Estate Planning After the One Big Beautiful Bill: What You Need to Know

The One Big Beautiful Bill (OBBB) Act, enacted on July 4, 2025, brought significant and welcome changes to federal estate and gift tax rules. For many families, business owners and investors, these changes provide greater certainty, but they also shift how estate and tax planning should be approached.

Here is what changed, what remained the same and what estate planning steps may still make sense.

What Changed

A major change is higher, permanent estate tax exemptions.

Starting January 1, 2026, the federal lifetime exemption for estate, gift and generation-skipping transfer (GST) taxes increased to:

• $15 million per individual
• $30 million per married couple (with proper planning)
  

Even more importantly, these exemption amounts are now permanent and indexed for inflation. This eliminates the prior concern that exemption levels would drop sharply after 2025, as was expected under prior law.

For many families, this means fewer estates will be subject to federal estate tax, and planning can now be done with greater long-term confidence.

What Stayed the Same

• The top federal estate tax rate remains 40% on amounts above the exemption

• State estate and inheritance taxes were not affected; some states still impose their own estate or inheritance taxes, even if no federal tax is due

• Asset growth, business value increases and future law changes can still create tax exposure over time

Does this mean estate planning is less important? Not at all. The focus of planning is simply shifting.

Because the exemption is higher and permanent, there is less pressure to rush large gifts solely to use the exemption before it disappears. However, planning still matters especially for families with:

• Rapidly appreciating assets (real estate, closely held businesses, private investments)
• Multi-generational wealth goals
• Business succession concerns
• Charitable intentions
  

In many cases, thoughtful planning can still reduce future taxes, protect assets and simplify transfers to heirs.

Key Planning Considerations Going Forward

Under the new law, effective estate planning often focuses on:

• Managing future growth rather than just reducing current estate size
• Trust planning, including dynasty and generation-skipping trusts, to preserve wealth over generations
• Business and entity planning, especially for pass-through businesses and real estate investors
• Liquidity planning, to ensure heirs can pay expenses, taxes or equalize inheritances
• Coordinating income, business and estate planning, since these areas are more interconnected than ever

Charitable strategies and life insurance planning also remain valuable tools, depending on individual goals.

What You Should Do Now

Even with the favorable changes under the OBBB, it is important to:

• Review existing wills, trusts and beneficiary designations
• Reassess gifting and trust strategies considering the new exemption levels
• Consider how asset growth, business succession and state taxes affect your long-term plan
• Coordinate estate planning with income tax, business and financial planning

What worked under prior law may no longer be optimal and new opportunities may now exist.

The Bottom Line

The One Big Beautiful Bill provides a more stable and generous framework for estate and gift tax planning. While fewer families may face federal estate tax, disciplined, integrated planning remains essential to protect wealth, support family goals and adapt to future changes.

Estate planning is no longer about racing against a deadline. It is about building a thoughtful, flexible strategy for the years ahead.

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