Planning for 2026 & Beyond: What High‑Earning Households Should Address Under the New Tax Landscape

Editor’s Note (late 2025): This article reflects the tax-planning landscape following the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025. OBBBA eliminated the previously expected 2026 sunset of key Tax Cuts and Jobs Act (TCJA) provisions. This content is based on current law as of late 2025.

Why 2026 Still Matters
While 2026 no longer brings a reversion to pre-TCJA tax rates or a halving of estate exemptions, the new landscape created by OBBBA presents its own planning challenges and opportunities.

Key updates under OBBBA:

Individual tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) are made permanent.
Standard deduction enhancements and itemized deduction limits from TCJA are retained.
The federal estate, gift, and GST exemption increases to $15 million per person in 2026, indexed for inflation.
The Qualified Business Income (QBI) deduction is preserved with new thresholds and phaseouts.
For high-net-worth families, business owners, and executives, the 2025–2026 window is about optimizing under this new regime. Not racing a sunset, but positioning wisely.

Updated Priority Planning Areas for 2025–2026
1. Estate & Gift Tax Planning

What Changed: Exemption increases to $15 million per person in 2026 (up from $13.99 million in 2025).
Strategic Focus: Optimize use of the expanded exemption, review trust structures (SLATs, GRATs, IDGTs), and consider portability strategies.
Planning Considerations: Review estate plans for phaseout implications and update documents before exemption indexing begins.

2. Income Tax Planning & Roth Strategies

What Changed: No automatic rate increase in 2026, but new phaseouts and complexity.
Strategic Focus: Align Roth conversions, income acceleration, or deferral with personal lifetime rate projections.
Planning Considerations: Model tax scenarios over 2025–2028 to manage bracket creep, new deductions, and phaseout cliffs.

3. Business Exit & Liquidity Planning

What Changed: Stable rate environment, but potential new surcharges or thresholds.
Strategic Focus: Plan for valuation, structure (ESOPs, trust-owned entities), and income timing with greater predictability.
Planning Considerations: Start transition planning to ensure optionality before new complexities phase in fully.

4. Executive Compensation & Deferred Income

What Changed: No TCJA-based deadline, but new phaseouts and interaction rules.
Strategic Focus: Coordinate equity comp (RSUs, NQSOs) and deferred income with tax modeling and long-term goals.
Planning Considerations: Evaluate early exercises or distributions in context of total tax exposure.

5. Trust & Entity Structure Review

What Changed: Higher exemption creates need to revisit older trusts and operating agreements.
Strategic Focus: Review grantor trust status, FLPs, and legacy entities for efficiency and alignment.
Planning Considerations: Update governing documents to reflect new tax baselines.

6. Charitable Giving & Legacy Planning

What Changed: Opportunity to integrate larger gifts with estate tax strategy. However, recent changes under OBBBA have made the charitable deduction rules less favorable overall. Deductions may now be subject to more restrictive limits and phaseouts, particularly at higher income levels.
Strategic Focus: Use donor-advised funds, CRTs, and private foundations to leverage increased exemptions and structure gifts in a way that preserves deductibility.
Planning Considerations: Bundle charitable contributions, evaluate timing, and coordinate with estate planning to optimize the deduction under the new law.

Timing Matters: What to Prioritize When
By December 31, 2025:
Finalize any administrative or legal updates needed to align with 2026 law.
Evaluate charitable giving strategies for 2025; consider making significant gifts this year to take advantage of more favorable deductibility rules before new limits phase in.
Model Roth conversions and income strategies for multiyear tax efficiency.
Begin trust/entity updates if legacy documents reference outdated thresholds.
Through 2026:
Execute gifting and legacy strategies using the new $15M exemption base.
Advance succession and business exit planning.
Optimize philanthropic strategies in light of new income and estate rules.
Why Planning in 2025 Is Still Critical
Although the 2026 “cliff” has been removed, the transition to a new and more complex structure demands proactive engagement. High-earning households gain the most when plans are executed deliberately, not reactively.

Next Steps
Whether you’re preparing for a business transition, managing a growing estate, or aligning executive compensation with your long-term goals, the current environment is ideal for strategic refinement.

For new relationships, consider a Complimentary Introductory Call or request a complimentary second opinion. For current clients, your Avion Wealth team is already evaluating how these changes may affect your plan.

To your success,
The Avion Wealth Team

Disclosures
This material is intended for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, accounting, or investment advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Avion Wealth LLC is a registered investment advisor. For more information, please see our Form ADV and other disclosures.

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