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Matthew Erskine

For a decade, estate planners have organized their world around a single number: roughly $100 trillion that the Baby Boomers were supposed to hand down . In September 2026, the more useful insight is that almost every assumption underneath that number is now in motion. Tax enforcement, transparency, mobility, asset composition, and family structure are all shifting at once. Here is what ultra-high net worth families and their advisors should be watching.

A permanent exemption meets a hollowed-out IRS. The estate and gift tax exemption climbed to $15 million per person in 2026 and, for the first time in years, carries no scheduled sunset . Yet the enforcement apparatus behind it is thinning dramatically. IRS audit revenue fell 35 per cent in fiscal 2025, examinations of individuals earning over $400,000 dropped 26 per cent, and the Global High Wealth program lost 27 per cent of its staff . The result is a widening gap between historically generous exemptions and historically weak enforcement. This is a gap that rewards aggressive planning in the short term but defers, rather than eliminates, the risk over a 10-year horizon.

When cases do get litigated, courts are pushing back. The Tax Court's decision in Lewis v. Commissioner this July, involving a $117.6 million QTIP trust, rejected a steep valuation discount as inconsistent with the decedent's intent. This is a reminder that intent-inconsistent discounts remain vulnerable precisely when they reach a courtroom .

Exit is more expensive, more visible, and more popular – simultaneously. US expatriations are running at their highest sustained rate on record, with roughly 6,500 projected for 2026 .  At the same time, the OECD's Crypto-Asset Reporting Framework went live on January 1, 2026, and US Form 1099-DA reporting begins on 2026 transactions, tightening global transparency . The investment-migration map has been redrawn, EU citizenship-by-investment is effectively closed, Caribbean program prices have doubled, and the US has entered at the premium end with a "Gold Card" carrying a $1 million-plus price tag per person. This is while taxing worldwide income .

The art market "recovery" is really the wealth transfer arriving as supply. Christie's and Sotheby's both posted blockbuster first halves, with combined house auction totals up nearly 70 per cent . But lots sold rose only 4.6 per cent, and single-owner estate collections supplied 32 per cent of value . This is even as the Knight Frank Luxury Investment Index slipped 0.4 per cent and the collector-car market stayed flat .  Estate valuation, insurance, and heir expectations should be indexed to flat underlying markets, not to headline trophy prices.

Illiquidity, inherited businesses, and unprepared heirs are colliding. Private-market secondaries hit a record ~$124 billion in the first half of 2026 as traditional exits stayed selective . Operating businesses are becoming the dominant transfer asset. Some 23 per cent of wealthy business owners will have inherited their company in 2026, versus 11 per cent who purchased one . Meanwhile only 36 per cent of UHNW respondents call their heirs "very prepared," and just 27 per cent of family offices have a structured heir education process . Estate liquidity planning around hard-to-value, hard-to-sell interests is shaping up to be the binding constraint of the next decade.

Family structure is the new litigation frontier. In the 2026 STEP Barometer, 71 per cent of practitioners flagged blended families as the top source of disputes . Add AI-generated wills , contested decanting, and fights over cryptographic key access, and the flexibility tools designed to reduce conflict are increasingly becoming its subject matter . California's AB 565 and the new Uniform Conflict of Laws in Trusts and Estates Act are early institutional responses .

Cyber risk is now a fiduciary question. Some 74 per cent of family businesses were hit by at least one cyberattack in the past two years , and 19 per cent of family offices have no defense plan at all . That is even as fewer than half of family offices maintain board-level governance frameworks . Families are outsourcing the problem faster than they are governing it.

The through-line for the coming decade is not a single trillion-dollar headline. It is that the machinery of wealth transfer, such as tax, transparency, mobility, and family governance, is being rebuilt in real time, and the families who plan for the machinery, not just the number, will be the ones who transfer wealth intact.

What to do before year-end.

For families:
Use the exemption but build the file. At $15 million per person, the exemption is the most generous it has ever been, and for now it carries no expiration. Thin enforcement makes an aggressive valuation tempting. Lewis is the reminder that a discount inconsistent with the governing instrument does not improve with age, and that the audit avoided in 2027 is not the proceeding lost in 2034. Commission the appraisal you would want a judge to read.

