Year-End Estate and Tax Planning Moves to Consider for 2027

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830 AM on Sunday mornings. Email Bruce and Peg at yourmoney@wealthenhancement.com. Advisory services offered through Wealth Enhancement Advisory Services LLC, a registered investment adviser and affiliate of Wealth Enhancement Group.

Year-end financial planning is often framed around a familiar question: What can I do before Dec. 31 to reduce this year’s tax bill?

For many families and business owners, that question may be too narrow. Tax planning still matters, but some of the most important year-end decisions involve how wealth is owned, transferred and eventually taxed.

This year, consider starting with your estate plan before turning to your tax return.

Revisit Your Estate Plan First

The federal estate and gift tax exemption is $15 million per person in 2026. For a married couple, that potentially provides $30 million of combined federal exemption with appropriate planning.

But being below the federal estate-tax threshold does not mean estate planning is completely buttoned up.

Review your will, revocable trust, powers of attorney and health care documents. Have there been births, deaths, marriages or divorces? Are the people named to manage your affairs still the people you would choose today?

Beneficiary designations deserve particular attention. Retirement accounts, life insurance policies and transfer-on-death accounts generally pass according to the beneficiary form on file, not according to instructions in your will. Make sure those designations remain consistent with your overall estate plan.

Account titling also matters. Property owned individually, jointly or through a trust may pass differently at death. The goal is to make sure your estate documents, beneficiary designations and account ownership all tell the same story.

And, if you’ve created one or more irrevocable trusts, you should also review them with your estate-planning attorney. An irrevocable trust generally cannot simply be changed or revoked, but it should still be reviewed periodically to make sure it is being administered as intended and remains appropriate in light of current family circumstances and tax law.

Be Strategic About Lifetime Gifts

The annual gift-tax exclusion is $19,000 per recipient in 2026. A married couple may potentially give $38,000 per recipient without using lifetime gift and estate tax exemption. But gifting should not become an automatic year-end exercise.

Start with the purpose. Are you helping a child buy a home? Funding education? Reducing the size of a taxable estate? Those goals may lead to very different strategies.

It is also important to consider income-tax consequences. Appreciated assets given during your lifetime generally carry the donor’s cost basis, while assets retained until death may qualify for an adjustment in basis.

That means giving away an appreciated asset may reduce an estate but potentially increase future capital-gains taxes for the recipient. Estate tax and capital-gains tax should be evaluated together through a single lens.

Coordinate Tax Moves

Once your estate plan is where you want it to be, it’s time to review the usual year-end tax-reduction opportunities.

Charitable giving merits particular attention in 2026. Depending on your situation, strategies may include bunching several years of contributions into one year, contributing appreciated securities rather than cash, using a donor-advised fund or making a Qualified Charitable Distribution, or QCD, directly from an IRA if eligible.

Investors should also look at capital gains and losses together. Tax-loss harvesting can be useful, but investment decisions should not be made solely for a deduction. Consider realized gains, carryforward losses, concentrated stock positions and charitable plans as part of the same discussion.

A partial Roth conversion may also be worth reviewing. The decision should consider more than today’s tax bracket. Future required minimum distributions, Medicare premiums, the tax position of a surviving spouse and the taxes heirs may eventually owe on inherited retirement accounts may all affect your decision.

Businesses Add Another Complex Layer

For business owners, estate planning and tax planning cannot be sensibly separated from succession planning. As you contemplate the future, ask yourself two different questions: Who will own the business, and who will run it? It may not be the same person or persons.

If one child works in the business while another does not, simply leaving equal ownership to both may create problems. A well-designed succession plan may use other investments, insurance or a structured buyout to provide for family members who will not participate in the company.

Owners should also review buy-sell agreements, business valuations, life insurance, retirement-plan contributions and the timing of major capital purchases or compensation decisions before year-end.

In summary, year-end planning should not be reduced to a checklist of deductions. Your goal should be to make thoughtful decisions today that leave your family, your estate and, if applicable, your business in the strongest financial position for the years ahead.

The originial article was publishes in Pioneer Press. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

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