Estate Planning After the One Big Beautiful Bill Act: What the New Rules Mean for Families

For years, estate planners and high-net-worth families were preparing for a 2026 “estate tax cliff.” Under prior law, the historically high exemption—nearly $14 million per individual—was scheduled to expire at the end of 2025 and revert to roughly half that amount. The One Big Beautiful Bill Act (OBBBA), passed in July 2025, rewrote that narrative. The exemption has now been permanently set at $15 million per individual (or $30 million for married couples), indexed for inflation going forward.

This development creates stability in the near term but should not be mistaken for an end to estate tax planning.

What Has Changed

• Old framework: Estate and gift tax exemptions were set to “sunset” to about $6–7 million per person in 2026.
• New law: The OBBBA permanently fixes the exemption at $15 million per person, with inflation adjustments.
• GST alignment: The generation-skipping transfer (GST) exemption also follows the new $15 million threshold.

For many families, this means their estate may no longer be subject to federal tax. For others, especially those above these thresholds, planning remains just as critical.

Why Planning Still Matters

Even with this increase, the estate tax remains a 40 percent levy on amounts above the exemption. Families with estates exceeding $15 million (or $30 million for couples) still face significant exposure.

Additionally, tax laws are never immune to political change. A future Congress could alter or reduce the exemption again. That uncertainty reinforces the need for flexibility in planning.

Strategies That Remain Important

• Trusts for Control and Privacy: Revocable and irrevocable trusts continue to provide probate avoidance, asset protection, and clarity for heirs.
• Lifetime Gifting: With a larger exemption, families now have even greater capacity to transfer appreciating assets tax-free during life.
• Business and Real Estate Planning: Techniques like family limited partnerships and valuation discounts remain powerful for closely held enterprises.
• Charitable Integration: Charitable trusts and donor-advised funds still allow families to align values with tax efficiency.

What Families Should Do Now

1. Update estate plan documents: Reflect the $15 million (and inflation-adjusted) exemption in wills and trusts.
2. Review past gifting strategies: Consider whether additional transfers make sense under the new law.
3. Reassess dynasty and GST trusts: Larger GST exemptions expand multi-generational planning opportunities.
4. Stay vigilant: The law provides stability, but circumstances—political, personal, and financial—can always change.

A New Era of Stability, with Familiar Lessons

The OBBBA eliminated the immediate fear of a 2026 estate tax cliff. That shift brings relief, but it should not invite complacency. The principles of sound estate planning remain constant: minimize taxes, maintain flexibility, and ensure wealth transfers align with family goals. The higher exemption is an opportunity to revisit and refine plans so they remain effective for decades, not just the next election cycle.