The OBBBA: Navigating New Estate Planning Horizons

High-net-worth individuals and families often face intricate estate planning decisions. The recently passed One Big Beautiful Bill Act (OBBBA) significantly reshapes the framework for estate and gift tax planning — especially for those whose estates hover near or above the $7 million mark. This blog will clarify the act’s implications in an accessible, actionable format.

Understanding the $15 Million Lifetime Exclusion

The OBBBA introduces a $15 million lifetime exclusion applicable to both estate and gift taxes, starting in 2026. Indexed for inflation, this change markedly benefits families with significant assets, offering more room for strategic planning.

The Combined $30 Million Exclusion for Couples

Under the new law, couples can take advantage of a combined $30 million exclusion. This adjustment drastically reduces the tax exposure for many families, creating more expanded opportunities to preserve wealth across generations.

Permanence and Potential Risk

While the OBBBA offers a sense of permanence by not including a sunset clause, it’s important to remember future legislative changes are always possible. This element underscores the importance of timely and strategic estate planning.

Analyzing the Previously Projected $7.2 Million Threshold

The anticipated $7.2 million threshold had introduced risks to estates nearing that value. The newest legislation alleviates a looming tax burden, creating an environment of greater financial security for involved families.

Portability and GST: Unchanging Rules

The OBBBA does not alter the portability of the estate tax exclusion. Portability allows a surviving spouse to use the deceased spouse’s unused exclusion through a federal estate tax return. However, the Generation-Skipping Transfer (GST) exemption remains non-transferable.

The Permanence of High Earner-Related Updates

For high earners and charitable givers, the 37% top tax rate persists. Additionally, the deduction cap and the updated rule for cash donations — set at 60% of AGI, over 0.5% of income — remain relevant considerations in tax planning.

Expanded Opportunities in Estate Planning

Under the new legislation, previously used exclusions still count. For example, someone who has already used a $13.99 million exclusion can gain $1.01 million more in 2026. These rules highlight the expanded planning opportunities created by the OBBBA.

Emphasizing Reduced Urgency but Ongoing Importance

Although the absence of a 2025 deadline provides flexibility, estate planning remains crucial. The expanded exclusion offers a temporary respite; still, those who have already made large gifts must carefully reconsider their strategies.

The OBBBA brings new horizons in estate planning by providing greater stability and expanded opportunities, yet complexities persist, especially for those who have previously made large gifts. The present moment is ideal for updating or crafting a robust estate plan. Now more than ever, connecting with an advisor for customized guidance is essential.