On May 22, 2025, the House of Representatives passed the One Big Beautiful Bill Act by a single-vote margin. This bill adopted many of the recommendations of the House Ways and Means Committee, with a few changes along the way. The Senate must now take up the bill and its proposals as part of the budget reconciliation process.
If passed in its present form, individuals would have more time to make substantial gifts and leverage the large estate planning exemption. Notably, the estate and gift tax basic exclusion amount for U.S. citizens and residents would be raised to a permanent base of $15,000,000 per individual, with this amount being adjusted for inflation for tax years after 2026.
If the Bill does not pass, many tax cuts that became effective in the Tax Cuts and Jobs Act (TCJA) 2017 are scheduled to end, or “sunset,” on January 1, 2026. This means that the current high estate and gift tax exemption (in 2025, $13,990,000 per person or, with proper planning, $27,980,000 for a married couple), absent Congressional action, is scheduled to decrease by approximately half, to about $7 million per person (or $14 million for a married couple), as indexed for inflation.
All estate planning clients should review the terms of their wills with their advisors to make sure that the plan is in keeping with the client’s particular goals and to take advantage of the large transfer tax exemption, if possible, before it is significantly reduced.
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