A Historic Shift in Wealth Transfer Policy

On July 4, 2025, President Donald J. Trump signed the One Big Beautiful Bill (OBBB) Act into law—a sweeping federal tax package with dramatic implications for estate and gift taxation.

Most notably, the Act permanently increased the federal estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual ($30 million per married couple), indexed annually for inflation starting in 2027.

This change did far more than expand a tax benefit: it marked a fundamental turning point in U.S. wealth transfer policy. For the first time in decades, estate planners and families can proceed with long-term, multi-generational planning under a structure that is not scheduled to expire.

 This article explains what the OBBB Act does, how it changes planning, and why its permanency is arguably the most consequential estate tax development since 2010.

The attorneys at Grant Morris Dodds, PLLC are ready to help you navigate these changes. Whether you’re reassessing your estate plan, exploring advanced strategies like SLATs, or just getting started, we invite you to schedule a free consultation.

The Key Provision: A Permanent, Indexed $15 Million Exemption

Before the OBBB Act, the estate and gift tax exemption was set to drop precipitously in 2026—from $13.61 million (2024) back to approximately $7 million per individual. This looming “sunset” under the 2017 Tax Cuts and Jobs Act (TCJA) created widespread uncertainty, leading to:

• Hasty irrevocable trusts
• Pre-2026 gifting rushes
• Fragmented multi-year planning
  

The OBBB Act changed everything by:

• Permanently setting the lifetime exemption at $15 million per person ($30 million for married couples)
• Indexing that amount for inflation beginning in 2027
• Aligning GST tax exemptions to the same threshold
• Retaining portability, allowing spouses to transfer unused exemption at death

This exemption amount now has no expiration date and no built-in sunset—a clear legislative intent to provide long-term certainty. “This is not just a temporary reprieve—it’s a new standard that professionals and families can plan around for the foreseeable future.” Frost Brown Todd Tax Advisory, July 2025

Why Permanency Matters: The Estate Planning World Recalibrates

For over 20 years, planners have operated under the shadow of scheduled sunsets and uncertain Congressional politics. The 2001 EGTRRA law, the 2010 temporary repeal, and the TCJA’s sunset framework made durable strategies hard to build.

Now, with the OBBB Act, that calculus changes:

This permanency allows for more thoughtful, less rushed planning—and potentially less costly or aggressive trust structures.

At the same time, estate tax planning is by no means obsolete. In fact, for ultra-high-net-worth families, it remains essential. With increased capital gains tax rates, the 3.8% Net Investment Income Tax (Obamacare surtax), and the enduring step-up in basis at death, families must continue weighing estate taxes against income and capital gains taxes. The step-up in basis often results in heirs receiving assets with little to no embedded gain, reducing future income tax burdens.

In many cases, the 40% estate tax rate may be lower than the effective capital gain rate when combined with state taxes and surtaxes, making thoughtful estate planning more relevant than ever.

For families with net worths in the $20–50 million range, especially those near the threshold of taxable estates, strategies like Spousal Lifetime Access Trusts (SLATs) remain attractive. These irrevocable trusts allow one spouse to gift assets while retaining indirect access to income or principal through the other spouse. With the higher exemption and the certainty provided by OBBB, SLATs allow couples to “have their cake and eat it too”—removing assets from the taxable estate while maintaining family benefit and flexibility.

What Does “Permanent” Mean, Really?

In legislative terms, “permanent” means the law includes no built-in expiration or “sunset” clause. Unlike the TCJA’s exemption increases—which were automatically scheduled to drop in 2026—the OBBB Act amends the Internal Revenue Code to fix the base exemption at $15 million and allows for annual cost-of-living increases.

Important caveats:

• Congress can still change the law in the future, but it must pass new legislation to do so.
• Absent such action, the exemption will not decline.
• This creates a default expectation of continuity, which estate planners can rely on.

In this sense, the exemption is as “permanent” as the income tax, the charitable deduction, or the unified credit itself.

Practical Planning Implications of the Permanent Exemption

Less Urgency to “Use It or Lose It”

From 2020–2025, clients were encouraged to use up their exemptions before the TCJA sunset. This often led to premature transfers of large assets to irrevocable trusts—sometimes at the expense of flexibility and liquidity.

Now, individuals and families no longer face that pressure. There is room to:

• Gift gradually over time
• Prioritize income tax strategies
• Avoid overly complex structures

Dynasty Trusts Become More Strategic

The permanent $15M GST exemption enables dynasty trusts to flourish—especially in states that permit perpetual or long-term trusts. Now, planners can focus on:

• Generation-skipping transfer efficiency
• Creditor and divorce protection
• Coordinated planning across decades

Portability Makes Simpler Plans Viable

The preservation of portability means many couples no longer need bypass trusts or other intricate formulas. A surviving spouse can inherit unused exemption and plan with up to $30 million.

This supports a growing trend toward “right-sized” estate planning, especially for clients with $10M–$30M in total wealth.

And yet, for clients on the higher end of that range or with fast-growing assets, the use of SLATs and other irrevocable gifting trusts remains highly prudent. These allow exemption use now, asset growth outside the estate, and family access via spousal beneficiary rights.

Help at Grant Morris Dodds

Our attorneys at Grant Morris Dodds, PLLC regularly help families weigh these decisions. Whether you are considering a SLAT, GRAT, or other planning tool, we offer the legal insight and practical experience to protect your legacy