Estates:Legacy Planning Reinvented in light of the One Big Beautiful Bill Act (OBBBA)

• The elevated, permanent federal estate, gift, and GST tax exemption—$15million per individual / $30million per married couple—as of January 1, 2026, indexed annually.
• How this averts the prior TCJA sunset, which would have reverted exemption levels to around $7million per person.
• The newfound planning possibilities—especially via dynasty trusts and multigenerational strategies.

It also covers the shift in estate planning strategies, reminder that comprehensive planning remains critical, and the persistent relevance of state-level estate and inheritance taxes, particularly in states like Oregon, Massachusetts, and Washington.

To enhance readability and structure, this massive post is organized into thematic sections with detailed subheadings, examples, and citations throughout.

Table of Contents

1. A Historic Shift: From Uncertainty to Permanence
2. Quantifying the New Exemption
3. Why the Change Matters: Planning Certainty & Strategy Reset
4. Reimagining Estate Planning in Light of OBBBA
   • Dynasty Trusts & GST Alignment
   • Rethinking “Use-It-Or-Lose-It” Gifting
   • Revamping Trust Structures and Flexibility
5. Still Essential: Wills, Powers of Attorney & Trusts
6. Don’t Forget the States: Estate Tax Traps Across the Map
   • State-by-State Rates & Thresholds
   • Strategic Planning for Multistate Assets
7. Client Conversation Checklist & Year-by-Year Action Plan
8. Future Outlook & Legislative Caveats
9. Conclusion: Planning Smarter for Long-Term Legacies

1. A Historic Shift: From Uncertainty to Permanence

As of January 1, 2026, the OBBBA permanently raises the federal estate, gift, and GST tax exemption to $15million per individual and $30million per married couple, with adjustments for inflation to begin in 2027

This move effectively nullifies the previously scheduled sunset of the TCJA-era exemption, which would have dropped the exemption to approximately $7million per person But OBBBA replaces that cliff-edge with lasting permanence—a seismic shift for estate planning.

Mark Wilson of Dentons highlights that this change removes year-end rushes for gifting strategies and gives clients much-needed clarity The Kiplinger’s Adviser Guide underscores the centrality of this elevated exemption as one of the bill’s most generous updates

2. Quantifying the New Exemption

The exemption amount jumps significantly—from around $14million in 2025 to $15million in 2026, per person, doubling for married couples with proper planning

Notably, the GST tax exemption also increases to $15million, matching estate and gift exemptions and fueling multigenerational strategies

Crucially, this is not temporary—it’s permanent unless future legislation intervenes

3. Why the Change Matters: Planning Certainty & Strategy Reset

This permanence brings major advantages:

• Eliminates urgency: Planners and clients can relax timelines previously driven by year-end deadlines under TCJA sunset
• Enables long-range planning: Confidence in exemption longevity allows planners to design durable strategies—e.g., dynasty trusts—that endure across generations
• Defends against volatility: Clients no longer need to act hastily out of fear of abrupt legislative reversion. Still, flexibility remains important if future policy adjusts course

4. Reimagining Estate Planning in Light of OBBBA

Dynasty Trusts & Multigenerational Planning

With the GST exemption at matching levels, dynasty trusts become far more potent. Families can now fund these trusts with up to $15million per grantor for compounding, tax-free wealth transfer across decades—or even centuries

Shifting from “Use-It-Or-Lose-It” Strategies

Before OBBBA, uncertainty drove clients toward aggressive lifetime gifting or cramming exemptions into year-end moves. Now, planners can thoughtfully structure GRATs, SLATs, and IDGTs, deploying exemptions strategically over time rather than rushing transfers

Enhancing Trust Structures & Flexibility

With reduced estate tax pressure, trust design can shift from purely exemption-driven to holistic blends of asset protection, liquidity, trustee flexibility, and family governance—without pushing assets into taxable territory.

5. Still Essential: Wills, Powers of Attorney & Trusts

Even with higher exemptions, foundational planning documents remain critical:

• Wills ensure your assets go where intended—not per default state intestacy rules
• Powers of attorney and health directives guard against incapacitation.
• Trusts, whether revocable or irrevocable, help bypass probate, integrate continuity, and maintain control.
• Legacy tools remain valuable—not just for tax, but for control and clarity.

6. Don’t Forget the States: Estate Tax Traps Across the Map

The federal exemption does not immune you from state-level taxes. Many states impose estate or inheritance taxes with much lower thresholds.

State-by-State Examples

• Oregon & Massachusetts: Exemptions as low as ~$1million, with high rates—Oregon’s minimum tax is 10% on estates that meet.
• Washington: Exemption about $2.19million, with progressive rates from 10% to 35% on higher value estates
• Connecticut, New York: Continues to impose estate tax; their exemptions still mirror federal levels now—but some don’t allow portability and have gift-recapture rules
• Other states: E.g., Minnesota ($3million), Rhode Island ($1.7million); inheritance taxes (e.g. NJ, PA) also exist

Implications for Multistate Assets

Clients with residences, real estate, or business interests in multiple states must plan for state-level estate tax, even when federal estates avoid tax. Tools like life insurance can provide necessary liquidity for these obligations

7. Client Conversation Checklist & Year-by-Year Action Plan

Now (Late 2025)

• Revisit existing estate plans, ensuring trusts, wills, and gifting strategies align with the new exemption landscape.
• Scale back or spread out gifting, letting assets appreciate in homes and trusts without immediate tax drag.
• Start setting up dynasty trusts where applicable.
• Coordinate with state-level counsel to address your actual estate tax obligations.

Year 2026 & Beyond

• Monitor indexing adjustments beginning 2027 and plan future transfers accordingly.
• Review trust administrative structures, ensuring they balance flexibility with longevity.
• For those in high-tax states, evaluate state-specific tax planning, such as QTIP, portability, or life policies.

8. Future Outlook & Legislative Caveats

While OBBBA makes this exemption permanent, no law is immune to future change. Legislative shifts may revisit estate tax levels, especially amid deficit pressures. That said, the current stability allows forward-looking planning with greater confidence

Meanwhile, public debates on wealth inequality could drive future reforms, though that’s speculative. Clients should stay adaptable and review plans periodically.

9. Conclusion: Planning Smarter for Long-Term Legacies

The OBBBA’s permanent $15million individual / $30 million couple exemption marks a landmark shift—transforming estate planning from reactive urgency to strategic liberty. It empowers families to invest in legacy, protect multigenerational wealth, and streamline planning.

But with this new tool come new responsibilities. Planners must rethink trust structures, don’t overlook state taxes, maintain critical estate documents, and remain vigilant for policy shifts.

Schedule a Consultation

Call Saltzman Mugan Dushoff at 702-330-3441 or email info@nvbusinesslaw.com to schedule a confidential consultation. We are Nevada’s leading trust and estate attorneys, let us simplify matters on your behalf.

Written by Cliff Capdevielle, Esq. | Saltzman Mugan Dushoff, PLLC | Nevada and California Licensed Tax Attorney