The One Big Beautiful Bill and Texas Estate Planning: What Changed, What Didn't, and What You Should Do Now

If you have an existing estate plan — or if you've been putting one off because you weren't sure how the tax landscape would shake out — the One Big Beautiful Bill Act (OBBBA) just gave you a reason to act.

Signed into law on July 4, 2025, the OBBBA permanently raised the federal estate and gift tax exemption to $15 million per individual and $30 million for married couples, effective January 1, 2026. More importantly, it removed the sunset provision that had been hanging over estate planners for nearly a decade. The uncertainty is gone. The rules are now stable — and stable rules are the best environment there is for thoughtful estate planning.

Here's what Texas families need to know.

A Quick History: Why This Matters So Much

To understand why this is significant, you have to understand where we've been.

In 2017, the Tax Cuts and Jobs Act (TCJA) dramatically increased the federal estate tax exemption — from about $5.5 million to over $11 million per person. That was welcome news for families with larger estates. The catch was that the TCJA's increase was temporary. Without further congressional action, the exemption was scheduled to "sunset" on January 1, 2026 and revert to roughly $7 million per individual (adjusted for inflation from the old $5 million base).

For years, estate planners — and their clients — lived with that ticking clock. Should you make large gifts now to lock in the higher exemption? Should you restructure your trust to account for the potential drop? The uncertainty made planning difficult and pushed many families toward complexity they may not have needed.

The OBBBA ended that uncertainty. Instead of letting the exemption revert, Congress made the higher exemption permanent and actually increased it further, to $15 million per person as of January 1, 2026. And unlike the TCJA, the OBBBA contains no sunset clause. Reducing the exemption now would require new legislation and a presidential signature — a much higher bar than simply letting a law expire.

What the OBBBA Actually Changed in Texas Estate Planning

The exemption amount. The federal lifetime gift, estate, and generation-skipping transfer (GST) tax exemption is now $15 million per individual, up from $13.99 million in 2025. For married couples, the combined exemption is $30 million. These amounts are effective January 1, 2026.

Inflation indexing. The $15 million figure will be adjusted upward for inflation each year after 2026, using 2025 as the base year. In practical terms, the exemption will only go up from here — absent new legislation.

Annual gift tax exclusion. The ability to give $19,000 per recipient per year (in 2025) without it counting against your lifetime exemption remains in place and will continue to be adjusted for inflation annually.

GST tax exemption. The generation-skipping transfer tax exemption — relevant for families transferring wealth to grandchildren or into long-term trusts — also increased to $15 million per person, in line with the estate and gift tax exemption.

Portability. The OBBBA preserves portability, which allows a surviving spouse to use any unused exemption from the deceased spouse's estate. To elect portability, the surviving spouse must file a federal estate tax return (Form 706) within nine months of death — even if no tax is owed. This deadline matters.

What the OBBBA Did NOT Change

The 40% tax rate. For estates that exceed the available exemption, the top federal estate tax rate is still 40%. The math is straightforward: any amount above your remaining exemption is taxed at a flat 40%. For an unmarried individual with a $20 million estate and $15 million of unused exemption, that's $5 million subject to tax — a $2 million bill.

The step-up in basis. Heirs still receive inherited assets at a stepped-up basis equal to the fair market value on the date of death. This is one of the most valuable features in the tax code for families passing appreciated assets — real estate, stocks, a family business — and it remains intact.

Texas has no state estate tax. Texas repealed its state estate tax in 2015. Unlike states such as Massachusetts or Oregon, which have their own estate taxes with much lower exemption thresholds, Texas families only face the federal tax. If you have property in multiple states, however, some of those states may still impose their own estate taxes.

What This Means for Texas Families

Most Texans Are Now Outside the Estate Tax Bracket

The practical reality is that the vast majority of Texas families — even those with significant assets — will not owe federal estate tax under the OBBBA. A married couple would need a combined taxable estate exceeding $30 million before federal estate tax enters the picture.

For most families, the conversation has shifted away from tax minimization and toward other estate planning goals: protecting assets from creditors, providing for a surviving spouse, caring for children or grandchildren, and making sure assets go to the right people in the right way. Those goals are just as important as ever — and a good estate plan addresses them regardless of tax exposure.

Community Property Adds Flexibility — and Complexity

Texas is a community property state, which means assets acquired during marriage are generally owned equally by both spouses. This creates both planning opportunities and complications that don't exist in common-law states.

