Estate Planning Changes Under the One Big Beautiful Bill Act

The estate tax exemption has been a moving target for years. Under the Tax Cuts and Jobs Act of 2017, the exemption roughly doubled to about $13.6 million per person. But that increase was set to expire after 2025, dropping the exemption back to around $7 million.

The One Big Beautiful Bill Act changed that.

What the OBBB Act Did

Starting in 2026, the federal estate tax exemption increases to $15 million per person, or $30 million for a married couple using portability. More importantly, this amount is now permanent and indexed to inflation. The sunset that had everyone concerned is gone.

For individuals and families with estates in the $7 million to $15 million range, this is significant. Under the old sunset rules, many would have faced estate tax liability starting in 2026. Now they will not.

Does This Mean You Can Ignore Estate Planning?

No. A higher exemption does not mean no planning is needed. Here is why:

State estate taxes still apply. Ohio does not currently have a state estate tax, but if you own property in states like Illinois, Massachusetts, or New York, those states have much lower exemptions, some as low as $1 million. Your estate could owe state tax even if it is well below the federal threshold.

Trusts still serve important purposes beyond tax savings. They protect assets from creditors, provide for minor children, manage distributions to beneficiaries who may not be ready for a large inheritance, and keep your affairs private by avoiding probate.

Income tax planning becomes more important as estate tax becomes less of a concern. Inherited assets receive a stepped-up cost basis, which eliminates capital gains on appreciation during the original owner lifetime. Proper timing and structuring of asset transfers can save beneficiaries significant income tax.

What High-Net-Worth Families Should Consider

Review your existing estate plan. If your plan was built around the assumption that the exemption would drop to $7 million, the math has changed. Some trusts or gift strategies that made sense under the old rules may no longer be necessary.

Consider using the higher exemption for lifetime gifts. You can gift up to $15 million without triggering gift tax. For families with growing businesses or appreciating real estate, transferring assets now locks in the current value and moves future appreciation out of your estate.

Update beneficiary designations. Life insurance policies, retirement accounts, and transfer-on-death accounts pass outside your will. Make sure these designations match your current plan.

Coordinate with your CPA and estate attorney. Tax planning and estate planning overlap significantly. The best results come when both professionals are working from the same playbook.

The OBBB Act removed a major source of uncertainty for high-net-worth families. But estate planning is about more than just avoiding tax. It is about making sure your assets go where you want, when you want, and in the way you want. The higher exemption gives you more room to work with, not a reason to stop planning.