Navigating the One Big Beautiful Bill Act: Key Tax Changes Impacting Estate Planning

Ever wondered how the recent One Big Beautiful Bill Act (OBBBA) might affect your estate planning? This revolutionary act, which became law on July 4, 2025, brings significant changes that will alter strategies for business owners, high-net-worth individuals, and their families. For instance, effective January 1, 2026, the OBBBA raises the federal estate, gift, and generation-skipping transfer tax exclusion amount to $15 million for US individuals. This major increase offers an opportunity to transfer more wealth to heirs tax-free, providing more certainty for long-term estate planning. Meanwhile, the Act temporarily raises the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for 2025 through 2029, providing potential relief for taxpayers in high-tax states like New York and Massachusetts. However, it’s not all rosy news. The OBBBA introduces a new floor for charitable deductions, impacting donors who choose to itemize. From 2026, only contributions exceeding 0.5% of an individual’s adjusted gross income will be deductible. As the dust settles on the OBBBA, it’s crucial to understand these changes and adapt your estate planning strategy accordingly.

Source: www.jdsupra.com