For married Texas couples, the $30 million combined exemption can be allocated between spouses in different ways. Couples can structure their estates so each spouse uses their individual $15 million exemption separately, or they can rely on portability to allow the surviving spouse to use any unused exemption. The right approach depends on the composition of the estate, the nature of the assets (separate vs. community property), and the couple's goals.

One nuance: portability is not automatic. The surviving spouse must elect it by filing Form 706 within nine months of the first spouse's death. If that deadline is missed, the unused exemption is gone. Given that no estate tax may be owed, families sometimes skip the Form 706 filing — and lose portability in the process.

Should You Simplify Your Existing Plan?

Many estate plans drafted during the TCJA years — or even earlier — contain provisions specifically designed to capture the estate tax exemption at the first spouse's death. These AB trust structures (also called credit shelter trusts or bypass trusts) were valuable tools when the exemption was lower and portability was uncertain. With a permanent $15 million exemption and portability available, the complexity of an AB trust may no longer be justified for many families.

That said, simplification isn't always the right answer. AB trusts still provide benefits independent of estate tax: creditor protection for trust assets, protection in the event of a surviving spouse's remarriage, and control over how assets pass to children from a prior relationship. Whether to simplify your plan is a fact-specific question that depends on your estate's size, structure, and your family situation.

Large Estates: The Planning Opportunity Is Real

For families with estates approaching or exceeding $15 million individually or $30 million combined, the OBBBA doesn't eliminate planning — it changes it. With the exemption now higher and indexed for inflation, the focus shifts toward:

Lifetime gifting into trusts. Transferring appreciating assets — a growing business interest, real estate in a rising market, investment accounts — out of your estate now locks in today's value for gift tax purposes. All future appreciation occurs outside your estate, free of estate tax when you die.

Spousal Lifetime Access Trusts (SLATs). A SLAT allows one spouse to make a large completed gift to a trust for the benefit of the other spouse and children, removing the assets from both spouses' estates while still providing indirect access to the funds through the trustee.

Charitable giving strategies. Charitable remainder trusts, donor-advised funds, and qualified opportunity zone investments remain powerful tools for families looking to reduce taxable estates while accomplishing philanthropic goals.

The key principle: the exemption is most effective when used early, because assets transferred now are valued at today's prices — not the much higher values they may reach in 10 or 20 years.

Does This Mean You Don't Need an Estate Plan?

No — and this point deserves emphasis.

Estate tax is only one reason to have an estate plan. The vast majority of what a good estate plan does has nothing to do with taxes at all. Without a proper plan in place, Texas law decides who inherits your property, who manages your affairs if you're incapacitated, and who raises your children if something happens to you. Those default outcomes may not be what you want.

A comprehensive estate plan typically addresses:

• Who inherits your assets and on what terms

• Protecting your children's inheritances from their creditors, divorces, or poor decisions

• Designating guardians for minor children

• Healthcare and financial powers of attorney so your chosen person can act if you're incapacitated

• Protecting a family business from disruption at your death

• Providing for a blended family without inadvertently disinheriting children from a prior relationship

• Medicaid and long-term care planning, particularly for an aging parent

  
  

None of these concerns went away when Congress raised the estate tax exemption.

The Bottom Line for Texas Families

The One Big Beautiful Bill Act settled a decade of uncertainty in the estate planning world. The rules are now stable, the exemption is generous, and the planning environment is the best it has been in years.

For most Texas families, this is a good time to revisit an existing plan with fresh eyes — not because there's a crisis, but because stable law is the right moment to make sure your documents still reflect your goals, your family situation, and your assets. For families with larger estates, the permanence of the new exemption actually opens up planning strategies that weren't worth pursuing under prior uncertainty.

At the Law Office of Ryan Putz, we help families in The Woodlands, Huntsville, and the surrounding Montgomery and Walker County areas create estate plans that protect what they've built. Whether you're starting from scratch or reviewing a plan you drafted years ago, we're here to walk through it with you.

Call us at (936) 978-2045 or visit https://www.ryanputzlaw.com to schedule a consultation.

Ryan Putz is a Texas attorney focusing on family law, estate planning, and probate. He serves clients in Walker County and Montgomery County, with offices in Huntsville and The Woodlands. This article is for general informational purposes only and does not constitute legal advice. Tax law is complex and individual circumstances vary — consult a licensed Texas attorney and a qualified tax professional regarding your specific situation.