The “One Big Beautiful Bill Act,” was signed into law by President Donald Trump on July 4, 2025. There was a lot of debate about how “beautiful” the bill was—it passed by razor-thin margins in both the House and the Senate. But there is no argument that it was big—it was approximately 870 pages long. Earlier versions were even more hefty, coming in at more than 1000 pages.

It’s no surprise, therefore, that most people aren’t aware of most of the new law’s contents, or how it might affect them. A complete analysis is far beyond the scope of this blog, but it is worth zeroing in on one aspect of the law that is relevant to readers of an estate planning and probate blog: its effect on tax, especially estate tax.

Tax Impacts of the “One Big Beautiful Bill Act”

As you may remember, the Tax Cuts and Jobs Act (TCJA) of 2017 approximately doubled the lifetime estate and gift tax exclusion from $5.49 million in 2017 to $11.18 million in 2018. The exclusion encompasses transfers subject to generation-skipping transfer tax as well as estate and gift tax. The exclusion amount was indexed for inflation, and was scheduled to “sunset” to 2017 levels (adjusted for inflation) after December 31, 2025.

In light of the Act’s passage, however, not only will the estate and gift tax exclusion not return to its pre-TCJA level, it will increase to $15 million dollars ($30 million for married couples) effective January 1, 2026. As before, the exclusion amount will be indexed for inflation. However, unlike the increase in the lifetime exclusion amount brought about by the TCJA, this one will not sunset; it will be permanent.

Other tax impacts of this new legislation include:

• Preservation of current individual tax rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%). Had these tax rates not been extended, a tax increase was scheduled to take effect in 2026.
• The increased standard deduction from the TCJA that was scheduled to expire has now been increased and made permanent. For tax year 2025, individuals will be able to take a standard deduction of $15,570. For married couples filing jointly, the standard deduction will be $31,500, and for heads of household it will be $23,625.
• The 20% pass-through deduction for qualified business income (QBI), which was set to expire, has been made permanent.
• Tax filers over the age of 65 using the standard deduction will be able to claim an additional deduction of $6,000 per person through 2028, with the benefit beginning to phase out for individual filers earning over $75,000 and joint filers earning over $150,000.
• Taxpayers will be able to deduct interest on loans taken out for the purchase of new cars with final assembly in the United States, up to $10,000. This deduction will be available for tax years 2025 through 2028, and begins to phase out for individual filers with incomes over $100,000, or joint filers with incomes over $200,000.
• The existing cap on State and Local Tax (SALT) deductions will increase from $10,000 to $40,000, increasing 1% annually. As with some of the other tax provisions, this one is temporary and phases out for those who earn over $500,000 annually.

How Will the New Law Affect My Estate Planning?

The immediate impact of the new legislation will be to protect some larger estates from taxation because of the now-permanent increase to the lifetime exclusion. Before the Act’s passage, the looming sunset of the TCJA’s increase to the exclusion amount had motivated many people to gift more aggressively or use irrevocable trusts in order to remove assets from their taxable estates.

Those measures are less urgent now, since under the new legislation, fewer than 0.1% of estates will be taxable. But that doesn’t mean that you need to pay less attention to your estate plan. In fact, the opposite may be true.

Fewer people may need tools like grantor retained annuity trusts (GRATs), charitable lead annuity trusts (CLATs), charitable lead unitrusts (CLUTs), spousal lifetime access trusts (SLATs), intentionally defective grantor trusts (IDGTs), and dynasty trusts to minimize estate tax under the new law. That doesn’t mean that those estate planning tools don’t still have utility. For example, these trusts can protect assets from creditors, shield wealth from divorce, support charitable goals, or provide a predictable income stream for the grantor.

While the new legislation does reduce or eliminate the federal estate tax risk for most estates, it does not affect state level estate taxes for those states that have them (Michigan does not), so tax planning may still be an issue for some people.

Then, there is the reality that this bill was unpopular with many, and passed by the narrowest of margins. A future Congress could change the law again, making it critical to regularly review your estate plan to ensure that you, your assets, and your beneficiaries remain protected.

Work with an Experienced Estate and Trust Attorney

The knowledgeable estate planning attorneys at Barron, Rosenberg, Mayoras & Mayoras advise clients concerned about the impact of developments in the law on their estate plan and exposure to taxation. Schedule a consultation today by calling (248) 641-7070 in Michigan or (941) 222-2199 in Florida to learn how we can assist you. You can also use our simple online contact form.