Estate planning is a complex and multifaceted process, so it’s unsurprising that there is often confusion when it comes to estate planning tools such as trusts. Not only are there many different kinds of trusts, but setting up a trust involves extensive legal documentation, ongoing administration, and tax implications. This article highlights and explores some of the most common misconceptions or “myths” related to trusts and trust planning. But first, let’s briefly talk about what trusts are and why people use them.

A trust is a legal arrangement that allows a person (a grantor) to transfer assets to a trustee to hold for one or more beneficiaries. Examples of assets that you might place in a trust include bank accounts, investment accounts, real estate, personal property, and digital assets.

Trusts serve several different purposes, including the following:

• to control exactly how and when your assets are distributed,
• to protect assets from creditors,
• to facilitate gifting assets to minors,
• to avoid the probate process, and
• sometimes, to provide tax benefits

With that being said, below are four myths about trusts that we feel need debunking.

Myth #1: Trusts always reduce income taxes.

While it’s true that under certain circumstances, trusts may reduce income taxes, frequently this is not the case. Irrevocable trusts that distribute income to beneficiaries in lower tax brackets may reduce the overall tax burden; however, since the tax brackets for trusts are condensed, the overall tax burden may be higher—especially if distributions are not made to beneficiaries, or if there are significant capital gains. Revocable trusts, on the other hand, offer no income tax advantage. Because the assets remain part of the grantor’s estate, all income is reported on the grantor’s personal tax return. So, in short, more often than not, trusts do not reduce the income tax burden.

Myth #2: Family members always make good trustees.

When faced with the task of naming a trustee to manage your trust, you may think the safest option is to select a trusted family member for the role. While a relative may be familiar with your family’s dynamics and values, and selecting a family member may save you the cost of hiring a professional trustee, there are some potential drawbacks associated with this route. Family members serving as trustees often lack expertise in managing and investing assets. Family members may also have difficulty making objective and unbiased decisions, or may even have a personal interest in family assets, leading to a conflict of interest. Additionally, the duties associated with trusteeship can be time-consuming and burdensome for the selected family member. It’s important to consider these factors before choosing a trustee. Hiring a professional trustee to manage your trust, while more costly, can help to avoid many of these potential complications.

Myth #3: You don’t need a will if you have a trust.

You may think that because you have set up a trust to transfer your assets, you do not need a will. After all, wills are only effective after your death and may be subject to the lengthy probate process that trusts avoid. However, a will serves other important purposes besides dictating the distribution of assets, such as designating guardianship for minor children and naming an executor. In addition, a will dictates what happens to any assets not included in the trust. For these reasons, it’s recommended that everyone create a will—even if they already have a trust.

Myth #4: Trusts are only for the wealthy.

Trusts are often associated with the wealthy; however, a trust can be a useful part of anyone’s estate plan, regardless of income. Trusts provide many of the same benefits—such as control over asset distribution, probate avoidance, and legal protection—for all individuals, regardless of net worth. Trusts can be especially useful tools in specific situations, such as for a parent with a special needs child. However, while there is no minimum asset amount required to set up and maintain a trust, doing so often involves considerable costs (i.e., attorney costs, trustee fees, tax professionals), which may be prohibitive to some. It’s important to ensure the benefits outweigh the costs of setting up a trust.

Stick with the Facts and Partner with RBT

At RBT CPAs, we help you distinguish between the facts and the myths and work with you to develop an estate plan that works for your unique needs. Call us today and find out how we can be Remarkably Better Together.

In 2026, AI is all around us—even if we’re not always aware of it. Smartphones, search engines, social media, online chatbots, and email platforms all incorporate AI technology to enhance efficiency and personalize user experiences. Almost every industry is adopting AI in some form or another to enhance productivity and streamline workflows. More and more, people are turning to AI for near-instantaneous solutions and assistance with everyday tasks, from creating meal plans to composing emails and mapping out monthly budgets. So, if AI can help with all of these tasks, can’t it also develop an estate plan for you? Let’s talk about it.

AI Uses in Estate Planning

AI is certainly gaining ground in the world of estate planning, both on the client and professional sides. Individuals are conducting their own estate planning research on AI platforms at home, while businesses are employing automated questionnaires and AI-driven chatbots to exchange information with clients. AI “voice synthesis” is even being used to recreate peoples’ voices for their loved ones after they pass. This technology opens the door to new possibilities for both clients and estate planning professionals alike. However, caution must be exercised. While it’s true that AI-powered tools like ChatGPT can provide generalized information about the estate planning process and can even generate templates of certain documents, AI alone should not be relied upon for your estate planning needs.

