Forbes
By Matthew F. Erskine
July 3rd, 2025
Estate Planning And The Final OBBBA: Key Changes High-Net-Worth Individuals Must Know
The One Big Beautiful Bill Act (OBBBA), passed by the Senate on July 1, 2025, and approved by the House just in time for the July 4 deadline, solidifies significant tax reforms from the 2017 Tax Cuts and Jobs Act (TCJA).
For high-net-worth families, collectors, and trustees, several crucial aspects stand out for estate planning:
1. Permanent, Inflation-Indexed Estate & Gift Tax Exemption
The final bill permanently increases the unified federal estate and lifetime gift tax exemption to $15 million per individual ($30 million for married couples), indexed for inflation starting in 2026. This secures the elevated threshold, preventing a drop to approximately $7 million per individual, which was anticipated if the TCJA provisions expired. This stability allows ultra-high-net-worth individuals to accelerate lifetime gifting and fund dynasty trusts efficiently.
2. GST Tax Exemption Reinforced
The generation-skipping transfer (GST) tax exemption is now aligned with the $15 million per individual exemption, also indexed for inflation. This paves the way for robust multi-generational planning through dynasty trusts and other strategic vehicles.
3. Trust Income Tax Brackets Made Permanent
The OBBBA retains the TCJA-era tax brackets for trusts and estates, with annual inflation adjustments, offering trustees long-term predictability in managing irrevocable trusts.
4. No SALT Deduction Expansion for High-Net-Worth Households
The legislation maintains the $10,000 cap on State and Local Tax (SALT) deductions, a move endorsed by Senate leadership. This decision means wealthy individuals in high-tax states must continue to focus on other tax planning strategies rather than relying on expanded SALT benefits.
5. Other Significant Changes Impacting Estate Planning
- The standard deduction increase for seniors is made permanent, adding $6,000, benefiting many decedents and beneficiaries.
- No alterations to carried interest, private foundation excise taxes, or Unrelated Business Income Tax (UBIT), ensuring current planning vehicles remain viable.
- A new charitable deduction floor requires corporations to claim at least a 1% floor, potentially enhancing strategies involving gifts of artwork or assets.
The permanent, inflation-indexed $15 million exemptions mean there is no longer a sunset provision. Delaying estate planning is riskier as assets expected to appreciate, such as art and collectibles, should be transferred or trust-funded sooner rather than later.
The OBBBA provides unprecedented permanence in estate and gift exemptions, presenting a well-defined planning window for high-net-worth families and fiduciaries. Revise estate plans to capitalize on the $15 million-per-individual exemptions, initiate or expand dynasty trusts, strengthen governance of holdings, augment liquidity reserves, and diversify planning strategies. This is a generationally significant moment—strategic action now can preserve and protect multigenerational wealth when it matters most.
Matthew F. Erskine, Attorney, Worcester, MA
