President Trump recently signed the so-called “Big Beautiful Bill,” bringing major changes—and some key consistencies—to the federal estate and gift tax landscape. Whether you’re an individual with a large estate or a family business owner, this legislation has long-term planning implications you should know about.
Let’s break it down:
What Changed
Exemption Doubled (Permanently)
The unified exemption for federal estate, gift, and GST (generation-skipping transfer) taxes has been permanently increased to approximately $13 million per person (or $26 million per married couple) in 2025. This locks in what had previously been a temporary provision under the 2017 Tax Cuts and Jobs Act.
Spousal Portability Simplified
Surviving spouses now have 10 years—up from 5—to claim their deceased spouse’s unused exemption amount, thanks to extended portability rules. There’s also a new safe harbor provision allowing certain late elections.
Valuation Discounts Preserved (with Guardrails)
Family-owned operating businesses can still apply discounts for lack of marketability and control. However, passive entities (like LLCs that only hold investments) will now see limits on such discounts.
More IRS Oversight on Lifetime Gifts
The IRS is now empowered to cross-check gift tax filings with 1099s and other asset transfers. This move is intended to crack down on underreported gifts and increase compliance.
What Stayed the Same
Top Tax Rate Still 40%
Despite speculation, the federal estate and gift tax rate holds steady at 40%.
Annual Gift Exclusion Remains
The annual exclusion for gifts is unchanged at $18,000 per recipient in 2025. You can still make unlimited annual gifts at this level without using any of your lifetime exemption.
Step-Up in Basis Survives
Heirs still enjoy a step-up in basis on inherited assets, avoiding capital gains on appreciation accrued during the decedent’s lifetime.
What It Means for You
If you’ve been considering gifting strategies, trust planning, or business succession—now is the time to act. The increased exemption amount combined with stronger IRS compliance tools creates both opportunity and urgency.
Want to review your estate plan? Contact our team at doylelawpc.com or call our office today.