As many of you know, on July 4, 2025, the President signed the One Big Beautiful Bill Act (OBBBA) into law. This legislation extends and builds on key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), including individual income tax changes like retaining current rates and increasing the SALT deduction.
Most importantly for wealth planning, OBBBA eliminates the looming sunset of the federal estate, gift, and generation-skipping transfer (GST) tax exemptions. This shift makes it essential to revisit your current estate plan to confirm it reflects your long-term goals and, where applicable, to assess whether further planning could help maximize tax efficiency.
Starting January 1, 2026, the exemptions will be permanently increased to $15 million per individual (or $30 million for married couples), with annual inflation adjustments thereafter. This is a modest increase over the current $13.99 million exemption, which had been scheduled to drop to roughly $7.2 million in 2026. The annual gift tax exclusion for 2025 is $19,000 per recipient and will continue to adjust annually for inflation.
The recent changes offer some welcome stability, allowing clients to proceed with estate planning and wealth transfers without the immediate concern of shrinking exemptions. However, it’s not smooth sailing for everyone. If your estate, including future growth, is likely to exceed the $15M (individual) or $30M (married) exemption, proactive planning remains essential. The estate and GST tax rates both hold at 40%, and the GST exemption remains non-portable—unlike the estate tax exemption, it can’t be transferred to a surviving spouse. For some, state estate taxes also continue to be a key consideration. Smart planning will leverage the gift exemption and use advanced techniques to mitigate estate tax, particularly on future growth of personal wealth.
Now is the time to assess how these changes affect your personal plan. Lifetime gifts transferring the future growth of appreciating assets can meaningfully reduce future estate tax exposure and preserve more for your family. Equally important, these developments call for a careful review of existing trust structures, especially those designed for generation-skipping transfer planning or income accumulation, to ensure they continue to serve their intended purpose under the updated tax laws.