For years, families with larger estates planned around a deadline. A tax break was set to shrink at the end of 2025, and the clock was ticking. A new federal law changed that, and the shift matters for how you approach estate tax planning today.
What the One Big Beautiful Bill Act Changed
On July 4, 2025, the One Big Beautiful Bill Act became law. Its most important estate planning provision sets the federal estate and gift tax exemption at $15 million per person, or $30 million for a married couple, starting January 1, 2026. The generation-skipping transfer tax exemption rises to match. And the amount will adjust for inflation in the years ahead.
That figure is up from $13.99 million per person in 2025. More significant than the increase is what the law took away. Under the earlier Tax Cuts and Jobs Act, the exemption was scheduled to fall by roughly half at the start of 2026, dropping to around $7 million per person. That reduction is gone.
Several familiar features stayed in place:
- Portability between spouses, so a surviving spouse can use a late spouse’s unused exemption
- The $19,000 annual gift exclusion per recipient, still adjusted for inflation
- The top federal estate and gift tax rate of 40%
The Tax Foundation’s breakdown of 2026 tax figures confirms the $15 million exemption and the unchanged $19,000 annual gift limit.
If Your Estate Is Modest
For most families, the pressure is off. The rushed “use it or lose it” gifting that defined recent years was driven by the coming reduction. With that threat gone, there is room to plan on your own timeline. Still, state death taxes, the step-up in basis, and beneficiary designations all deserve attention no matter what the federal exemption says.
If Your Estate Is Larger
For wealth near or above the exemption, the math is different. The higher threshold is an opportunity. Reviewing how much exemption you have already used, whether more gifting makes sense, and how trusts fit your goals can preserve more for the people and causes you care about. The same law also reshaped several charitable giving deductions, which often factor into planning at this level.
Why Review Still Matters
A generous exemption today is no guarantee for tomorrow. Congress can revisit these rules, and plenty of tax provisions have moved before. Building a plan that works under current law, while staying flexible enough to absorb change, is the sensible path. Sound estate tax planning keeps that balance in view.
Working with an estate tax planning lawyer means your plan reflects the law as it stands now and can adapt if the exemption shifts again.
Tax laws change more often than most estate plans get reviewed. If you have not looked at yours since this law passed, or you are unsure how the new exemption affects your situation, consider sitting down with an attorney who can walk through the numbers and confirm your plan still does what you intend. The team at Estate Planning Pros helps clients read these changes correctly and decide what, if anything, to adjust, whether that means updating a trust, rethinking a gifting strategy, or simply confirming the current plan still holds up.