Stress-test the estate for liquidity, not just for tax. If the balance sheet has become an operating company, a fund interest, or a collection, answer the unglamorous question: where does the cash come from to pay the tax, equalize the heirs, and keep the business running all in the same quarter? Model it at flat asset values, not at trophy-auction prices.

Tell the heirs something. Only about a third of ultra-high net worth families describe their heirs as very prepared, and more than a third respond to that worry by not disclosing the full amount of family wealth. Withholding the number does not buy readiness. It defers the education to the worst possible moment when the parent is gone and the lawyers are already retained.

For their advisors:
Re-paper the flexibility before someone litigates it. Decanting powers, trust protector provisions, virtual representation consents, and choice-of-law clauses were drafted as conflict-avoidance machinery. They are becoming what families fight about instead. California’s rewritten Probate Code § 15804 and the new Uniform Conflict of Laws in Trusts and Estates Act change the analysis. So, review the documents against the rules in force now, not the ones in effect when they were signed.

Give custody and cyber a name, not a vendor. Private keys, exchange credentials, and family-office security are still filed under operations at most institutions. They are fiduciary items. Put them on the fiduciary checklist, assign a responsible person by name, and write down what happens when that person is unreachable.

Then pick two and calendar them. None of this requires a view on whether the number is $36 trillion or $124 trillion. It requires only the observation that exemption, enforcement, transparency, and family structure are now moving in different directions at the same time. That means that arrangements described as permanent have a way of becoming temporary on sixty days’ notice.

Footnotes
1,  CNBC, July 17, 2026, https://www.cnbc.com/2026/07/17/great-wealth-transfer-estimates.html; Visa Business and Economic Insights, https://usa.visa.com/partner-with-us/visa-consulting-analytics/economic-insights/great-wealth-transfer-reality-check.html. The headline figure is contested. Cerulli Associates estimates $124 trillion in total transfers through 2048, roughly $106 trillion of it to heirs after about $18 trillion to charity. A July 2026 Visa analysis, which excludes the top 1 per cent entirely, puts boomer-to-Gen-X/millennial transfer at $36 trillion over 20 years. Cerulli estimates that half of the $100 trillion-plus will come from high net worth or ultra-wealthy families – the segment both models agree is largest and least well described.

2,  Internal Revenue Service, What’s New – Estate and Gift Tax, https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax; McDermott Will & Schulte, https://www.mcdermottlaw.com/insights/inflation-adjustment-federal-estate-gift-gst-tax-exemptions/. The basic exclusion amount rose to $15,000,000 for 2026 from $13,990,000 in 2025 under P.L. 119-21 ; the annual gift exclusion holds at $19,000. Clients who had exhausted prior exemption gained an incremental $1,010,000 or $2,020,000 of gifting capacity in 2026, with no hardwired sunset remaining.

3, CBS News, September 1, 2026, https://www.cbsnews.com/news/irs-audit-revenue-decline-worker-cuts/, reporting a Treasury Inspector General for Tax Administration report dated August 26, 2026. Audit revenue fell 35 per cent in fiscal 2025, to $6.5 billion from $10 billion; examinations of individuals earning over $400,000 fell 26 per cent to approximately 43,000; new partnership audits fell 30 per cent; the Global High Wealth program had 27 per cent fewer employees; and audit and collections staffing stood at 17,517 in January 2026, down almost 10,000 from FY2024.

4,  Lewis v. Commissioner, T.C. Memo. 2026-58 ; see Wealth Management, Tax Law Update, September 2026, https://www.wealthmanagement.com/estate-planning/tax-law-update-september-2026. The QTIP trust was valued at $117,604,143. The Tax Court measured the children’s gifts as the remainder interests surrendered under a nonjudicial termination agreement, rejecting a severe discount premised on the surviving spouse’s power of appointment as contrary to the decedent’s intent – against taxpayer expert values of $156,000 and an IRS position of roughly $53 million.

