Estate Planning After the One Big Beautiful Bill: Protecting Your Legacy in 2025 and Beyond - Vincent A. Virga

Introduction

Estate planning has always been a cornerstone of wealth management for high-net-worth families. The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, made sweeping changes to the federal tax code, many of which directly affect how estates are structured, taxed, and transferred. While some provisions are permanent, others are temporary, requiring families to remain vigilant.

The most important development for estate planning is the permanent increase in the estate and gift tax exemption. Other provisions, such as adjustments to charitable giving rules and temporary changes to the SALT deduction, also carry implications for long-term planning. If you have not recently reviewed your estate plan, the OBBB creates a clear reason to revisit it now.

The New Federal Estate and Gift Tax Exemptions

The OBBB raised the federal estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual and $30 million for married couples, starting in 2026, with future indexing for inflation.[1] This exemption was originally set to fall by nearly half when provisions of the 2017 Tax Cuts and Jobs Act (TCJA) were scheduled to sunset. By making the higher exemption permanent, OBBB eliminates that uncertainty.

For high-net-worth families, this means greater flexibility. You can transfer more wealth during your lifetime without incurring federal gift tax, or leave a larger estate to heirs without federal estate tax liability. However, state-level estate and inheritance taxes remain unchanged, and thresholds in some states are far lower.[2] Multi-state families must plan carefully to account for these differences.

Charitable Planning Under the New Rules

OBBB introduced new floors for charitable deductions. Individuals may deduct charitable gifts only once they exceed 0.5 percent of adjusted gross income (AGI), while corporations must exceed 1 percent of AGI before deductions apply.[3]

For families with significant charitable goals, these floors may not have much impact, since annual giving often exceeds these levels. However, for those making smaller annual contributions, bunching gifts into a single year or using donor-advised funds (DAFs) may maximize tax efficiency. The 60 percent of AGI cap on cash contributions to public charities remains unchanged.[4]

Charitable remainder trusts (CRTs) and private foundations remain effective tools for combining philanthropy with tax efficiency. If your plan involves long-term charitable impact, these structures may also help address estate tax exposure while providing income streams for heirs.

The SALT Deduction Adjustment

The OBBB temporarily raised the state and local tax (SALT) deduction cap from $10,000 to $40,000 for joint filers (or $20,000 for separate filers), effective 2025 through 2029.[5] For families in high-tax states, this change provides meaningful relief. However, because the increase is temporary, it should not be the sole driver of long-term estate strategies.

Planning for multi-state residency, particularly for retirees or families with second homes, remains an important consideration. A move to a state without estate or income taxes can provide substantial longterm benefits.

Trusts and Wealth Transfer Structures

Trusts remain the foundation of sophisticated estate planning. The permanence of the $15 million exemption creates an environment where families can transfer wealth more confidently, but the tools for doing so remain critical.

Irrevocable Life Insurance Trusts (ILITs): Remove life insurance proceeds from the taxable estate while providing liquidity for heirs.
Grantor Retained Annuity Trusts (GRATs): Allow appreciation on assets to pass to heirs at reduced gift tax cost.
Family Limited Partnerships (FLPs) or LLCs: Consolidate family assets, apply valuation discounts, and maintain control while transferring interests to heirs.

Even with higher exemptions, these strategies help reduce risk, protect assets, and establish long-term governance. If your estate plan relies solely on exemptions, it may not be optimized to reflect today’s opportunities.

Family Governance and Wealth Education

Estate planning is not only about taxes. It is also about preparing heirs to manage wealth responsibly. Formal family governance structures—such as mission statements, family councils, and education programs—help preserve wealth across generations.

With OBBB providing clarity on exemptions and deductions, families can shift more focus to governance. Integrating philanthropic goals into a family mission statement can align heirs around values as well as financial assets. If you have not documented how you want your wealth to shape your family’s legacy, this is an important step to consider now.

Integrating Estate Planning with Investment and Tax Strategy

The permanence of OBBB’s higher exemptions and income brackets allows for more stable planning. But because some provisions, such as the SALT deduction increase, are temporary, estate strategies must remain flexible. Stress-testing your estate plan under multiple scenarios—different market outcomes, inflation levels, and possible tax law revisions—remains essential.[6]

Coordination across investment, tax, and estate planning professionals is critical. Decisions about gifting, charitable giving, and trust funding all intersect with investment strategy. If these areas are not integrated, opportunities can be missed and risks overlooked.

Conclusion

The One Big Beautiful Bill has created a new foundation for estate planning. With a permanent $15 million federal exemption, higher temporary SALT deductions, and new rules for charitable giving, highnet-worth families have both opportunities and responsibilities.

This is a moment to revisit your estate plan. Aligning trusts, charitable strategies, and family governance with today’s rules can help protect your legacy and reduce unnecessary taxes. If you have not updated your estate plan since OBBB’s passage, now is the right time to take action. For guidance on integrating estate planning with your investment and tax strategy, visit www.pfswealthgroup.com or email info@pfswealthgroup.com.

Required Disclosure:

Insurance products are offered through the insurance business PFS Wealth Management Group. PFS Wealth Management Group is also an

Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products. The insurance products offered by PFS Wealth Management Group are not subject to Investment Advisor requirements.

Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This radio show is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

PFS Wealth Management Group is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by PFS Wealth Management Group. A PR firm was paid to assist with media placement. 3326645-10/25

References: