Estate Tax and the One Big Beautiful Bill
Signed into law by President Trump in July 2025, the One Big Beautiful Bill Act brings sweeping changes to federal estate tax law. It’s a game-changer for individuals and families thinking about how to pass on wealth, offering clarity, certainty, and opportunities for estate planning. For those of greater means, this bill represents millions in tax savings.
Exemption Increased
The federal estate and gift tax exemption has been permanently increased to $15 million per person, or $30 million for married couples. Under the old rules (from the 2017 Tax Cuts and Jobs Act), the exemption was set to expire at the end of 2025 and drop to about $7 million per person. That uncertainty caused many people to rush into estate planning. But now, the $15 million exemption is permanent, it’s indexed for inflation, so it will increase over time, and it creates long-term stability for planning.
Planning Across Generations
The new law also boosts the generation-skipping transfer (GST) tax exemption to $15 million per person. That’s good news for those looking to transfer wealth to grandchildren or even great-grandchildren—while avoiding extra taxes across generations.
What This Means for Your Estate Plan
1. No More Rushed Gifting
With the exemption locked in, there’s no need to scramble to give away assets before a deadline. Families now have more time and flexibility to plan thoughtfully.
2. New Opportunities for Wealthy Families
If your estate exceeds $30 million, you’ll still face federal estate taxes—but now with a much smaller tax burden. That opens doors for: larger lifetime gifts, smarter use of irrevocable trusts, and better planning for business succession and charitable giving.
3. Time to Review Existing Plans
If you created complex plans anticipating the old exemption’s expiration, it may be time for a refresh. Simplifying trust structures, updating distributions, or reworking beneficiary designations might now make sense.
Don’t Forget About State Estate Taxes
While the federal exemption has soared, many states still impose estate taxes with much lower thresholds. Even if you’re exempt from federal estate tax, your estate may still owe taxes at the state level.
Maryland: Estate tax exemption of $5 million
District of Columbia: Estate tax exemption of approximately $4.7 million (indexed for inflation)
That means state-level planning is still essential—especially if you live in or own property in these jurisdictions.
Gift Tax Planning Still Has a Role
The $15 million exemption applies to both estate and gift taxes, giving you more flexibility. But remember, the annual gift tax exclusion still exists (currently around $18,000 per person), and smart gifting can reduce your taxable estate over time.
Trusts and Planning Still Matter
Even with this generous exemption, trusts and planning tools remain important—especially for: Protecting assets from creditors, planning for incapacity or blended families, structuring charitable giving and minimizing income taxes on inherited assets.
The One Big Beautiful Bill Act delivers unprecedented certainty for estate planners. The permanent $15 million exemption is a massive relief for most American families—and a powerful planning tool for those with substantial wealth.
But tax law is only part of the picture. Your goals, family dynamics, and legacy wishes are just as important. A thoughtful, customized plan—built with trusted professionals—will help you protect what matters most.
Disclaimer: This article is for informational purposes only and is not legal or tax advice. Everyone’s situation is unique—be sure to consult with a qualified estate planning attorney and tax advisor before making changes to your plan.
