BY BERNARD A. KROOKS, CERTIFIED ELDER LAW ATTORNEY

SPECIAL GUEST CONTRIBUTOR: JOEL KROOKS, ESQ.

As we enter 2026, there are important federal and New York State estate tax changes that should be on every client’s radar. Whether you’re updating an existing estate plan or starting one for the first time, understanding the updated exemption amounts, gift tax figures, and planning opportunities is essential to protect your legacy and minimize tax exposure.

Due to the One Big Beautiful Bill, the federal estate and gift tax exemption for 2026 is $15 million for each individual, up from $13.99 million in 2025.  Thus, in 2026, a married couple can give away during lifetime or on death (or a combination thereof) $30 million without incurring federal estate or gift tax.  

New York, of course, has its own estate tax which kicks in for taxable estates over $7.35 million, up from $7.16 million in 2025.  However, New York does not have a gift tax, although any lifetime gifts made within three years of death are “clawed back” into the decedent’s New York taxable estate for purposes of calculating their New York state estate tax. New York’s estate tax has a notable “cliff” provision: if your estate’s value exceeds the exemption by more than 5 percent, the entire estate—not just the excess—is subject to tax. This makes precise valuation and planning critical for estates close to the exemption threshold.

In addition, each individual is still permitted to give $19,000 in 2026 to as many people as they wish in any calendar year. This number did not increase from 2025. Thus, a married couple who has three children and seven grandchildren, can give $38,000 ($19,000 each) to each of them in 2026, an aggregate of $380,000, without paying gift taxes or even having to file a gift tax return.  Moreover, gifts made for educational or medical purposes are not subject to the $19,000 limit so long as the gifts are made directly to the educational or medical provider. Annual gifting remains a highly effective tool to reduce the size of your taxable estate over time. Coordinating gifts with your overall estate plan can shift future appreciation out of your taxable estate and help avoid both federal and state estate taxes.

Lastly, beginning in 2026, new limitations will apply to charitable deductions for taxpayers who itemize. Charitable contributions will be deductible only to the extent they exceed 0.5 percent of the donor’s adjusted gross income (AGI). This means that smaller charitable gifts may not generate any tax benefit for itemizers unless total contributions rise above this threshold. As a result, clients may wish to reconsider the structure of charitable giving, particularly with respect to year-end contributions and donor-advised funds. Furthermore, taxpayers who claim the standard deduction will be eligible for an above-the-line charitable deduction starting in 2026. This provision allows deductions of up to $1,000 for individual filers and $2,000 for married couples filing jointly, providing a limited tax incentive for charitable giving even when itemizing is not advantageous.

If you do not yet have an estate plan in place, consider making it a priority this year to have one prepared by an experienced estate planning attorney. If your existing plan has not been reviewed recently—or if you have experienced significant life changes—now is an ideal time to revisit your strategy. With the updated 2026 exemption amounts in effect, coordinating with an estate planning attorney and your financial advisor can help ensure your legacy goals are preserved as the tax landscape continues to evolve.

Bernard A. Krooks, Esq., is a founding partner of Littman Krooks LLP. He was named 2021 “Lawyer of the Year” by Best Lawyers in America® for excellence in Elder Law and has been honored as one of the “Best Lawyers” in America since 2008. He was elected to the Estate Planning Hall of Fame by the National Association of Estate Planners & Councils (NAEPC). Krooks is past Chair of the Elder Law Committee of the American College of Trust and Estate Counsel (ACTEC). Mr. Krooks may be reached at 914-684-2100 or by visiting the firm’s website at www.littmankrooks.com.