Here’s why.

What are the risks?

Due to the convenience and low cost of many AI programs, you may be tempted to rely solely on artificial intelligence for estate planning guidance, without consulting with professionals like attorneys or accountants. However, doing so can result in errors and misinformation, incorrect documentation, and a plan that does not carry out your wishes as you intend. AI systems operate on statistics, algorithms, and data available on the internet. These programs cannot think or discern as a human being can, and therefore can miss important nuances or even portray misinformation as fact. Such nuances and errors can have a significant impact on your estate plan—a single incorrect word, number, or legal oversight can completely alter how your assets are managed after you pass. An improperly executed will or trust can lead to confusion, legal battles, inheritance disputes, and tax consequences for your heirs. Beyond that, any personal information you submit to an AI model such as ChatGPT automatically becomes part of its database, risking the exposure of your confidential data to outside parties.

Why You Still Need Human Advisors

Estate planning professionals, such as accountants and attorneys:

• possess a deep knowledge and understanding of complex legal concepts and tax laws specific to your state
• have real experience working with a wide range of clients with unique situations
• meet with you to understand your goals, personal wishes, and family dynamics
• customize your estate plan to align with your specific intentions
• provide expert advice on legal and tax considerations
• know the right questions to ask to ensure that your needs and goals are met
• provide ongoing support throughout the estate planning process
• ensure your sensitive personal and financial information remains confidential

Partner with RBT for Estate Planning Guidance You Can Trust

While AI certainly offers some helpful benefits for both individuals and professionals throughout the estate planning process, this technology should be used as a supplement to the role of human advisors—not a substitute. RBT CPAs’ Trust, Estate, and Gift practice is here to take the guesswork out of estate planning. In conjunction with your attorney, our tax professionals are here to ensure your estate plan aligns with your financial goals and intentions. You can rely on our team to handle both your personal and business tax needs with the utmost professionalism and attention. Give RBT CPAs a call today and find out how we can be Remarkably Better Together.

People are often confused about the rules surrounding required minimum distributions (RMDs). This article provides answers to common questions regarding the rules and timelines surrounding RMDs.

If you turned 73 in 2025 and own a retirement account, you will likely need to take your first required minimum distribution by April 1, 2026, to avoid potential penalties.

What is an RMD?

A required minimum distribution (RMD) is the minimum amount that must be withdrawn each year from certain retirement accounts once the account holder reaches age 73.

Retirement Plans Subject to RMD Rules

RMD requirements generally apply to the following retirement plans:

• Employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans
• IRA-based plans such as traditional IRAs, Simplified Employee Pension (SEP) IRAs, and SIMPLE IRAs
• Inherited Roth IRAs and designated Roth accounts after the death of the account holder

When are you required to start taking RMDs?

Owners of IRA-based retirement plans must begin taking RMDs in the year they turn 73, even if they are still working.

If you turned 73 during 2025, your first RMD must be taken by April 1, 2026. Your second RMD must then be taken by December 31, 2026.

For workplace retirement plans (i.e.,401(k) or profit-sharing plans), RMDs can generally be delayed until retirement if you are still working. However, this exception does not apply to individuals who own 5% or more of the business sponsoring the retirement plan.

What happens if you fail to take an RMD?

If you do not withdraw the full required amount within the specified time frame, you may be subject to a 25% excise tax on the amount that should have been withdrawn.

If the error is corrected within two years, the penalty may be reduced to 10%. In certain cases, the penalty may also be waived if the individual can demonstrate that the failure to take the RMD was due to reasonable error and that appropriate corrective steps are being taken.

How is your RMD calculated?

Your RMD is calculated by dividing the balance of your retirement account as of December 31 of the previous year by a life expectancy factor provided by the IRS in Publication 590-B.

Most individuals use the “Uniform Lifetime Table” to determine their life expectancy factor.

Example

A 73-year-old individual has $100,000 in their retirement account as of December 31, 2025.

According to the Uniform Lifetime Table, the life expectancy factor for someone age 73 is 26.5.

$100,000 ÷ 26.5 = $3,773.58

In this example, the individual’s RMD would be $3,773.58.

Can you withdraw more than the required minimum?

