Since the start of the year, sweeping changes have taken effect nationwide. New federal and state laws are creating ripple effects that now reach the legacies of families in Minnesota. Understanding the current landscape for estate planning is crucial to ensuring your estate remains protected.
When federal and state law collide
Under the One Big Beautiful Bill Act (OBBBA), the federal estate tax exemption increased to $15 million per individual and $30 million for married couples. However, in Minnesota, the state threshold remains at $3 million. Exceeding this amount requires you to pay estate tax. This means that your heirs could owe a significant amount upon your death.
How strategic gifting can help
Gifting is one of the common strategies for minimizing total estate amounts. For 2026, the Internal Revenue Service (IRS) allows individuals to give up to $19,000 per recipient without reporting the action. If you are married, you and your spouse can combine this to give $38,000 to as many people as you prefer.
However, timing is a critical matter when you plan to start gifting. In Minnesota, all gifts exceeding the annual exclusion made within three years of death can be considered as part of your estate for tax purposes.
What the dynasty trust means for families
Previously, families could only create trust funds that lasted for up to 90 years. Now, Minnesota law allows trusts to last for up to 500 years. The change is significantly beneficial for families who want to keep farmland, businesses or investments within the family line for centuries.
Why portability does not exist in Minnesota
While the federal estate tax portability does not apply in Minnesota, it is possible to avoid it. Residents with combined assets exceeding $3 million can create a credit shelter or family trust. This ensures that both parties’ exemptions apply, shielding their estate from state taxes.
Avoid leaving your legacy to chance
Considering all the changes, estate planning in Minnesota can be overwhelming. Choosing a do-it-yourself approach could expose you to mistakes that bring lasting consequences. An experienced estate planning attorney can help you leverage these new 2026 rules to lock in your family’s future.