What the new “Big Beautiful Bill” Could Mean for Estate and Gift Taxes

With the recent passage of the sweeping legislation called the Big Beautiful Bill, below is a quick breakdown of tbe new bill as it relates to estate and tax planning for our clients:

Key Proposed Changes to Estate and Gift Tax Law

Increased Estate and Gift Tax Exemption Made Permanent — Not a Repeal
The legislation does not eliminate the federal estate tax. Instead, it would raise the estate and gift tax exemption to $15 million per person (or $30 million per married couple) beginning in 2026, and make that exemption permanent and inflation-adjusted.

Former Law: The exemption is $13.61 million per person in 2024 and is scheduled to sunset to approximately $7 million (inflation-adjusted) in 2026 under the 2017 Tax Cuts and Jobs Act.

Gift Tax Remains, With Aligned Exemption
The new law retains the federal gift tax but align its exemption with the new estate tax threshold of $15 million.

GST Tax Remains, With Higher Exemption
The Generation-Skipping Transfer (GST) tax — which applies to transfers to grandchildren or more remote descendants — is preserved in the new law, with its exemption similarly raised to $15 million per person. This will continue to support multigenerational wealth planning strategies.

Step-Up in Basis Preserved
Notably, the new law retains the step-up in basis at death, meaning heirs would inherit appreciated assets at their fair market value on the date of death.

What This Could Mean for Your Estate Plan

Even though the new law may appear favorable for individuals with substantial estates, it’s important to understand the broader implications:

The High Exemption Create Planning Opportunities
Thee increased exemption allows for larger lifetime gifts and the creation of irrevocable trusts to lock in tax-free transfers under the new limits.

Review and Update Your Documents.
Trusts and estate plans created under older exemption levels may need to be updated or revised. Some clients may benefit from simplifying their plans, while others might choose to proactively use the larger exemption.

Disclaimer

This article is intended for informational purposes only and does not constitute legal advice. Each individual’s situation is unique, and we encourage you to consult with legal and tax professionals before making estate planning decisions. To schedule a consultation, please contact TLD Law directly.