Yes. You are always permitted to withdraw more than the required minimum distribution in any given year.

Are RMDs taxable?

Yes. RMDs are generally taxable as ordinary income because contributions to these retirement accounts were typically made with pre-tax dollars.

However, New York State provides a retirement income exclusion. Individuals age 59½ or older may exclude up to $20,000 of retirement income per year from New York State income tax. Married couples filing jointly may each qualify for this exclusion.

Additional Information and Guidance

Additional information and answers to common questions can be found on the IRS Required Minimum Distribution (RMD) FAQs. To avoid potential penalties and ensure accurate calculations, consider working with an accounting professional familiar with RMD requirements, deadlines, and tax implications. RBT CPAs’ estate planning team is here to answer your RMD-related questions, and to support all of your other accounting, tax, audit, and advisory needs. Give us a call today to find out how we can be Remarkably Better Together.

Revocable living trusts (RLTs) are common in estate planning, and commonly misunderstood. They’re sometimes presented as a clean, all-purpose solution that avoids probate, reduces taxes, and simplifies everything after death. In reality, they’re more nuanced than that.

This article isn’t meant to argue for or against revocable living trusts. Instead, the goal is to explain what they actually do, what they don’t do, and what’s worth paying attention to if you already have one or are considering setting one up. Like most legal and tax tools, their effectiveness depends heavily on individual facts and circumstances.

What is a revocable living trust?

An RLT is a trust created during an individual’s lifetime that can be amended, restated, or revoked at any time while the grantor (the person who creates it) is alive and competent. In most cases, the grantor also serves as the initial trustee and beneficiary during life – meaning they retain control over the trust and continue to benefit from the assets held in it.

From a practical standpoint, this usually means day-to-day control usually doesn’t change. Assets can still be bought, sold, and managed as before. The trust becomes more relevant if the grantor becomes incapacitated or dies, when a successor trustee steps in to manage or distribute assets under the trust’s terms.

Myth #1: “A revocable living trust automatically avoids probate.”

Reality: Only assets that are actually owned by the trust avoid probate.

Creating the trust document alone isn’t enough. Assets must be properly titled in the name of the trust (often referred to as “funding” the trust). If a home, investment account, or business interest remains in an individual’s name, that asset may still be subject to probate, even if a trust exists.

This is one of the most common disconnects. Many trusts are only partially funded, which can result in a mix of probate and non-probate administration. A revocable trust can help avoid probate, but only for assets that are correctly aligned with it.

It’s also worth noting that probate itself varies widely by state. In some jurisdictions, probate is relatively streamlined and inexpensive. In others, it can be slow, formal, and costly – particularly for real estate. Whether probate avoidance is a meaningful benefit often depends on where the grantor lives and what assets they own.

Myth #2: “A revocable trust reduces estate taxes.”

 Reality: In most cases, it does not.

Because the grantor retains the power to revoke or change the trust, assets held in a revocable living trust are generally still included in the grantor’s taxable estate. From a federal estate tax perspective, ownership hasn’t really shifted.

During life, revocable trusts are usually treated as “grantor trusts” for income tax purposes. Income, deductions, and credits are typically reported on the individual’s personal return, just as they would be if the trust didn’t exist. This treatment is outlined in guidance from the IRS.

That said, while a revocable trust usually doesn’t reduce estate taxes, it may help reduce other estate-related costs. In states where probate is expensive or attorney-intensive, avoiding or minimizing probate can result in lower administrative fees, court costs, and delays. These savings aren’t tax savings, but they can still be meaningful.

Estate tax planning, when needed, generally requires additional strategies beyond a standard revocable trust.

Myth #3: “A revocable trust protects assets from creditors or lawsuits.”

Reality: Generally, it does not – but there are limited, situational benefits worth understanding.

Because the grantor can revoke the trust and reclaim the assets, creditors are usually able to reach trust assets to the same extent they could reach assets owned outright. For this reason, RLTs aren’t considered asset-protection vehicles in the traditional sense.

However, there are narrow circumstances where an RLT can indirectly help preserve assets – not by blocking creditors, but by improving control and administration. For example:

• Incapacity planning: a well-drafted trust can ensure that a successor trustee steps in seamlessly if the grantor becomes incapacitated, reducing the risk of court-appointed guardianship or mismanagement.
• Trustee succession safeguards: trust terms can be written to bypass an otherwise-named successor trustee if that person is unable or unsuitable to serve (for example, due to legal financial, or personal issues), allowing an alternate or professional trustee to step in.

