Signed into law on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) has made a sweeping change to the federal estate and gift tax landscape—one that significantly impacts families with substantial assets and those looking to create a legacy.

Here’s what you need to know, and what you should consider discussing with your estate planning attorney.

What Changed?
Under the previous law, the federal estate and gift tax exclusion amount was scheduled to drop by nearly half on January 1, 2026, reverting back to pre-2018 levels (adjusted for inflation). That meant many families were rushing to complete large gifts or fund irrevocable trusts before the end of this year.

But OBBBA changed all that.

Key Highlights of the One Big Beautiful Bill:

• Permanently increases the lifetime federal estate and gift tax exclusion to $15 million per person starting in 2026 (indexed for inflation going forward).
• Preserves portability for married couples—allowing them to combine unused exemption amounts.
• Maintains the current 40% estate and gift tax rate for amounts above the exemption.
• Extends flexibility for lifetime gifting and long-term estate planning strategies.

This means families now have more room and more time to develop thoughtful estate plans—without the pressure of a 2025 deadline.

What Does “Permanent” Really Mean?
The OBBBA made the $15 million exclusion “permanent”—but that doesn’t mean it’s untouchable.

“Permanent” in tax law simply means there’s no scheduled expiration. It doesn’t prevent Congress or a future administration from changing it later.

Just as the 2017 Tax Cuts and Jobs Act temporarily doubled the exemption, the OBBBA’s changes could be amended or reversed by a new political majority. That’s why it remains critical to plan proactively while today’s law is in effect.

Estate Planning Opportunities to Consider
Even with the higher exemption, estate planning remains essential. The goal isn’t just tax minimization—it’s ensuring your wealth passes to the right people, in the right way, at the right time.

Here are a few planning strategies you may want to explore:

1. Lifetime Gifting: Make strategic use of your $15 million exemption (or $30 million for married couples). Gifts now can grow outside of your estate, protecting future appreciation from estate tax.

2. Irrevocable Trusts – Trusts like:

• Spousal Lifetime Access Trusts (SLATs)
• Irrevocable Life Insurance Trusts (ILITs)
• Dynasty Trusts can help protect assets, preserve generational wealth, and create clear rules for distribution.

3. Review Existing Plans: If you made large gifts in the past to “lock in” the higher exemption before 2026, it’s time to revisit your plan. The $15M cap may change your strategy.

4. Charitable Giving: Incorporate charitable remainder trusts (CRTs) or donor-advised funds (DAFs) to reduce taxable estate value while supporting causes that matter to you.

5. Business Succession Planning: Family business owners should work with counsel to explore tax-efficient ways to transfer ownership—especially with the added exemption space now available.

6. Portability Planning: Although married couples can combine unused exemptions, proper planning is still needed to make portability elections and protect the Generation-Skipping Transfer (GST) exemption, which is not portable.

Other Notable Highlights of the OBBBA (Beyond Estate Planning)
Although the estate tax changes are grabbing headlines, the One Big Beautiful Bill includes a wide range of reforms:

• Income Tax Adjustments: Current TCJA rates remain, with small inflation-adjusted increases.
• Corporate Tax Cut: The corporate income tax rate was reduced from 21% to 18%, aiming to boost domestic investment.
• Bonus Depreciation Extended: 100% bonus depreciation for qualified business property was extended through 2028.
• Small Business Incentives: Increased Section 179 expensing limits and expanded access to capital deductions for entrepreneurs.
• 529 Plan Expansion: Now allows penalty-free withdrawals for homeschooling expenses and apprenticeships.
• Family Tax Credit Enhancements: The child tax credit was increased and partially extended beyond prior phase-out thresholds.

What Should You Do Now?
Even though the pressure to act before 2026 has eased, proactive planning is still key. The tax code could change again in the future, and many estate planning strategies take time to implement properly.

Whether your estate is well under $15 million or well over it, a solid plan ensures your loved ones are protected, your intentions are honored, and your legacy is preserved.

We recommend all clients review their estate plans in light of these new changes. If you haven’t created an estate plan—or haven’t reviewed it in the last 3–5 years—this is the perfect time to connect.

Book a complimentary consultation to discuss your current plan and whether any updates are necessary based on the new law.