Nicknamed the “One Big Beautiful Bill,” President Trump’s sweeping tax reform proposal has passed the House of Representatives and is now under review in the Senate. This 1,100-plus-page bill builds on the foundation of the 2017 Tax Cuts and Jobs Act (TCJA), aiming to extend key provisions, introduce new tax breaks for workers and families, and boost U.S. investment. With an estimated 10-year price tag of $4.1 trillion, the legislation also includes major updates that could reshape estate planning and significantly affect how wealth is passed down to future generations.
Permanent Extension of Individual Tax Cuts
One of the core goals of the bill is to make the TCJA’s individual tax changes permanent. These include maintaining lower marginal tax rates, keeping the enhanced standard deduction ($32,000 for joint filers under the new bill), and continuing the repeal of personal exemptions. One of the thorniest issues is the state and local tax (SALT) deduction provision. It appears this figure should be a $40,000 cap up to $500,000 of AGI.
These provisions, while designed for income tax relief, indirectly impact estate planning by increasing after-tax cash flow and reducing the need for income-shifting strategies in the short term. The marriage penalty continues to be mitigated for most brackets, which is relevant for married couples structuring trusts or gifting strategies.
Increased Gift and Estate Tax Exemptions
Significantly, the proposal would make the higher estate and gift tax exemption amounts permanent, rather than allowing them to sunset in 2026. Under current law, the lifetime exemption is $13.61 million per person ($27.22 million per couple), but it’s scheduled to drop by about half when the TCJA provisions expire. Trump’s new bill would maintain the higher thresholds indefinitely, providing high-net-worth individuals with an extended window to transfer wealth without triggering federal estate or gift tax. For families with complex estate plans or large privately held assets (e.g., real estate, closely held businesses), this creates a valuable opportunity to revisit the benefits of trusts, such as Grantor Retained Annuity Trusts (GRATs), SLATs (see below), Irrevocable Life Insurance Trusts (ILITs), and other gifting vehicles.
Step-Up in Cost Basis and Capital Gains Treatment
Importantly, the bill retains the step-up in basis at death, meaning heirs would still inherit appreciated assets at their fair market value, eliminating built-in capital gains for income tax purposes. While there had been previous discussions about eliminating the step-up or taxing unrealized gains at death, this proposal takes no such step. This reinforces the value of holding appreciating assets through life and passing them on through the estate, especially for families with concentrated positions in real estate or closely held stock.
Implications for Trust Structures and Generational Planning
For those using irrevocable trusts to shield assets from estate taxes or control distributions over time, the permanence of the current exemption levels provides clarity and flexibility. It may also reduce the urgency of more aggressive estate freeze strategies, but it’s important not to become complacent; future political changes could reverse course.
Additionally, if you’ve been considering the use of dynasty trusts or spousal lifetime access trusts (SLATs), this bill may extend the planning horizon, offering more time to fully fund these vehicles.
Tax Incentives for Multigenerational Goals
Some of the new provisions in the bill may be minor on their own but carry long-term planning implications. For example, the proposed “MAGA Savings Accounts” would allow tax-free savings of up to $1,000 annually per child born during Trump’s second term. While largely symbolic, these accounts could be leveraged as part of a broader multigenerational wealth strategy, especially if combined with 529 plans, Roth IRAs for teens, or custodial accounts for early investing.
Action Steps to Consider
Review gifting plans: Consider making additional lifetime gifts to family members or irrevocable trusts while the exemption is high.
Revisit trust strategies: With higher exemptions potentially locked in, now is the time to fine-tune SLATs, GRATs, and other irrevocable structures.
Reassess asset titling: Ensure taxable and non-taxable assets are titled optimally to take full advantage of step-up in basis rules.
Coordinate with legal counsel: Estate planning documents such as wills, trusts, and powers of attorney should be updated regularly to reflect current law and family dynamics.
Is Your Estate Plan Ready for the Big Beautiful Tax Act? Let’s Connect!
Elevate Wealth Management is keeping a close watch on the advancement of this legislation through Congress. Regardless of whether the bill passes in full, the proposed changes offer valuable insight that can help inform your estate planning and legacy goals.
Are you wondering how this evolving legislation may impact your wealth transfer strategy or estate plan? We’re here to help. Contact us today to schedule a personalized review by reaching out to us at jim@elevateasset.com or 307.673.5675.
About Jim
Jim Shellenberger, CFA, CFP® is a financial advisor at Elevate Wealth Management, an independent, fee-only wealth management firm serving young professionals, pre-retirees, and retirees in Sheridan, Wyoming, and surrounding areas. With the mission of serving and educating, Jim is dedicated to providing comprehensive, top-notch services that not only help his clients reach their goals, but also empower them to make the best financial decisions for their lives and walk toward their future with confidence. Jim is known for going the extra mile, not only offering valuable knowledge in investment management as a former investment analyst, but building long-lasting relationships so he can give honest, customized advice and strategies that make an impact on their lives.
Jim has a bachelor’s degree in business administration with a minor in finance from the University of Wyoming. He is proud to be a Wyoming native and loves exploring the outdoors with his family—hiking, fishing, hunting, and backpacking. Faith is an integral part of Jim’s life, and he always looks forward to attending church on Sundays, Bible study on Fridays, and being part of his church community. He’s also an avid sports fan! Fun fact: Jim owns shares in the Green Bay Packers. To learn more about Jim, connect with him on LinkedIn.
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