These are not creditor-protection strategies in the strict legal sense, but they can matter in preserving assets through orderly management during vulnerable periods.

Myth #4: “Once there’s a trust, beneficiary designations don’t matter.”

Reality: Beneficiary designations often control how assets pass and can override the trust.

Retirement accounts, life insurance policies, and many financial accounts transfer by beneficiary designation. If those designations don’t align with the trust, the trust may not govern those assets at all.

Coordination is key – and it isn’t always intuitive. For example, certain assets, like ordinary bank or brokerage accounts, may be titled in the name of the trust. Others, such as retirement accounts or life insurance policies, are often better left payable directly to individuals, depending on tax, distribution, and planning goals. In some cases, a trust may be named as beneficiary, but only if it’s properly drafted to handle those assets.

There’s no universal rule here. The “right” approach depends on the type of asset, the beneficiaries involved, and the broader estate and tax plan.

Myth #5: “A revocable trust eliminates all court involvement and delays.”

Reality: It can reduce probate involvement, but administration still takes time and effort.

Even without probate, someone must gather assets, pay expenses, handle tax filings, and carry out the terms of the trust. A revocable trust can streamline this process, especially for more complex estates, but it doesn’t eliminate administrative responsibility.

One of the underappreciated benefits of an RLT is that it allows for more detailed and customized instructions than a simple will. This can be particularly helpful when the estate includes a closely held business, multiple properties, or assets that require ongoing management. Clear instructions can reduce uncertainty, minimize disputes, and give successor trustees a practical roadmap during administration.

It changes the process; it doesn’t remove it.

Myth #6: “Revocable trusts guarantee privacy.”

Reality: Privacy is generally the rule, but there are important exceptions.

Unlike probate proceedings, trust documents typically aren’t filed with the court, which helps keep estate details out of the public record. This is one of the most cited advantages of revocable trusts.

However, privacy isn’t absolute. Trustees have disclosure obligations to beneficiaries, and disputes over the trust can lead to litigation. In those cases, certain information may become part of a court record. Even then, trusts are rarely made public in their entirety, but some loss of privacy is possible.

The takeaway: RLTs usually enhance privacy, but they don’t guarantee complete confidentiality in every scenario.

When a revocable living trust can be a good fit

Revocable trusts tend to be most useful when one or more of the following apply:

• Real estate is owned in more than one state
• Avoiding probate is a high priority, particularly in states with complex or costly probate systems
• Continuity is important in the event of incapacity
• The estate includes complex, illiquid, or hard-to-administer assets
• Privacy is a meaningful concern
• Distributions are uneven, long-term, or likely to cause friction among heirs

They can also help reduce the risk of disputes by allowing the grantor to leave clearer, more detailed instructions than would typically appear in a basic will.

In contrast, an RLT may offer limited additional value when an estate is simple, most assets already pass efficiently by beneficiary designation, and state probate rules provide for a streamlined or expedited administration process. Probate varies significantly by state, and in some jurisdictions, the process can be far more burdensome than many people expect.

The most common issue to watch for: trust funding and maintenance

The biggest practical risk with revocable living trusts isn’t the document itself; it’s follow-through.

Assets need to be retitled, beneficiary designations coordinated, and the trust revisited periodically as circumstances change. New accounts, real estate purchases, family changes, or changes in state law can all affect how well the trust works in practice.

The good news is that revocable trusts are flexible. If issues are identified, they can usually be addressed during the grantor’s lifetime through amendments, restatements, or improved coordination.

Practical takeaway 

Revocable living trusts are neither a universal solution nor something to dismiss outright. They’re one tool among many, and their effectiveness depends on how they’re designed, funded, and maintained – and on the individual facts involved.

For those who already have a trust, periodic review can help ensure it still aligns with current goals, assets, and family dynamics. For those considering one, understanding what the trust does – and just as importantly, what it doesn’t do – can prevent surprises later.

If you have questions about how a revocable living trust fits into your broader tax and estate plan, or whether your existing trust is properly aligned with your current circumstances, please contact our office. We’re happy to work with you and your estate planning attorney to ensure asset ownership and tax considerations are coordinated and working as intended.

This article is provided for general informational purposes only and should not be relied upon as legal or tax advice. Estate planning strategies should always be evaluated with qualified professionals in light of your individual facts and state laws.

