President Donald Trump signed the new federal tax bill, also known as the “One Big Beautiful Bill Act,” into law on July 4, 2025. The new bill contains various changes that could directly affect your estate planning strategies. The bill includes changes to various tax exemptions, including federal estate taxes, gift taxes, and generation-skipping transfer (GST) taxes. These changes go into effect on January 1, 2026. Contact a Kramer Green Aventura estate planning attorney today for advice about how the new federal tax law will impact your estate plan.
Increases to Tax Exemptions
Currently, the federal estate tax, gift tax, and GST tax exemptions are $13.99 million per person. As of 2026, the federal estate tax, gift tax, and GST tax exemptions will increase to $15 million per person and $30 million per married couple. This figure is indexed for inflation in future years. Absent the new tax bill, the current exemptions would have decreased by almost half when the 2017 tax cuts expire on December 31, 2025.
Even more importantly, this increase in tax exemptions does not automatically expire in the future. While this change likely does not affect estate planning advice for very high-net-worth individuals, the increased exemptions free up individuals with smaller estates to focus on planning to minimize income taxes.
Expanded SALT Deduction
The new bill increases the state and local tax (SALT) deduction cap to $40,000 for married tax filers and $20,000 for single filers in 2025. The SALT deduction cap gradually increases by about one percent in future years, as indexed to inflation. However, the SALT deduction cap reverts to $10,000 in 2030. Phase-out of the SALT deduction cap begins when joint or single filers have a modified adjusted gross income (MAGI) of more than $500,000.
Tax Rates Remain Steady
Tax rates on transfers of more than the exemption amount will remain at 40%.
Basis Step-Up Rules Are Unchanged
Basis step-up rules will remain unchanged. In other words, property in a decedent’s estate will have a stepped-up in basis as to its value as of the date of death, just as it does now.
Portability Remains
The portability rule allows a surviving spouse to use a deceased spouse’s unused estate and gift tax exemption. However, the GST exemption is non-portable for the surviving spouse. Again, the new tax bill leaves these rules unchanged.
Income Tax Rates Preserved
The new federal tax bill cements the lower income tax brackets that the Tax Cuts & Jobs Act of 2017 established. Absent Congressional action, these lower tax rates would have expired as of December 31, 2025. The top marginal tax rate will remain at 37%, instead of increasing to 39.6%, the previous rate. This provision also has no sunset date, meaning that it will not automatically expire on a certain date.
Frequently Asked Questions (FAQ)
Since many of the provisions in the new federal tax bill have no expiration dates, does this mean that they are permanent?
Although the bill’s provisions, including tax exemptions, have no automatic “sunset” or expiration provisions, Congress could still change them in the future by repealing the tax bill. The risk of repeal is largely dependent on the political makeup of Congress and the Presidency and the results of future elections.
Does the new federal tax bill change any rules about charitable giving?
Yes. The new tax bill creates a $1,000 charitable deduction for single taxpayers who take the standard deduction ($2,000 for joint filers). Additionally, taxpayers who itemize their deductions cannot claim any deduction for charitable contributions until their total charitable contributions exceed 0.5% of their adjusted gross income (AGI) before losses. Therefore, consolidating charitable giving in a single tax year may be advisable to take maximum advantage of the charitable contribution deduction for those who itemize their deductions.
At what income level does the SALT (State and Local Taxes) deduction cap begin to phase out?
The maximum SALT deduction cap of $40,000 begins to phase out for taxpayers with a modified adjusted gross income (MAGI) of $500,000, but not below $10,000. At $600,000 or more, the limit is $10,000.
Call Kramer Green for Individualized Estate Planning Assistance
Various provisions of the new federal tax bill can significantly impact the estate planning process. A Pembroke Pines estate planning lawyer at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can assist you in updating your estate plan to take advantage of the new tax provisions. We aim to help you preserve your assets and simplify estate matters for your surviving family members.
Our team can walk you through every step of estate planning with clarity and confidence. Contact our office today at (954) 966-2112 or online to schedule a time to meet with us about your estate plan with our Hallandale Beach estate planning attorney.