Tax Season is the Perfect Time to Review Your Estate Plan

How Estate Planning and Tax Season Intersect

Each tax season, individuals review their income, expenses, and any gifts or charitable donations made during the year to determine whether they are owed a refund or have additional tax obligations to the state or federal government. That same process can also help identify whether changes to asset ownership, trusts, or fiduciary roles may create additional tax filing responsibilities.

Tax season is therefore a good time to review how your assets are titled and what types of tax returns may need to be filed. In addition to federal and state individual income tax returns due each April, some individuals may also need to file fiduciary income tax returns for estates or trusts, as well as federal gift tax returns. If you are a business owner, the type of tax return you must file—and the filing deadline—will depend on the structure of your business.

Trust Tax Returns

Trust ownership can also affect how income is reported for tax purposes. Certain trusts, including revocable living trusts, Medicaid asset protection trusts that are structured as grantor trusts, and other intentionally defective grantor trusts, generally do not file their own income tax returns during the grantor’s lifetime. Instead, income generated by the trust’s assets is reported on the grantor’s personal income tax return, as though the assets were still owned individually. While these trusts may be assigned their own tax identification numbers, trustees should consult with their accountant to determine whether an informational return should be filed.

Other types of trusts, however—such as irrevocable non-grantor trusts—are considered separate tax entities and may be required to file their own fiduciary income tax returns. Because trust taxation can vary depending on the type of trust and how it was structured, it is important for trustees and grantors to confirm their filing obligations with an accountant or attorney.

Gift Tax Returns

In addition to your individual income tax return, you may also need to file a federal gift tax return if you made gifts exceeding the annual federal gift tax exclusion amount. For both 2025 and 2026, the annual exclusion is $19,000 per recipient. Gifts above this amount must be reported on a federal gift tax return. While a tax is unlikely to be owed in most situations, these gifts reduce the total amount that can be transferred tax-free during your lifetime. In 2025, the federal lifetime gift and estate tax exemption was $13,990,000 per individual, and in 2026 the exemption increased to $15,000,000.

Other Tax Considerations

Additional tax responsibilities may arise if you are serving as the executor or administrator of an estate, or as the trustee of a trust established by someone who has passed away. If an estate or trust generates more than $600 in income during the year, the fiduciary may need to file a federal fiduciary income tax return. Because filing thresholds and rules can change over time, it is important to confirm the current requirements each year with a qualified legal and tax professional. When distributions are made to beneficiaries, those beneficiaries should receive a Schedule K-1 (Form 1041) reflecting their share of the income, which must be provided to their accountant when preparing their personal tax return.

Take Time to Evaluate Your Estate Plan This Tax Season

Tax season can feel overwhelming, but it also provides a useful opportunity to review the financial roles you hold—whether as an individual taxpayer, trustee, or executor—and to ensure you are meeting any tax obligations associated with those roles. By taking the time each year to review these responsibilities, you can help ensure that both your tax filings and your estate plan remain aligned.