The so-called, “Big Beautiful Bill” was signed into law on July 4, 2025. The subjects covered by the One Big Beautiful Bill Act (“OBBBA”) are many, but this article focuses on the transfer tax implications of the Act.

In short, the main change for transfer tax purposes is the increase of the baseline exemption to $15,000,000 in 2026 and for inflation adjustments thereafter – while also removing a scheduled sunset of the provisions.  This was perhaps the most unexpected outcome of the bill, but was made possible by the use of the reconciliation process for OBBBA.  Otherwise, the Act would have required the asset of 60 senators to have an effect longer than 10 years. Instead, only a majority was required – and the thinnest of majorities was achieved with the participation of the Vice President in casting the deciding 51st vote.

Estate Tax Over Time After Enactment of OBBBA

Estate Tax Exemption/Exclusion Amounts Over Time Since 1916

The chart above shows the dramatic impact that the higher exclusion amounts can have on estate planning. Although the prior law would still have excluded the vast majority of Americans from transfer taxation, the higher exemption will limit the impact to less than 1% of the population.  However, the closeness of the vote suggests increased vigilance and proactivity for those that are near or over the new exclusion amount. While no change would likely be possible during the current administration, the election of a Democratic president and a small change in the make up of Congress could easily lead to a reduction of the higher exclusions.

We will continue to evaluate planning what might be the most attractive planning options after OBBBA and will contextualize the implications for each of our clients, but here are our initial thoughts about what this means for estate planning in 2025 and into the near term:

  • Individuals with a net worth of close to or more than $15 Million, or those that expect to exceed that amount (as adjusted for inflation) in the future, should continue to factor in the potential estate, gift, and generation-skipping transfer tax (all three collectively referred to as the “transfer tax”) consequences in their planning. Individuals worth roughly half that amount should consider whether insulating themselves from potential reductions in transfer tax exclusion amounts would be worthwhile.
  • Married couples with a net worth of close to or more than $30 Million, or those that expect to exceed that amount  in the future, should continue to factor in the potential transfer tax consequences in their planning. Couples worth roughly half that amount would likely benefit from estate tax planning in their revocable trusts while also considering whether insulating themselves from potential reductions in transfer tax exclusion amounts would be worthwhile.
  • Non-tax implications of inheritance planning will continue to have increased importance – at least that has been our experience. Having a higher exemption focuses those below the exemptions on these matters because tax considerations are less of a distraction for them. With more estate planning conversations associated with the personal implications of gifts and inheritances, the more attuned we as advisors have become and the more open our clients have become to having such conversations.

We encourage you to connect with your Certus attorney or our firm to determine how the changes represented by OBBBA impact you and your planning.