The One Big Beautiful Bill Act is 870 pages long (or at least my version is). Just a few lines of one page of the bill covers an increase and extension to the federal estate tax exemption. We’ll cover that below.

The rest of the bill seems to focus on extending, or making relatively permanent, existing tax policies and credits. Similar to what is happening with the federal estate tax exemption. Some Missouri families may be interested in additional changes related to tax rates, the standard deduction, child tax credits, and qualified business income. I may write about those in the future, and will link those here if so.

And for anyone still with us…

Here’s the information:

• The federal estate tax exemption is increasing to $15 million per person, adjusted annually for inflation. And without an expiration date.
• For married couples, this means the ability to transfer $30 million without federal estate tax.
• This also means the gift tax and generation skipping transfer tax exemptions are raised to the same $15 million per person.
• These changes are effective on January 1, 2026, brought about under the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025.

Some additional background:

• The current federal estate tax exemption is at $13.99 million, which has been adjusting up from the last federal estate tax exemption change in 2018 to $10 million per person.
• The current $13.99 million federal exemption was scheduled to expire at the end of this year, which would have left us with an exemption around $7 million per person.
• This change hits at the heart of the exemption, moving it to $15 million per person, and without a sunset date.

What these changes mean for most Missouri families:

• Probably not much. Obviously, the federal estate tax isn’t designed to apply to most families. And notably, Missouri doesn’t impose a state level estate tax.
• For families with a business, farmland, or other high value investment holdings, these changes may be a breath of fresh air. Technically, the exemption was going to expire at the end of this year, which could have exposed families to a 40% federal estate tax on a portion of their wealth.
• I’m not certain anyone actually thought the exemptions would sunset without change, but at least now it’s official. And the changes aren’t scheduled to expire. Which allows families to plan more confidently for the time being.

About WLS Notes

WLS Notes provides informal, and often casual, commentary on matters of interest to Drew Williams, attorney at Williams Legal Services. These notes are personal perspectives, and not intended as legal advice.

Williams Legal Services is a law practice in Chesterfield, Missouri focused on estate planning and family law. If you have questions about estate planning or family law, you’re welcome to schedule a free consultation through the link below.