If you have lifetime gifts or assets to pass on — whether physical property, personal possessions or financial holdings like retirement accounts, CDs and savings — it’s in your best interest to create a clear estate plan. Doing so ensures your wishes are honored and your loved ones are protected from unnecessary complications.
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Now, with President Donald Trump’s administration proposing sweeping tax reforms under the newly passed “One Big Beautiful Bill Act,” estate planning is once again in the spotlight. These changes could significantly impact how wealth is transferred, taxed, and preserved — especially if the estate tax exemption is made permanent or repealed altogether.
To explore how estate planning may shift under a second Trump administration, GOBankingRates spoke with experts about what you need to know — and whether it’s time to take action now.
Watch for an Expiring Credit
An important thing to know immediately, according to David Faust, partner at Gallet Dreyer & Berkey, is that the federal estate unitary credit is expiring at the end of 2025. For this year, that credit is $13.99 million for individuals, or $28 million for a married couple.
“The amount which estates will be subject to federal estate tax in 2026, and later years will automatically be reduced to approximately $7 million for individuals, or $14 million for married couples, unless Congress and the administration change the law.”
Wait To See If the Estate Tax Is Permanent
On the other hand, the Trump Administration could renew the current, rather high exemption amount and make it a permanent fixture, according to Cory Krueger, an estate-planning and probate attorney and partner at Hensley and Krueger.
That would effectively reduce the need for sophisticated tax-free estate planning for 99% of U.S. citizens, though he stressed you still need a will. “Everyone should still have a will — it will just make things simpler for those that are under the high tax exemption threshold,” he said.
Unfortunately, nobody can predict with certainty when this, or any other provisions of the Internal Revenue Code, will change, Faust said. It’s best to assume the credit will not be reapproved rather than to hope for the best. After all, sound estate planning depends on realistic decision-making and strategizing.
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Consider These Other Tax Changes
While not directly tied to the estate tax, a broad range of proposed tax changes could still impact estate planning by influencing projected federal revenue, which according to Faust, is a key factor in determining whether and how the estate tax might be revised.
These include, Faust said, “raising the limit on deductions of state and local taxes (SALT), reducing or eliminating the tax on tips and social security, lowering the corporate and capital gains tax rates, revising individual income tax rates.”
Consider Reducing Taxable Estate
In the meantime, Faust encourages people to consider what they can do to reduce their taxable estate and gift tax liability. This could include making strategic cash gifts or carefully timing the sale of a business or stocks to minimize capital gains taxes
“If you live in a state with a high estate tax of its own, be mindful of whether any action might affect your state estate tax,” Faust warned.
Don’t Expect Retroactive Changes
It’s also good to plan for the likelihood that any changes in the tax law affecting estate or income may not be retroactive, Faust said. “Therefore, it is critical for you and your advisors to keep a careful watch over developments in Washington. Be prepared to act but wait until there is more clarity about impending changes.”
Prepare To Lose the Step-up Basis
If the estate tax is repealed, another negative tax implication could relate to how taxes are assessed for the beneficiary, Krueger said. For example, estate beneficiaries or heirs-at-law of a deceased individual currently receive a step-up in basis related to inherited assets and property.
This means the value of inherited assets is assessed as of the date of death, which eliminates capital gains tax on any appreciation of the assets prior to the death of the deceased person.
“If this step-up in basis provision is abolished, the beneficiaries and/or heirs will be forced to pay capital gains taxes upon a sale of the inherited assets — which, in turn, could result in inherited assets remaining within the family for a longer period of time versus a sale on the open market.”
Remember State Level Estate Taxes
It’s also important to remember that no matter what happens at the federal level, many states have their own estate or inheritance taxes with lower exemption thresholds, said Yan Lian Kuang-Maoga, partner at Pitta & Baione LLP.
“Ensure that your estate plan accounts for these state-level taxes, as they can substantially affect your heirs’ inheritance,” she noted.
Review and Update Your Estate Plan
If you haven’t revisited your estate plan since the Tax Cuts and Jobs Act was passed in 2017, now is the time, Kuang-Maoga said. “Work with an estate planning attorney to ensure your plan takes full advantage of the current tax environment.”
Don’t Make Big Changes
Otherwise, Faust suggested that now is not the time to make changes in estate planning, unless there are reasons to do so “other than trying to anticipate what will happen in Washington.” For now, it is merely the right time to prepare and watch, he concluded.
Caitlyn Moorhead contributed to the reporting for this article.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 9 Ways Your Estate Planning Strategy Should Change Under Trump