5,  IMI Daily, September 2, 2026, https://www.imidaily.com/north-america/americans-are-renouncing-citizenship-at-the-highest-sustained-rate-on-record/. Published expatriate names totaled 1,462 in Q1 2026 and 1,781 in Q2 2026 – 3,243 in the first half, the highest first half outside pandemic-distorted 2020 – tracking to approximately 6,500 for the full year against 2020’s record 6,707. Published lists lag actual renunciations by 12 to 18 months, and covered-expatriate thresholds remain $2 million net worth or $190,000 average annual tax liability.

6,  FinTech Global, August 14, 2026, https://fintech.global/2026/08/14/the-carf-deadline-crypto-firms-cannot-afford-to-miss/. The OECD Crypto-Asset Reporting Framework took effect in committed jurisdictions on 1 January 2026 – approximately 46 jurisdictions including the United Kingdom, all 27 EU member states, Japan, Canada and Switzerland – with first reports covering calendar-year 2026 and first exchanges in 2027; roughly 29 further jurisdictions follow by 2028, and the United States targets 2029. EU DAC8 applies from January 1, 2026 with first reports due January 31, 2027. Form 1099-DA reporting for digital-asset brokers begins with 2026 transactions, with penalties around $310 per return.

7,  trumpcard.gov, https://www.trumpcard.gov/; Citizenship by Investment Pro, July 19, 2026, https://citizenshipbyinvestmentpro.com/cbi-report-2026/state-of-the-market. The Gold Card requires a nonrefundable $15,000 DHS processing fee plus a $1 million gift to the United States, with a further $15,000 fee and $1 million gift for each additional family member; the site states that holders are subject to U.S. tax including on non-U.S. income. The five Eastern Caribbean programs doubled minimum prices to a roughly $200,000 floor under the ECCIRA treaty, with a shared regulator and mandatory interviews. On the EU: Malta’s program was forced through court-ordered redesign after the CJEU ruling, and the source describes the surviving route as merit-based, slower and costlier rather than wholly eliminated.

8,  The Art Newspaper, July 15, 2026, https://www.theartnewspaper.com/2026/07/15/trophy-lots-and-luxury-goods-fuel-rebound-for-christies-and-sothebys-2026-half-year-results; Observer, July 15, 2026, https://observer.com/2026/07/art-market-auctions-christies-sothebys-h1-2026-auction-results-newhouse-lewis-luxury/. Christie’s posted $4.5 billion in total revenue with public auction sales up 71% to $3.5 billion and 91 per cent sell-through; Sotheby’s reached an all-time-high $4.4 billion total, up 58 per cent, with $3.4 billion at auction and record private sales of $826 million. The “nearly 70 per cent” figure is the combined Christie’s/Sotheby’s/Phillips auction total of $6.77 billion, up 69.8 per cent year over year.

9,  Observer, July 15, 2026, https://observer.com/2026/07/art-market-auctions-christies-sothebys-h1-2026-auction-results-newhouse-lewis-luxury/. Single-owner collections accounted for $2.17 billion, or 32 per cent of total auction value, while lots sold rose only 4.6 per cent. Individual estate results reset records: the S.I. Newhouse collection made $630.8 million at Christie’s in May 2026 and the Joe Lewis collection $406.2 million at Sotheby’s in London in June 2026, the highest-value single-owner sale ever staged in the United Kingdom.

10,  The Exclusivist, June 12, 2026, https://theexclusivist.com/the-briefing-proven-collectibles-quietly-outperforming-in-q2-2026/; Hagerty, https://www.hagerty.com/media/market-trends/hagerty-insider/data-driven/heres-what-our-experts-predict-for-the-2026-collector-car-market/. The Knight Frank Luxury Investment Index returned −0.4 per cent for 2025, improving from −3.3 per cent in 2024, with Impressionist and Modern art up 13.6 per cent and watches up 5.1 per cent; the Hagerty Market Rating stood at 59.01 in Q2 2026, flat-market territory for nearly a year.

11,  Lazard, Interim 2026 Secondary Market Report, August 13, 2026, https://www.lazard.com/research-insights/lazard-interim-2026-secondary-market-report/. First-half 2026 secondary volume hit a record approximately $124 billion, up 28 per cent year over year, with GP-led at $61 billion and LP-led at $63 billion; trailing-twelve-month volume reached approximately $260 billion — double the 2021 market — against a full-year forecast of $275 billion.

