The One Big Beautiful Bill Act was signed into law on July 4, 2025. And if you followed the headlines, you may have walked away thinking your estate strategy was just fine (at least for now).
For most families, the federal picture IS just fine. The estate tax exemption is now $15 million per person, that's $30 million per couple. Meaning fewer than 0.1% of estates will ever owe a single dollar of federal estate tax. And that's now permanent. Legislation must be passed to change it. That's far more important than people realize.
But the federal number is not the only number that matters.
There is good news for my fellow Missourians as the Show Me State has no estate tax and no inheritance tax. But twelve states and the District of Columbia still impose their own. Five states impose an inheritance tax. Maryland does both.
And if you own property in any of those states, their rules follow that property regardless of where you call home.
But the headlines miss the most important thing entirely.
For most families the real conversation has nothing to do with the estate tax map above. It has to do with income taxes, outdated documents, and the quiet erosion that happens when an estate strategy written years ago has never been revisited.
The federal estate tax may not be coming for your family. But the IRS absolutely is. Just through a different door. And for most families, that door leads straight to the inherited IRA problem.
The Inherited IRA Problem
When a non-spouse inherits a traditional IRA or 401(k), the beneficiary's 10-year clock starts ticking. Thanks to the SECURE Act, most non-spouse beneficiaries must fully distribute the account within 10 years of inheritance. Every dollar that comes out is taxed as ordinary income in the year it is withdrawn, on top of any other earnings. And that means your funds, designed for your children, could end up going to the IRS in a higher amount than needed.
Think about what that means in practice. A parent spends 30 years building a $500,000 IRA. They pass it to an adult child who is in their peak earning years. That child now has 10 years to pull out $500,000 of fully taxable income on top of their existing salary. The tax bill can be significant and it arrives at the worst possible time.
There is no step around it. There is no stretch. There is no way to simply let it grow indefinitely the way beneficiaries could before 2020.
So what can be done? Take control. Plan on your terms, based on your wishes, using real assumptions. Before it becomes someone else's problem.
Proactive planning strategies exist to reduce the inherited IRA tax burden. Roth conversions during lower income years. Qualified charitable distributions for those who are charitably inclined. Thoughtful distribution timing across the 10-year window. All require a conversation before the inheritance arrives, not after. And each has some potentially hidden impacts many folks overlook.
The families who navigate this well are the ones who plan for it. Not the ones who react to it.
Estate Planning in Today's World
The real value of estate planning conversations is often misunderstood or completely overlooked. A well-structured estate strategy is rarely ever really about avoiding taxes. It is about control. And more specifically, maintaining control.
Control over who receives things. What they receive. When they receive it. Under what conditions. And without the time, cost, and public exposure of the probate process.
A revocable living trust is one of the most practical and underutilized tools in estate planning. Not because of what it does for taxes. Here's a tip, it doesn't do much if anything for taxes. But it does a lot to reduce chaos and minimize conflict for families.
Probate is public. A trust is private. Anyone can walk into a courthouse and read a will after it has been admitted to probate. A trust passes assets to beneficiaries quietly, efficiently, and without public exposure.
Probate takes time. A trust does not. In some states the probate process can take months or years. Assets held in a trust transfer to beneficiaries without court involvement.
A trust gives you specificity. A will says who gets what. A trust can say when, how, under what circumstances, and with what conditions. For families with blended households, minor children, beneficiaries with special needs, or simply a strong opinion about how assets should be used, that specificity matters enormously.
And perhaps most importantly, a trust gives you flexibility. The ability to update, adjust, and respond to life's changes without starting over.
Today's Wide Open Planning Window
Most people think of estate planning as a legal conversation. In reality the most important parts of it are financial. And right now the financial environment is about as favorable as it has been in a long time. For families who are intentional, it opens up a very real planning window with very real opportunity.
Tax brackets are more permanent than they have been in nearly a decade. The OBBBA locked in the TCJA rates including the 37% top rate. No sunset. No expiration. Changing them requires new legislation. And while far from guaranteed, alignment between the White House, Senate, and House is likely critical to enact change. This means we have a known position and an opportunity to plan around it for the foreseeable future.
The 2026 standard deduction is higher than ever. $15,750 for single filers. $31,500 for joint filers. Indexed to inflation going forward. Fewer families are itemizing which changes the calculus on certain deductions and strategies worth revisiting. And for those over 65, a temporary $6,000 additional deduction is available through 2028.
The combination of permanent lower brackets, high standard deductions, and the additional senior deduction creates a window for Roth conversions, strategic distributions, and income tax planning that may not look this favorable again for a long time.
The question is not whether the window exists. It clearly does. The question is whether your family is taking advantage of it.
Simple Steps to Get Started
Start with the drawer. Pull out your estate documents. Your will. Your trust if you have one. Your beneficiary designation forms. Look at the dates. Look at the names. Ask yourself honestly whether what is written still reflects what you actually want to happen.
If the answer is yes, great. You are off to a good start and are ready to move on to a more strategic and forward thinking conversation.
If the answer is no, not sure, or I cannot remember, take a deep breath and relax. A coordinated estate review can get you on the right path.
We sit down together, review existing documents. Ensure beneficiary designations on retirement accounts and life insurance policies are current and intentional. We review titling of assets and ask if it still makes sense. We identify anything that has been overtaken by life events or legal changes. We flag items that require a legal update or a more advanced conversation with an estate attorney. We quantify future tax risk from a long-term perspective.
This may feel like a lot, but a few small steps can make it all feel manageable. Summer is a great season for this discussion. Families are often together, at the pool, on vacation, but without the rush of year end and the holidays. And there's plenty of time to discuss, strategize, and implement opportunity before the end of the year.
If you or someone in your family has been putting this off, now just might be the perfect time to start.
We are proud to be your financial friend. And clarity starts with a simple conversation.
1 Forbes, July 3, 2025
2 Center on Budget and Policy Priorities, December 19, 2025
3 Tax Foundation, October 28, 2025
4 AARP, March 31, 2026
5 Commerce Trust, August 30, 2024
Disclosure: This blog is for informational and educational purposes only and does not constitute legal or tax advice. Estate planning rules vary significantly by state and individual circumstance. Consult a qualified estate planning attorney and financial advisor before making decisions based on this content. State exemption amounts and rates are subject to change.