Estate Planning Under the One Big Beautiful Bill Act
Major legislation often brings a wave of uncertainty—especially when it affects something as personal and long‑term as estate planning. The One Big Beautiful Bill Act (OBBBA), signed into law in July, is no exception. But while the changes may feel overwhelming, understanding them now can help you strengthen your long‑term strategy and take advantage of new planning opportunities.
What the OBBBA Means for Your Estate and Retirement Planning
Below are several key changes included in the OBBBA. The order is intentionally mixed to help you explore each provision with fresh perspective.
Fewer Estates Owing Federal Tax
Only about 0.25% of estates will owe federal estate tax under the new rules. This is great news for most families, but it’s still important to keep an eye on state-level estate or inheritance taxes, which may apply depending on where you live.
Medicare Budget Impact
The Act delays key Medicare cost‑sharing assistance rules until 2034 and opens the door to as much as $490 billion in cuts. If PAYGO rules activate, seniors may see higher out‑of‑pocket expenses or reduced provider access—another reason to review your long‑term healthcare strategy.
Estate and Gift Tax Exemption Increase
Beginning January 1, 2026, the federal estate and gift tax exemption will rise to $15 million per individual and $30 million per couple, with inflation adjustments each year. This update eliminates prior uncertainty around scheduled phase‑downs and gives families more room to plan tax‑efficient wealth transfers.
Social Security Tax Changes
A new, temporary deduction—up to $6,000 for individuals or $12,000 for couples over age 65—could reduce the number of retirees who pay taxes on Social Security benefits. This provision expires in 2028 unless renewed, so it’s wise to consider how it fits into your short-term planning.
Medicaid Reform and Long‑Term Care Planning
The OBBBA includes $1 trillion in federal Medicaid cuts, new work or volunteer requirements, and tighter eligibility rules. Qualifying for long‑term care support may become more difficult, so now is a key moment to explore private insurance options and asset‑protection strategies.
No Other Structural Estate Tax Changes
Aside from the new exemption amount, the fundamental structure of estate, gift, and GST taxes remains unchanged. Provisions from the 2017 Tax Cuts and Jobs Act continue to hold, providing consistency for long‑range planning.
A Chance to Plan Proactively
While the OBBBA introduces complexity, it also offers a valuable window for strategic planning. Now is an ideal time to revisit your estate documents, long‑term care plans, and tax strategies to ensure they align with the updated rules. A trusted advisor can help you interpret how these changes apply to your unique financial picture and guide you toward smart, confident decisions for your family’s future.