The estate and gift tax planning conversation just changed. OBBBA, the federal tax bill signed in 2025, made the federal estate and gift tax exemption permanent at $15 million per person, indexed to inflation. That removed the urgent deadline many families were planning against, the scheduled end-of-2025 sunset that would have cut the exemption roughly in half. The exemption is no longer disappearing. So the new question is not how to use it before it goes away. It is what to do now that it does not.
For most high-net-worth families, the answer is not “nothing.” The federal headline number changed. State estate tax exposure, generational transfers, basis planning, and the role of lifetime gifting all still matter. The planning just has more time and a different shape.
What OBBBA actually changed
Before OBBBA, the federal estate and gift tax exemption was the doubled exemption created by the 2017 Tax Cuts and Jobs Act. That doubled amount was scheduled to sunset at the end of 2025, dropping back to roughly half its level. Through most of 2024 and 2025, that pending sunset was the single biggest driver of estate planning urgency. Families with eight-figure net worth were being told that 2025 was the last year to use the higher exemption at scale.
OBBBA changed three things. First, it set the exemption at $15 million per person, or $30 million per married couple, going forward. Second, it made that amount permanent, removing the sunset. Third, it indexed the exemption to inflation, so it will continue to rise rather than reset.
The combined effect is that the wealth level at which federal estate tax becomes a real concern just moved up significantly, and the artificial deadline that was driving rushed gifting is gone.
What did not change
This is the part that gets glossed over in the headlines. Several things were not touched by OBBBA.
- Maryland’s separate state estate tax. A family can be well under the federal exemption and still owe Maryland estate tax on death.
- The District of Columbia’s separate estate tax, on its own threshold.
- The federal gift tax mechanics. Lifetime gifts above the annual exclusion still use exemption, and gifts above exemption still trigger gift tax.
- The generation-skipping transfer tax, which has its own rules and its own exemption tracking.
- The annual gift tax exclusion ($19,000 per recipient in 2025, also indexed to inflation).
- Step-up in basis at death, which remains the single largest tax-planning feature of dying with appreciated assets.
The shift in the federal exemption is significant, but it does not eliminate the rest of the estate and gift tax system. Families and advisors who assume OBBBA made all of estate planning go away are going to be unpleasantly surprised.
If you already accelerated gifting in 2024 or 2025
A lot of families pulled the trigger on large lifetime gifts in 2024 or 2025 specifically because the sunset was coming. Now that the sunset is gone, the natural question is whether those gifts were a mistake.
For most families, the answer is no. Lifetime gifts that move appreciating assets out of the estate continue to produce a real benefit, because future appreciation occurs outside the taxable estate. The gifted assets keep growing for the family without growing the eventual estate tax liability.
There are situations where accelerated gifting produced a worse outcome than holding, particularly when the gift was a very low-basis asset that would have received a step-up at death and now will not. That tradeoff is worth modeling. But the more common situation is that accelerated gifts are still doing useful work, even though the urgency that prompted them is gone.
The Maryland piece
Maryland is one of a small number of states that maintains a separate estate tax. The state exemption is materially lower than the federal exemption and has not moved in line with federal changes. The result is a Maryland-specific tax exposure that has to be planned around independently.
This matters for two reasons. First, a family that is comfortably under the federal exemption can still face material Maryland estate tax. Second, portability between spouses works differently at the state level than at the federal level, which can affect how a married couple structures the disposition of assets.
For Maryland and DC residents, OBBBA simplified the federal conversation but left the state conversation intact. The state exposure deserves its own modeling, not an assumption that the federal exemption covers everything.
What this means for ongoing planning
A few things follow from the new permanent landscape.
Plans that were built around the 2025 sunset should be reviewed in the new context. SLATs, dynasty trusts, GRATs, and other vehicles that made urgent sense under a sunsetting exemption may still make sense under a permanent one, but the analysis is different. Plans that were aggressive specifically because of the deadline may now be more aggressive than the situation actually calls for.
Lifetime annual exclusion gifting remains a quiet workhorse. Nineteen thousand dollars per recipient per donor, year over year, moves real money out of an estate over a decade without using exemption. For families with multiple children and grandchildren, this is still the simplest and most consistent planning tool.
Basis planning becomes relatively more important. With less estate tax pressure for many families, the question of which assets to hold to death (for the step-up in basis) versus gift during life (to remove future appreciation) shifts. The right call depends on the asset, the basis, and the holding period.
Generation-skipping planning still requires its own attention. GST exemption rules are not identical to estate tax exemption rules, and OBBBA did not flatten the difference.
Where a CPA fits in this conversation
Estate plans are written by estate attorneys, not CPAs. But the tax modeling around an estate plan, the gift tax returns when lifetime gifts are made, the eventual Form 706 when an estate becomes taxable, and the coordination with state-level estate tax all sit on the CPA side of the desk.
A CPA who works with high-net-worth families regularly does three things in this conversation. We run the numbers under different scenarios, so the family and the attorney are looking at actual projected outcomes rather than rules of thumb. We handle the filings, including the Form 709 gift tax returns that many families need each year even when no tax is owed. And we coordinate with the attorney so the legal structure and the tax outcomes line up.
For a Maryland family or one with mixed-state exposure, having a CPA who understands the state-level pieces is particularly useful. The federal exemption being permanent does not change that.
Q: Does this mean we do not need an estate plan anymore?
A: No. The federal exemption being permanent at $15 million removes one source of urgency, but it does not remove the need for a plan. State estate tax, generational transfers, basis planning, and the mechanics of how assets actually pass to the next generation all still need to be worked out. Most high-net-worth families still benefit from a current, integrated plan.
Q: What about gifts I already made in 2024 or 2025?
A: They are not undone, and for most families they are still doing useful work. Lifetime gifts that moved appreciating assets out of the estate continue to keep that appreciation outside the eventual estate. The main situation where an accelerated gift produced a worse outcome than holding is when the gifted asset had a very low basis and would have received a step-up at death. That tradeoff is worth modeling case by case.
Q: Does Maryland’s estate tax still apply?
A: Yes. Maryland maintains a separate state estate tax with its own exemption, which is materially lower than the federal exemption and has not moved in line with federal changes. A Maryland family can be under the federal exemption and still owe Maryland estate tax. The state exposure deserves its own analysis, particularly for married couples where state-level portability rules differ from federal rules.
Q: What is the annual gift exclusion right now?
A: The annual gift tax exclusion is $19,000 per recipient, per donor, in 2025, and is indexed to inflation. A married couple can effectively gift $38,000 per recipient per year without using any lifetime exemption. Over a decade and across multiple recipients, this is one of the most reliable long-term tools for moving wealth out of an estate.
Q: Should I still be using a SLAT, GRAT, or dynasty trust?
A: It depends on the family situation. Strategies built specifically around using exemption before the 2025 sunset deserve a fresh look in the new permanent context. Some of them still make sense. Some were aggressive specifically because of the deadline. The right answer requires looking at the specific facts with your estate attorney and your CPA, in the new permanent landscape rather than the one that existed when the original plan was drafted.
If your estate plan was built around the assumed 2025 sunset, this is a good time to revisit it. The strategy that was right under a sunsetting exemption is not automatically the strategy that is right under a permanent one. Pull the current plan, schedule a working session with your estate attorney, and bring a CPA who works with high-net-worth families into the conversation.
Strauss & Associates has been working with families and their advisors on estate and gift tax planning since 1986. If you would like to talk through what OBBBA changes for your situation, contact us online or call us at 410-363-1011.