New York Estate Planning Law Changes 2026

Estate planning does not exist in a vacuum. Federal and state laws shape what strategies work, what taxes apply, and how courts and fiduciaries handle estates. In 2026, several significant developments are directly affecting how New York residents should approach their planning — and whether existing plans still reflect the current legal landscape.

Federal Estate Tax Exemption Changes in 2026

One of the most consequential developments involves the federal estate tax exemption. The Tax Cuts and Jobs Act (TCJA), enacted in 2017, roughly doubled the federal exemption. Those elevated limits were always scheduled to expire — 2026 is the year that sunset takes effect unless Congress passed legislation to extend or permanently change the rules.

The practical result is that federal estate tax may now apply to estates that would have been fully protected just a year ago. For high-net-worth New York families, this shifts the calculation significantly. Strategies like large lifetime gifts, spousal lifetime access trusts (SLATs), and irrevocable life insurance trusts (ILITs) have become more relevant for those whose estates approach or exceed the revised thresholds.

If you haven't reviewed your estate plan since 2023 or earlier, the federal exemption change alone is a reason to schedule an updated review.

New York's Separate Estate Tax — And the Cliff Rule

New York imposes its own estate tax, completely separate from federal law. The state uses a basic exclusion amount that adjusts annually for inflation — and it works very differently from the federal system.

The most important distinction is what estate planners call the cliff rule. Under New York law, if a taxable estate exceeds 105% of the state exemption amount, the entire estate — not just the amount above the threshold — becomes subject to New York estate tax. This means a relatively small increase in estate value can trigger a disproportionately large tax bill.

This makes careful valuation and planning critical. Strategies that reduce the taxable estate below the cliff threshold — through charitable giving, lifetime gifting, or irrevocable trusts — gs. New York has no gift tax, making lifetime gifting a particularlyuseful tool.

No Portability of the New York Estate Tax Exemption

Under federal law, a married couple can effectively double their combined exemption using portability — the surviving spouse can use any unused portion of the first spouse's federal exemption. This is a significant planning tool at th

New York does not have portability.

When the first spouse dies, whatever remains of their New York state ed to the surviving spouse. Each spouse's exemption must be usedindependently. For married New Yorkers, this means intentional planning — often through credit shelter trusts (also called bypass trusts) — is the only way to capture the benefit of both spouses' state exemptions.

Couples who rely solely on simple "I love you" wills that pass everytg spouse may be leaving significant tax planning value unused.

Beneficiary Designations Still Override Everything

Beneficiary designations on retirement accounts, life insurance policcounts, and transfer-on-death investment accounts do not pass throughyour will or trust. They transfer directly to the named beneficiary — overriding whatever your other estate plan documents say.

This creates a risk most people underestimate. Common problems includ

• A former spouse still listed as primary beneficiary on an old 401(k
• Parents listed on accounts opened before children were born
• No contingent beneficiary named, causing assets to fall into the pr
• Minor children named directly, triggering court-supervised custodianship until age 18

Reviewing and updating beneficiary designations as part of a 2026 plan review ensures they align with your current wishes and integrate cleanly with your trust or will.

Digital Asset Planning Is No Longer Optional

Cryptocurrency holdings, online brokerage accounts, digital businesses, and even valuable domain names or content accounts all constitute digital assets that require estate planning. New York has adopted the Revised Uniform Fiduciary ARUFADAA), which provides a legal framework for how fiduciaries —executors, trustees, agents under power of attorney — can access and manage these assets.

But RUFADAA does not solve the practical problem of access. If your executor cannot locate wallet seed phrases, cannot log in to accounts, or cannot identify what digital assets exist, the legal framework is irrelevant. A comprehens:

• A secure, regularly updated inventory of digital assets and access
• Explicit authorization in your power of attorney and trust documents for digital access
• Guidance on which assets should be transferred, liquidated, or pres

As the percentage of personal wealth held in digital form continues td component of any complete estate plan.

Medicaid and Long-Term Care Planning Developments

Medicaid eligibility in New York requires navigating a complex set ofnt administrative guidance has clarified how certain trust structures— particularly irrevocable Medicaid Asset Protection Trusts (MAPTs) — are treated during the five-year look-back period.

The core principle remains: assets transferred to a MAPT must remain there for five years before they are protected from Medicaid's spend-down requirements. Families that start this planning early — ideally a decade before a potential xibility and the greatest range of options. Waiting until a health crisis to explore Medicaid planning rarely proterm care costs are a concern for you or an aging parent, aconversation with an estate planning attorney now is worth far more than one during a medical emergency.

When Did You Last Update Your Plan?

Estate planning documents are not permanent. The law changes — as 2026 illustrates clearly — and your family situation and financial picture change too. Marriages, divorces, births, deaths, significant asset acquisitions, business chnt state can all require updates. A good rule of thumb: review your estate plan every three to five yea major life event or significant legal change. If your documents areolder than that, there is a reasonable chance they no longer accomplish what you intended.

Work With an Attorney Who Tracks These Changes

The 2026 developments in federal and New York estate planning law are not abstract planning considerations — they are changes affecting estates being settled and planbeing drafted right now. Whether the issue is the federal exemption s' New York exemptions through trust planning, or updating beneficiarydesignations that have grown stale, the right plan requires current legal knowledge.
At Zeus Estate Planning, we work with New York families to create and maintain estate plans that reflect real legal conditions — not outdated templates. If your plan hasn't been reviewed recently, or if you're starting to think about etime, we're here to help.

Contact Zeus Estate Planning today to schedule a consulta