One Big Beautiful Bill Act: Important Estate and Gift Tax Law Changes

On July 4, 2025, Congress passed, and President Trump enacted, the One Big Beautiful Bill Act (the “Act”). While the Act affects various policy areas, it includes many tax law changes, extending and making permanent certain provisions of the 2017 Tax Cuts and Jobs Act. This alert does not provide a comprehensive summary of the Act, but it will highlight significant provisions related to individual gift and estate tax planning matters.

Increased Exemptions Made Permanent

The current estate, lifetime gift, and generation-skipping transfer (“GST”) tax exemptions are $13,990,000 per person (base amount, indexed for inflation), or $27,980,000 for a married couple. Barring Congressional action, the current exemptions would sunset on January 1, 2026, reverting to $5,000,000 (base amount, indexed for inflation).  With the passage of the Act, beginning on January 1, 2026, the Act will permanently increase the estate, lifetime gift, and GST tax exemptions to $15,000,000 per person (base amount, indexed for inflation), or $30,000,000 for a married couple.  The tax rates for gift, estate, and GST transfers will remain the same – 40% is the top marginal rate for gift/estate tax, and 40% is the flat rate for the GST tax.  While the tax exemptions described above have been made permanent by the Act, this means there is no expiration or sunset provision; however, Congress could always pass future legislation to change them.  

There are other important tax changes in the Act, including changes to tax credits, the standard deduction, limiting certain itemized deductions, and other corporate and individual tax modifications.  You should consult with your tax advisor to determine whether such changes affect you.

Actions to Take Now

After years of uncertainty, the Act provides individuals with stability for their planning decisions.   You should review existing Wills and testamentary trusts to ensure they reflect your current wishes.  It is particularly important to review any formula clauses tied to your estate tax exemption, as the formula may no longer reflect your intent.  In addition, consider whether you should simplify your documents (e.g., if they currently contain tax planning provisions and you no longer need to incorporate such provisions). 

If you wish to discuss your planning matters with our attorneys, please contact our office.