How the One Big Beautiful Bill Act Transforms Estate Planning
President Trump signed the sweeping One Big Beautiful Bill Act into law on July 4, 2025. This major legislation permanently extends several provisions from the Tax Cuts and Jobs Act and introduces new mechanics that significantly impact estate, gift, and GST (generation-skipping transfer) taxes. Here's what you need to know.
1. Estate & Gift Tax Exemption Permanently Boosted
Starting January 1, 2026, the lifetime estate and gift tax exemption will rise to $15 million per person, or $30 million per married couple, with future indexing for inflation. This replaces the previously scheduled drop to approximately $7 million per person. The exemption threshold now provides long-term certainty, reducing estate tax liability for ultra-high net worth families.
2. Key TCJA Provisions Made Permanent
Key tax provisions introduced in the 2017 Tax Cuts and Jobs Act, including income tax brackets, standard deductions, and pass-through entity benefits, are now permanent under the new law. This stability extends to:
Income tax top rate remaining at 37%
Alternative Minimum Tax thresholds keeping taxpayers out of AMT at current levels
Qualified Business Income (QBI/199A) deduction preserved for pass-throughs
3. GST Tax Exemption Doubles
Concurrently, the GST tax exemption also doubles, aligning with the estate and gift threshold at $15 million per individual and $30 million per couple, permanently indexed for inflation.
4. Planning Implications: What to Do Now
Review and Update Trust Structures
Structures such as IDGTs, SLATs, and charitable lead trusts may remain viable but should be reviewed to ensure compliance and optimal tax outcomes under the new permanent rules.
Consider GST-Optimized Trusts
With the exemption now higher and permanent, layering GST planning into your trust architecture can preserve wealth for multiple generations.
State-Level Estate Tax Coordination
Because many states impose their own estate or inheritance taxes with lower thresholds, aligning federal and state planning remains critical, especially given shifting thresholds and policy certainty.
5. Broader Context: Why Planning Still Matters
Even with a $15 million federal exemption, estate planning remains essential for control, clarity, and distribution of wealth, not just tax avoidance. Tools like wills, powers of attorney, healthcare directives, and properly structured trusts remain foundational, regardless of net worth.