On July 4th, the "Big Beautiful Bill" (BBB) was signed into law—a sweeping tax and spending package with far-reaching implications. While headlines have focused on tip income deductions and business incentives, one crucial area has received far less attention: your family's estate and legacy planning. Here's what consumers need to know.
According to Forbes, the BBB makes the estate and gift tax exemption permanent at $15 million per individual (or $30 million per married couple), indexed annually for inflation. This sounds like great news—until you dig deeper.
Only about 0.25% of U.S. households have that kind of net worth. However, despite the term "permanent," experts caution that this exemption could be rolled back depending on political shifts or economic pressure. If economic growth fails to meet expectations or deficits increase, future legislation may target wealth transfers to raise tax revenue.
Planning now, while current laws are favorable, remains a wise strategy.
The BBB spans over 940 pages and introduces a tangled web of tax rules, incentives, deductions, and limitations. Examples include:
New tax treatment for tip and overtime income
Temporary and permanent income tax breaks
Income-based phase-outs on credits and deductions
Enhanced options for specific accounts like ABLE and 529 plans
As Forbes notes, the inconsistencies and arbitrary nature of many BBB provisions make the law difficult to interpret and even harder to plan around. For taxpayers, the practical takeaway is this: ongoing tax planning and estate updates are more essential than ever.
The highly polarized legislative process behind the BBB reflects deeper societal divisions. With these divisions often spilling into family disputes and legal conflicts, estate litigation is becoming more common.
Families should consider incorporating asset protection strategies into their estate planning to reduce the risk of future legal complications. This includes creating properly structured trusts, clear guardianship instructions, and updated medical directives.
The BBB expanded and modified several important tax-advantaged accounts:
ABLE Accounts: Permanently raised contribution limits and allowed 529 plan rollovers.
529 Plans: Now include coverage for credentialing and K-12 education.
Trump Accounts: New savings vehicles for minors, with limits on usage and expiration.
These updates make it easier to plan for the needs of children, dependents, and disabled individuals. But the rules are intricate and vary significantly depending on timing, usage, and income levels.
Families should review and possibly revise how they approach education funding, dependent care, and special needs planning in light of these changes.
The BBB presents both opportunity and uncertainty. Its tax provisions could support long-term financial strategies, but only if consumers understand and respond to them proactively.
Regular reviews of your estate plan, tax exposure, and legacy goals are essential in a post-BBB world.
A digital vault like IronClad Family's iVaultX can support these efforts by securely organizing your legal, financial, and healthcare documents in one encrypted, accessible location. It won't replace professional advice, but it will make executing your plan easier when it matters most.
Sources:
Forbes: "The Big Beautiful Bill" by Martin Shenkman, July 2025
Congressional Budget Office
U.S. Federal Reserve, Household Wealth Data
U.S. Treasury, ABLE and 529 Account Updates