What the “One Big Beautiful Bill” Means for Estate Planning 

If you’ve heard in the news about the “One Big Beautiful Bill,” you’re not alone, and you might be wondering what it means for your family, your wallet, and your long-term financial planning. 

This legislation has made permanent, and improved upon, many of the tax cuts that were set to expire after 2025, added a few incentives, but created a few trade-offs buried in the details. Whether you’re raising a family, running a small business, or preparing for retirement in New Jersey, these changes may directly impact how you plan and protect your estate. 

This article showcases only some of the changes in the Bill, but the most important ones that will impact estate plans for middle-class families.  

•  Tax Cuts from 2017 Stay in Place 

Back in 2017, the federal government passed a law that lowered income tax rates, increased the standard deduction, and capped certain deductions. These changes were set to expire after 2025. This new bill makes many of those changes permanent and improves on some of the prior limits. For example,  

• The Federal Estate, Gift, and Generation Skipping Tax exclusion amount has permanently increased to $15 million, per person, indexed for inflation. This means that the Federal government will not impose a tax at your death unless you own (and have given away in excess of the annual exclusion amount) more than $15 million if you pass away in 2026 or later. 

• The State and local Tax Deduction ( SALT Deduction) was previously capped at $10,000; the One Big Beautiful Bill has increased the cap to $40,000 (if the married couple earns $500,000 or less), which is a huge benefit to New Jersey homeowners whose property taxes often exceed the prior $10,000 cap. 

• Higher Standard Deduction & Bigger Child Tax Credit 

Under the extended tax rules, the standard deduction (the amount you subtract from your income before taxes are calculated) will remain almost double what it was pre-2017. For example, married couples can continue deducting around $27,000, instead of the old amount closer to $13,000. 

The child tax credit, which is a direct dollar-for-dollar reduction in your tax bill, goes up to $2,200 per child, and increases each year after as inflation rises. 

That’s real savings for families with kids, and it makes filing taxes simpler for those who don’t itemize deductions. 

• No Federal Taxes on Overtime or Tip Income (Up to $25,000) 

If you work in a job where overtime, shift differentials, or tips are a big part of the paycheck (nurses, restaurant staff, police, and hospitality workers, for example), this change could save hundreds in taxes each year. 

Up to $25,000 of that income will be exempt from federal income tax. 

This benefit phases out for higher-income earners, so it’s especially designed to help working-class and middle-income families build their wealth. 

•  Extra Tax Deduction for Seniors 

From 2025 through 2028, seniors will get an additional $6,000 deduction on top of the standard deduction. If you’re retired and living on a fixed income, this means more of your money stays in your pocket and less goes to the government. 

• Permanent Tax Deduction for Small Businesses 

If you own a small business, freelance, or operate an LLC or S-corporation, you can continue to take the 20% qualified business income deduction ( “QBID”) from your taxable income. 

This is a huge win for consultants, realtors, therapists, side-giggers, and family-owned businesses. Unlike earlier versions of the law, this deduction is now permanent under the bill, so you can plan with more certainty. 

•  “Trump Accounts” for Children’s Long-Term Savings 

A new type of savings account, nicknamed “Trump Accounts,” allows families to put away money for their children that grows tax-deferred until adulthood. Unlike a 529 plan, which is limited to education expenses like tuition and books, a Trump Account wouldn’t have those restrictions. While both offer tax-deferred growth, the Trump Account is designed to give kids a financial head start with fewer strings attached. 

• Cuts to Programs Like Medicaid, SNAP, and Healthcare Credits 

To help offset some of the tax cuts, the bill proposes reductions in government programs that many New Jersey families rely on, including Medicaid (not Medicare), SNAP benefits (formerly known as food stamps), and subsidies for health insurance 

If you or a loved one depends on these programs, the proposed cuts could mean less support or higher out-of-pocket costs. 

What This Means for Your Estate Plan 

Whether you’re just starting to think about your legacy or you’ve already done some estate planning, now is the time to review your strategy. These new rules could affect gifting strategies, how your trust is structured, and whether it’s time to shift certain assets. If you’re a business owner or have a blended family, these changes may impact how much your heirs ultimately receive. These new tax provisions are intended to help more Americans build their wealth, but saving more today is only useful if your estate plan is set up to protect and distribute those funds effectively. 

Understanding the tax code is one thing but applying it to your life is another. Our estate planning team works with New Jersey families every day to build smart, flexible plans that reflect today’s realities and tomorrow’s possibilities. 

If you’re wondering how this tax bill impacts your family, your small business, or your long-term goals, we’re here to help you prepare a plan that works just as hard as you do. Schedule a consultation today to ensure that the savings the One Big Beautiful Bill provides to you are protected for your future.  

FAQs

1. What is the “One Big Beautiful Bill”?

It’s a proposed law that would extend and expand tax cuts from 2017, give new tax breaks to workers, families, and businesses, and make several changes to federal spending, all in one large package

2. Will I pay less in taxes under this bill?

Ideally, yes, especially if you’re middle-income, a parent, a senior, or a small business owner. The bill increases deductions and extends tax cuts that were set to expire after 2025.

3. What’s new for families and parents?

The child tax credit goes up to about $2,200 per child, and there’s a new type of savings account for kids (“Trump Accounts”) that lets money grow tax-free until adulthood.

4. How does this help older Americans?

Seniors get an extra $6,000 tax deduction for a few years, which can help reduce their taxable income and lower what they owe.

5. Does this bill help small business owners?

Yes, it would make the 20% small business income deduction permanent. This is great for freelancers, contractors, and family-owned businesses.

6. What’s being cut to pay for all this?

Spending on Medicaid, SNAP (food stamps), and clean energy programs would be reduced or phased out. This could impact lower-income families and environmental efforts.