Barbara Snapp Danberg is a partner with Brockstedt Mandalas Federico. Nicholas Tyler is an attorney with the firm.
Each year during tax season, millions of Americans focus on gathering documents, meeting filing deadlines and hoping for refunds. What often goes overlooked is that tax time may also be the most practical moment to revisit an estate plan. For residents in Delaware, that conversation carries unique weight.
Roughly 1 in 5 Delaware residents is 65 or older, a share that ranks among the five highest in the nation and that has grown faster than in nearly any other state over the past decade. The Delaware State Plan on Aging shows that, by 2040, nearly 34% of Delaware’s population will be 65 and older. Estate planning here is not a distant concern. It is a present and growing reality for a large portion of residents, and tax season often brings that reality into focus.
For many Delaware families and business owners, tax returns provide the clearest annual snapshots of their financial lives. They capture far more than income — reflecting investments, real estate, business activity, charitable giving and major life changes. Those details often reveal a simple truth: An estate plan created years ago may no longer align with the life someone is living today.
A tax return reveals more than you think
A typical tax return reflects many milestones that should prompt a review of estate-planning documents. It may show new investment accounts or substantial growth in existing ones, the purchase of a vacation home or a rental property, or the start or expansion of a business. It can also reflect changes in marital status, the addition of children or dependents, or significant charitable contributions.
In Delaware, this connection is particularly important. The state has one of the highest concentrations of vacation/seasonal homes in the U.S., with over 34,000 units near the coast. In places like Dewey Beach, where nearly all housing, 98%, is used seasonally, ownership of a second home is not just common; it is often a significant part of an individual’s overall financial picture.
These properties frequently introduce added complexity during tax time. A vacation home may generate rental income, create deductible expenses or trigger multistate tax considerations, depending on how it is used. It may also be owned jointly, have been placed in a trust or is intended to be passed to multiple heirs — each of which carries different estate-planning implications.
Business owners face higher stakes
For business owners, the connection between tax planning and estate planning becomes even more critical. Tax filings often reveal how much of a person’s wealth is tied to a privately held company. Pass-through income, changing ownership percentages and increasing valuations can dramatically reshape an estate over time.
That dynamic is especially relevant in Delaware, where the state’s business-friendly environment has made it home to hundreds of thousands of corporate entities and closely held companies. Yet older estate plans often address business interests only briefly, particularly if those plans were created before the company grew in value or complexity.
Tax season raises several important questions. If something unexpected happens, who would control the business? How would ownership transfer to heirs or partners? Would family members be forced to sell assets to cover taxes or operational costs? Without thoughtful planning, the death or incapacity of a business owner can create uncertainty for both the company and the family. A coordinated strategy that considers both tax exposure and succession planning preserves stability when emotions and financial pressures collide.
Why Delaware residents should pay attention
For Delaware residents, estate planning involves some unique advantages worth understanding. The state no longer imposes an inheritance or estate tax, and it does not levy a gift tax. While federal estate tax rules may still apply to very large estates, Delaware’s framework creates meaningful planning flexibility. The state is also widely recognized for its sophisticated trust laws and long-standing role as a center for business formation — tools that can be enormously valuable for individuals and families who want to structure their assets carefully.
But those advantages only work if estate plans are regularly updated to reflect current financial circumstances.
Estate planning should evolve with life
Most families benefit from having core estate-planning documents in place, including wills or trusts, powers of attorney, health care directives and updated beneficiary designations. These documents provide clarity about decision-making, asset distribution and responsibility if incapacity occurs. Without them, families may face unnecessary stress, uncertainty and court involvement.
Tax season offers a natural annual checkpoint. As financial records are reviewed, it is worth asking a simple question. Does the estate plan still reflect the life shown on the return? For many, the answer is no. That makes this the right time to revisit and update it.
Reader reactions, pro or con, are welcomed at civiltalk@iniusa.org.
