Imagine working your entire life to build a legacy, only to see a significant portion of it lost to taxes. This isn’t just about numbers; it’s about safeguarding what you’ve worked so hard to create for the future you envision for your heirs and charitable interests. For high-net-worth individuals, especially those with significant business or real estate assets, upcoming estate tax changes in 2026 are set to dramatically impact the wealth transferred to the next generation. Without proactive planning, the wealth you intend to pass on could be sharply reduced by tax liabilities—leaving your family and philanthropic goals to face an uncertain future.

The 2026 Estate Tax Exemption Sunset: Why Acting Now is Critical

In 2026, the federal estate tax exemption will revert from its current high of $12.92 million per individual to approximately $5 million (adjusted for inflation). This reduction means that any estate valued above the new threshold will be taxed, potentially at a rate as high as 40% federally, and that’s before considering additional state-level estate or inheritance taxes. For high-net-worth families, this change could increase the number of estates subject to federal estate taxes by more than 100%, placing substantial tax liabilities on estates and diminishing the wealth passed on to future generations.

The time to act is now. By taking advantage of the current exemption, we can implement strategies that maximize wealth transfer while helping to minimizethe impact of taxes. At Finley Davis Financial, we offer a comprehensive approach that leverages both strategic experience and advanced wealth visualization technology, allowing you to see your wealth, legacy, and where it’s going.

Strategies to Safeguard Your Wealth and Preserve Your Legacy

Here’s how we can help structure your estate plan to minimize taxes and maximize the legacy you leave behind:

Lifetime Gifting:
Gifting wealth during your lifetime can significantly reduce your taxable estate. Under current laws, you can make use of the annual gift tax exclusion, which allows you to give up to $17,000 per recipient tax-free each year, in addition to leveraging the lifetime gift exemption before it reverts in 2026. We help you develop a gifting strategy that maximizes these exclusions, keeping your gifts both tax-efficient and aligned with your overall estate plan. This approach not only reduces the size of your taxable estate but also allows your heirs to benefit from your wealth while you’re here to witness it.

Irrevocable Trusts:
Placing assets into an irrevocable trust, such as a Grantor Retained Annuity Trust (GRAT) or Irrevocable Life Insurance Trust (ILIT), removes these assets from your taxable estate. Trusts can be used to protect large portions of your estate from tax liabilities, transferring wealth to your heirs in a tax-efficient manner. Finley Davis Financial can help structure trusts that align with your financial and familial goals, providing financial projections to illustrate how each trust can work over the years to protect your wealth and reduce tax exposure.

Family Limited Partnerships (FLPs):
By transferring assets into a Family Limited Partnership, you retain control over investment and management decisions while providing a tax-advantageous means to transfer wealth. FLPs can be leveraged to apply valuation discounts for estate and gift tax purposes, significantly reducing the tax liabilities associated with large family-owned assets. We work closely with your legal and tax advisors to establish FLPs that align with both your long-term investment goals and your tax planning objectives.

Charitable Giving:
Charitable donations offer substantial tax benefits, reducing both income and estate taxes. Establishing a charitable trust or foundation allows for more structured giving that supports your philanthropic goals while providing income tax deductions and estate tax exemptions. Finley Davis Financial can help you integrate charitable giving into your estate plan, guiding your generosity to create a lasting impact with valuable tax benefits.

Life Insurance in Irrevocable Trusts:
Life insurance, when held within an irrevocable trust, can provide necessary liquidity to cover estate taxes and keep your most valuable assets intact for your heirs. In addition, life insurance proceeds owned by an irrevocable trust are typically excluded from your taxable estate. Our team assesses your life insurance needs within the context of your estate plan, providing your heirs with the funds necessary to pay estate taxes without having to liquidate other assets.

Visualize Your Wealth and Legacy with Advanced Wealth Technology

We understand that estate planning isn’t just about implementing strategies—it’s about clearly seeing the legacy you’re creating and understanding how your wealth will impact your family and community for generations. At Finley Davis Financial, we employ advanced wealth visualization technology that allows you to see your entire financial picture in real time. This technology enables you to:

Visualize Your Legacy:
See the projected outcomes of different estate planning strategies, with detailed insights into how your wealth will flow to heirs, charities, and other beneficiaries. Our system gives you a clear, dynamic view of your estate plan’s impact, providing confidence in your decisions.

Explore “What If” Scenarios:
Our technology models multiple scenarios, helping you understand the effects of various tax-efficient strategies before committing to any specific plan. This proactive approach gives you the flexibility to make adjustments as the tax landscape evolves, supporting the ongoing protection of your wealth.

Track Progress Over Time:
Estate planning is an ongoing process, and our visualization tools allow you to track and adjust your plan over time, responding to changes in both your financial situation and tax laws.

Finley Davis Financial: A Partner in Protecting and Preserving Your Legacy

At Finley Davis Financial, we’re not only committed to maximizing the wealth you pass on but to crafting a legacy that reflects your personal and philanthropic goals. With our blend of sophisticated strategies and real-time visualization technology, you stay informed and in control. By planning ahead, we help make sure that your intentions, not tax liabilities, shape your legacy.

Now is the time to act. Connect with us today to explore how we can help preserve your wealth and empower the future you envision for generations to come.

Contact us to discuss your unique situation.

‍LSF, LSA, and Finley Davis Financial do not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.