As tax laws evolve and exemptions shift, high-net-worth individuals face both challenges and opportunities. With the right approach, you can unlock permanent exemption increases and preserve wealth for future generations.

Understanding the 2026 Tax Law Landscape

In 2026, key estate, gift, and generation-skipping transfer exemptions have been permanently increased to $15 million per individual ($30 million per couple), adjusted for inflation. This change reverses prior scheduled reductions and provides a historic window for strategic planning.

The One Big Beautiful Bill Act (OBBBA) introduces sweeping changes: new caps on itemized deductions for top-bracket earners, modified contribution limits, and revised estate-planning opportunities. Meanwhile, the SALT deduction expansion through 2029 offers relief at moderate incomes but phases out for higher earners.

Charitable giving via Qualified Charitable Distributions (QCDs) sees a new limit of $108,000 per person in 2025, counting toward required minimum distributions. With the Tax Cuts and Jobs Act (TCJA) set to expire after 2025—and federal debt nearing $2 trillion—experts warn of potential rate hikes. Acting before year-end 2025 ensures you benefit from current provisions.

Asset Location and Portfolio Optimization

Effective asset placement can dramatically reduce your tax burden. By segregating high-yield bonds and CDs into tax-deferred accounts, you avoid ordinary income rates on interest. Equities, with their preferential long-term capital gains treatment, thrive in taxable portfolios.

• Allocate bonds and CDs to IRAs or 401(k)s to minimize taxable interest income.
• Keep stocks and dividend-paying equities in taxable accounts for lower rates.
• Perform strategic tax-loss harvesting to offset gains and reinvest in tax-efficient vehicles.
• Rebalance concentrated positions to manage both market and tax risk.

Maximizing Retirement and Tax-Advantaged Accounts

Retirement vehicles remain cornerstones of any tax-efficient plan. Whether you choose Roth, traditional, or health savings accounts, each offers unique benefits and tactical opportunities.

New “Trump Accounts” are anticipated in mid-2026, promising additional vehicles for high-income earners. Monitor regulatory updates to integrate these tools promptly.

Charitable Giving Strategies

Philanthropy can be both meaningful and tax-smart. By accelerating gifts before 2026, you capitalize on current rates and exemptions.

• Use donor-advised funds for immediate deductions and future flexibility.
• Establish charitable remainder trusts to receive income streams while obtaining upfront deductions.
• Leverage QCDs to transfer IRA funds directly to charity, reducing AGI.
• Gift long-term appreciated securities for maximum tax efficiency.

Preserving Wealth Through Estate Planning

Comprehensive estate planning ensures assets transfer seamlessly and tax-efficiently. Annual gifting under the exclusion amount trims your taxable estate over time, while a full step-up in basis at death can eliminate heirs’ capital gains liabilities on appreciated assets.

Irrevocable trusts—such as generation-skipping or spousal lifetime access trusts—can remove assets from your estate while retaining indirect family access. Family limited partnerships and LLCs allow you to transfer interests at a discounted value, providing creditor protection and continued management control.

For business owners, intentionally defective grantor trusts freeze asset values, with the grantor paying income taxes and heirs inheriting future appreciation tax-free. A regularly updated comprehensive plan should include wills, trusts, beneficiary designations, and titling reviews to reflect evolving laws like OBBBA.

Year-End and Immediate Actions

To prepare for 2026, prioritize these activities before December 31, 2025:

• Harvest unrealized losses to offset gains and carry forward deductions.
• Maximize retirement and charitable contributions while rates remain favorable.
• Execute Roth conversions in stages to manage tax brackets.
• Review and update estate documents in light of new OBBBA provisions.
• Adjust estimated payments using the 90%/110% rule and invest cash in short-term fixed income.

Creating a Lasting Legacy

Beyond taxes, true wealth preservation involves clear communication, diversified holdings, and robust insurance. Engage family members in discussions to align long-term objectives and ensure your legacy reflects your values.

By combining strategic asset location, charitable acceleration, and comprehensive estate planning, you can navigate 2026’s tax landscape with confidence and leave a lasting impact for generations to come.