On July 4, 2025, new tax legislation known informally as the “Big Beautiful Bill” was signed into law. The law permanently alters several key areas of the tax code—especially in the areas of estate planning. Many provisions built on the 2017 Tax Cuts and Jobs Act and are likely to shape planning strategies for years to come.
Estate & Gift Tax Exemptions
A major point of relief for many families: the enhanced federal estate and gift tax exemption—previously expected to drop in 2026—is now permanent under the new law.
As of 2025, individuals can transfer up to $13.99 million free of federal estate or gift tax, or $27.98 million for married couples. This exemption will continue to be indexed for inflation annually. For 2026, the exemption level is set to $15 million for individuals, or $30 million for married couples.
Planning Tools Remain
While the bill introduces some changes, it leaves the most widely used estate planning tools untouched. Popular structures continue to offer strategic advantages for reducing taxable estates and passing wealth efficiently across generation, including: Spousal Lifetime Access Trusts (SLATs), Irrevocable Life Insurance Trusts (ILITs), Charitable Trusts (CLATs and CRUTs), Intentionally Defective Grantor Trusts (IDGTs), Grantor Retained Annuity Trusts (GRATs), and Beneficiary Defective Inheritor’s Trusts (BDITs)
Planning Enhancements for Business-Owners and Real Estate Investors
Some of the most significant changes introduced by the bill include enhanced tax planning opportunities for business owners and real estate investors. With proper planning, the potential tax savings of utilizing Qualified Small Business Stock (QSBS), bonus depreciation, and revamped opportunity zone criteria can have significant impacts on income tax planning through basis adjustments.
What This All Means for Families
Now is an excellent time to reassess your estate planning framework. Families and their advisors should:
- Revisit current gifting plans and trust arrangements.
- Consider establishing or funding irrevocable trusts while current exemptions hold.
- Review insurance, charitable giving, and family entity structures in light of the new law.
The Pendleton Square team is available to help guide you through this evolving landscape with customized administration services aligned with your values and legacy goals.
