Breaking Developments
On July 1 and 2, 2025, the Senate narrowly passed the “One Big Beautiful Bill” (OBBBA)—formerly the “Big Beautiful Bill”—by a 51–50 margin, with Vice President Vance casting the tie-breaking vote. The legislation would:
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Permanently raise the federal estate tax exemption to $15 million per individual (indexed for inflation).
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Extend key 2017 TCJA tax provisions (e.g., standard deduction, pass-through deduction).
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Include new deductions for tips, overtime, and senior taxpayers.
The bill now returns to the House for final approval, with Republicans aiming for a sign-off before their self-imposed July 4 deadline.
⚖️ Implications for Middle-Class Families
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Federal estate protection: The top-tier exemption jump to $15 million offers a cushion for wealthy families—but real estate, life insurance, small business ownership, and retirement savings could still push many middle-class estates near or above this mark.
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State-level vulnerabilities: Even with federal reform, some states (e.g., New York, Oregon) maintain separate estate/inheritance taxes that may kick in at far lower thresholds.
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Legislative uncertainty: Despite Senate passage, ideological splits remain in the GOP—moderates worry about cuts to Medicaid and SALT impacts, and some conservatives are uneasy over deficit increases—keeping the House vote far from guaranteed.
💼 What You Should Do Right Now
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Reassess your estate total—including often-neglected assets like life insurance and business interests.
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Plan gift strategies—the current exemption remains through December 31, 2025; unused portions won’t roll over afterward.
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Use trusts and ILITs—to exclude life insurance from your taxable estate and protect other holdings.
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Evaluate state tax rules—some states may tax estates regardless of federal changes.
✅ Final Takeaway
Senate passage of the OBBBA brings powerful estate tax reform—yet the House vote is still pending, and procedural timing could delay or alter final provisions. The potential increase to a $15 million exemption offers relief, but families with assets in the mid-seven-figure to low-eight-figure range still need to plan thoroughly.
Please contact our office to schedule a consultation and learn how these important legislative changes could impact your estate and gift planning decisions.
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.