Recent legislative changes present new opportunities for American parents saving for their children’s future. 2025 saw both the expansion of 529 education savings plans and the creation of “Trump accounts,” a new type of investment account for children. Both of these investment accounts offer parents the opportunity to prepare for their children’s financial future—but which should you choose? Before we answer that question, let’s break down the key features of each plan.

529 Plans

A 529 plan is a tax-advantaged savings account that can be used to pay for qualifying educational expenses. Initially created as a way for people to save for college tuition, “qualified expenses” covered under 529 plans expanded in 2018 to include tuition for K-12 education as well. With the passage of the One Big Beautiful Bill Act (OBBBA) in July of 2025, 529 plan coverage has expanded even further to include additional educational expenses.

Below are the key details to know about 529 plans:

• Money in 529 accounts grows tax-deferred.
• Withdrawals for qualifying educational expenses are generally tax-free.
• There are no annual contribution limits for 529 plans (some states have lifetime contribution limits).
• S. residents of any income level are able to open a 529 account for a designated beneficiary, including a relative, friend, or themself.
• Funds can be used for a variety of educational expenses, including (but not limited to) college tuition, K-12 tuition, books and supplies, testing fees, technology, expenses related to participation in registered apprenticeship programs, and certain expenses related to enrollment in a recognized postsecondary credential program.
• Many states offer tax deductions or tax credits for 529 contributions.
• Unused funds from a 529 plan can be rolled into a Roth IRA in the name of the beneficiary or transferred to other family members.
• 529 plans offer multiple options for investment funds.

Trump Accounts

Created by the One Big Beautiful Bill Act (OBBBA), the “Trump account” is a new tax-deferred investment account for U.S. citizens under the age of 18. Parents can start to register for the new Trump accounts when they file their 2025 tax returns, but contributions will not begin until July 2026.

Here are the key details to know about Trump accounts:

• Savings in Trump accounts grow tax-deferred.
• Withdrawals are taxed as ordinary income.
• Accounts opened for children born between January 1, 2025, and December 31, 2028, include a one-time $1,000 government contribution.
• Contributions can be made by parents, relatives, employers, and other taxable entities, as well as non-profit and government entities.
• Contributions to these accounts are capped at $5,000 a year per child (this amount will be indexed for inflation after 2027) and can be made each year until the child turns 18.
• Distributions before the child turns 18 are generally prohibited.
• Penalty-free withdrawals can be made once the account holder turns 59.5 years old. A 10% additional tax applies to withdrawals taken before age 59.5, with some exceptions, such as for first-time home purchases or higher education costs.
• Funds in 529 accounts can only be invested in one U.S. stock index fund.

So…529 Plan or Trump Account?

Trump accounts and 529 accounts are both tax-advantaged tools designed for saving for your child’s future, but they serve different purposes. While Trump accounts offer a new savings tool for children, they are significantly more limited than 529 plans. The 529 program is well-established with a wide range of investment options, while the Trump account is a new program with investment restrictions and other limitations. In short, 529 plans remain the best way to save for a child’s education and future. However, parents of children born between 2025 and 2028 should still claim the “tax-free” federal deposit provided through the Trump account program.

For additional guidance related to tax-advantaged savings and investment plans, please don’t hesitate to reach out to our team at RBT CPAs. Our Trust, Estate, and Gift team is here to help you plan financially for your family’s future. Call us today and find out how we can be Remarkably Better Together.

As individuals living in an increasingly online world, a great deal of our personal property today exists in digital form. “Digital assets” range from digital images and documents to online accounts and cryptocurrency. When it comes to estate planning, special considerations must be taken into account for digital assets. Since digital assets take many different forms, exist in various locations, and are typically protected by multiple layers of security, advanced planning is crucial to ensuring your assets are managed according to your wishes. Below are some factors to consider when planning for the future treatment of your digital assets.

What is a digital asset?

A digital asset is an item of value that is stored electronically and can be bought, sold, owned, transferred, or traded. Examples of digital assets include cryptocurrencies and NFTs (nonfungible tokens), online banking and investment accounts (the accounts themselves, not the funds), email accounts, digital photos and documents, videos, online content, intellectual property, websites, social media accounts, and more.

