How the One Big Beautiful Bill Is Shaping Estate Planning

As an estate planning attorney with Adams & Sullivan, one of the most important developments in federal tax law in recent years is the passage of the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. This sweeping legislative package — which touches everything from income taxes to business provisions — also brings significant changes to the federal estate, gift, and generation-skipping transfer (GST) tax system that directly affect how we plan for wealth transfer and legacy.

1.  Permanent Higher Estate & Gift Tax Exemptions = Planning Certainty

Perhaps the most far-reaching estate-planning impact of the OBBBA is making the higher federal estate and gift tax exemption permanent.

Prior to this law, the federal lifetime exemption (the amount you can transfer, either during life or at death, without federal transfer taxes) was elevated by the 2017 Tax Cuts and Jobs Act (TCJA) but scheduled to sunset at the end of 2025. That sunset would have cut the exemption roughly in half — from about $13.99 million (in 2025) to much lower levels — creating a “use it or lose it” deadline for high-net-worth clients.

Under the OBBBA:

• The federal estate, gift, and GST tax exemption increases to $15 million per individual (and $30 million for married couples if done properly and certain parameters are met) beginning January 1, 2026.
• Importantly, this exemption is now permanent and indexed for inflation, rather than temporary or scheduled to revert in future years.

For most families, this means a dramatically reduced likelihood of federal estate tax being owed on death, especially for estates under these new thresholds. For many clients planning around multigenerational wealth transfer, the peace of mind of a permanently higher exemption is invaluable.

2.  Gift Planning Still Important — but With More Flexibility

Even though the exemption is higher and permanent, lifetime gifting remains a key strategy in well-crafted estate plans:

• The annual gift tax exclusion continues, allowing you to give a certain amount each year to any individual without using any lifetime exemption (e.g., $19,000 per donee in 2025).
• Making taxable gifts during life can reduce the size of a taxable estate and leverage valuation discounts for certain assets. With the overall exemption higher, clients now have more flexibility to time and structure gifts without fear of losing exemption value due to sunset provisions.

Though the elevated exemption reduces pressure to make gifts before 2026, lifetime gifting remains useful — especially for families who want to optimize tax outcomes or transfer ownership interests in closely held businesses.

3.  Trust Planning and Advanced Strategies Are Still Relevant

Some estate planning techniques — like various trust structures (e.g., grantor trusts, SLATs, GRATs) and generation-skipping transfer planning — are unaffected in core tax treatment by the Act. However, the higher exemption and permanence of the rules broaden the strategic options available:

• With a larger buffer before federal tax applies, clients can focus more attention on income tax efficiency, basis planning, and family governance rather than trying to force wealth out of estates solely to avoid taxation.
• GST planning remains powerful for families planning to transfer wealth across multiple generations — especially since the GST exemption parallels the federal unified exemption.

4.  Step-Up in Basis Rules Are Still Intact

One key provision critical to most estate and tax planning remains unchanged by the OBBBA: assets received at death generally continue to receive a step-up in tax basis to fair market value. This means heirs may pay less tax when they sell inherited property, based on its value at your death rather than your original cost basis.

That benefit boosts the attractiveness of holding assets until death versus gifting them during life — especially for assets that have appreciated significantly.

5.  What This Means for Nebraska Residents

For Nebraskans and others who plan their estates under combined federal and state tax regimes:

• The OBBBA’s federal changes provide important relief at the federal level, but state estate or inheritance taxes (including Nebraska’s inheritance tax) remain separate considerations. Planning that minimizes state tax exposure — particularly in states with inheritance or estate taxes — remains crucial.
• Given Nebraska’s own tax structure, clients with estates near state-level thresholds (particularly if you are giving to people other than immediate relatives) should continue careful planning with state tax impacts in mind.

6.  Bottom Line: Planning, Not Panic

The One Big Beautiful Bill has indeed reshaped the estate planning landscape — but in most ways, it does so by expanding planning opportunities rather than eliminating the need for thoughtful strategy.

• The permanent higher federal exemption gives individuals and families breathing room and long-term certainty.
• Lifetime gifting and trust planning remain valuable tools.
• Step-up in basis, annual exclusions, and portability continue to be essential elements of a robust plan.

No single piece of legislation eliminates the complexity of wealth transfer — but this law does give advisors and clients a clearer runway to craft thoughtful, efficient estate plans that reflect family goals, not just tax avoidance.

If you’re unsure how these changes interact with your existing estate plan or personal goals, schedule a review with the estate planning attorneys of Adams & Sullivan to ensure your documents — and your strategy — keep pace with changes in the law.

Adams & Sullivan, P.C., L.L.O. was established in 1951 and for 30 years Mr. Sullivan has been helping property owners, heirs, and trustees navigate the intricately connected real estate, probate, and trust laws

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