Hosts discussed 2026 federal and NC estate tax changes, noting the estate tax exemption rose to $15 million per individual and the annual gift tax exclusion increased to $19,000 per recipient. They explained gifting rules, reporting requirements, charitable gifts (unlimited) and the 40% tax on amounts exceeding the exemption, and highlighted planning opportunities for passing real estate and businesses to the next generation. They also emphasized that long-term care costs—often paid privately—are now a primary threat to estates, recommending elder-law and asset-protection planning.

Estate tax exemption level and background

• Historical context of estate tax thresholds and past concern among clients (00:25–03:29) [00:25] [01:15] [02:08] [03:00]

• 2026 federal (and North Carolina) estate tax exemption raised to $15 million per individual (up from $13.9M in 2025). Implication: estates under $15M generally not subject to federal/N.C. estate tax (04:05–04:30) [04:05] [04:30]

• Many listeners are unaware of the increase; only very wealthy estates typically meet the threshold (04:59–06:19) [04:59] [06:19]

Annual gift exclusion and gift-tax basics

• Annual gift exclusion increased from $10,000 (historical) to $19,000 per recipient in 2026; gifts at or below this amount do not require reporting (06:49–07:46) [06:49] [07:18] [07:46]

• Gifts exceeding $19,000 must be reported on a gift tax return; lifetime gift/estate exemption equals the $15M exemption and lifetime gifts reduce the remaining exemption available at death (08:14–10:02) [08:14] [08:42] [09:09] [09:37] [10:02]

• Example: gifting several million during life reduces the remaining exemption (e.g., gift $3M leaves $12M of exemption) and must be recorded by the IRS (09:37–10:02) [09:37] [10:02]

• $19,000 per person annual exclusion requires no reporting; amounts above that require filing (10:02–10:47) [10:02] [10:47]

Charitable gifts and tax treatment

• Charitable bequests or outright gifts to qualifying charities are unlimited for estate tax exclusion purposes; leaving part of the estate to charity can eliminate estate tax on remaining assets under planning scenarios (14:12–15:08) [14:12] [14:41] [15:08]

• Example: in a $20M estate, $5M left to charity and $15M to heirs could result in zero estate tax liability (15:08–15:35) [15:08] [15:35]

• Amounts exceeding the exemption are subject to a high estate tax rate (discussed as ~40% on amounts over the exemption) (15:35–16:27) [15:35] [16:01] [16:27]

Valuation and what counts in the estate

• Comprehensive inventory is essential: real estate, business interests, stock accounts, life insurance, IRAs, 401(k)s, annuities — all are included in estate valuation (01:45–03:00) [01:45] [02:34] [03:00]

• Assets that pass by beneficiary designation (life insurance, IRAs, POD accounts) are still included in the gross estate for estate tax calculation (18:12–19:36) [18:12] [18:42] [19:08] [19:36]

• Real estate values (especially coastal cottages, vacation homes) have appreciated significantly and can push owners closer to exemption limits—importance of inventory and valuation review (05:53–06:49) [05:53] [06:19] [11:42] [12:11]

Opportunities for intergenerational transfers and business succession

• Higher exemption and larger annual gift exclusion create more opportunity for gifting property, business stock, and transferring management/control to next generation during lifetime (11:15–13:08) [11:15] [12:41] [13:08]

• Gifting corporate stock or business interests up to $19,000 per recipient annually without reporting can be part of succession strategies (23:51–24:19) [23:51] [24:19]

• Greater flexibility now for business owners to transfer ownership or management while retaining some involvement (21:57–22:54) [21:57] [22:27] [22:54]

Practical client examples and advice

• Practitioner anecdote: client from western county wanting to gift several million to her daughter and being unaware of reporting/lifetime exemption effects; counsel required to explain consequences (09:09–09:37) [09:09] [09:37]

• Attorneys should inventory estates, calculate aggregated values, and discuss lifetime gifting versus saving exemption for death-time use (01:15–03:29) [01:15] [01:45] [03:29]

• Even clients who believe they are far below $15M should review their holdings since combined assets (insurance, retirement, real property) may produce surprising totals (24:40–19:36) [24:40] [18:12] [19:36]

Estate tax vs. long-term care: shifting primary risk

• While estate tax is less of a concern for many due to higher exemption, the major current threat to family wealth is long-term care costs (24:40–26:28) [24:40] [25:08] [25:33] [26:00]

• Medicare does not cover long-term custodial care; it covers short-term post-hospital rehabilitation only. Prolonged institutional care becomes self-pay and can rapidly deplete assets (26:28–27:39) [26:28] [26:55] [27:39]

• Typical long-term care costs (example ranges cited $10,000–$14,000/month) can exhaust savings and threaten family homes and business assets over multi-year stays (27:39–28:05) [27:39] [28:05]

• Planning options include asset protection and elder-law strategies to preserve resources and protect family property from spend-down (28:33–29:00) [28:33] [29:00]

Call to action and contact information

• Listeners encouraged to review their estate inventories and contact Harvell & Collins for planning appointments; contact number provided: 252-726-9050 and website harvellandcollins.com (00:00–00:25) [00:00] [00:25]

• Hosts emphasized that 2026’s higher thresholds present new planning opportunities and the importance of acting now to address both gifting and long-term care planning (04:05–04:30) [04:05] [29:00]

Closing remarks

• Summary reiteration of key takeaways: exemption rose to $15M, annual gift exclusion now $19,000, charitable gifts unlimited for estate exclusion, estate valuation must include all asset types, and long-term care costs are an urgent planning priority (04:30–07:46) [04:30] [06:49] [14:12] [18:12] [26:28]