Family Asset Organization: A Summer Refresh to Secure Your Kin's Tomorrow
News Article: Permanent Increase in Federal Estate and Gift Tax Exemption Offers Estate Planning Opportunities
The One Big Beautiful Bill Act (OBBBA), which was entered into law on July 4, 2025, has brought significant changes to estate planning for high-net-worth individuals. The Act permanently increases the federal estate and gift tax exemption to $15 million per individual, effective January 1, 2026, and indexed for inflation in subsequent years.
This increase means that more wealth can be transferred free of federal estate and gift taxes. An individual can transfer up to $15 million (and, for married couples, $30 million combined) without incurring these taxes at death or through lifetime gifts. The exemption being indexed for inflation provides long-term stability and predictability, reducing the need for last-minute planning efforts to use expiring exemptions.
For those who have already used their prior exemption amounts, they gain an additional $1 million or more in transfer capability starting in 2026. Lifetime gifting becomes even more advantageous to shift future asset appreciation outside the taxable estate. Since the estate tax rate remains at 40%, gifts during life that remove appreciating assets from the estate can mitigate taxes on future growth, which might outpace inflation adjustments to the exemption.
The generation-skipping transfer (GST) tax exemption is also increased to match the higher estate and gift tax exemption, supporting intergenerational wealth planning.
In summary, the OBBBA’s permanent $15 million exemption enhances estate planning flexibility, reduces uncertainty about future exemption levels, and encourages high-net-worth individuals to engage in strategic gifting to minimize estate taxes on appreciating assets.
For future years, the federal estate and gift tax exemption amount will be $15 million with an adjustment for inflation. Regardless of asset levels, it is recommended to reevaluate your estate plan during the summer. Life changes such as marriage, divorce, children, disability, relocation, or the death of a loved one can affect your estate plan.
Examples of annual gifts include contributing to a 529 plan, helping a grandchild buy a vehicle, or gifting into an irrevocable trust. Charitable trusts or family foundations that reflect your values can also be established. Estate planning involves meaningful conversations with family members about your intentions.
Consulting with an experienced estate planning attorney is recommended to ensure an effective estate plan is created. Now is a great time to review or create your estate plan.
[1] The White House. (2025). One Big Beautiful Bill Act (OBBBA). Retrieved from https://www.whitehouse.gov/obbba/
[2] Internal Revenue Service. (2026). Estate, Gift, and Generation-Skipping Transfer Taxes: Exemption Equivalents. Retrieved from https://www.irs.gov/taxtopics/tc701
[3] Congressional Budget Office. (2025). One Big Beautiful Bill Act (OBBBA): Estimated Budget Effects. Retrieved from https://www.cbo.gov/publication/57547
- This permanent increase in the federal estate and gift tax exemption to $15 million per individual, as provided by the OBBBA, offers opportunities for wealth-management strategies in personal-finance and business planning, allowing high-net-worth individuals to transfer more wealth while minimizing federal estate and gift taxes.
- With the increased generation-skipping transfer (GST) tax exemption now matching the higher estate and gift tax exemption, wealth-management professionals are seeing a surge in interest for estate planning services, as intergenerational wealth-management strategies become more feasible and attractive for high-net-worth families.
