What You Need to Know About the “One Big Beautiful Bill” (OBBBA)

Signed into law on July 4, 2025, the One Big Beautiful Bill Act isn’t just about taxes and budgets—it could drastically change how you plan for your future and your family’s inheritance.

1. Bigger Estate & Gift Tax Exemptions

If you’ve been worrying about the 2026 estate tax “sunset” that would have cut your exemption in half—good news! That’s off the table.

✅ Instead, starting January 1, 2026:

The federal estate and gift tax exemption is set at $15 million per person ($30 million for couples)
That’s indexed for inflation going forward
The Generation Skipping Transfer (GST) Tax exemption matches that amount

What this means for you:

More room to transfer wealth, fund trusts, and secure your legacy without Uncle Sam taking a huge bite out of it.

2. Extra Gifting Power in 2026

Already used up your lifetime gift exemption? You’ll get an additional $1.11 million to use starting in 2026.

✅ Great time to make strategic gifts

✅ Consider funding a dynastic trust or gifting appreciating assets

3. SALT Deduction Temporarily Increased

The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 through 2029, adjusted for inflation.

BUT there’s a catch:

Phased out for incomes over $500,000
Eliminated for $600,000+ incomes

If you’re a high-income earner in a high-tax state, talk to your tax advisor about PTET (Pass Through Entity Tax) strategies that might help you bypass this cap.

4. More Flexibility for 529 Plans

Planning for your kids’ education just got easier.

529 Plan distributions are now tax-free for:

Tutoring
SAT/ACT prep
Educational therapies

It’s not just about tuition anymore!

5. Changes to Charitable Deductions

Giving is still good—but the rules have shifted.

Itemizers: Only donations over 0.5% of AGI count toward deductions
Non-itemizers: Can now claim a $1,000 (single) or $2,000 (joint) charitable deduction with the standard deduction

Strategic giving is key here. Timing and structuring your donations could make a big difference.

6. Final Thoughts on Protecting Your Legacy

Even with these updates, foundational estate planning is still essential.

✅ Update your will and trusts

✅ Review powers of attorney and healthcare directives

✅ Don’t forget state-specific estate and inheritance taxes

✅ Consider gifting strategies, asset protection, business succession, and long-term care planning

What Should You Do Now?

The OBBBA has opened up a powerful window of opportunity—but it might not stay open forever. Political shifts could reverse these benefits in the future.

Now is the time to:

Meet with your estate planning attorney
Review your gifting strategy
Take action while the tax environment is favorable

Not sure where to begin? Let’s talk. Your legacy deserves a plan that works.

Need help updating your estate plan or understanding how these changes apply to your situation? To schedule an appointment with one of our estate planning attorneys, call us today at (480) 719-7333 and let’s optimize your future.