The One Big Beautiful Bill, signed into law on July 4, 2025, brings permanent changes to the tax code that could reshape estate planning for families.
With the estate tax exemption rising to $15 million per person ($30 million per couple) effective 2026, and new deductions for seniors and families, this legislation offers opportunities but also complexities for high-net-worth individuals.
In this guide, we’ll explore how the bill impacts estate planning, including stats on tax savings, pros/cons, and strategies to optimize your plan.
If you’re wondering “how does the big beautiful bill affect estate planning in 2025?” or “what is the estate tax exemption in 2025 under the big beautiful bill?”, read on for clear answers.
Key Changes in the Big Beautiful Bill for Estate Planning
The bill makes several tax provisions permanent, providing long-term certainty for estate strategies. Here are the main updates relevant to estate planning in 2025:
1. Estate Tax Exemption Increase
Starting 2026, the exemption rises to $15 million per person ($30 million per couple with portability), indexed for inflation.
Stat: This is up from the current $13.99 million, potentially reducing estate taxes for ultra-high-net-worth families by 40% on affected assets.
Big Question & Answer: “What is the estate tax exemption in 2025 under the big beautiful bill?” – It remains $13.99 million in 2025, jumping to $15 million in 2026.
2. SALT Deduction Cap and Phaseout
Cap increases to $40,000, phasing out between $500k and $600k AGI, sunsetting after 2029.
Stat: High-income individuals in high-tax states could save up to $20,000 annually, but phaseouts create a marriage penalty.
Big Question & Answer: “How does the big beautiful bill change SALT deductions for estate planning?” – It expands deductions, aiding gifting and trust funding in high-tax areas.
3. Permanent Ordinary Income Tax Brackets
Seven brackets (10% to 37%) are now permanent, offering predictability for Roth conversions and distributions.
Stat: This could reduce lifetime taxes by 15–20% for strategic planners.
4. Expanded Child and Adoption Credits
Child Tax Credit: $2,200 per child, permanent and inflation-adjusted.
Adoption Credit: Partially refundable up to $5k starting 2025.
Stat: Families could save $4,400+ annually, enhancing gifting in trusts.
5. New Senior Deduction
$6,000 per taxpayer age 65+, phasing out above $150k MFJ, expires 2028.
Stat: Seniors near phaseout could save $2,400 in taxes annually.
Big Question & Answer: “How does the big beautiful bill help seniors in estate planning?” – It reduces taxable income, freeing funds for trusts or gifting.
Pros and Cons
Pros:
Permanent Exemptions: $15M exemption reduces urgency for gifting, but opens dynasty trust opportunities.
Family Benefits: Expanded credits support multigenerational planning, with 60% estate reduction possible via gifting.
Cons:
Temporary Provisions: SALT cap sunsets in 2029, creating planning uncertainty.
Phaseouts: High-income individuals ($500k+ AGI) lose SALT benefits, with marriage penalties.
Complexity: New Trump Accounts and credits require entity restructures for business owners.
Big Beautiful Bill Changes: 2025 Comparison Table
Change
Pre-Bill
Post-Bill 2025
Impact on Estate Planning
Estate Tax Exemption
$13.99M/person
$15M/person (2026)
Reduces gifting urgency; boosts dynasty trusts
SALT Deduction Cap
$10k
$40k (phases out $500k–$600k AGI)
Aids high-tax state individuals; review trusts for income
Income Tax Brackets
Temporary
Permanent (10–37%)
Enables Roth conversions; bracket management for distributions
Senior Deduction
None
$6,000/65+ (phases out $150k MFJ)
Lowers taxable income; frees funds for gifting
Child Tax Credit
$2,000
$2,200 (permanent)
Enhances family trusts; reduces taxable estate
Strategies for Estate Planning Under the Big Beautiful Bill
Leverage Exemption Increase: Use irrevocable trusts for gifting above $15M, saving 40% on taxes.
Optimize SALT Phaseouts: Shift income to trusts in low-tax states.
Plan Roth Conversions: With permanent brackets, convert IRAs early to avoid 37% rates.
Incorporate Family Credits: Use expanded child/adoption credits in multigenerational trusts.
Senior Deduction Modeling: For 65+, maximize deductions before 2028 sunset.
Big Question & Answer: “How does the big beautiful bill change estate taxes in 2025?” – Exemption stays $13.99M until 2026, but plan for $15M now.
Conclusion
The Big Beautiful Bill offers tax relief and certainty for 2025 estate planning, but phaseouts and temporaries require proactive strategies. With 56% of Americans underestimating probate costs, now’s the time to review your plan.
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