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On July 4, 2025, the sweeping legislative measure H.R.1, also known as the “One Big Beautiful Bill Act,” was codified, bringing significant changes to estate planning. As a trusted resource for companies and individuals, we will provide a summary of the key changes and their implications, as well as guidance on how to approach this process to help navigate a new landscape of tax regulations and opportunities.

Understanding the Changes to Estate Planning Under H.R. 1

Individuals who are planning on making gifts and structuring transfers into trusts should pay close attention to the changes outlined in H.R. 1 as it relates to prior tax legislation under The Tax Cuts and Jobs Act of 2017 (TCJA).  The key changes include:

• Increased lifetime exclusion amount to $15 million ($30 million for married couples) in 2026, with no sunsetting clause, and increasing annually based on inflation.
• Repeal of the lifetime exclusion sunset clause allowing individuals to transfer more assets now and into the foreseeable future, and to appreciate outside of one’s estate.
• The ability to be more strategic regarding estate planning opportunities.

Detailing the Increased Lifetime Exclusion Amounts

TCJA increased the lifetime exclusion for federal estate, gift, and generation-skipping transfer taxes from $5.49 million per individual and $10.98 million for married couples, to $11.18 million per individual and $22.36 million for married couples. In 2025, this annual exclusion amount, indexed to inflation, stood at $13.99 million per individual and $27.98 million for married couples.

Initially, this was set to expire at the end of 2025, reverting to  $5 million inflation-indexed from 2017, which in 2026 would have meant approximately $7 million per individual and around $14 million for married couples.¹ However, now under H.R. 1, the individual lifetime exclusion amount has been increased to $15 million ($30 million for married couples) in 2026, with no sunsetting clause, and will increase annually based on inflation. This change brings some degree of permanence to estate tax legislation, creating opportunities for individuals to make gifts without incurring transfer taxes.

The impact of H.R. 1 will be most immediate for individuals who pass in 2026. Nevertheless, the new legislation has reduced the timing pressure to execute estate plans before the TCJA provisions expired. Although the timing pressure has eased, it is prudent for high-net worth individuals to proactively review, update, and execute their estate plans (or a portion thereof) by considering these changes and engaging in ongoing conversations with wealth advisors and estate attorneys to maximize the tax benefits enacted by the legislation.

Key Implications of the Repeal of the Lifetime Exclusion Sunset Clause

The repeal of the lifetime exclusion sunset clause in 2026 under TCJA has a two-pronged impact on individuals who are considering how to best maximize the tax benefits of gifting. This impact includes:

• Allowing individuals to transfer more assets now and into the foreseeable future, allowing the assets to appreciate outside of one’s estate, and potentially lowering the effective tax burden upon death.
• Enabling individuals to take a more strategic approach to structuring gifting, by selecting which assets to transfer during their lifetime.

This allows a more deliberate and tax-efficient approach to gifting, rather than necessitating a rush to transfer assets before the previous TCJA deadline.

Strategic Estate Planning in the Wake of H.R. 1

As the TCJA sunsetting provision loomed, individuals were incentivized to front-load transfers during 2025. This was done to take advantage of temporarily elevated lifetime exclusion amounts. As a result, many considered transferring assets with little-to-no expected appreciation into tax-advantaged investment vehicles to claim the exclusion.

In contrast, following the passage of H.R. 1, individuals can now take a more strategic approach to tax planning. Instead of racing the clock, they can selectively move assets that may have a higher potential for future value appreciation. As gifts are reported at their current fair market value upon transfer, strategic allocation of certain assets with higher value upside can allow for a larger percentage of an individual’s overall portfolio upon death to be shielded from estate taxes, thus maximizing the post-tax benefit available to descendants and beneficiaries and potentially minimizing liquidity needs at death.

Maximizing Tax Savings with Non-Cash Gifts

While estate taxes may not have major implications for the vast majority of Americans, proactive planning is highly recommended for high-net-worth individuals. We suggest speaking with an estate attorney or financial planner to review your individual circumstances.

Structuring gifts to maximize tax savings can be a complicated exercise that likely necessitates the assistance of experienced advisors. While cash contributions are relatively straightforward, making non-cash gifts, including transfers of assets (physical, financial, etc.), necessitates that individuals determine the fair market value of the gifted interest at the time of transfer and adequately disclose the fair market value of the gift to the IRS through the filing of Form 709 (the U.S. Gift and Generation-Skipping Transfer Tax Return).

If you are contemplating a transfer of non-cash assets, we welcome you to contact the article authors or Contact Us to discuss how a qualified appraisal can help meet tax reporting requirements.

1 Lifetime exclusion amounts cover gifts above and beyond the annual exclusion amount ($19,000 per individual, per recipient, in 2025).