In this episode of Wealthyist podcast, hosts Brian Lamborne, a senior wealth strategist, and Alec Durand, an estate planning attorney with Annex Wealth, discuss the implications of the recently passed One Big Beautiful Bill Act in the context of the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA, effective since 2018, doubled the federal estate tax exemption to around $14 million (adjusted to $13.99 million in 2025), reduced income tax brackets, doubled the standard deduction, and introduced benefits like the Qualified Business Income (QBI) deduction and bonus depreciation for businesses. These changes simplified estate planning for many, as fewer people faced federal estate tax issues, and complex strategies became less necessary.

The One Big Beautiful Bill Act largely continues the TCJA provisions, providing clarity by making them permanent and eliminating the sunset provisions set to expire in 2025. Key updates include increasing the estate tax exemption to $15 million in 2026 (indexed for inflation thereafter) and maintaining income tax brackets and the standard deduction. This permanence alleviates concerns about the exemption dropping significantly, which would have impacted estates valued between $10-20 million. The bill also made minor tweaks to QBI and other tax provisions but didn’t drastically alter the tax landscape.

The hosts emphasize that the planning prompted by the TCJA’s potential sunset was still valuable and remains relevant. For high-net-worth individuals, particularly business owners, the clarity provided by the new law offers opportunities to refine estate plans, update documents like buy-sell agreements, and ensure alignment with current goals. They stress the importance of reviewing operating agreements, business valuations, and estate plans to avoid conflicts (e.g., between buy-sell agreements and trusts) and to prepare for wealth transitions, especially for estates up to $30 million for married couples. The episode underscores that while the new law didn’t change much in tax policy, proactive planning remains critical for effective wealth management and transfer.