The recently signed One Big Beautiful Bill Act of 2025 covers a vast amount of ground. It may take some time before every aspect has been thoroughly examined. For now, a recent article appearing in Forbes, “10 Reasons To Reevaluate Your Estate Plan Following The 2025 Tax Law,” offers a good overview of how the 2025 tax law impacts your estate plan and taxes.
Estate and Gift Tax Exemptions: The federal estate, gift, and generation-skipping transfer tax exemption is now set at $15 million per individual and $30 million for married couples. This extremely high exemption is particularly beneficial to high-net-worth families.
How Permanent Is the Exemption? While this may seem unlikely now, remember that estate planning is a long-term strategy. If political power shifts, the exemption could be undone. Proactive planning remains essential to safeguard legacies.
Trust Income Taxation: The 2025 law permanently modifies trust income tax brackets and rules. This may be a good time to evaluate trust structures to minimize taxes and make sure that your heirs don’t give more to the government than necessary.
State-Level Estate and Inheritance Taxes: Certain states tie their own estate taxes to federal tax rates, while others have separate systems. Review your state’s estate and/or inheritance taxes.
Long-Term Care Costs and Medicaid Adjustments: Those who rely on public benefits for healthcare or whose loved ones depend on Medicaid and other government programs need to prepare for upcoming cuts. Private LTC insurance and Medicaid planning are more important now than ever for middle-class Americans who want to protect the money they have earned over a lifetime.
Long-Term Care Insurance Deductions: Qualified long-term care insurance premiums remain deductible, and the deduction may increase because of the new law. Verify if your policies meet the requirements.
Retirement Accounts and Income Tax Strategies: Permanent changes were made to individual income tax provisions impacting IRAs, Roth conversions and income shifting strategies. You’ll want to ensure that your retirement accounts align with your estate plan to minimize taxes.
Business Succession and Asset Management. Changes have been made to valuation rules and succession planning, so any buy-sell agreements, liquidity planning and leadership transition plans should be reviewed by an experienced estate planning attorney.
Family Legacy and Estate Goals: Whenever there is a significant change to tax laws, estate plans should be reviewed to ensure they take advantage of any new opportunities. Consult with your estate planning attorney to determine how the new laws will impact your estate plan, including charitable giving plans, and to identify any necessary changes.
Speak with your estate planning attorney to see how the 2025 tax law will impact your estate plan. Whether it is a minor change, or a significant one, being aware of changes in tax law is critical. If you would like to learn more about how tax laws impact your estate planning, please visit our previous posts.
Reference: Forbes (July 7, 2025) “10 Reasons To Reevaluate Your Estate Plan Following The 2025 Tax Law”
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