In 2026, the estate planning landscape has shifted dramatically due to the One Big Beautiful Bill Act (OBBBA). For Americans with a net worth of $1M+, the game isn’t just about avoiding the 40% federal death tax—which currently only hits estates over $15 million—it’s about avoiding the “invisible” costs: probate fees, state-level taxes, and the “Step-Up in Basis” trap.
Here is your 2026 essential checklist for securing a seven-figure legacy.
1. The “Probate-Proof” Foundation
If your $1M+ net worth includes real estate or a business, a simple Will isn’t enough. In many states, probate can eat 3–7% of your estate’s value in legal fees.
- Revocable Living Trust (RLT): This is the “gold standard” for 2026. Assets in an RLT bypass the public, expensive probate court process.
- The “Funding” Audit: A trust is just a piece of paper unless you “fund” it. Ensure your house deed, brokerage accounts, and business interests are retitled in the name of the Trust.
2. Master the 2026 Tax Thresholds
While the federal exemption is a massive $15 million per individual ($30 million for couples) this year, the “State Tax Cliff” is where most millionaires get blindsided.
- Check State Exemptions: States like Oregon, Massachusetts, and Washington have estate tax thresholds as low as $1M to $2M. If you live there, you owe state taxes even if the IRS ignores you.
- Annual Gifting: You can now give away $19,000 per person ($38,000 for couples) per year without it counting toward your lifetime limit. This is a “use it or lose it” strategy to shrink a taxable estate.
3. The “Step-Up in Basis” Strategy
The OBBBA preserved the Step-Up in Basis for 2026. This is the single greatest tax gift for heirs.
- Strategy: If you have highly appreciated stocks (e.g., Nvidia bought in 2020), holding them until death allows your heirs to “reset” the cost basis to the current 2026 market value.
- Action: Avoid selling these assets now and paying 20% capital gains; let your heirs inherit them tax-free instead.
4. Digital & Modern Directives
In 2026, “assets” aren’t just in the bank. They are in the cloud.
- Digital Asset Memorandum: List your crypto private keys, social media logins, and cloud storage. Without this, your digital legacy (and potentially thousands in crypto) is lost forever.
- Power of Attorney (POA) for 2026: Ensure your POA includes specific language for digital assets and medical AI consultations, which have become standard in modern healthcare.
5. Beneficiary “Clean Up”
Many $1M+ estates fail because of a 10-year-old form.
- The Override Rule: Remember that beneficiary designations on IRAs, 401(k)s, and Life Insurance override whatever is in your Will.
- Review: Ensure your ex-spouse or a deceased relative isn’t still listed on your primary accounts.
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