Why Your Florida Trust Needs a "2026 Audit" Right Now
For years, the estate planning world held its breath for the “2025 Sunset”—the moment federal tax exemptions were scheduled to drop. However, as of January 1, 2026, the landscape has shifted. With federal estate and gift tax exemptions now stabilized at approximately $15 million per individual, the “fear-based” planning of the last decade is officially obsolete. If your trust was drafted before 2024, it may contain “ticking time bombs” that no longer serve your family’s best interests.
The Danger of the "Formula Clause"
Many high-net-worth Florida estate plans utilize “formula clauses” designed to automatically fund credit shelter trusts to avoid taxes. In 2010, when exemptions were lower, these made sense. In 2026, these clauses can be disastrous. They can inadvertently divert millions of dollars away from a surviving spouse and into restrictive trusts for children—all to save a federal estate tax that, under the new $15M limit, your estate may not even owe.
Flexibility is the New Asset Protection
In the current Florida wealth transfer, we are seeing a shift from “Tax Avoidance” to “Asset Flexibility.” A 2026 Trust Audit ensures your plan utilizes modern tools like Trust Protector Provisions, Decanting, and Step-up in Basis Optimization to ensure your heirs don’t get hit with capital gains taxes.
The Florida "Sandwich Generation" Crisis
As a Managing Partner and a caregiver myself, I see the “Sandwich Generation” struggle firsthand. You are managing aging parents and growing children. Your estate plan should be a source of relief. A 2026 audit looks at your Durable Power of Attorney and Healthcare Surrogates to ensure they are compliant with current Florida statutes.
Lori Vella is an Estate Planning and Business Attorney. She works virtually throughout Florida and New York, but has her home office in Tampa, Florida. She is mom to a little boy which ignited the passion for helping other families. She and her son enjoy car rides, playgrounds and taking mini-adventures. They also have an organic garden that surprisingly yields vegetables. Lori considers herself well-versed in Seinfeld and welcomes any trivia!
Disclaimer: The Law Office of Lori Vella’s website contains general information directed to Florida residents. This firm does not intend to give legal advice through its pages and/or blog. If you need legal advice, we encourage you to find an attorney licensed in your state. This language on this website does not create an attorney-client relationship between you and this firm.