Creating a list of your digital assets

A digital asset inventory—a comprehensive list of all of your electronically stored assets—is critical for estate planning purposes. Creating a document listing all of your digital accounts will make it easier for you and your loved ones to keep track of what you own and where your assets are located, and will help to prevent property from being overlooked or forgotten. Make sure to update this list periodically to include any changes to your digital assets over time.

Ensuring the necessary parties will have access to your digital assets

It’s important to make sure your heirs and other necessary parties are able to access your digital assets after you pass. Most digital assets are protected by security mechanisms such as usernames and passwords, two-factor authentication, or security questions. These login credentials will need to be recorded and accessible to the designated parties when they require them. A password manager is one option for securely storing this sensitive information until it is needed. Digital assets may also be protected by privacy laws and terms-of-service agreements. Some account providers allow you to designate in advance what happens to your account after you pass. Otherwise, you may need to grant authority for others to access your digital assets and accounts via official legal documentation, which can be accomplished in coordination with an estate planning attorney. As part of your estate plan, make sure you specify the name or names of the people who you want to be able to access each account.

Partner with RBT CPAs

Transferring digital assets as a part of your estate plan requires additional layers of advance planning. RBT’s experts in our Trust, Estate, and Gift practice—in conjunction with your estate planning attorney—are here to help you navigate this process and ensure that your assets are managed according to your wishes when the time comes. Give RBT CPAs a call today and find out how we can be Remarkably Better Together.

Charitable remainder trusts (CRTs) can be an effective means of managing your wealth and achieving your charitable giving goals. Let’s go over the basics of charitable remainder trusts and their potential benefits.

What is a charitable remainder trust, and how does it work?

A charitable remainder trust (CRT) is a type of irrevocable trust that allows donors to donate to charity while also receiving certain tax benefits. The grantor of a charitable remainder trust makes contributions to the trust in the form of property, cash, or other assets. Either the grantor themselves or another designated beneficiary then receives distributions from the trust for life or for a set period of time (no longer than 20 years). After that time, the remainder of the trust’s assets is donated to one or more charitable organizations of the grantor’s choosing—hence the name “charitable remainder trust.”

Types of CRTs

There are two main types of charitable remainder trusts:

1. Charitable Remainder Annuity Trust (CRAT): pays a fixed dollar amount each year and does not allow additional contributions.
2. Charitable Remainder Unitrust (CRUT): pays a fixed percentage based on the trust balance (which is revalued annually) and allows for ongoing contributions.

Benefits of Charitable Remainder Trusts

• Predictable income stream: A CRT provides a regular and reliable income stream to the non-charitable beneficiaries for the lifetime of the trust.
• Immediate partial income tax deduction: A CRT provides a partial income tax deduction to the donor in the year the trust is created and funded. The amount of the deduction is limited to the value of the remainder interest that will go to charity. This amount will vary based on factors such as the payout rate of the trust and the ages of the noncharitable beneficiaries. The deduction is also subject to AGI limits and other limitations under the tax code.
• Tax-free growth: Because the CRT is a tax-exempt entity, assets within the trust grow tax-free.
• Deferred capital gains tax: CRTs avoid immediate capital gains tax on the sale of assets transferred to the trust.
• Reduced estate taxes: Since a CRT is an irrevocable trust, the assets within the trust are removed from the grantor’s taxable estate, thereby reducing the grantor’s estate tax liability.
• Asset protection: The assets in a CRT are protected from creditors and lawsuits.

Other Things to Know

• Since a CRT is an irrevocable trust, the grantor relinquishes control of the trust’s assets to the trustee. Any assets that go into the trust cannot be returned.
• The annual annuity distributed from the trust must be at least 5%, but no more than 50%, of the initial fair market value of the trust’s assets.
• The portion donated to charity must be at least 10% of the initial value of the assets in the trust.
• Based on how the trust is structured, the grantor or other beneficiaries may receive income from the trust annually, semi-annually, quarterly, or monthly.
• Payments from a charitable remainder trust are taxable as income and must be reported to the IRS. CRTs must file Form 5227, Split-Interest Trust Information Return

Partner with RBT for Your Estate Planning

RBT’s Trust, Estate, and Gift team is here to help you establish and manage your charitable remainder trust. Our experienced professionals handle your trust’s accounting, tax compliance, and financial administration, so you can have the peace of mind that your assets are protected. Call us today and find out how we can be Remarkably Better Together.

