Why “Topping Off” Irrevocable Trusts Has Gained Momentum in 2026

Changes in transfer tax rules often prompt families to revisit existing estate plans, and 2026 is shaping up to be a year of reassessment. With the federal estate and gift tax exemption increasing from $13.9 million to $15 million per individual, many individuals and couples are discovering that prior planning left room for additional tax-efficient transfers.

For married couples, the combined exemption now reaches $30 million. That increase has led to a noticeable planning trend: adding assets to previously funded irrevocable trusts to fully utilize the expanded exemption.

What Does It Mean to “Top Off” an Irrevocable Trust?

“Topping off” an irrevocable trust refers to making an additional gift to a trust that already exists, bringing total lifetime transfers closer to the current exemption amount.

Many irrevocable trusts were created when exemption levels were lower. At that time, grantors often funded trusts conservatively, balancing tax planning goals with personal liquidity needs and uncertainty about future laws. As exemption amounts rise, those same trusts may now have capacity for additional contributions that were not previously available.

Rather than creating new structures, families are often choosing to add assets to trusts that are already established and functioning.

Why the Exemption Increase Is Driving Action

The increase from $13.9 million to $15 million represents an additional $1.1 million per individual that can be transferred without incurring federal gift or estate tax. While incremental, that additional amount can have a meaningful long-term impact when placed in trust.

Assets contributed to an irrevocable trust are generally removed from the grantor’s taxable estate, allowing future appreciation to occur outside the estate. For families focused on long-term wealth transfer, this makes using the increased exemption particularly attractive.

For couples, the opportunity is magnified, often prompting coordinated planning to ensure both exemptions are fully utilized.

Why Existing Trusts Are Often the Preferred Vehicle

Using an existing irrevocable trust can simplify the planning process. The trust’s terms, beneficiaries, and administrative framework are already in place, and in many cases the trust was drafted with the expectation that additional funding might occur over time.

Adding assets to an existing trust can reduce complexity and administrative burden compared to creating and managing multiple trusts. That said, not every irrevocable trust permits additional contributions, and careful review of the trust document is essential before moving forward.

Practical Considerations Matter

Although topping off may sound straightforward, it requires careful coordination. Asset valuation, gift timing, liquidity needs, and tax reporting must all be considered. In some situations, generation-skipping transfer tax issues or trust-specific restrictions may also come into play.

Many families are acting now in light of the current exemption levels, recognizing that transfer tax rules are subject to change. 

Administrative and Trustee Considerations

Additional contributions to an irrevocable trust have real administrative implications. Trustees must ensure that gifts are accepted in accordance with the trust’s terms, recorded properly, and administered consistently with fiduciary obligations.

Professional trustees can play an important role in supporting this process by coordinating with legal and tax advisors, maintaining accurate records, and ensuring continuity as trusts evolve.

At Independent Trust Company, irrevocable trust administration is approached with the understanding that planning strategies change over time. As families revisit existing trusts in response to updated exemption levels, ITC works alongside advisors to support careful administration when trusts are expanded or further funded.