On July 4th, 2025, President Trump passed the One Big Beautiful Bill Act (OBBBA). This bill contains many provisions regarding taxes, college financial aid, and other topics relevant to our clients. In this post, we will explore several important updates that could impact estate and gift tax strategy, particularly for individuals and families with estates approaching or exceeding $7 million. Below is a breakdown of the key takeaways for high-net-worth individuals.

The lifetime exclusion is now $15 million — permanently.

Starting in 2026, the basic exclusion amount for federal estate and gift taxes increases to $15 million per person, indexed for inflation from 2025 onward. That’s up from a projected $7.2 million if the previous law had sunsetted as scheduled.

With each spouse’s exclusion now set at $15 million, couples can collectively transfer up to $30 million without incurring estate or gift taxes.

Higher thresholds = lower tax exposure.

Before this law was passed, the estate and gift tax exclusion was set to drop to roughly $7.2 million in 2026. That meant individuals with more than $7 million in assets (or $14 million for couples) were likely to face federal estate taxes. 

With the new $15 million exclusion, many individuals may no longer owe any estate tax. And those with estates above $15 million will still benefit from substantially reduced tax exposure.

More room for future planning.

If you’ve already used a large portion of your exclusion through prior gifts, the bump to $15 million increases your remaining lifetime exclusion. For instance, someone who maxed out the $13.99 million exemption in 2025 gains an additional $1.01 million in 2026.

Complexities remain, especially with past gifts.

Your new available exclusion will still need to account for any taxable gifts made in prior years. Navigating these calculations correctly will be essential to avoid unexpected tax consequences, especially if you’ve made large gifts in past years. 

No sunset clause — yet still not “set in stone.”

Unlike prior tax changes, this increase doesn’t come with a built-in expiration date. However, a future Congress and administration could amend or reduce the exclusion. While the $15 million amount applies to both lifetime gifts and transfers at death, those considering lifetime gifting may want to act sooner to lock in current law.

Portability and goods and services tax rules remain unchanged.

If a spouse passes away without using their full estate tax exclusion, the surviving spouse may be able to use the remaining unused portion. This is known as “portability.” However, to do so, the executor of the deceased spouse’s estate must elect portability by filing a federal estate tax return, even if no estate tax is owed. This rule has not changed under the new law.

Similarly, the generation-skipping transfer tax exemption, which allows assets to pass to grandchildren or other "skip" beneficiaries without additional tax, continues to match the $15 million exclusion. However, unlike the estate tax exclusion, any unused GST exemption cannot be transferred to a surviving spouse.

Additional changes for high earners and charitable giving.

Beyond estate and gift tax updates, the OBBBA includes several provisions that could impact your broader tax strategy, including:

• The top individual tax rate of 37% is now permanent.
• A new cap on the amount that itemized deductions can reduce your tax bill (replacing the old Pease provision).
• A permanent rule stipulating that cash donations to charity can be deducted up to 60% of AGI, but only to the extent they exceed 0.5% of income.

If you itemize deductions or make significant charitable contributions, these updates may affect your tax planning moving forward.

Less urgency — but not less importance.

With the exclusion increase now permanent, there’s no longer a December 31, 2025, “use-it-or-lose-it” deadline. Still, it may be wise to develop or revise your gifting and estate strategy in light of these changes.

If you’d like help assessing your situation or fine-tuning your estate plan in light of these changes, don’t hesitate to reach out. We’re here to ensure your strategy stays aligned with the law and your long-term goals.

Sources: https://www.congress.gov/bill/119th-congress/house-bill/1/text

This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities.