Breaking Update

Today, the House narrowly passed the final version of the “One Big Beautiful Bill” (OBBBA) by a vote of 218–214, sending it directly to President Trump for his signature—expected by July 4. This marks the culmination of a high-stakes legislative push to preserve and enhance key tax protections.

🏛️ What It Means for the Estate Tax

• The bill permanently sets the federal estate and gift tax exemption at $15 million per individual ($30 million per couple), fully indexed for inflation starting in 2026.

• This prevents the scheduled drop back to approximately $7 million that would have taken effect if TCJA provisions expired at the end of 2025.

⚠️ How Middle-Class Households Are Affected

While the expanded exemption safeguards ultra-wealthy estates, many middle-class families still face exposure:

• Life insurance payouts—often excluded from estate planning—are included in taxable estate value if owned at death.

• Retirement accounts, high-value real estate, and small business ownership may push estates near or above the exemption, especially when combined.

• State-level estate or inheritance taxes remain a concern, as many states levy taxes at significantly lower thresholds than the new federal level.

💡 What You Should Do Before the Bill Takes Effect

1. Recalculate your total estate now—include life insurance, retirement accounts, business interests, and real property.

2. Act during the 2025 window—you can still leverage the current $13.99 million exemption and annual gift exclusions before the new rules take effect.

3. Use estate planning strategies:

   • Irrevocable Life Insurance Trusts (ILITs) keep policy proceeds out of your estate.

   • Trust vehicles like SLATs or bypass trusts help shelter business and investment assets.

4. Consult professionals—state-level taxes, probate nuances, and family-specific factors vary, so personalized legal and financial advice is essential.

✅ Bottom Line

With presidential approval expected imminently, the $15 million exemption becomes law—but families with lifetime assets in the $7 – $15 million range still need to navigate the transition. Now is the time to consolidate your estate plan, optimize gifting, and consult with professionals to safeguard your legacy.

Disclaimer:
The information provided in this post is for educational and general informational purposes only and does not constitute legal, tax, financial, or other professional advice. Laws, regulations, and interpretations are subject to change frequently and may vary by jurisdiction. You should not rely solely on this information when making decisions affecting your personal circumstances. Please consult with a qualified attorney, tax advisor, or financial professional for advice specific to your situation. The transmission or receipt of this information does not create an attorney-client relationship or any other professional relationship. This post may be considered advertising under applicable state laws.