Now is the Time to Write a New Estate Plan or Revise an Existing Plan

Key Takeaways:
  • The One Big Beautiful Bill makes the $15 million estate tax exemption permanent, giving families the clarity they need to plan confidently for the future.
  • Now is the ideal time to revisit or create an estate plan to align with new tax laws and protect your legacy.
  • Working with an experienced advisor ensures your estate plan takes full advantage of the new rules while keeping your family’s goals front and center.

 

The “One Big Beautiful Bill” (OBBB) that was enacted in July 2025, making significant changes to the tax system, brought welcome certainty to the world of estate planning. Many people are responding by updating their estate plans or putting together estate plans for the first time.

Perhaps the most significant change to come out of OBBB concerning estate planning is the permanence of the new estate tax exemption of $15 million per person (indexed for inflation), effective starting in 2026. With the certainty that this brings to the planning process, many people now feel comfortable doing the long-term planning and preparation that is necessary to craft an effective estate plan.

Estate Planning Before OBBB: Why There Was Uncertainty

When the Tax Cuts and Jobs Act (TCJA) of 2017 was enacted, it included several provisions that put estate planners into both a state of joy and a state of uncertainty.

The TCJA doubled the federal estate tax exemption and indexed it to inflation, resulting in a 2025 exemption of $13.9 million per person ($27.8 million for married taxpayers filing jointly). This was a boon to individuals who were looking for ways to craft a tax-efficient estate plan.

However, the TCJA made that exemption temporary, with a December 2025 expiration date, at which time the exemption would revert to the previous level of approximately $6 million per person.

As a result, many people either delayed estate planning or put together estate plans that capitalized on the TCJA’s provisions, understanding that they would have to rewrite the plans before TCJA’s expiration date of Dec. 31, 2025.

While the OBBB again makes an estate plan rewrite inevitable for most people, it comes with the certainty that the estate tax exemption and other major provisions will remain stable for the foreseeable future.

Who Needs to Revisit Their Estate Plan Now?

We encourage clients to review and, if necessary, tweak their estate plans every two to four years to ensure that the plan is keeping up with their lives. Marriages occur, babies are born, divorces happen. All of these things can trigger changes in estate plans. If it’s been a few years since you have looked at your estate plan, the OBBB provides the perfect stimulus to review it now and make changes that will maximize the benefits that the new law may provide for you.

Following is a summary of the things we’re helping clients make decisions about in the wake of the OBBB enactment.

If You are Close to the $15 million Exemption

If you hold assets that place you close to the $15 million exemption, there are options to “freeze” your estate so it doesn’t go over that amount, including:

  • Transferring assets into an irrevocable trust, so growth that happens is legally outside of the estate.
  • Set up a dynasty trust, in which you can place assets over multiple generations. These trusts exist in perpetuity, and they eliminate the potential for estate taxes.
  • Establish a Spousal Lifetime Access Trust (SLAT) or a Grantor Retained Annuity Trust (GRAT), both of which are irrevocable trusts.

The OBBB has changed certain estate planning strategies, particularly related to the permanence of the $15 million exemption. The end-of-life strategy now is to ensure that assets are maximized in order to take advantage of the step-up in basis without going over the $15 million exemption when death occurs. If the estate appears to be exceeding the exemption when death is near, a trustee can be allowed to transfer assets to bring it down.

Annual Gift Tax Exemption

The annual gift tax exemption is still a great planning opportunity that can help you tamp down the assets in your estate, if that’s necessary, and be generous with your family members.

In 2025, you can gift up to $19,000 to anyone, without it counting against your lifetime exemption of $15 million. Moreover, you can gift to as many people as you want. If you are close to the $15 million exemption and want to shed assets from your estate, making a gift to every family member can be a good place to start.

When you gift amounts that is over $19,000 to individuals, it’s important to file a Form 709 United States Gift (and Generation-Skipping) Tax Return with the IRS. You won’t have to pay taxes on the gift, until you have gifted in excess of the lifetime limit; this form simply enables the IRS to track how much you are gifting that is over the $19,000 annual limit, since it will impact your $15 million lifetime exemption.

Portability

If one spouse dies without using all of his or her $15 million exemption, the unused portion can be transferred to the surviving spouse, increasing the surviving spouse’s exemption.

Portability doesn’t happen automatically. It must be elected on Form 706 United States Gift (and Generation-Skipping) Tax Return, which is filed with the IRS by the executor of the deceased spouse’s estate within five years of the date of death. Portability must be elected, which is not as easy as it should be. Work with a professional who is familiar with the form and its rules to make sure it’s done right.

Charitable Planning

Increasingly more people are entering the estate planning years having never had children. Or they have children but are planning to leave a significant part of their estates to charity.

The unlimited charitable deduction for estate and gift purposes remains unchanged by the OBBB. If the value of an estate is above $15 million, assets can be transferred to a charitable organization as part of the planning process as a way to avoid estate taxes upon death.

Additionally, many clients are utilizing Charitable Remainder Trusts and Donor Advised Funds to manage their charitable legacies.

Valuation Discounts

When a family business is part of the process, estate planning becomes more complex. One of the most important tools to use in protecting the estate’s assets is valuation discounting.

Valuation discounts, when properly applied, can lower the value of a business and, hence, prevent overvalued assets from pushing an estate over the $15 million exemption limit. In that way, valuation discounts are a risk management tool for preserving the value of an estate.

It’s important to work with professionals who understand how to properly analyze a business’ valuation, integrate the value into an estate plan and apply discounts within legal guidelines.

What to Do Now

If you haven’t put together an estate plan, or if you haven’t reviewed and updated your estate plan in several years, now is the time to act.

  • Schedule an appointment with an estate and trust professional.
  • At that meeting, bring your existing estate and trust documents.
  • Have a discussion with your spouse about what has changed since you last updated your plan.
  • Design a new plan and make sure all titling is changed. An estate plan is only as good as the follow-through with documentation. When you set up a trust the only things that go directly to the trust are assets titled to the trust. So part of the update process is to review the titling on all assets.
Protect your Legacy With Confidence

Our goal is to simplify the estate plans we work with, a process made easier by the OBBB. If you would like to discuss an estate plan review, contact an Adams Brown advisor.