From the year they turn 73, owners of IRAs must begin to take required minimum distributions (RMDs) annually. An RMD is the minimum amount an individual must withdraw from their IRA each year. These withdrawals increase the IRA holder’s overall taxable income, potentially triggering higher tax rates and impacting the individual’s eligibility for certain tax deductions and credits. However, a person can avoid this income increase by donating to charity through a qualified charitable distribution (QCD), which also satisfies their RMD requirement. Let’s go over some of the most common questions surrounding qualified charitable distributions and how QCDs can be incorporated into your estate planning strategy.

What is a qualified charitable distribution?

A qualified charitable distribution (QCD) is a tax-free transfer of money from an individual’s IRA to a qualified charity. The distribution must be made directly by the trustee of the IRA to the selected charity (a distribution paid to the IRA owner first and then donated does not count as a QCD). For IRA owners who are 73 or older, QCDs count toward annual required minimum distributions (RMDs) without increasing the taxpayer’s adjusted gross income (AGI).

Who can make a qualified charitable distribution?

Owners of IRAs who are at least 70.5 years old can make QCDs. This option to make a QCD is available to eligible IRA owners regardless of whether they itemize deductions on their tax returns.

What is the maximum amount you can donate via QCDs per year?

In 2025, individuals can donate up to $108,000 via QCDs per calendar year across all charities. For married couples over 70.5 years old, each spouse can donate up to $108,000. This amount is indexed annually for inflation.

Which charities count as “qualified charities”?

Not all charities are considered qualified for QCD purposes. The IRS maintains a searchable database of all qualified charities, which can be accessed here. Before donating to a charitable organization, eligible taxpayers should confirm that the organization qualifies to receive QCDs.

What is the role of qualified charitable distributions in estate planning?

A QCD can be used to fulfill all or part of the annual RMD requirement for IRA owners aged 73 and over. By reducing the balance of your IRA, QCDs may also reduce your required minimum distributions in future years. In addition, when you make a qualified charitable distribution, your funds are transferred tax-free to a charity of your choice, reducing your taxable estate. By reducing the taxable assets in your estate, QCDs can also help to minimize the tax burden on your heirs upon your death.

Does the One Big Beautiful Bill Act impact QCDs?

The One Big Beautiful Bill Act (OBBBA) introduces a new floor on deductions for donors who itemize, effective for 2026. Under this new provision, donors who itemize will only be able to claim a deduction to the extent that their qualified contributions exceed 0.5% of their adjusted gross income (AGI). However, this provision does not impact qualified charitable distributions. QCDs reduce taxable income directly and therefore bypass the new AGI floor, increasing the value of QCDs as a tax strategy for donors over the age of 70.5.

Ask Us Your QCD and Estate Planning Questions

For more information about qualified charitable distributions, and for all of your other estate planning questions, please don’t hesitate to reach out to our experts in our Trust, Estate, and Gift Practice. Our team is here to support your long-term personal wealth and charitable giving goals through a highly individualized client experience. Give us a call today and find out how we can be Remarkably Better Together.

The One Big Beautiful Bill Act (OBBBA) has introduced sweeping changes across the economic and legal landscape of our country, impacting individuals, families, and businesses in a range of ways. These changes will affect various aspects of financial planning—and estate planning is no exception. From revised estate and gift tax exemptions to expanded uses for 529 savings plans, the legislation includes provisions that could affect your family’s financial future. In this article, we break down the key changes introduced by the OBBBA that may impact your long-term estate planning strategy.

Federal Estate, Gift, and GST Exemption

Beginning in 2026, the OBBBA permanently increases the lifetime exemption amount for the federal estate, gift, and generation-skipping transfer (GST) tax to $15 million per person ($30 million for married couples), indexed annually for inflation. The OBBBA eliminates the previously scheduled sunset of the higher exemption threshold. Please note that the New York State estate tax exemption amount remains at $7.16 million per person.

Permanent Extension of TCJA Tax Rates

The OBBBA makes permanent the tax rates and brackets established by the Tax Cuts and Jobs Act (TCJA) of 2017.

Qualified Small Business Stock (QSBS)

For QSBS acquired after enactment of the OBBBA, the percentage of gain excluded from gross income will rise from 50% to 75% if the stock is held for four years. If held for five years or more, the exclusion percentage will increase to 100%.

