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On July 3, the House passed the Senate version of H.R. 1, the so-called “One Big Beautiful Bill” (“OBBB”), and the OBBB was signed into law by the President on July 4, 2025.

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This legislation not only extends most provisions of the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025, but amplifes many of those provisions, including the exclusions for estate, gift, and generation-skipping (GST) tax.

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The estate, gift and GST tax related exclusion amounts were scheduled to revert to $5,000,000 (indexed for inflation from 2011, or approximately $7,000,000) beginning on January 1, 2026. The amount for 2025 is $13,990,000 ($10,000,000 indexed for inflation from 2011). Effective January 1, 2026, the OBBB increased the estate, gift, and GST tax exclusion amounts to $15,000,000 per person, indexed for inflation from 2026. This increase is “permanent,” unlike the 2017 tax law changes that were scheduled to sunset at the end of 2025.  For any taxpayer that has used all their gift tax exclusion amount through 2025, they will have slightly above $1,000,000 more to use in 2026.

This author likes to remind folks that tax law is like Wisconsin weather: if you don’t like it, wait a while, it’ll change.  While the OBBB makes changes to the tax law permanent, tax law is always subject to change by the next Congress and President. Therefore, the increased amounts should stay in place through the end of the current presidency (in theory, the end of 2028). People who have a net worth more than $14,000,000 (for a married couple) or $7,000,000 (for single persons) do not need to rush to make large gifts prior to the end of 2025.

The higher exclusion amounts do not reduce the need to review estate plans or continue planning with transfers of appreciating assets, but they do give us extra time for planning opportunities prior to the next potential changes.

Please consult your Michael Best Wealth Planning Services attorney with any questions.

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“One Big Beautiful Bill” Estate, Gift and GST Implications

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