President Trump’s expansive tax proposal known as the “One Big Beautiful Bill” has cleared the House of Representatives and is now under Senate review. Spanning more than 1,100 pages, the legislation aims to extend core elements of the 2017 Tax Cuts and Jobs Act (TCJA), introduce new tax benefits for families and workers, and encourage investment within the U.S. economy. With a projected cost of $4.1 trillion over the next decade, the bill also contains several key provisions that could significantly impact estate planning strategies and the transfer of generational wealth.
Here are my key takeaways for your consideration.
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.
What Could the Big Beautiful Tax Act Mean for Your Legacy?
Rest assured, my team and I are actively tracking the movement of this legislation through Congress. Regardless of the final outcome, the proposed direction provides valuable insight for shaping your estate planning and legacy strategies.
If you’re wondering how your estate plan or wealth transfer approach might need to adapt, I’m here to help. Email me at jim@glhcfinancial.com or call 916-967-3208 to schedule a personalized review.
About Jim
James Callens is a financial advisor at GLH&C Financial Services, a full-service, comprehensive wealth management firm. Jim has over 30 years of experience in the financial industry and uses his extensive resources and knowledge to help his clients experience simplicity and clarity in their financial lives. Jim spent more than 20 years working for GE Financial Advisors, both in its insurance services department and as a regional manager and financial advisor. He took part in GE’s Six Sigma Quality Training program and completed the National Association of Life Underwriter’s four-year LUTCF course. Jim also earned his certificate in financial planning from the University of California at Davis. In 2011, Jim combined his own firm, Callens Financial Group, with GLH Financial Services, creating GLH&C Financial Services, so he could provide even more value to his clients.
Jim lives in Folsom, California, with his wife, Melissa, and his four children, Jacob, Kristen, Grant, and Andrew. Together, they enjoy outdoor activities like kayaking, bicycling, and vacationing at Lake Tahoe. To learn more about Jim, connect with him on LinkedIn.