With the passage of the One Big Beautiful Bill Act (OBBBA), the federal estate and gift tax exemption is slated to increase permanently to $15 million per person (or $30 million per married couple) starting in 2026. For many high net worth families, this shift is being hailed as a long-awaited alleviation from looming estate tax concerns. But don’t be fooled by the size of the exemption because estate planning is no less essential today than it was before.
The truth is that effective planning has always been about more than just taxes. In today’s world of complex assets, evolving family structures, and increased political uncertainty, smart estate plans are as much about control, protection, and adaptability as they are about avoiding a hefty tax bill.
A bigger exemption doesn’t mean fewer problems
The expanded exemption doesn’t eliminate the need for planning; it just shifts the focus.
Consider a family with a $25 million net worth. On paper, they may now fall entirely under the federal exemption threshold. But what happens if their wealth grows? What if a future Congress reverses the exemption (as has happened before)? What about state estate taxes, which can still apply at far lower thresholds? And even if the numbers stay favorable, high net worth estates are rarely simple. Real estate, private businesses, trusts, cross-border holdings, and family offices require coordinated planning to avoid unintended consequences.
Estate planning is about control
Taxes are just one dimension of wealth transfer. Equally important is how and when that wealth is distributed; and under what conditions. Without clear directives, family dynamics can sour. Assets may be mismanaged. Distributions may conflict with your values or your heirs’ readiness. Estate planning gives you the tools to:
- Control distributions over time (e.g., staggered trusts or milestone-based payouts);
- Protect assets from creditors, divorcing spouses, or financial inexperience;
- Keep family businesses intact through buy-sell agreements, succession plans, and voting/non-voting share structures;
- Plan for blended families, charitable giving, and non-traditional heirs.
Even with no estate tax liability, these objectives require careful legal structuring, especially across generations.
Liquidity, legacy, and flexibility still matter
Many estates are illiquid, meaning they are comprised of real estate, equity in operating businesses, or investment interests. If you pass away without a coordinated plan, your heirs may be forced to sell prized assets to cover debts, expenses, or imbalances in your plan.
So what about charitable giving? For many high net worth individuals, legacy planning is about more than transfers; it’s about impact. Structuring gifts through donor-advised funds, private foundations, or charitable remainder trusts takes time and legal foresight.
A good estate plan also allows for flexibility. Through powers of appointment, disclaimer provisions, or adaptable trust terms, you can give your fiduciaries tools to react to future tax law, economic shifts, or family changes—without having to unwind an overly rigid plan.
The real risk is mistaking relief for finality
The expanded exemption is a political win for many, but it’s not guaranteed to last forever. Future administrations may revisit it. States may adjust their own tax thresholds. Market downturns or surges can dramatically alter your estate’s value.
The biggest mistake high net worth individuals can make is assuming that the new exemption means they can safely pause or defer planning. In reality, now is the perfect time to revisit and refine your estate plan, while you have more tools and more flexibility at your disposal.
The bottom line is state planning isn’t just about minimizing taxes. It’s about ensuring your wishes are honored, your values carried forward, and your legacy preserved. No matter the size of your estate, the right plan ensures your wishes are honored and your legacy is protected, offering clarity, control, and confidence. The tax code may change, but your goals shouldn’t.
