Your Estate Plan Just Got an Upgrade: Here's What to Do Now

The One Big Beautiful Bill Act, signed into law on July 4, 2025, made significant changes to federal tax rules, credits, and deductions. For estate planning specifically, the 2026 federal estate tax basic exclusion amount is now $15 million per individual, up from $13.99 million for 2025. Married couples may be able to protect up to $30 million with proper planning. The annual gift tax exclusion also remains $19,000 per recipient in 2026.  

That is a meaningful update for many households, but it doesn’t make estate planning less important. In some cases, it makes a review even more important and timely, because plans written under older tax assumptions may no longer fit the family’s current goals. 

Review Old Bypass and AB Trust Language Before It Becomes a Problem 

One of the first places to look is an older will or revocable trust that includes bypass trust, credit shelter trust, or AB trust language. 

These provisions were commonly used when the federal estate tax exemption was much lower. The basic idea was to divide assets at the first spouse’s death so that each spouse’s exemption could be used efficiently. That strategy made sense for many couples at the time. 

Today, for families well below the federal estate tax threshold, that same language may create unnecessary complexity. It may force assets into a trust when the surviving spouse expected flexibility. It may create administrative costs, separate tax filings, or less favorable income tax treatment. And it may no longer provide much federal estate tax benefit. 

That does not mean these trusts are always wrong. They can still be valuable for asset protection, blended families, remarriage concerns, creditor protection, or making sure assets ultimately pass to children or other intended beneficiaries. The key is not to assume the document is still right just because it was right when it was drafted. 

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Estate Planning Is Not Just for High-Net-Worth Families 

The higher federal estate tax exclusion may take many families out of federal estate tax territory, but proper estate planning is about much more than federal estate tax. 

Most families still need a plan for who can act if they become incapacitated, who inherits specific assets, who makes healthcare decisions, and how beneficiaries receive money. That means reviewing durable powers of attorney, healthcare proxies, living wills, guardianship provisions for minor children, and beneficiary designations on retirement accounts and life insurance. 

These documents are often where problems show up. A retirement account may still name an ex-spouse. A life insurance policy may list a deceased parent. A will may name a guardian who has moved away or is no longer the right fit. None of those issues require a taxable estate to create real stress for a family. 

New Rules Also Matter for Everyday Planning 

Several OBBBA provisions affect families who are not traditionally considered high net worth. For example, the 2026 standard deduction is $32,200 for married couples filing jointly, $16,100 for single filers, and $24,150 for heads of household. Taxpayers age 65 and older may also be eligible for an additional $6,000 deduction from 2025 through 2028, subject to income phaseouts.  

That matters because income taxes and cash flow are part of estate planning, especially for retirees. If a surviving spouse’s tax filing status changes, income taxes can change too. If one spouse becomes ill or passes away, the household may need a plan for required minimum distributions, Social Security decisions, healthcare costs, and liquidity. 

There are also new planning tools for families with children. Trump Accounts cannot be funded before July 4, 2026, but eligible children may receive a one-time $1,000 federal contribution, and parents, guardians, employers, or others may make authorized contributions subject to annual limits. These accounts will not replace 529 plans or traditional estate strategies, but they add another option for helping younger family members build long-term financial footing.  

The adoption credit was also enhanced, with a portion becoming refundable for tax years after December 31, 2024, which may matter for families growing through adoption.  

Coordinate the Legal Document with the Financial Plan 

A strong estate plan is not just a legal document. It is a coordinated strategy. 

Your attorney drafts the documents. Your CPA helps evaluate tax implications. Your financial advisor helps connect the documents to your assets, account titling, beneficiary designations, investment strategy, insurance coverage, and retirement income plan. 

That coordination is where many estate plans either succeed or fall short. A trust that is never funded may not accomplish its purpose. A will does not control assets that pass by beneficiary designation. A tax-efficient investment strategy may unravel if assets are titled incorrectly. 

At WHZ, our role is to help clients see how all of these different pieces fit together. Estate planning should not feel like a one-time paperwork project. It should be part of an ongoing financial plan that adjusts as laws change, families evolve, and priorities become clearer. (For more information on this, see our step-by-step guide, Smart Strategies for Maximizing Generational Wealth.) 

If your estate plan was written before the OBBBA, or if it has been more than a few years since you reviewed it, now is a good time to revisit it. The goal is not just to reduce taxes. The goal is to make sure your plan supports the people you love, reflects your wishes, and gives your family clarity when they need it most. 

At WHZ, our goal is to help you move forward with Absolute Confidence, Unwavering Partnership, For Life. Schedule a discovery session with us or call 860-928-2341 to see how we can help you and your family. 

Authored by WHZ Associate Vice President, Wealth Advisor Jonathan Matthews. AI may have been used in the research and initial drafting of this piece. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084, 860.928.2341. http://www.whzwealth.com. 

RELATED FAQs

What did OBBBA change for estate planning? 

OBBBA increases the federal estate and gift tax exemption to $15 million per person for 2026. It also provides a higher generation-skipping transfer tax exemption, creating more planning flexibility for high-net-worth families. 

Does the $15 million exemption mean I no longer need an estate plan? 

No. Estate planning is about much more than federal estate tax. A strong plan addresses control, privacy, incapacity, beneficiary protection, state taxes, business succession, charitable intent, and family communication. 

Why should older wills and trusts be reviewed now? 

Many documents were drafted around the expectation that the federal exemption would fall after 2025. Older bypass, credit shelter, or AB trust formulas may now fund trusts differently than intended and should be reviewed with an estate planning attorney. 

Are bypass trusts and AB trusts still useful? 

They can be, especially for state estate tax planning, blended families, creditor protection, and control over how assets pass to beneficiaries. The issue is whether the trust language is still flexible and appropriate under current law. 

How does Massachusetts estate tax affect planning? 

Massachusetts has a much lower estate tax filing threshold than the federal system. For deaths on or after January 1, 2023, an estate tax return is required when the gross estate plus adjusted taxable gifts exceeds $2 million. 

What should high-net-worth families review first? 

Start with wills, revocable trusts, bypass trusts, beneficiary designations, asset titling, powers of attorney, health care directives, lifetime gifting plans, and state estate tax exposure. Then coordinate with your CPA, attorney, and wealth advisor.