12,  Bank of America 2026 Study of Wealthy Americans , https://institute.bankofamerica.com/transformation/study-of-wealthy-americans.html; see also Fortune, July 15, 2026, https://fortune.com/2026/07/15/124-trillion-dollar-great-wealth-transfer-more-inherited-businesses-bofa-report/. The 23 per cent-inherited / 11 per cent-purchased split reverses 2022’s 5 per cent inherited and 28 per cent purchased, and is more than double 2024 levels.

13,  Bank of America Private Bank, Study of Wealthy Americans, https://www.privatebank.bankofamerica.com/articles/study-of-wealthy-americans.html; UBS Global Family Office Report 2026, May 28, 2026, https://www.ubs.com/global/en/media/display-page-ndp/en-20260528-global-family-office-report-2026.html. Among UHNW respondents , 36 per cent say their heirs are very prepared, 61 per cent worry family wealth will damage heirs’ motivation, and 36 per cent respond by not disclosing the full amount of family wealth. Only 35 per cent of family offices have a defined succession plan for the office itself and only 27 per cent a structured process to educate and prepare heirs.

14,  STEP Barometer 2026, reported in DWF, The rise in probate disputes, June 2026, https://dwfgroup.com/en/news-and-insights/insights/2026/6/the-rise-in-probate-disputes. 71% of practitioners identify blended families as the structure most likely to generate disputes; 41% report increased disputes involving blended or modern families; 68% report conflict between children or stepchildren and surviving spouses; and 77% observe the Great Wealth Transfer in their practice.

15,  STEP Barometer 2026, via DWF, https://dwfgroup.com/en/news-and-insights/insights/2026/6/the-rise-in-probate-disputes; JD Supra / Offit Kurman, 30 June 2026, https://www.jdsupra.com/legalnews/top-five-probate-litigation-trends-what-6590134/. 15% of practitioners report encountering errors in AI-generated wills, alongside 47% seeing errors in wills prepared by unqualified individuals and 34% encountering disputes arising from poor will drafting. Remainder beneficiaries increasingly contest decanting on the theory that it impermissibly alters vested interests; digital-asset disputes turn on possession of private cryptographic keys, exchange platform policies, and date-of-death valuation of volatile assets.

16,  Beverly Hills Bar Association, September 2026 legal updates — trusts and estates law, https://bhba.org/modernlawyer-posts/september-2026-legal-updates-trusts-estates-law/; Uniform Law Commission, new acts, https://uniformlaws.org/acts/catalog/newacts. AB 565 rewrote California Probate Code § 15804 in its entirety effective 1 January 2026, permitting representation by adults with “substantially identical” interests, requiring written consents, and barring virtual representation entirely where a conflict exists. The Uniform Law Commission approved the Uniform Conflict of Laws in Trusts and Estates Act at its 135th Annual Meeting , clarifying when parties may choose applicable law and when a state’s strong public policy overrides that choice.

17,  Deloitte Private, 29 January 2026, https://www.deloitte.com/global/en/about/press-room/family-business-cybersecurity-2026.html. Survey of 1,587 family businesses with $100 million-plus in revenue across 35 countries: 74% suffered at least one cyberattack in the past two years and 33% multiple incidents ; 49% admit gaps in their cyber strategy and 8% have none; and 54% reported financial losses.

18,  Ocorian, May 2026, https://www.ocorian.com/knowledge-hub/insights/family-offices-need-strengthen-cyber-risk-defence-survey-shows. Study of 200 family office professionals representing $119.37 billion: 43% suffered a cyberattack in the past two years, 19% have no defence plan at all, 22% have no incident response plan, 49% already take third-party cybersecurity support, and 72% expect outsourcing to increase over three years.

19,  UBS Global Family Office Report 2026, 28 May 2026, https://www.ubs.com/global/en/media/display-page-ndp/en-20260528-global-family-office-report-2026.html. 68% of family offices have formal financial performance measurement and 60% run investment committees, but fewer than half have formal governance frameworks with board-level oversight.