Understanding the OBBA: Boosting Estate Tax Breaks for the Wealthy

Ever wondered how the super-rich manage to leave such large inheritances? A large part of the answer lies in the recent tax law changes. The One Big Beautiful Act (OBBA), signed into law in 2025, significantly increases the federal estate tax exemption from $7 million to an eye-popping $15 million per person starting in 2026. This figure even adjusts for inflation, making it a significant tax break for the wealthiest Americans.

Moreover, the impact of this law is magnified for married couples. Any unused exemption from the first spouse who dies can be transferred to the surviving spouse. This means a couple could leave up to $30 million tax-free to their heirs in 2026. Furthermore, the law does not change the federal tax rates imposed on the taxable portion of estates, which range from 18% to 40%.

With such a high exemption, it’s no surprise that only a tiny percentage of estates end up paying this tax. In 2001, 2.1% of Americans who died left behind taxable estates. By 2019, this figure had plummeted to just 0.07%, and even with the new law, it’s only expected to rise to 0.2% by 2026.

However, don’t forget that state laws can be a different story. As of 2025, 12 states and the District of Columbia impose their own estate taxes with varying exemption levels and tax rates. For instance, in Massachusetts, the exemption level is $2 million, and the tax rate can reach up to 16%.

So, whether you’re building a fortune or planning for the future, it’s clear that understanding and navigating these tax laws is crucial. Consult with a knowledgeable tax advisor to ensure you’re maximizing your estate’s potential.

Source: www.gulfcoastnewsnow.com