New York Estate Law Changes for 2026
Can you believe that 2025 is more than five sixths of the way finished? Perhaps it is time to take a page from Generation Z and “lock in” to accomplish your goals before 2025 ends, instead of waiting until 2026 to make resolutions for the year. Even if you are inclined to make resolutions every January, some of your estate planning goals can’t wait, because some changes in laws related to estate planning will go into effect at the beginning of 2026. In some cases, the end of this year is your last chance to make some money-saving moves. In others, new opportunities will arise at the beginning of 2026. Meanwhile, new changes to federal policies will mean greater financial constraints for seniors who are already retired and for those who plan to retire in the near future. For help getting your estate plan into shape for 2026, contact a Bronx estate planning lawyer.
Opportunities to Save on Taxes
The new federal tax legislation includes plenty of perks for middle income and high-income individuals. These are some ways that you might see your tax burden get lower in 2026:
- The cap on the state and local tax (SALT) deduction rose from $10,000 to $40,000 starting with 2025, with small annual increases through 2029. The higher cap phases down for incomes above $500,000.
- The federal gift and estate tax exemption rose to $15 million per person for 2026, with no scheduled expiration date. New York’s own estate tax still applies to estates above $7,350,000, so New York families still need state-level planning.
- The new law creates tax-advantaged savings accounts for children, and the federal government deposits $1,000 for U.S. citizen children born from 2025 through 2028. Family members can add money to these accounts, which makes them a useful destination for cash gifts to young grandchildren.
Are You Ready for Changes to Medicaid?
Estate planning websites are full of aspirational content about leaving your heirs a generous inheritance, but most people’s reality is that they will eventually have to rely on Medicaid for nursing home care, which means strategically spending down their assets or transferring them to a Medicaid asset protection trust.
Recent federal legislation reduced Medicaid funding, and those changes will phase in over the next several years. Because the details of how New York will respond are still developing, it makes sense to plan ahead rather than count on today’s rules staying the same. If you can afford it, you should buy long-term care insurance or hybrid life insurance, if you can possibly afford it. If you have missed the boat on insurance because of your age or pre-existing medical conditions, you should get started on a Medicaid asset protection strategy.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you adapt your estate plan to align with recent policy changes regarding taxes and Medicaid. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
health.ny.gov/health_care/medicaid/program/medicaid_modernization/