On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBB) into law, a move that helps families pass down generational businesses and wealth without breaking the bank. Starting next year, the federal estate tax exemption will jump to $15 million per person—almost double what it was before 2018.
It’s tough to sit down and plan for a time when one will no longer be with his or her loved ones. However, getting affairs in order is one of the kindest things someone can do for their family. A solid Last Will and Testament isn’t for the one who makes it—it is to make life easier for those left behind during an already painful time. When family businesses are involved, passing down a farm or small business could create massive tax bills that bankrupt the next generation. The OBBB’s new estate tax rules make this process a bit less of a headache.
The law locks in a $15 million estate and gift tax exemption per person ($30 million for married couples), effective Jan. 1, 2026. That’s up from $13.99 million in 2025. Without this change, the exemption would have dropped to roughly $7 million after the Tax Cuts and Jobs Act (TCJA) expired on Dec. 31, 2025.
Take, for example, Jolene Reissen, a corn farmer from Iowa. She is living proof that not just the ultra-wealthy benefit from this. The impact of estate tax policies extends to critical sectors such as agriculture, where the expiration of the Tax Cuts and Jobs Act (TCJA) would have been devastating. In her testimony before the U.S. House Ways and Means Committee, Riessen emphasized that the TCJA’s increased exemption has been vital for preserving family farms, which are the backbone of rural economies and national food supply chains. The loss of these tax provisions could ripple through communities, impacting everything from local businesses to food prices nationwide. The OBBB has literally saved the family farm for her.
“If that exemption drops back down, my boys would have to sell half the ground and all the equipment just to be able to pay the death tax. That would make it much harder for them to continue farming,” Riessen remarked earlier this year.
The OBBB scraps the TCJA’s sunset clause, which would have slashed the exemption after 2025. It also extends some income tax brackets and deductions, but the estate tax changes are the real focus, aimed squarely at how family businesses and wealth move from one generation to the next.
However, experts say that those planning their estates will still need to plan carefully due to differing state laws and the chance of future law changes. These rules start Jan. 1, 2026, and will not affect 2025.
Garrett Watson, policy analysis director at the Tax Foundation, said, “A permanent expanded estate tax exemption reduces the complications associated with the tax for most households, but ideally policymakers will take the final step and repeal the estate tax entirely in future reform efforts.” This provision does have its critics, with some claiming that this change hands a massive tax break to the ultra-rich.
For those with substantial assets, the OBBB underscores the importance of strategic estate planning, balancing federal exemptions with state regulations to ensure a lasting legacy. As the law takes effect, consulting with financial and legal experts will be crucial to navigate this evolving landscape and maximize the benefits for future generations.