CEO Musings: Estate Planning After the One Big Beautiful Bill Act (OBBBA)

By Michael W. Hoffman



Over the last decades, the focus of estate planning has been to minimize the federal estate tax. The estate tax rate has varied from 70% down to 35%, but has always been a significant amount to avoid.

In an era where the federal estate tax was 40% or 50%, and the capital gains rate was 20% to 28%, the savings of federal estate taxes always over-rode the tax basis step-up objective. But now we have a big tax law change and we should consider how these changes affect our planning. 

With estate planning, the OBBBA could have a substantial effect on the structure of our wills. By increasing the estate tax exemption to $15M beginning in 2026 ($30M for a married couple), very few families will be exposed to the federal death tax. Sure, there will still be ultra-high net worth families that should pursue many available remedies to lower their estate tax exposure. However, with so many estates now being non-taxable, the focus has changed to income tax matters versus estate tax matters. Read more  

A QCD is a direct transfer from an Individual Retirement Account (IRA) to any eligible nonprofit organization. Distributions from an IRA, which would otherwise be taxable ordinary income, are offset by the QCD. In 2025, individual taxpayers can transfer up to $108,000 to the charity of their choosing. For those Married Filing Jointly, spouses are also entitled to make an additional $108,000 donation, bringing the total allowable donation amount to $216,000. Read more