Does the New Tax Law Impact Your Estate Strategy?

In July 2025, the One Big Beautiful Bill Act made the federal estate and gift tax exemption permanent at $15 million per person and $30 million for married couples. For the vast majority of families, that effectively takes the federal estate tax off the table. Fewer than 0.1 percent of estates that filed returns in recent years owed any federal estate tax to begin with.^1,2

That said, a future Congress could always revisit tax law. And the federal number is only one piece of the picture. The new law did not touch state rules, property held in more than one state, or anything inside estate documents written for the previous landscape. That is where the attention belongs.

A Few Things Worth Knowing

• Trusts written for the old tax law. Some trust structures were built around the anticipated expiration of the higher federal exemption. With the exemption now set at a higher level, some of those structures may be doing nothing useful—or worse, potentially creating a more difficult issue for a family.³
  
  
• Property held in more than one state. Estate and inheritance taxes follow property, not just people. A vacation home, investment property, or any real estate in a state other than where you live can trigger that state’s rules even if your home state has no death tax of its own.
  
  
• For families who live in (or own property in) a state with its own estate tax. Several states and the District of Columbia still impose their own estate taxes, and most have thresholds far lower than the federal level. Oregon’s exemption is $1 million. Massachusetts's is $2 million and is not indexed for inflation. A family with a paid-off home, a retirement account, and other assets can cross those lines without thinking of themselves as wealthy at all.⁴
  
  
• For families who live in (or own property in) New York. New York has what is known as an “estate tax cliff.” Once an estate exceeds 105 percent of the state’s exemption (currently around $7.35 million), the entire estate is taxed, not just the amount above the threshold. A married couple in New York with a combined estate just above that line could owe the state hundreds of thousands of dollars while owing nothing to the federal government.⁴
  
  

Where Documents Tend to Drift

Estate documents tend to go out of date in two ways. They drift slowly as the law changes around them, or they shift suddenly when a family member dies, divorces, remarries, or has children. Most families update after sudden events and miss the slow drift entirely. The result is a document that was thoughtful when prepared but has not kept pace with either the family or the law since.

A few specifics worth a second look, regardless of estate size:

• Beneficiary designations. Designations on retirement accounts and life insurance typically override everything in a will or trust. Courts have upheld transfers to ex-spouses, deceased relatives, and unintended heirs because designations were never updated.
  
  
• Powers of attorney and healthcare directives. These should still reflect your current wishes and name people who are living, capable, and the right choice today.
  
  
• Executors and trustees. People named years ago may have moved, declined in health, or shifted in their relationships with the family.
  
  
• Asset titling. Title determines what passes through probate and what does not. A trust that holds no assets because titling was never updated does not do what it was designed to do.
  
  

Why Summer Is a Practical Time

Families often come together in the summer. The year-end rush has not started. There is no more useful conversation to have over a few unhurried days than the one that answers the question: Does what we have in place still reflect what we want to happen after we are gone? It does not have to start around a conference table. It can begin informally, with a question like, “When did we last look at this?”

Setting up a trust involves navigating complex tax rules and regulations. If you suspect your trust needs a close review, we can help coordinate with your legal professional to determine if changes might be needed.

If you would like to walk through your estate documents together, please reach out. 

^{1. Forbes, July 3, 2025.}

^{2. Center on Budget and Policy Priorities, December 19, 2025.}

^{3. Commerce Trust, August 30, 2024.}

^{4. Tax Foundation, October 28, 2025.}