Estate Tax Relief Extended: What You Need to Know About the $15 Million Exemption

by | Jul 10, 2025 | Estate Planning

Estate Tax Relief

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA 2025). Among other changes, this legislation permanently increases the federal estate and gift tax exemption.

What Changed?

Under OBBBA 2025, the federal lifetime exemption for estate and gift taxes will:

  • Increase to $15 million per person starting in 2026.
  • Be adjusted for inflation annually using 2025 as the new base year.
  • Avoid the previously scheduled drop to about $7.2 million on January 1, 2026, which would have occurred under the 2017 Tax Cuts and Jobs Act (TCJA).

This increase is considered permanent, as there is no sunset clause. However, future legislation could still reduce the exemption if political control shifts.

Planning Implications

For many high-net-worth individuals and families, this is a significant development. Here’s how it affects planning:

  • $15 million per individual / $30 million per couple can now be transferred tax-free over a lifetime or at death.
  • Individuals who have already made substantial gifts under the current $13.99 million exemption will gain additional room for future gifting.
  • The new law gives families more flexibility and time. There’s no longer a December 31, 2025 “deadline” to rush major gifts.

What Didn’t Change?

  • Portability rules for unused exemptions between spouses remain the same.
  • The Generation-Skipping Transfer (GST) tax exemption still matches the basic exclusion amount and remains non-portable.
  • Treasury regulations issued in 2019 to address clawback concerns are now largely irrelevant.

Who Benefits?

  • Ultra high-net-worth families: May still owe estate tax, but now with reduced exposure.
  • Families with estates between $7 million and $30 million: May no longer face federal estate taxes at all.
  • Those considering taxable gifts: Now have more room for strategic planning beyond 2025.

Want to Maximize the $15 Million Exemption?

This permanent increase gives individuals and families breathing room, but not a reason to delay. Political winds can shift quickly, and future legislation could roll back this exemption.

Now is the time to review your estate plan. Our team can help you take advantage of the increased exemption and build a long-term strategy that protects your wealth.

📞 Contact Starr Law Firm to schedule a consultation and begin planning with confidence.