The One Big Beautiful Bill Act (OBBBA), enacted in July made one of the most sweeping changes to estate planning in recent memory by permanently raising the federal estate and gift tax exemption to $15 million per person ($30 million for married couples) beginning in 2026. There will be ongoing inflation adjustments, but this means that most estates below these thresholds will remain exempt from federal estate and gift taxes.

For families and planners who had been bracing for the exemption to fall back to around $7.2 million in 2026, OBBBA removes that looming deadline and provides a new level of certainty. But as the dust settled last month (August 2025), several important considerations and potential complications emerged.

What Changed, And Why It Matters

Before OBBBA, wealthier families were racing to use up exemption amounts before they were cut in half. By locking in the higher exemption and indexing it to inflation, OBBBA changed that equation. Still, “permanent” in tax law is never truly permanent. Advanced strategies remain essential for very high-net-worth individuals, and even those under the new threshold should revisit plans written for a different tax environment.

Fallout from August 2025

A few developments and clarifications surfaced in August that estate planners should keep in
mind:

• Formula Clauses Need Review. Many wills and trusts contain funding formulas tied to exemption amounts that assumed a 2026 reduction. These may now create unintended outcomes if left unexamined.
• Awaiting IRS Guidance. We are still waiting for Treasury and the IRS to clarify OBBBA’s rules and what will need to be coordinated across gift, estate, and generation-skipping transfer taxes (including updated forms and instructions).
• Estate Tax Closing Letters. On August 4, the IRS confirmed a reduced user fee of $56 for estate tax closing letters. While a technical point, it matters for executors navigating the process.
• State Estate Taxes Remain. OBBBA does not affect state-level estate or inheritance taxes. Several states set thresholds far below the federal level, so state exposure remains a concern.
• Income Tax and SALT Considerations. OBBBA’s related increase in the state and local tax (SALT) deduction cap may influence where families establish trust situs or residency. This intersection of income and estate planning is worth watching.

Who Should Revisit Their Planning

Our take is that VHNW individuals (estates well above $15 million or $30 million for couples) should continue to implement advanced strategies. These may include dynasty trusts, grantor-retained annuity trusts (GRATs), and estate freezes, and are tools that remain essential for protecting against potential future rollbacks and preserving wealth across generations.

Individuals with total estates nearer the exemption amount may want to explore more flexible approaches, such as spousal lifetime access trusts (SLATs) that offer both tax efficiency and continued access to assets. The pressure of an expiring exemption is lifted, so now these strategies can be approached with greater care and less urgency.

For those with more moderate levels of wealth, federal estate tax exposure is unlikely, but a review of revocable trusts, asset protection measures, and income tax planning still has value. State-level estate and inheritance taxes, along with unique family considerations, remain important factors in this review.

Several technical points are worth keeping in mind, however, as families revisit their plans.

• Timing of Gifts. Lifetime gifting can reduce a taxable estate, but heirs may inherit assets with low basis, leading to higher capital gains tax when the assets are sold. With a higher exemption, some families can pause and weigh these trade-offs more carefully.
• Federal Portability Still Applies. Unused exemption from a deceased spouse can still be transferred to the surviving spouse if the proper election is made.
• Flexibility Matters. Even with higher exemptions, laws evolve. Trusts that allow future adjustment can provide security while keeping options open.

What is the Bottom Line

The OBBBA’s permanent increase in the federal exemption dramatically reduces the number of estates subject to federal tax. Yet, as August 2025 highlighted, estate planning is not a set-it-and-forget-it approach. Formula clauses, pending IRS guidance, and state estate taxes all keep the field complicated.

The best next step? Reassess existing wills, trusts, and gifting strategies in light of both OBBBA and the follow-up issues that surfaced this summer. For many families, the good news is there’s more breathing room and less urgency—but thoughtful, updated planning remains essential.

The Estate Planning Attorneys at Sassoon Cymrot Law, LLC are ready to help you evaluate gifting, restructure trusts, and determine whether or not to implement more flexible strategies so your planning stays effective no matter how tax laws evolve. We look forward to hearing from you.