The "Big Beautiful Bill":
A Simple Guide to Estate and Gift Tax Changes
Thinking about passing on your wealth to family? The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, notably impacts estate and financial planning.
What's the Big News?
The most important change is that the "Big Beautiful Bill" makes some tax benefits permanent that were set to expire. This gives you more certainty for your long-term plans.
Here's a breakdown of the key changes:
- Higher Tax-Free Amount: Starting in 2026, you can give away up to $15 million during your lifetime or at death without having to pay federal gift or estate taxes. This is a significant increase from the current $13.99 million.
- Inflation Protection: After 2027, this $15 million amount will change each year to keep up with inflation. This means the value of your tax-free amount won't shrink over time.
- Spousal Benefit: If you're married, you and your spouse can combine your tax-free amounts, meaning you can pass on up to $30 million without paying federal taxes.
- No More "Use It or Lose It" Rush: Before this bill, many people felt pressured to give away money to use their tax-free amount before it was set to expire in 2026. Now, that worry is gone.
These updates provide a more stable and predictable environment for estate planning. Consulting with an estate planning attorney to understand how the "Big Beautiful Bill" impacts your specific situation and long-term goals is recommended – even if you do not have a $15 million estate. Reach out to Arena Collective to set up a complimentary consult to discuss next steps!