review and Update Your Estate Planning Documents. If you haven’t reviewed your will, trust, powers of attorney, and beneficiary designations in the last three to five years, now is the time. The estate tax 2026 changes may require updates to formula clauses, trust funding provisions, and overall distribution strategies. An estate plan that was perfectly optimized under the current high exemption may need significant adjustments to remain effective under a lower exemption. Work with a qualified estate planning attorney to ensure your documents reflect the current legal landscape and your evolving wishes.

Step 3: Consider Accelerated Gifting Strategies. One of the most talked-about strategies in light of estate tax 2026 is making large gifts before the exemption drops. Under current law, you can gift up to the full exemption amount — roughly $13.61 million per person — during your lifetime without triggering gift tax. The IRS has confirmed through anti-clawback regulations that gifts made under the higher exemption will not be penalized if the exemption later decreases. This means there’s a genuine use-it-or-lose-it window that closes at the end of 2025. However, gifting is complex and irrevocable, so it requires careful consideration of your own financial needs and goals.

Step 4: Explore Irrevocable Trust Structures. For those with estates that may be affected by the estate tax 2026 sunset, irrevocable trusts can be powerful tools for removing assets from your taxable estate. Structures like Spousal Lifetime Access Trusts (SLATs), Irrevocable Life Insurance Trusts (ILITs), and Grantor Retained Annuity Trusts (GRATs) each serve different purposes and offer different advantages. A SLAT, for example, allows one spouse to make a gift to an irrevocable trust while the other spouse retains the ability to receive distributions — providing a balance between tax reduction and continued access to funds. These strategies take time to set up properly, making it important to start conversations now rather than waiting until the final weeks of 2025.

Step 5: Maximize Annual Gift Tax Exclusions. In addition to larger lifetime gift strategies, don’t overlook the power of annual exclusion gifts. For 2024, you can give up to $18,000 per recipient per year without using any of your lifetime exemption. A married couple can give $36,000 per recipient. If you have multiple children and grandchildren, these gifts can add up significantly over time and help reduce your taxable estate without any complex trust structures. While annual exclusion gifts alone may not solve a major estate tax 2026 exposure, they’re an important piece of a comprehensive strategy.

Step 6: Review Life Insurance Ownership and Beneficiary Designations. Life insurance death benefits are included in your gross estate if you own the policy or have incidents of ownership at the time of death. For Treasure Coast retirees who carry significant life insurance, this can push an estate over the reduced exemption threshold. Transferring ownership of a life insurance policy to an ILIT or another appropriate structure can remove the death benefit from your taxable estate, though there are important rules and timing requirements to be aware of. Beneficiary designations across all accounts — retirement plans, insurance policies, and transfer-on-death accounts — should also be reviewed to ensure they align with your overall estate tax 2026 planning strategy.

Step 7: Coordinate With Your Full Advisory Team. Estate planning doesn’t happen in a vacuum. The most effective strategies for addressing estate tax 2026 require coordination between your financial advisor, estate planning attorney, tax professional, and insurance specialist. Each professional brings a different lens to the conversation, and the best outcomes happen when everyone is working from the same playbook. If your advisors haven’t been communicating with each other, now is the ideal time to bring them together for a comprehensive planning meeting.

Florida-Specific Advantages You Should Know About

One of the reasons so many retirees choose the Treasure Coast — and Florida in general — is the state’s favorable tax environment. Florida has no state income tax, no state estate tax, and no state inheritance tax. This is a meaningful advantage when you’re planning around the estate tax 2026 federal changes, because it means you’re only dealing with one layer of potential estate taxation rather than two. Retirees in states like New York, Massachusetts, or Oregon, for example, face state estate taxes with exemptions far lower than the federal threshold, sometimes as low as $1 million. Here in Stuart, Port St. Lucie, and across Martin and St. Lucie counties, you don’t have that additional concern.

Florida’s homestead protections also offer important benefits for estate planning. The state’s homestead exemption provides certain protections from creditors and places restrictions — and safeguards — on how your primary residence can be devised in your will. Understanding these rules is important, especially if your estate plan involves passing your home to specific beneficiaries. When you pair Florida’s lack of a state estate tax with these homestead protections and thoughtful estate tax 2026 planning at the federal level, the Treasure Coast becomes an even more attractive place to build and protect generational wealth.

