Understanding the One Big Beautiful Bill Act (OBBB) and Its Impact on Estate Planning

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBB) into law, creating a significant shift in estate planning and wealth transfer regulations. This new legislation aims to support families, particularly those with generational businesses, by easing the financial burden associated with estate taxes.

Key Changes in the Estate Tax Landscape

Increased Federal Estate Tax Exemption

One of the most noteworthy features of the OBBB is the substantial increase in the federal estate tax exemption. Starting January 1, 2026, the exemption will rise to $15 million per person ($30 million for married couples). This change marks a significant leap from the previous exemption of $13.99 million in 2025, and drastically upholds the benefit of businesses and properties passed down through generations.

Why Is This Important?

Planning for a time when we’re no longer here can be a daunting task. However, putting one’s affairs in order is a profound act of love for family. A well-crafted Last Will and Testament can simplify the process for loved ones during an already challenging time. The OBBB alleviates some burdens by reducing tax liabilities on family businesses, which historically could lead to financial strain or even bankruptcy for the next generation.

Real-World Implications: A Farmer’s Perspective

Take the case of Jolene Reissen, a corn farmer from Iowa, who illustrates the law’s direct impact on families in agriculture. Jolene’s story highlights how estate tax policies do not solely benefit the wealthy, but also crucial sectors like farming, which are foundational to rural economies and national food supply chains.

In a recent testimony before the U.S. House Ways and Means Committee, Reissen discussed how the increased exemption has been vital for preserving family farms. “If that exemption drops back down, my boys would have to sell half the ground and all the equipment just to be able to pay the death tax,” she said, emphasizing the stakes involved in maintaining a family farm.

The Future of Family Farms

The OBBB effectively removes the sunset clause from the Tax Cuts and Jobs Act (TCJA), which would have seen the exemption revert to roughly $7 million after December 31, 2025. This crucial change aims to provide greater stability and future-proofing for family-run businesses.

Navigating State Laws and Planning Ahead

While the OBBB marks a positive change for estate planning, it’s important to remember that estate laws differ by state, and future legislative changes could still alter the landscape. Garrett Watson, the policy analysis director at the Tax Foundation, notes the necessity for careful estate planning. He suggests that a permanent expanded estate tax exemption is beneficial for many households, but that future reforms could ideally eliminate the estate tax entirely.

The Importance of Professional Guidance

For individuals with substantial assets, the implications of the OBBB are monumental. The law places a significant emphasis on strategic estate planning, encouraging families to collaborate with financial and legal experts. This proactive approach ensures that families can maximize the benefits of the new estate tax laws while remaining compliant with state regulations.

Conclusion: Preparing for Generational Wealth Transfer

As the One Big Beautiful Bill Act takes effect on January 1, 2026, families and business owners must remain vigilant and informed. The expanded estate tax exemptions serve as a powerful tool for wealth transfer, but careful planning is essential. By consulting with professionals and understanding both federal and state laws, families can ensure that their legacies endure and thrive for generations to come.

By shifting the focus on facilitating the smooth transfer of assets, the OBBB not only protects families from excessive taxation but strengthens the grassroots of the economy by preserving vital businesses. Embracing this new law can provide peace of mind for countless families across the nation.