Your estate plan, one year after OBBBA 

More than a year ago, many estate planners across the country were watching a clock. The Tax Cuts and Jobs Act’s elevated exemption was set to sunset at the end of 2025, which would have cut the federal estate and gift tax exemption roughly in half, from nearly $14 million down to approximately $7 million per person.

The One Big Beautiful Bill Act (OBBBA) made the higher exemption permanent. . . and added to it. It’s a meaningful shift, and one worth understanding clearly—not just for what it changed, but also for what it didn’t.

What OBBBA actually did to the federal exemption

The OBBBA permanently set the unified estate, gift, and generation-skipping transfer (GST) tax exemption at $15 million per individual, effective January 1, 2026. For married couples, that’s $30 million combined. The exemption is also indexed for inflation going forward, so the number will continue to grow over time.

To put that in context: without OBBBA, the 2025 exemption of $13.99 million would have dropped to roughly $7 million on January 1, 2026. Clients who had been racing to make large lifetime gifts before the sunset no longer face that pressure.

For clients who already used their full $13.99 million exemption in 2025, the math works out to approximately $1.01 million in additional exemption per person (or $2.02 million per couple) now available to deploy. That’s not a windfall, but it’s a real number worth incorporating into an updated plan.

Which wealth-transfer strategies still make sense?

The permanent exemption doesn’t make sophisticated planning strategies obsolete. If anything, it strengthens the case for using them thoughtfully rather than reactively.

Several tools hold up well regardless of exemption level:

Annual exclusion gifting. The annual gift tax exclusion is $19,000 per donor per recipient in 2026. This requires no exemption usage and remains one of the most straightforward ways to transfer wealth over time.

Spousal Lifetime Access Trusts (SLATs). SLATs let one spouse gift assets into an irrevocable trust for the benefit of the other, removing the assets from the taxable estate while preserving some access. They’re particularly useful for married couples who want to use their exemption without fully giving up access to the funds.

Grantor Retained Annuity Trusts (GRATs). GRATs are effective estate-freezing tools: the grantor transfers assets into an irrevocable trust, receives an annuity for a fixed term of years, and passes any growth above the “7520 rate”—an interest rate published by the IRS, which fluctuates monthly—to beneficiaries free of gift or estate taxes.

Dynasty trusts. For families focused on multigenerational wealth transfer, dynasty trusts can hold assets across generations while minimizing recurring estate tax exposure.

These are long-term planning tools that work best when implemented with intention rather than urgency.

Don’t overlook portability

One area that often gets lost in estate planning conversations is electing portability of the deceased spousal unused exclusion (DSUE) to a surviving spouse, which can augment the survivor’s own estate tax exemption.

OBBBA didn’t change how portability works. What it did do is raise the underlying exemption amount, which means the DSUE election matters more now, not less. An executor who fails to file a portability election on a timely filed federal estate tax return (Form 706) for a deceased spouse may be leaving significant exemption on the table.

Federal relief doesn’t solve everything

Here’s a point that surprises some clients: the $15 million federal exemption may not help as much as you think if you live or own property in a state with its own estate tax.

Several states, including New York, Massachusetts, and Oregon, impose separate estate or inheritance taxes with exemptions well below the federal threshold. These state taxes aren’t tied to federal law and didn’t change when OBBBA passed. For example, a New York estate worth between $8 million and $15 million may owe no federal tax but still face a meaningful state-level bill.

The federal number is just one piece of the picture, not the whole picture.

State-level planning isn’t something to ignore for residents of high-tax states or non-residents who own property there.

What to revisit now

The permanent exemption is a good reason to look at existing estate planning documents with fresh eyes, not necessarily to redraft them, but to check whether they still reflect your current goals and circumstances.

A few areas worth reviewing:

Beneficiary designations. These don’t update automatically when your life changes. Marriages, divorces, births, and deaths can all create gaps between what your documents say and what you actually want.

Trust funding mechanics. An unfunded trust accomplishes nothing. If assets haven’t been properly transferred into a trust, the planning structure isn’t working the way it should.

Outdated assumptions. Plans built around the old exemption sunset or older family circumstances may no longer reflect current goals, not because the law changed the document language, but because your situation has evolved.

This kind of checkup doesn’t have to be overwhelming. Most of the time, it’s a conversation—one that surfaces small issues before they become larger ones.

Your next step

Estate planning works best when it’s proactive. The OBBBA exemption increase created new capacity for lifetime gifting and multigenerational planning. Whether you’ve already used a large portion of your exemption or are just beginning to think through the options, now is a practical time to reconnect with your advisors.

Kaufman Rossin’s Estate & Trust team can walk you through how the new federal exemption interacts with your existing plan, whether state-level exposure warrants additional attention, and which wealth-transfer strategies fit your goals.