Additionally, Florida’s favorable trust laws make it a good jurisdiction for establishing and administering irrevocable trusts. If you’re considering strategies like SLATs or dynasty trusts as part of your estate tax 2026 preparation, Florida’s legal framework is generally supportive of these structures. Of course, the specific details matter enormously, and you’ll want to work with an attorney who is well-versed in both Florida trust law and federal estate tax regulations.

Common Mistakes to Avoid When Planning for Estate Tax 2026

The first and most common mistake is simply waiting too long. Complex estate planning strategies — particularly those involving irrevocable trusts, asset appraisals, and coordinated gifting — take time to implement properly. Attorneys, CPAs, and financial advisors all see a crush of demand as major tax deadlines approach, and the estate tax 2026 sunset is no exception. Starting the process now gives you the luxury of thoughtful decision-making rather than rushed execution. If you wait until the fall of 2025, you may find that the professionals you want to work with are already at capacity.

Another common mistake is making irrevocable decisions without fully understanding their implications. Gifting $10 million to an irrevocable trust sounds like a smart estate tax 2026 strategy on paper, but if it leaves you without sufficient resources for your own retirement, healthcare needs, or lifestyle, it’s a plan that creates more problems than it solves. Every gifting and trust strategy should be stress-tested against your personal financial plan to ensure you’re not sacrificing your own security for tax savings. Remember, you can’t take the gift back once it’s made.

A third mistake is failing to account for potential changes in the law. While we recommend planning as though the sunset will happen, you should also build flexibility into your strategy wherever possible. Some trust structures can be designed with provisions that allow for adjustments depending on how the law evolves. The estate tax 2026 landscape could still shift if Congress acts, and your plan should be resilient enough to serve you well under multiple scenarios. Rigid, all-or-nothing approaches rarely serve families well over the long term.

Working With Professionals to Get It Right

Given the complexity and the stakes involved, estate tax 2026 planning is not a DIY project. The interplay between federal estate tax law, gift tax rules, income tax considerations, trust administration requirements, and Florida-specific provisions demands professional guidance. A qualified estate planning attorney can draft or update your documents, a CPA or tax advisor can model the tax implications of various strategies, and a financial advisor can ensure your plan aligns with your broader retirement and income goals. At 1715tcf.com, we believe in the power of education and informed decision-making — and working with the right team is a critical part of that equation.

When selecting professionals to help with your estate tax 2026 planning, look for individuals who have specific experience with estate and gift tax strategies, not just general practitioners. Ask about their familiarity with the TCJA sunset provisions and the types of trust structures that may be relevant to your situation. The best advisors will take the time to understand your complete financial picture, your family dynamics, and your values before recommending any specific strategy. They’ll also be transparent about the costs, risks, and limitations of every option they present.

It’s also worth noting that the planning process itself can be a valuable family conversation. Many Treasure Coast families find that discussing estate plans openly — including the rationale behind gifting strategies and trust structures — strengthens family relationships and reduces the potential for conflict down the road. The estate tax 2026 deadline provides a natural catalyst for having these important conversations before time runs short.

Final Thoughts and Next Steps

The estate tax 2026 sunset is not a distant hypothetical — it’s a real, scheduled change in the law that could meaningfully impact families across the Treasure Coast and beyond. Whether your estate is clearly above the projected lower exemption, right on the edge, or comfortably below it, the smart move is to get informed, get organized, and make deliberate decisions while you still have the full range of options available to you. The seven steps outlined above provide a solid framework for getting started, but every family’s situation is unique, and the details matter enormously.

If you found this guide helpful, we’d encourage you to listen to the related episode of The 1715 Podcast, where we walk through these estate tax 2026 strategies in a conversational format that’s easy to follow. You can also explore additional resources and educational content at 1715tcf.com. And if you’d like personalized guidance for your specific situation, we always recommend scheduling a conversation with a qualified financial professional who can look at the full picture and help you make confident decisions. The clock is ticking — but there’s still plenty of time to act thoughtfully.

This content is for educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Please consult a qualified financial professional before making any financial decisions.