President Trump’s latest tax reform proposal, known as the “One Big Beautiful Bill,” has made it through the House and now awaits a Senate vote. The 1,100-page legislation picks up where the 2017 Tax Cuts and Jobs Act (TCJA) left off—aiming to extend its key provisions, roll out new tax breaks for families and workers, and promote U.S.-based investment. With an estimated $4.1 trillion price tag over the next decade, the bill also includes notable changes that could reshape estate planning strategies and affect how wealth is transferred across generations.
Permanent Extension of Individual Tax Cuts
One of the core goals of the bill is to make the TCJA’s individual tax changes permanent. These include maintaining lower marginal tax rates, keeping the enhanced standard deduction ($32,000 for joint filers under the new bill), and continuing the repeal of personal exemptions. One of the thorniest issues is the state and local tax (SALT) deduction provision. It appears this figure should be a $40,000 cap up to $500,000 of AGI.
These provisions, while designed for income tax relief, indirectly impact estate planning by increasing after-tax cash flow and reducing the need for income-shifting strategies in the short term. The marriage penalty continues to be mitigated for most brackets, which is relevant for married couples structuring trusts or gifting strategies.
Increased Gift and Estate Tax Exemptions
Significantly, the proposal would make the higher estate and gift tax exemption amounts permanent, rather than allowing them to sunset in 2026. Under current law, the lifetime exemption is $13.61 million per person ($27.22 million per couple), but it’s scheduled to drop by about half when the TCJA provisions expire. Trump’s new bill would maintain the higher thresholds indefinitely, providing high-net-worth individuals with an extended window to transfer wealth without triggering federal estate or gift tax. For families with complex estate plans or large privately held assets (e.g., real estate, closely held businesses), this creates a valuable opportunity to revisit the benefits of trusts, such as Grantor Retained Annuity Trusts (GRATs), SLATs (see below), Irrevocable Life Insurance Trusts (ILITs), and other gifting vehicles.
Step-Up in Cost Basis and Capital Gains Treatment
Importantly, the bill retains the step-up in basis at death, meaning heirs would still inherit appreciated assets at their fair market value, eliminating built-in capital gains for income tax purposes. While there had been previous discussions about eliminating the step-up or taxing unrealized gains at death, this proposal takes no such step. This reinforces the value of holding appreciating assets through life and passing them on through the estate, especially for families with concentrated positions in real estate or closely held stock.
Implications for Trust Structures and Generational Planning
For those using irrevocable trusts to shield assets from estate taxes or control distributions over time, the permanence of the current exemption levels provides clarity and flexibility. It may also reduce the urgency of more aggressive estate freeze strategies, but it’s important not to become complacent; future political changes could reverse course.
Additionally, if you’ve been considering the use of dynasty trusts or spousal lifetime access trusts (SLATs), this bill may extend the planning horizon, offering more time to fully fund these vehicles.
Tax Incentives for Multigenerational Goals
Some of the new provisions in the bill may be minor on their own but carry long-term planning implications. For example, the proposed “MAGA Savings Accounts” would allow tax-free savings of up to $1,000 annually per child born during Trump’s second term. While largely symbolic, these accounts could be leveraged as part of a broader multigenerational wealth strategy, especially if combined with 529 plans, Roth IRAs for teens, or custodial accounts for early investing.
Action Steps to Consider
Review gifting plans: Consider making additional lifetime gifts to family members or irrevocable trusts while the exemption is high.
Revisit trust strategies: With higher exemptions potentially locked in, now is the time to fine-tune SLATs, GRATs, and other irrevocable structures.
Reassess asset titling: Ensure taxable and non-taxable assets are titled optimally to take full advantage of step-up in basis rules.
Coordinate with legal counsel: Estate planning documents such as wills, trusts, and powers of attorney should be updated regularly to reflect current law and family dynamics.
Ready to Review Your Estate Plan in Light of the Big Beautiful Tax Act?
Attitude Financial Advisors is actively tracking the bill’s movement through Congress. Regardless of the final outcome, the trends in these changes can provide valuable insight to help you design your estate planning and legacy goals with our experienced guidance.
Are you interested in exploring how your estate plan or wealth transfer strategy may need adjustment based on this proposal? Contact us to arrange a personalized review. Reach out to me via email at btrugman@attitudefinancial.com or give me a call at (516) 762-7603 to set up a free consultation.
About Bryan
Bryan Trugman is managing partner, co-founder, and a CERTIFIED FINANCIAL PLANNER® practitioner at Attitude Financial Advisors. With more than 17 years of experience, Bryan specializes in addressing the financial needs of new parents as they seek to realign their finances, assisting divorced individuals as they navigate an unforeseen fork in the road, and strategizing with those seeking to accrue a dependable retirement nest egg. Bryan is known for being a good listener and building strong relationships with his clients so he can help them develop a customized financial plan based on what’s important to them. He is passionate about helping his clients experience financial confidence so they can worry less and play more. Bryan has a bachelor’s degree in industrial and systems engineering with a minor in mathematics from State University of New York at Binghamton. He has served on the board of the Financial Planning Association and continues to be actively involved in the national organization. He is also a member of the Plainview-Old Bethpage Chamber of Commerce and has served as its vice president and as a board member. When he’s not working, you can find Bryan on the ballroom dance floor or engaged in a fast-paced game of doubles on the tennis court. To learn more about Bryan, connect with him on LinkedIn. Or, watch his latest webinar on: How Much Is Enough? A Surprisingly Simple Way to Calculate Your Retirement Savings Needs.
