How the One Big Beautiful Bill Will Impact Your Finances

Signed into law on July 4, 2025, the One Big Beautiful Bill Act (OBBA) introduces significant, permanent changes to the tax code. For high-net-worth individuals, three provisions stand out:

1. A historically high estate tax exemption
2. Expanded lifetime gifting opportunities
3. The return of 100% bonus depreciation for qualifying business assets

We’ll break down these key changes and what they mean for your wealth plan.

Estate Tax Exemption: More Room for Legacy Planning

Starting next year, the federal estate and gift tax exemption rises to $15 million per individual, or $30 million for married couples, and will be indexed for inflation.

This year, the exemption was about $13.99 million per person and was set to be slashed by roughly 50% in 2026. The reversal not only preserves but expands the shield against the 40% federal estate tax.

Action point: Review your estate plan to ensure wills, trusts, and beneficiary designations align with the new exemption levels. For couples, confirm your financial and legal documents capture portability rules so the unused exemption of a deceased spouse is preserved.

Lifetime Gifting: Move Assets Early & Let Them Grow Outside Your Estate

The estate tax exemption applies to lifetime gifts as well as bequests. Removing assets from your estate during your life allows the assets to appreciate outside the estate. For example, a $1 million gift invested with a 7% annual return could grow to almost $2 million in a decade, entirely outside your taxable estate and avoiding up to $800,000 in future estate taxes.

Strategies to consider include:

• Annual exclusion gifts. Give up to $19,000 per recipient in 2025 without cutting into your lifetime exemption.
• Irrevocable life insurance trusts (ILITs). Keep life insurance proceeds outside your estate and provide liquidity for heirs.
• Donor-advised funds. Remove assets from your estate while securing an immediate charitable deduction.

These techniques work best when integrated into a broader plan that considers cash flow needs, family goals, and potential changes in tax law.

100% Bonus Depreciation: A Win for Business Owners and Investors

The OBBA reinstates 100% bonus depreciation for qualifying property placed in service on or after January 19, 2025. Without this change, bonus depreciation would have fallen to 40% this year and been phased out entirely by 2027.

What qualifies? MACRS property with a recovery period of 20 years or less, including machinery, equipment, vehicles, furniture, certain building improvements, and some software. New and used assets (new to you) can both qualify.

Why it matters: Immediate expensing accelerates deductions into the current tax year. A top-bracket taxpayer who owns a pass-through entity could buy $100,000 of equipment in 2025 and deduct the full amount now, saving up to $37,000 in federal income tax, versus just $14,800 under 40% bonus depreciation.

Action point: If you’re planning capital investments, coordinate with your CPA to move forward promptly. Timing matters, since the deduction only applies once the property is ready and available for use.

Other Provisions Worth Noting

While the estate exemption, gifting flexibility, and bonus depreciation are the headline items, you should also watch for new savings vehicles introduced in the OBBA.

One example, the new “Trump” accounts, will allow additional after-tax contributions for long-term savings once implemented. The administrative framework is still being developed, but these accounts will likely be offered through banks and credit unions.

Meanwhile, existing tools remain relevant:

• Custodial Roth IRAs for working children, allowing decades of tax-free growth
• Charitable trusts to combine philanthropy with estate planning
• 529 plans for education savings, with potential state tax benefits

Each should be evaluated in the context of your overall tax and investment strategy.

Planning Principles

The OBBA’s changes reward proactive, coordinated planning:

• Act while the window is open. The $15M/$30M estate exemption is law today; there’s no guarantee it will be tomorrow.
• Integrate gifting and investment strategy. Removing appreciating assets from your estate early maximizes long-term tax savings.
• Time large purchases. For business owners, the restored bonus depreciation makes certain acquisitions more tax-efficient if completed now.
• Coordinate with professionals. Estate attorneys, CPAs, and investment advisors should work together to align legal structures, tax tactics, and portfolio allocation.

The Bottom Line

The One Big Beautiful Bill Act creates one of the most favorable tax environments in recent memory. The expanded estate exemption offers unprecedented capacity to transfer wealth tax-free. Lifetime gifting strategies can compound those benefits over generations. And the return of 100% bonus depreciation gives business owners and investors a powerful tool to accelerate deductions and free up capital.

But opportunity without action is wasted. With thoughtful, timely planning, you can use these provisions to protect your wealth, support your family, and invest in future growth, while keeping more of your resources out of the IRS’s reach.