What OBBBA Changed for Estate Planning

Before 2025, many families were racing a deadline. The higher estate tax exemption created in 2017 was set to fall by roughly half at the start of 2026, and advisors urged clients to make large gifts before it did.

The One Big Beautiful Bill Act, signed July 4, 2025, changed that. It set the basic exclusion amount at $15 million for gifts made and deaths occurring after December 31, 2025, and adjusts that amount for inflation in later years. The law contains no scheduled expiration for this change.

What changed

• A higher exemption: $15 million per person in 2026, up from $13.99 million for 2025.
• No sunset: the reduction scheduled for 2026 was removed. Congress can still change the law in the future, but there's no built-in deadline.
• Inflation indexing: the amount will be adjusted for inflation in the years after 2026.
• Annual gifts: the gift tax annual exclusion is $19,000 per recipient for 2026, the same as 2025.

What didn't change

The top estate and gift tax rate is still 40% on amounts above the exemption. Married couples can still use portability, which lets a surviving spouse use a deceased spouse's unused exemption, but generally only if an estate tax return is filed after the first death. Many families skip that return because no tax is due, and lose the benefit.

The generation-skipping transfer tax exemption generally follows the same amount, so trusts meant to benefit grandchildren still need careful planning.

Why planning still matters for business owners

A $15 million exemption sounds like it takes most families out of the estate tax. For owners of $2 million to $50 million companies, that may not hold for long. A growing business, appreciating real estate and investment accounts can push an estate past the exemption, especially over a 20- or 30-year horizon.

Estate tax is also only one of the risks. Without a plan, families can face:

• A forced sale of the business or land to pay taxes or settle disputes among heirs.
• No clear successor ready to run the company.
• Assets passing outright to heirs who aren't prepared to manage them.
• Probate delays that freeze accounts and decisions.

Give now or hold until death?

With the deadline gone, the question shifts from how fast you can give to what you should give, and when. Lifetime gifts move future growth out of your estate. But gifted assets generally keep your original tax basis, while assets that pass at death usually receive a new basis equal to their value at that time. For low-basis assets, holding them may save your heirs more in income tax than gifting would save in estate tax.

Texas is a community property state. When one spouse dies, both halves of community property can generally receive a new basis, not just the deceased spouse's half. That makes the choice between gifting and holding especially important for Texas couples.

Moves worth reviewing in 2026

• Update your estate projection with current values and realistic growth rates.
• Confirm that wills, trusts and beneficiary designations still match your goals.
• Review buy-sell agreements and how the business would be valued.
• Consider trusts for control, privacy and protection, not just tax savings.
• Plan for liquidity so heirs aren't forced to sell assets to cover taxes or expenses.
• Use annual exclusion gifts, and direct payments of tuition or medical bills, where they fit.

Your estate plan works best when your CPA and estate attorney work from the same numbers. We coordinate with your legal team so tax projections, valuations and documents line up.

General information, not tax or legal advice. Consult a CPA about your situation.