Estate Planning Tax Considerations
Understand estate tax exemptions, gift tax strategies, and wealth transfer planning for 2026.
Estate planning is about more than documents. It is about ensuring your wealth passes to the people and causes you care about, in the most tax-efficient way possible.
Wealth transfer planning is one of the cornerstones of what we do at Windward Private Wealth Management. We work side by side with Kansas City families and their estate planning attorneys to coordinate the complex intersection of estate documents, tax strategy, and multi-generational wealth planning.
The 2026 Estate Tax Landscape: What Changed?
For years, families and advisors have been planning around a looming deadline — the scheduled sunset of the Tax Cuts and Jobs Act exemptions at the end of 2025, which would have cut the estate tax exemption roughly in half.
That uncertainty is now resolved. President Trump signed the One Big Beautiful Bill Act (OBBBA) into law on July 4, 2025, permanently extending the elevated federal estate, gift, and generation-skipping transfer tax exemptions. Beginning in 2026, the exemption is set at $15 million per individual, indexed for inflation starting in 2027, with no sunset provision. For married couples, that means a combined exemption of $30 million with portability.
This is significant, permanent clarity — but it does not mean estate planning is less important. It means the focus shifts.
What This Means for You
With the exemption now permanent at $15 million, federal transfer taxes are a concern only for the wealthiest families. For most of our clients, income tax planning — including basis adjustment at death and the use of non-grantor trusts — will take on greater importance than transfer tax planning.
Families who rushed to make large gifts before the end of 2025 should also review their existing trust documents. Many credit shelter or GST trusts with formula clauses may no longer provide transfer tax benefits and could even be disadvantageous by denying a basis step-up at the surviving spouse's death.
And while "permanent" brings welcome stability, it is a relative term — given political uncertainties and rising federal debt, there is no guarantee the increased exemptions will not be reduced by a future administration. Acting thoughtfully now still makes sense.
Key Estate Planning Tax Strategies
Annual Gift Tax Exclusion - The annual gift tax exclusion for 2026 is $19,000 per recipient— $38,000 for a married couple. This is one of the simplest ways to transfer wealth tax-free without touching your lifetime exemption.
Lifetime Gift Tax Exemption - With a $15 million individual exemption, there is meaningful room for strategic lifetime gifting. Transferring appreciating assets — business interests, real estate, securities — out of your estate now means all future growth passes to heirs free of transfer tax.
Irrevocable Trusts - Irrevocable trusts continue to be valuable planning tools, now with more capacity to fund them:
- Irrevocable Life Insurance Trusts (ILITs): Keep life insurance proceeds out of your estate
- Grantor Retained Annuity Trusts (GRATs): Transfer appreciation to heirs with minimal gift tax
- Spousal Lifetime Access Trusts (SLATs): Allow couples to use their exemptions while maintaining indirect access to assets
Generation-Skipping Transfer Tax (GSTT) - The GST exemption mirrors the estate and gift tax exemption at $15 million per person but remains non-portable between spouses — requiring careful allocation to maximize multi-generational wealth transfer.
Charitable Giving as an Estate Planning Tool - Charitable remainder trusts, charitable lead trusts, and donor-advised funds remain effective tools for reducing your taxable estate while supporting causes you care about. Note that the OBBBA introduced a floor for charitable deductions beginning in 2026 — only contributions exceeding 0.5% of Adjusted Gross Income will be deductible for itemizers, so the structure and timing of charitable gifts deserves a fresh look.
Kansas and Missouri Considerations
Kansas and Missouri continue to have no state estate tax or inheritance tax, so federal planning remains the primary focus for families here. This is an advantage compared to states like New York or Illinois, where state-level estate taxes can be substantial even for estates well under the new federal threshold.
The Windward Approach
The OBBBA resolved the immediate urgency around the exemption sunset, but it did not reduce the importance of thoughtful, coordinated planning. If anything, with transfer tax concerns reduced for many families, the conversation shifts to income tax efficiency, basis planning, and multi-generational structure — which is exactly where Windward's integrated approach adds the most value.
We work alongside your estate planning attorney to ensure your estate plan, tax strategy, and investment plan are all aligned. Our multi-generational focus means we think about wealth transfer across decades, not just years.
Ready to talk through how the new law may affect your wealth transfer goals? Schedule a Discovery Meeting with our team to explore strategies and connect with the right legal and tax professionals for your situation.
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