Expansion of 529 Plans

The OBBBA expands permitted uses of funds in 529 education savings plans by broadening the definition of “qualified expenses.” Tax-exempt distributions from 529 savings plans now apply to additional expenses (beyond tuition) related to enrollment in private, public, or religious elementary or secondary schools, including books, materials, testing fees, tutoring costs, dual enrollment fees, and educational therapies. The OBBBA also increases the annual limit for 529 account distributions for K-12 expenses from $10,000 to $20,000. Additionally, the OBBBA allows 529 plan funds to be used for “qualified postsecondary credentialing expenses,” including tuition, fees, books, supplies, testing, equipment, and continuing education required for participation in recognized postsecondary credential programs.

Trump Accounts

The OBBBA establishes a “Trump account,” a new tax-deferred investment account for children who are U.S. citizens under the age of 18. Contributions to these accounts are capped at $5,000 a year (adjusted for inflation after 2027) and can be made by parents, relatives, employers, and other taxable entities, as well as non-profit and government entities. Accounts opened for children born between January 1, 2025, and December 31, 2028 will include a one-time $1,000 government contribution.

Charitable Contributions

For taxpayers who do not itemize, the OBBBA creates a charitable contribution deduction of up to $1,000 for single filers for certain charitable contributions ($2,000 for married couples filing jointly). For taxpayers who choose to itemize, the OBBBA establishes a 0.5% floor on the charitable contribution deduction. For corporations, the bill establishes a 1% floor for charitable deduction contributions. Deductions for corporate charitable contributions cannot exceed 10% of the corporation’s taxable income.

Estate Planning Outlook

All in all, the One Big Beautiful Bill Act protects and expands policies favorable for family wealth management and estate planning. RBT CPAs will continue to provide updated information to our clients as more detailed guidance on the OBBBA is issued. In the meantime, to find out how the recent tax law changes might impact your estate plan, we encourage you to reach out to our Trust, Estate & Gift team at RBT CPAs. As always, RBT CPAs is here to support all of your estate planning, accounting, tax, and advisory needs. Contact us today to find out how we can be Remarkably Better Together.

When you think about creating your will, you may imagine yourself many years down the road, getting your affairs in order when life’s circumstances call for it.

While this may be the case for some people, it isn’t the recommended method.

So, when should you start planning your will? The answer may surprise you.

Best practice is to create a will when you are legally able to, which is generally at the age of 18 in the United States.

While we know that most teenagers are not ringing in their 18^th birthday by drafting a will, typically the sooner a person creates a will, the better. It’s rarely too early to begin planning your will, but there may come a time when it is too late.

So, let’s go over some “will basics,” as well as some important considerations to keep in mind during will planning.

What is a will, and why is it important?

A will is a legal document stating an individual’s wishes for the management and distribution of their estate after death. Not only does a will specify how a person’s assets will be distributed, but it also indicates who can make decisions on that person’s behalf if they are not able to, via legal documents such as healthcare proxies and powers of attorney. Wills can also serve other purposes, such as designating guardianship over minor children.

If a person dies without a will in place, state laws determine how their estate will be distributed. However, the state’s plan may not accurately reflect the decedent’s wishes. Establishing a will early on ensures that your estate is managed according to your wishes—and not the state’s laws—after you pass. A will also makes estate administration easier for your heirs by clearly documenting your wishes and instructions.

Some Important Considerations When Planning a Will

• Your will should be reviewed and updated for major life events such as marriage, divorce, birth of a child, etc. Don’t just set it and forget it.
• Wills are not just for people with significant assets—they are valuable and necessary tools for everyone, regardless of net worth.
• Wills must be executed properly in order to be considered valid. It’s important to be aware of the legal formalities required for the execution of a will, such as the presence of witnesses and the notarization of signatures.
• Keep in mind that beneficiary designations override instructions in a will in some cases, such as with life insurance policies, retirement accounts, health savings accounts, and trusts (see here for our article on this topic). Be sure to update your beneficiary designations to reflect any changes to your will.
• Creating a will is just one component of the estate planning process. Estate planning may also involve setting up trusts, beneficiary designations, healthcare directives, tax planning, and more.

RBT CPAs’ experts in our Trust, Estate, and Gift Practice can help you create and update a will and estate plan that ensures you and your loved ones will be taken care of according to your wishes during your lifetime and after. RBT CPAs has proudly provided accounting, advisory, tax, and audit services to individuals and businesses in the Hudson Valley and beyond for over 55 years. Get in touch to learn more about our services—and find out how we can be Remarkably Better Together.