Why waiting might cost you more than you think
Here’s a little reminder from your future self:
“I wish we had talked to someone about this before the rules changed.”
2026 might feel far off. But in estate planning terms, it’s practically tomorrow. And the current federal estate and gift tax exemptions? They’re unusually high. Historically high, in fact. That window won’t stay open much longer.
If Congress doesn’t act, those generous exemptions will be cut in half on January 1, 2026. And that means more of your hard-earned assets could end up in federal estate taxes instead of in the hands of your family. It’s not about panic; it’s about planning, while you still can.
At Bellomo & Associates, we don’t believe in scrambling at the last minute. We believe in being ready, and now is the time to take action.
Big Changes Are Coming—But You Still Have Time
Right now, individuals can pass on up to $13.99 million tax-free. For married couples, that number nearly doubles. But when the current law sunsets, those thresholds are expected to drop to around $7 million per person.
That change might not seem urgent until you consider how quickly assets grow. A $12 million estate today can become a $15 million estate in just a few years through investment growth or business appreciation. If your estate crosses the lower threshold, your family could face a 40% tax on everything above it.
If you’ve been on the fence about updating your plan, this is your wake-up call.
Are Credit Shelter Trusts About to Make a Comeback?
Remember credit shelter trusts? Also called family or bypass trusts, they were a standard tool for married couples looking to reduce the estate tax. After the 2017 tax changes, many stopped using them because their estates no longer triggered the tax.
But with the exemption set to drop, these trusts may become relevant again.
Credit shelter trusts allow the first spouse’s share of the estate to be placed in a trust that avoids taxation when the second spouse dies. But they come with tradeoffs. For example, trust assets only receive a single step-up in cost basis, which could create capital gains issues for your children later on.
Some families consider disclaimer trusts, where the surviving spouse has the option to fund a credit shelter trust after the first death. That offers flexibility, but it assumes the surviving spouse is both willing and able to make a fast, complex decision during a stressful time.
These aren’t decisions you want to leave for your loved ones to figure out under pressure. If your estate might be impacted, now is the time to talk through the options with a qualified attorney.
Plan for Growth, Not Just Today
It’s easy to look at what you own today and feel like you’re in the clear. But estate planning is about preparing for the future, not just recording the present.
Let’s say you and your spouse have $12 million in combined assets. At just 6% annual growth, you’ll cross $14.5 million in a few years. That puts you right near the reduced exemption level and possibly over it.
What can you do now to prepare?
- Make use of your annual gift exclusions—$19,000 per person in 2025
- Use today’s larger lifetime exemptions while they’re still available
- Transfer appreciating assets into irrevocable trusts
- Incorporate charitable giving to reduce taxable estate value
Whether you’re looking to support your family, preserve your legacy, or support a cause close to your heart, early planning gives you more control.
Even If You Think You’re Safe, Check Again
You may feel like the tax law changes won’t affect you, but it’s worth a second look.
Life has a way of shifting the numbers. A business gets sold. A parent passes. A grandchild is born. Your goals may evolve. Your executor may no longer be the best fit. And maybe your beneficiaries need more structure than you thought.
Your estate plan should grow and change as you do. This is not a set-it-and-forget-it moment.
Talk Now—Relax Later
Having proactive conversations now with a qualified estate planning attorney doesn’t just protect your family; it can save them from unnecessary taxes, legal battles, and stress later on.
At Bellomo & Associates, we help families create estate plans that work—plans that preserve what you’ve built and carry out your wishes, even through a changing legal landscape.
Register for a Workshop today, and let’s start a conversation that your future self will thank you for.
