By Annaliese Bennett, Esq.
The One Big Beautiful Bill Act, often nicknamed the “OBBA,” was signed into law in July 2025 and made permanent changes to the federal estate, gift, and generation-skipping transfer (GST) tax exemptions.
Under the 2017 Tax Cuts and Jobs Act (TCJA), the federal estate and gift tax exemption was temporarily doubled and is currently set at $13.99 million per individual in 2025. These provisions were scheduled to expire, or “sunset,” on January 1, 2026, which would have returned the exemption to the pre-TCJA threshold of $5 million per individual (or an estimated $7 million per individual when adjusted for inflation).
The OBBA removed the sunset provisions of the TCJA and “permanently” increased the exemption levels. Beginning January 1, 2026, the lifetime exemption levels for estate, gift, and GST taxes are $15 million per individual and $30 million per married couple, with annual inflation adjustments.
While the exemption increases are “permanent” in the sense that there are no longer looming sunset provisions that come with a built-in expiration date, it is important to keep in mind that federal tax laws are always subject to change based on the current political landscape and future legislative changes.
The OBBA provides an opportunity for high-net worth individuals to make thoughtful choices about long-term planning and legacy preservation. Individuals and families whose net worth is near or over the exemption level should take advantage of the clarity the OBBA provides and use this time to reevaluate existing plans to ensure tax saving benefits are maximized.
For those who may have already used their previous exemption amounts, the increased threshold provides a renewed opportunity to support loved ones and charities through strategic gifting. For others who may be nearing the threshold, utilizing estate planning vehicles such as irrevocable trusts to shelter the growth of appreciating assets can be an effective tool to minimize tax liability.
Regardless of your net worth, now is still a great time to take advantage of these historically high exemption levels by utilizing strategies to move assets outside of your taxable estate. While regular reviews of your estate plan are always encouraged, the OBBA provides a unique opportunity to review and ensure your plan is both efficient and aligned with your long-term goals.
