By the skin of its teeth, Trump’s “Big Beautiful Bill” made it into law. It’s no surprise that it passed with only Republican votes. When it comes to tax legislation, that seems to now be the norm. When we go back and forth between a “triple R government” and a “triple D government,” we can expect the tax pendulum to swing back and forth. I say this because these new “permanent” tax provisions aren’t likely to be “permanent.” Here are some “Musings from Marvin” on tax planning under the new law:
- On New Year’s Day 2026, the estate tax exemption will be $15 million per person (plus annual increases for inflation, starting in 2027). I recommend locking in that exemption soon, before the pendulum swings back. The earlier you use it, the more benefit you receive, as you not only escape the 40% estate tax on the $15 million transferred, but also on all future appreciation.
- By doing “squeeze & freeze” planning with certain types of trusts, you can lock in the exemption but still retain access, control, and flexibility.
- If your estate is under $15 million now but you expect it to grow, now is the ideal time to transfer assets to those types of trusts. What matters isn’t what you’re worth today, but what you might be worth at the time of your death, which may be considerably more.
- When Congress drafted legislation in 2021 to close estate tax loopholes (which fell only 2 votes short of passing), the proposed legislation grandfathered planning that was done in the past. By planning now under today’s favorable laws, the planning would likely be grandfathered upon a future law change.
- If your estate exceeds the $15 million exemption, you can continue to shift assets out of your estate by selling assets to grantor trusts (as opposed to making additional gifts that would be hit with a 40% gift tax). Such sales are free of income tax. You carry a note that is still in your estate, but that note is “frozen” and can later be burned down.
- With diminished estate tax concerns, the focus shifts to tools you can use to save income tax. For example, we have developed tools to achieve a tax-free basis step-up, such as shifting basis from one asset you plan to keep to another asset you wish to sell, using mixing bowl partnership rules. Other tools involve ways to minimize tax on the sale of a business, restructuring your business to benefit from expanded opportunities as a Section 1202 Qualified Small Business, Roth IRA planning, more basis bump ideas, and other strategies.
At least for now, we continue to be in the “Golden Age of Estate Planning.” In his Washington Post article of June 30, 2025, Professor Ray Madoff concurs: “Indeed, it has been 35 years since Congress has taken any action to close estate tax loopholes. As a result of this quiet quitting, tax advisers have developed a virtual alphabet soup of avoidance techniques, including GRATs and CRATs and SLATs and SLANTs and ILITs, and IDGTs – which have allowed their wealthy clients to effectively eliminate their estate tax liabilities.” True, but to make that happen, you have to take action. Otherwise, the federal government is your 40% partner in all your estate growth above the $15 million exemption.
We urge you to fight the temptation to be complacent. We are living in a hot political climate, with heavy polarization and resentment. This political climate, combined with our nation’s $36 trillion national debt, make now the ideal time for tax minimization planning. Take action before the political winds shift and the pendulum swings again.
Marvin E. Blum
Note: Madoff’s article is entitled: “A Signature GOP Issue Is Omitted from Trump’s “Big” Tax Bill.”
Marvin Blum advises that now is the ideal time for planning to minimize tax, before the political winds shift and the pendulum swings again.