A recent change in federal tax law could have major implications for your estate planning. In a piece of legislation informally dubbed the “One Big Beautiful Bill” (OBB), the federal estate tax exemption has been made “permanent”—or at least, it no longer has a set expiration date.
This means that the current exemption amount, roughly $15 million per person, is here to stay. For married couples, that’s a combined $30 million that can be transferred either during life or at death without incurring estate tax.
This is no small change, because in past decades, estate tax exemptions were typically temporary and subject to political shifts or automatic phase-outs. For example, the 2017 Trump tax cuts doubled the exemption, but that provision was set to expire in 2026. The OBB removes that sunset clause and even increases the exemption in future years.
So what does this mean for you and your estate plan?
A New Planning Landscape
If your total estate is less than $30 million per married couple, then this expanded exemption probably means that you don’t have to worry about estate taxes any longer. In fact, you probably won’t owe any federal estate tax now.
But many existing estate plans were written when the exemption was much lower and can have outdated provisions or prioritize estate tax avoidance over income tax efficiency.
One of the biggest risks? Losing the step-up in basis.
This tax rule allows heirs to reset the cost basis of inherited assets—like stocks or real estate—to their fair market value at the time of death.
That means they can sell those assets without paying capital gains tax on prior appreciation. But some estate tax planning strategies eliminate this benefit, which can cost heirs thousands—or even millions—in unnecessary taxes.
Who Still Needs to Plan Around Estate Tax?
Families with estates exceeding the $15 million ($30 million for couples) exemption still will have a 40% federal estate tax on any excess amount. For these cases, estate planning remains essential, and finding the right strategy is key.
One of the most common strategies is to essentially “freeze” the value of an estate. This involves transferring any appreciating assets, like stocks or real estate, into trusts that allow the growth to happen outside of a taxable estate.
Let’s look at an example. Say John sells $15 million in stocks to a trust in exchange for a promissory note. This locks the estate in at $15 million, and the trust captures any future appreciation on a tax-free basis.
Doing this foregoes the step-up in basis, but it can also result in an overall lower tax bill compared to a 40% estate tax on future growth.
Time to Reevaluate
This legislative change creates two distinct planning tracks—those who need to simplify and capture income tax savings, and those who need to act to reduce estate tax liability.
In either case, this is a critical moment to revisit your documents, update your plan, and make sure your strategy reflects today’s tax laws—not yesterday’s.
Is your estate plan built for the new rules? Let our team at CPMT help you assess where you stand and ensure your plan is working for you—not against you.