New tax legislation has been passed and signed into law. The act, known as the “One Big Beautiful Bill,” includes changes to federal income, estate, gift, and generation-skipping transfer taxes.

Below are key provisions that affect federal estate, gift, and generation-skipping transfer tax planning as of January 1, 2026.

What you need to know:

• Tax exemptions have increased. As of 2026, the federal estate, gift, and generation-skipping transfer tax exemptions will be set at $15 million per person, indexed for inflation in future years. Before, exemptions would have been cut about in half at the end of 2025 when the 2017 tax act expired. This reduction will not happen.
• Tax rate remains unchanged. The tax rate on transfers above the exemption amount will remain at 40%.
• Basis step-up rules will not change. Property included in a decedent’s estate will continue to receive a step-up in basis to its value at the date of death. This is a key income tax planning tool for families.
• Portability is preserved. The rule allowing a surviving spouse to claim and use the deceased spouse’s unused exemption, called “portability,” will not change. We’ve used this effectively for many clients to preserve exemptions and reduce future estate tax liability.

What should you do now?

If you haven’t reviewed your estate plan recently—or if your plan was built around the possibility of a lower exemption in 2026—now is an ideal time to schedule an estate planning checkup. We can help you assess how the new tax law will impact your long-term goals and ensure your plan maximizes the benefits of the new law.

There are many other changes in the bill that are likely to affect your taxes. We recommend that you speak with your wealth advisor and your accountant, too. 

To stay up-to-date on changes in estate planning law and regulations, connect with Jessica on LinkedIn.

This post was created by Jessica Marchegiano, founder of JM LAW and senior estate planning attorney.