New Estate Tax Changes: What You Need to Know Now
Discover the new estate tax exemptions and what they mean for you!
Have you heard about the latest changes to estate tax laws? The One Big Beautiful Bill Act, signed into law on July 4, 2025, has ushered in significant updates that affect estate planning for individuals and families across the United States. Starting on January 1, 2026, the federal lifetime gift, estate, and generation-skipping transfer tax exemptions will increase to $15 million per person and $30 million for married couples. This change means that families can now plan with greater long-term certainty and potentially save substantial amounts in taxes.
One of the most important aspects of this legislation is the repeal of the Tax Cuts and Jobs Act’s (TCJA) sunset provision, which would have drastically reduced the exemptions to about $7 million per person by the end of 2025. With the new law in place, there’s no longer an urgent need to rush into estate planning decisions before the deadline. However, high-net-worth individuals might still want to consider making strategic gifts now to lock in asset growth outside their estates before any future changes could impact these exemptions.
It’s also vital to understand how these changes play out at the state level. For instance, New York has its own estate tax exemption of $7.16 million per person, which is separate from the federal exemptions and remains indexed for inflation. Notably, New York does not have an inheritance or gift tax, but it does impose a three-year clawback period for gifts made before death, meaning those gifts could be included in the estate valuation for tax purposes. Meanwhile, Connecticut has aligned its exemption with the federal limits, matching the $13.99 million threshold for 2025.
Given these updates, it’s prudent for individuals to review their estate plans with a qualified attorney. The new exemptions offer a unique opportunity for families to reassess their financial strategies and make the most of the increased limits. Consulting with an estate planning attorney can help ensure that your strategy aligns with current laws and maximizes available benefits. In light of the recent changes, consider taking action sooner rather than later to secure your financial legacy and achieve significant tax savings.
Staying informed about these shifts is crucial for effective estate planning. With the potential for future changes in tax law, now is the time to take advantage of the current exemptions before any adjustments could emerge. Don’t wait—evaluate your estate plan today to make the most of these beneficial changes.