The One Big Beautiful Bill Act, signed in July 2025, changed the rules that shape how families pass on wealth. It made the federal estate tax exemption permanent and much higher, which shifts the focus of planning for most households. The result is not less planning, but a different kind.
What the OBBBA Changed
The law permanently raised the federal estate, gift, and generation-skipping transfer tax exemption. For 2026, the IRS sets that figure at $15 million per person, or $30 million for a married couple, and it adjusts for inflation going forward.
Before this change, many plans were built around a scheduled drop in the exemption. That drop never happened. The 40% top rate stayed the same, but the higher exemption means most estates will owe no federal estate tax at all. Because the change has no scheduled expiration, families can plan for the long term without bracing for a reversal.
Why Your Plan Still Needs a Look
A higher exemption does not make estate tax planning unnecessary. It changes what matters. With fewer families facing federal estate tax, the focus moves to income taxes, asset protection, and making sure documents still do what you intended. That makes this a strong moment to confirm your plan reflects your goals rather than a tax threat that has passed.
Where the Focus Shifts
Several priorities now take center stage for most families:
- Tax basis. Assets passed at death generally get a step-up in basis, which can erase built-in capital gains. Gifting those same assets during life usually passes along the lower basis instead.
- Portability. A surviving spouse can use a deceased spouse’s unused exemption, but only if an estate tax return is filed on time.
- State estate taxes. Some states tax estates at far lower thresholds than the federal level, so where you live still matters.
- Outdated formulas. Many wills and trusts use clauses tied to old exemption amounts, which can overfund a trust or send assets to the wrong place.
- Retirement accounts. These do not receive a step-up in basis, so how you leave them affects the tax your heirs pay.
Outdated Documents Are the Real Risk
The biggest danger right now is not a tax bill. It is a plan that no longer matches the law it was written under. A formula clause drafted in 2015 can behave very differently when the exemption is $15 million. Reviewing those provisions now prevents surprises later. An estate tax planning lawyer can read your existing documents against current law and flag anything that no longer fits.
At Estate Planning Pros, we help families update plans after major tax changes and weigh income tax, basis, and state tax issues together. If your estate plan predates the OBBBA, this is a sensible time to revisit it. Sitting down with an attorney to review your documents can confirm that they still carry out your wishes under the law as it stands today.