What The Big Beautiful Bill Means For Estate Tax Exemptions
On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law. The Bill covers a variety of issues related to taxes, federal program spending, and government agencies, among other issues. However, one notable part of the Bill is its extension and enhancement of increased estate and gift tax exemption amounts. Our East Greenwich, RI probate lawyer is here to help you understand how this new law may apply to your and your estate.
Attorney Geoffrey M. Aptt has a decade of legal experience and has advised clients with assets over $300 million. For assistance with your estate plan, contact Aptt Law LLC today.
The Language Of The Bill
Under § 70106, the One Big Beautiful Bill Act makes amendments to previous legislation, 26 U.S.C. § 2010.
First, the Bill increases the basic exclusion amount. Under the original statute, the basic exclusion amount was $5,000,000 per person. In 2017 legislation, 115 P.L. 97 § 11061, the basic exclusion amount was raised from $5,000,000 to $10,000,000. However, under the One Big Beautiful Bill Act, the basic exclusion amount is now raised to $15,000,000.
Further, the new Bill also accounts for future inflation adjustments. In the case of persons who die after 2026, the basic exclusion amount will be raised proportionately with the cost-of-living adjustment determined for 2025.
Additionally, the new Bill removes the expiration or end date for the basic exclusion amount increase. Previously, the increase in the basic exclusion amount applied only between December 31, 2017, and January 1, 2026, meaning that the increased basic exclusion amount would, after its January 1 sunset date, revert back to the original $5,000,000 amount, adjusted for inflation. Notably, the One Big Beautiful Bill Act removes this expiration clause, meaning that the new $15,000,000 basic exclusion amount is permanent.
Finally, the Bill notes that these amendments shall become effective and apply to estates of decedents dying and gifts made after December 31, 2025.
Effects Of The Bill On Estate Planning
The IRS collects federal taxes both on gifts made during a person’s life and on a person’s estate that leaves gifts to heirs after his or her death, if the monetary value of the gift or the inheritance is above a certain amount.
Under the new Bill, an individual can either gift or devise in a will up to $15,000,000 before incurring the federal tax. In the future, this amount will continue to increase in proportion with the rate of inflation.
Further, because of the Bill’s removal of the sunset provision, individuals considering making a gift or devising a portion of his or her estate no longer need to worry about doing so before the reversion date in order to avoid additional federal gift and estate taxes.
Contact Our East Greenwich Probate Lawyer Today
In conclusion, under the One Big Beautiful Bill Act, giftors, testators, and testatrixes will now only be taxed for gifts or estates made in excess of $15,000,000, and the expiration date for the increased basic exclusion amount is now permanently removed. Individuals and families with high net worth can take advantage of this exemption to limit their federal gift and estate tax liability. Our team at Aptt Law LLC is here to help you navigate the new law, minimize your federal estate and gift tax liability, and protect your assets and your future.
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