Our JM LAW estate and legacy planning team carefully monitors all changes in laws and regulations that may affect your estate and legacy plan.

The budget reconciliation bill that recently passed the House of Representatives has been sent to the Senate. We expect the Senate to make changes to the bill. That said, there are a number of specific provisions in the House version that, if signed into law, could reshape how you plan for wealth, gifting, and long-term care. Here are the highlights:

Increased Estate & Gift Tax Exemption

The estate tax exemption would increase to $15 million, adjusted for inflation going forward. This may reduce or eliminate federal estate tax liability for many high-net-worth individuals and families.

For our clients who are considering lifetime gifting strategies, this higher exemption could provide more opportunities for wealth transfer without triggering negative tax consequences.

New Legacy Planning Tool For Parents

A new federal program would allow parents or guardians to open tax-advantaged investment accounts, called Trump accounts, for children born between January 1, 2024, and December 31, 2028. The federal government would contribute $1,000 per qualifying child. Families could contribute up to $5,000 per year.

The funds would become partially accessible when the child reaches age 18 and fully accessible at age 30. Approved uses of the funds include education, housing, and training.

These accounts would provide a new option for multi-generational wealth building and education-focused legacy planning.

Potential Tax Breaks

Individual and estate tax cuts originally passed in the Tax Cuts and Jobs Act of 2017 would be preserved. A temporary $1,000 increase to the standard deduction ($2,000 for joint filers) would apply through 2028.

Those 65 and older could see a $4,000 increase in their standard deduction through 2028.

The child tax credit would increase to $2,500 through 2028, then revert to $2,000 and adjust with inflation.

Changes That Affect Medicaid & Long-Term Care

The bill that passed the House includes $700 billion in projected cuts to Medicaid and adds new work and eligibility requirements.

Beginning December 31, 2026, adults who are considered able-bodied and who do not have dependents would need to complete 80 hours per month of work, education, or service to qualify for the program. Eligibility would be verified twice per year instead of once per year.

These changes will increase the complexity of Medicaid planning and affect those who will need long-term care.

Should Proactive Clients Act Now?

Your JM LAW team is watching the legislation closely as it moves through the Senate. Now is the right time to evaluate your estate and legacy plan. Planning now can help you stay ahead of the curve.

If you have any questions or would like to review your estate plan, please schedule a consultation. We are here to guide you through every stage of the planning process.

This post was created by Avatus Stone, COO & estate planning strategist at JM LAW, PLLC.