The Estate Plan You Rushed in 2025 — and What to Do With It Now

For three years, the message was relentless: use it or lose it.

The estate tax exemption was scheduled to fall off a cliff on January 1, 2026 — from roughly $14 million per person back to something in the neighborhood of $7 million. Advisors, attorneys, and every financial newsletter in America told you the same thing: move assets now, while the exemption is high, because after the sunset the opportunity is gone forever.

So a lot of people moved. Irrevocable trusts got funded. Business interests got gifted. Spousal lifetime access trusts got drafted in a hurry in the fall of 2025, because the deadline was December 31 and the calendar was not negotiable.

Then, on July 4, 2025, the One Big Beautiful Bill Act was signed — and the cliff simply disappeared.

Not only did the sunset get repealed, the exemption went up. For 2026 it's $15 million per person, $30 million for a married couple, permanent and indexed for inflation going forward. The number everyone was racing to beat is now more than double what they feared.

If you spent 2025 in that scramble, you're probably wondering what it was all for. Here's the honest answer: some of what you did is still excellent. Some of it solved a problem you no longer have. And a few pieces may now be working against you. The only way to know which is which is to actually look.

First, the good news

Nothing you gifted got clawed back. This was the great fear during the sunset years — that you'd use a $13 million exemption, the law would drop to $7 million, and the IRS would come after the difference. Treasury settled this with anti-clawback rules: gifts made under the higher exemption stay protected, even if the exemption later falls. That protection held, and it still holds.

Assets you moved are still out of your estate. If you gifted an interest in a growing business or an appreciating property, all the growth since that transfer happens outside your taxable estate. That was the real point of the exercise, and it worked — often better than the exemption math alone would suggest.

You have more room than you did. Because the exemption rose rather than fell, anyone who used only part of theirs now has additional capacity — and no deadline forcing them to use it.

So this isn't a story about wasted effort. It's a story about a plan built for one set of rules now operating under another.

Now the part worth checking

Here's what I'd want to look at if you did anything significant in 2024 or 2025.

1. The irrevocable trust is still irrevocable. This is the one people underestimate. You moved assets out of your control to beat a deadline that evaporated. If your total estate now sits comfortably below $30 million as a couple, you may have permanently given up access to assets to avoid a tax you were never going to owe. There are sometimes ways to add flexibility after the fact — trust protectors, decanting, powers of appointment, depending on the document and the state — but they're technical and they aren't universal. Worth asking your estate attorney what's actually available in your case.

2. You may have traded away a step-up in basis for nothing. This is the sharpest one. Assets you keep until death generally get a basis step-up — heirs inherit them at current market value, and the built-in capital gain disappears. Assets you gift into an irrevocable trust during your life generally don't. During the sunset panic, giving up a step-up to avoid a 40% estate tax was often a good trade. But if your estate is now well under the exemption, you may have handed your children a large future capital gains bill in order to dodge an estate tax that no longer applies to you. That's a real cost, and it's easy to miss because it doesn't show up until the asset is sold — potentially decades from now.

3. Your documents may contain formula clauses tied to the old numbers. Many wills and trusts don't state a dollar figure. They say something like "fund the family trust with the maximum amount that can pass free of federal estate tax, and leave the remainder to my spouse." That language was written when the exemption was $1 million, or $5 million. At $15 million, the same sentence can now sweep your entire estate into a bypass trust and leave your surviving spouse with the remainder of nothing. This is not a hypothetical drafting curiosity — it's one of the most common ways a perfectly good estate plan quietly produces an outcome nobody intended.

4. Your state did not get the memo. The federal exemption is now $15 million. Several states tax estates at dramatically lower thresholds — Oregon at $1 million, Massachusetts and Washington around $2 million, Minnesota at $3 million — and OBBBA didn't touch any of them. You can owe zero federal estate tax and still write a meaningful check to your state. If you live in one of those states, or own property there, the state analysis is now the one that actually drives your planning.

5. The generation-skipping exemption still isn't portable. Portability lets a surviving spouse pick up the deceased spouse's unused estate tax exemption. It does not work that way for the GST exemption, which matters if you're planning for grandchildren or multi-generational trusts. Use it or genuinely lose it — that "use it or lose it" framing was always true here, and it still is.

6. Portability requires an actual filing. It isn't automatic. Claiming a deceased spouse's unused exemption requires filing an estate tax return to make the election, even when no tax is owed. Families skip this all the time because there's no tax due, and the exemption evaporates.

The pattern underneath this

Notice what actually went wrong for people who now regret their 2025 moves. It wasn't bad advice — a sunset was genuinely scheduled, and planning around it was reasonable. What went wrong is that a deadline made the decision instead of a plan.

When a countdown clock is running, urgency substitutes for analysis. You stop asking "does this structure serve my family regardless of the tax law?" and start asking "how do I get this done before December 31?" Those two questions produce very different documents.

The good news is that the pressure is off. The exemption is permanent — and while "permanent" in tax law only means "until Congress decides otherwise," there's no scheduled cliff, no countdown, and no reason to rush. Families can plan thoughtfully now instead of scrambling against an arbitrary date.

Which makes this the right moment to do the unglamorous thing: pull the documents out, read what they actually say, and find out whether the plan you have is the plan you'd choose today.

Rules over feelings — and a plan built on a deadline was never really a plan.

If you did significant estate work in 2024 or 2025, it's worth a fresh review — particularly the formula clauses, the basis question, and your state's threshold. Bring your documents to your estate attorney and your CPA, and let's look at them together against what your plan is actually supposed to accomplish.

This article is for educational purposes only and is not tax or legal advice. Estate planning is highly technical, state-specific, and dependent on your individual documents and circumstances. Nothing here should be acted on without review by qualified estate counsel and your tax advisor.