By Ted Stricker, CFP®
The One Big Beautiful Tax Cut Act, President Trump’s sweeping tax proposal, has just passed in the House of Representatives and is now heading to the Senate for consideration. At over 1,100 pages, the bill is designed to extend key provisions from the 2017 Tax Cuts and Jobs Act (TCJA), add new tax breaks for workers and families, and promote domestic investment. With an estimated price tag of $4.1 trillion over 10 years, it also includes several provisions that carry important implications for estate planning and generational wealth transfer.
As always, our goal is to ensure you’re informed and positioned to act strategically.
Permanent Extension of Individual Tax Cuts
One of the core goals of the bill is to make the TCJA’s individual tax changes permanent. These include maintaining lower marginal tax rates, keeping the enhanced standard deduction ($32,000 for joint filers under the new bill), and continuing the repeal of personal exemptions. One of the thorniest issues is the state and local tax (SALT) deduction provision, championed by NY lawmakers. It appears this figure should be a $40,000 cap up to $500,000 of AGI.
These provisions, while designed for income tax relief, indirectly impact estate planning by increasing after-tax cash flow and reducing the need for income-shifting strategies in the short term. The marriage penalty continues to be mitigated for most brackets, which is relevant for married couples structuring trusts or gifting strategies.
Increased Gift and Estate Tax Exemptions
Significantly, the proposal would make the higher estate and gift tax exemption amounts permanent, rather than allowing them to sunset in 2026. Under current law, the lifetime exemption is $13.61 million per person ($27.22 million per couple), but it’s scheduled to drop by about half when the TCJA provisions expire. Trump’s new bill would maintain the higher thresholds indefinitely, providing high-net-worth individuals with an extended window to transfer wealth without triggering federal estate or gift tax. For families with complex estate plans or large privately held assets (e.g., real estate, closely held businesses), this creates a valuable opportunity to revisit GRATs, SLATs, ILITs, and other gifting vehicles.
Step-Up in Basis and Capital Gains
Importantly, the bill retains the step-up in basis at death, meaning heirs would still inherit appreciated assets at their fair market value, eliminating built-in capital gains for income tax purposes. While there had been previous discussions about eliminating the step-up or taxing unrealized gains at death, this proposal takes no such step. This reinforces the value of holding appreciating assets through life and passing them on through the estate, especially for families with concentrated positions in real estate or closely held stock.
Implications for Trust Structures and Generational Planning
For those using irrevocable trusts to shield assets from estate taxes or control distributions over time, the permanence of the current exemption levels provides clarity and flexibility. It may also reduce the urgency of more aggressive estate freeze strategies, but it’s important not to become complacent; future political changes could reverse course. Additionally, if you’ve been considering the use of dynasty trusts or spousal lifetime access trusts (SLATs), this bill may extend the planning horizon, offering more time to fully fund these vehicles.
Tax Incentives With Multigenerational Potential
Some of the new provisions in the bill may be minor on their own but carry long-term planning implications. For example, the proposed “MAGA Savings Accounts” would allow tax-free savings of up to $1,000 annually per child born during Trump’s second term. While largely symbolic, these accounts could be leveraged as part of a broader multigenerational wealth strategy—especially if combined with 529 plans, Roth IRAs for teens, or custodial accounts for early investing.
Action Steps to Consider
- Review gifting plans: Consider making additional lifetime gifts to family members or irrevocable trusts while the exemption is high.
- Revisit trust strategies: With higher exemptions potentially locked in, now is the time to fine-tune SLATs, GRATs, and other irrevocable structures.
- Reassess asset titling: Ensure taxable and non-taxable assets are titled optimally to take full advantage of step-up in basis rules.
- Coordinate with legal counsel: Estate planning documents such as wills, trusts, and powers of attorney should be updated regularly to reflect current law and family dynamics.
Let’s Strategize Together
The Bernath + Rosenberg team is closely monitoring the progress of this bill through Congress. Whether or not the full proposal passes, the direction of these changes can help guide proactive tax and estate strategies.
If you’d like to discuss how your estate plan or wealth transfer strategy should evolve in response to this proposal, please reach out to schedule a review by calling (212) 221-1140 or emailing info@brwealth.com.
About Ted
Ted Stricker is a partner and financial advisor at Bernath + Rosenberg, a full-service accounting, tax, and wealth management firm with offices in Monsey, NY, Lakewood, NJ, Cedarhurst, NY, and Miami Beach, FL. The firm demonstrates a personalized approach to custom-tailored solutions and an unwavering commitment to client service. With over 26 years of experience in the financial services industry, Ted manages the firm’s wealth management team, and specializes in designing financial plans for business owners and affluent families. Since joining the team in 2015, he provides practical and sound advice, combining innovative approaches and strategies that reflect clients’ personality, lifestyle, and goals.
Ted obtained a Bachelor of Science in Economics & Business Administration from University at Albany. He also holds the CERTIFIED FINANCIAL PLANNER® designation as well as the Series 7, 24, 55, 63, 65, and NY Life & Health licenses, and is a member of the Financial Planning Association. To learn more about Ted, connect with him on LinkedIn.
Professionals associated with Bernath & Rosenberg P.C. may be either (1) registered representatives with, and securities and advisory services offered through LPL Financial, Member FINRA/SIPC, a registered investment advisor; or (2) solely tax professionals of Bernath & Rosenberg P.C., and not affiliated with LPL Financial. Tax/accounting/CPA-related services offered through Bernath & Rosenberg P.C. is a separate legal entity and not affiliated with LPL Financial. LPL Financial does not offer tax advice or tax/accounting/CPA-related services.
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