One aspect of the “Big Beautiful Bill” that was signed by President Trump on July 4, 2025 – Section 70106 of H.R. 1 – means that Congress acted quicker than I expected on the estate tax sunset. Under the Tax Cuts and Jobs Act of 2017, the estate tax exemption (currently $13,990,000 for 2024) was set to sunset on December 31, 2025 and revert to the 2017 law of approximately $5,450,000 (i.e. the incredible shrinking exemption).
However, with the “BBB”, Congress included a provision creating a new $15,000,000 “permanent” federal estate and gift tax exemption, to take effect on January 1, 2026. This exemption will continue to be adjusted in the future for inflation. In effect, this increase is simply the inflation factor adjustment to the current exemption amount. Congress only eliminated the sunset provision of the last tax act.
The reason I say “permanent” is because it is as permanent as any tax law — until the next Congress and next new administration decides to change it once again. However, after many years of a high exemption, it will be difficult for a future administration in 2028 and beyond to advocate for suddenly drastically reducing the exemption in the face of the disruption on farm families and business owners.
