Year-end estate and tax planning steps to weigh for 2027

Year-end financial planning is often reduced to a single question: What can I do before Dec. 31 to lower this year’s tax bill?

For many families and business owners, that view is too limited. Taxes still matter, but some of the most important decisions at year end involve how wealth is owned, transferred and ultimately taxed.

This year, it may make sense to begin with your estate plan before you look at your tax return.

Start by reviewing your estate plan

The federal estate and gift tax exemption is $15 million per person in 2026. For married couples, that can amount to $30 million of combined federal exemption with proper planning.

Still, staying below the federal estate-tax threshold does not mean your estate plan is complete.

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

Beneficiary designations deserve close attention. Retirement accounts, life insurance policies and transfer-on-death accounts usually pass based on the beneficiary form on file, not the instructions in your will. Make sure those designations still match your overall estate plan.

Account ownership also matters. Property held individually, jointly or in a trust may transfer differently at death. The aim is to ensure your estate documents, beneficiary forms and account titles all align.

If you have set up one or more irrevocable trusts, review them with your estate-planning attorney as well. An irrevocable trust generally cannot simply be changed or revoked, but it should still be reviewed from time to time to confirm that it is being administered as intended and still fits current family circumstances and tax law.

Use lifetime gifts with purpose

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 a routine year-end habit.

Begin with the goal. Are you helping a child buy a home, paying for education or reducing the size of a taxable estate? Different goals can lead to very different approaches.

Income-tax effects also matter. Appreciated assets given during life generally carry the donor’s cost basis, while assets held until death may receive a basis adjustment.

So transferring an appreciated asset can shrink an estate while potentially increasing the recipient’s future capital-gains tax. Estate tax and capital-gains tax should be considered together.

Coordinate your tax strategies

After your estate plan is where you want it, it is time to revisit the usual year-end tax-saving moves.

Charitable giving deserves special attention in 2026. Depending on your circumstances, strategies may include bunching several years of donations into one year, giving appreciated securities instead of cash, using a donor-advised fund or making a Qualified Charitable Distribution, or QCD, directly from an IRA if you qualify.

Investors should also review capital gains and losses together. Tax-loss harvesting can help, but investment choices should not be driven by a deduction alone. Consider realized gains, carryforward losses, concentrated stock positions and charitable plans as part of the same conversation.

A partial Roth conversion may also be worth evaluating. The decision should look beyond today’s tax bracket. Future required minimum distributions, Medicare premiums, the tax situation of a surviving spouse and the taxes heirs may eventually owe on inherited retirement accounts may all influence the outcome.

Business owners face another layer of complexity

For business owners, estate planning and tax planning cannot be separated from succession planning. As you think about the future, ask two different questions: Who will own the business, and who will run it? Those may not be the same people.

If one child works in the business and another does not, leaving equal ownership to both may create complications. A thoughtful succession plan may rely on other assets, insurance or a structured buyout to provide for family members who will not be involved 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 the end, year-end planning should be more than a checklist of deductions. The goal is to make careful decisions now that leave your family, your estate and, if relevant, your business in the strongest possible financial position for the years ahead.