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A high-level look at how the One Big Beautiful Bill Act could impact your estate plan
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), which is a major piece of legislation that locks in several changes to income, gift, and estate tax rules. For individuals and families with significant assets, and even for those who have more moderate estates, this is one of the most impactful moments in estate planning in recent years.
Here’s what you need to know and why it matters.
A New Estate and Gift Tax Exemption That’s Here to Stay
Beginning in 2026, the federal estate and lifetime gift tax exemption will be permanently set at $15 million per person ($30 million per couple), with annual adjustments for inflation. With the current exemption at $13,990,000 for 2025, this represents a significant and permanent increase.
This replaces the uncertainty created by prior sunset provisions, which would have reduced the exemption to about $7 million per person if no action had been taken.
What this means for families: With this law, high-net-worth individuals have clarity and a window of opportunity to make strategic planning moves, such as lifetime gifting or funding long-term trusts. For those with more modest estate who live in state like Massachusetts, additional opportunities exist to save significant state estate taxes.
Other Key Updates in the Law
The OBBBA includes more than just a change to the exemption amount. Here are several other provisions that may be relevant depending on your situation:
- Generation-Skipping Transfer (GST) Exemption Increased:
The GST exemption now matches the $15 million per person federal estate and gift tax exemption, which supports stronger multigenerational wealth planning through vehicles such as dynasty trusts. The GST exemption will also be adjusted annually for inflation.
- Personal Income tax Brackets and Trust and Estate Income Tax Brackets Made Permanent:
Income tax brackets for individuals, trusts, and estates, originally introduced in the 2017 TCJA, are now permanent and will be adjusted for inflation. The top bracket rate is now set at 37 percent. If the law had sunset, the top bracket would have increased to 39.6 percent. This provides more predictability for individuals and trustees managing income-producing assets.
- State and Local Tax (SALT) Deduction Cap Increase:
The $10,000 cap on SALT deductions will increase to $40,000 starting in 2025, but is scheduled to sunset back to $10,000 in 2030. The SALT deduction begins to phase out once modified adjusted gross income (MAGI) exceeds $500,000 for joint filers, and decreases to $10,000 once MAGI reaches $600,000.
Note that the SALT deduction is available for trusts, which may make non-grantor trust planning more attractive for some individuals. Families in high-tax states should still explore other planning tools rather than relying solely on expanded deductions.
- Additional Deduction for Seniors:
The law permanently increases the standard deduction by $6,000 for seniors (This deduction phases out for seniors with MAGI that exceeds $150,000.
How does this impact MA Estate Planning?
There is a tremendous opportunity to save even more in Massachusetts estate taxes thanks to the increase in the federal gift tax exemption to $15 million, indexed for inflation. Based on the new law and the planning techniques we can implement, it’s possible to save up to $4,266,800 for a married couple and $1,866,800 for a single person.
We’ll go into more detail on these opportunities in future posts.
Does This Affect You?
If you live in Massachusetts or any other state with a state estate tax, or if your estate is valued near or above $15 million for individuals or $30 million for couples, or is projected to exceed those amounts during your lifetime, this new law is directly relevant to your planning.
Even if your assets are below those thresholds today, this is still a good time to check in. Asset values can rise quickly due to real estate appreciation, business growth, or inherited wealth.
This law does not include a sunset date. But if we have learned anything over the last 25 years, it is that when there is a change in administration or Congress, tax law changes usually follow. Delaying action could lead to missed opportunities, especially if you intend to gift appreciating or illiquid assets in the future.
Why We’re Watching This Closely
At Family Estate Planning Law Group, we believe estate planning should be proactive and relationship-driven. We work closely with your financial and tax professionals to help you align your plan with changing laws and changing life circumstances.
This bill (and any legislation that impacts Estate Planning) is a perfect example of why planning should be ongoing. This new law opens the door to meaningful opportunities for families, but only if you know how to take advantage of them.
What to Expect Next
We’re reviewing the law in detail and preparing guidance based on different planning scenarios. Over the next few weeks, we’ll share more insight into strategies that may make sense for families to consider, including:
- Estate tax planning for Massachusetts residents using the Massachusetts Standby Gifting Trust
- Lifetime gifting before asset values increase
- Income and distribution planning for existing trusts
- Expanding or establishing dynasty trusts
- Strategic charitable planning
- Managing and transferring unique assets like family businesses
If you’re not sure how this law might impact your current plan, you’re not alone. We’ll help you navigate what matters and stay aligned with your goals.
