Estate Planning Impacts of the One Big Beautiful Bill Act

The One Big Beautiful Bill Act (OBBBA) has created understandable concern for individuals and families across Minnesota and Wisconsin, particularly when it comes to long-term planning. While the legislation introduces sweeping changes, understanding its key provisions now can strengthen your strategy moving forward. This moment also offers an opportunity to revisit your estate planning documents, update your approach, and work closely with an estate planning attorney to ensure your plan remains aligned with your goals.

Below is an overview of the major estate planning impacts of the OBBBA.

Medicaid Reform and Long-Term Care Planning

The OBBBA includes $1 trillion in federal Medicaid cuts alongside new work and volunteer requirements and stricter eligibility checks. These changes may make it more difficult for aging individuals to qualify for long-term care support. Now is the time to consider private long-term care insurance, asset protection planning, and discussions with an estate planning lawyer or probate litigation attorney to ensure future care needs are addressed.

No Other Structural Estate Tax Changes

Apart from the increased exemption, the broader structure of estate, gift, and generation-skipping transfer taxes remains unchanged. The provisions set under the 2017 Tax Cuts and Jobs Act continue to govern these systems. A corporate attorney, small business attorney, or probate counsel can help clarify how these rules apply to complex estates in Minnesota or Wisconsin involving business assets, real estate, or multistate holdings.

 

Fewer Estates Owing Federal Tax

Only about 0.25% of estates will now owe federal estate tax—an exceptionally small percentage. However, individuals should still prepare for potential state-level taxes. This is a critical conversation to have with an estate planning attorney, real estate attorney, or business attorney for entrepreneurs, especially when navigating property or business interests across state lines.

Social Security Tax Changes

The OBBBA introduces a temporary new deduction of up to $6,000 (or $12,000 for qualifying couples over age 65) for taxpayers under certain income limits. This adjustment may increase the number of seniors whose Social Security benefits remain untaxed. Unless renewed, this provision expires in 2028. Consulting with corporate legal counsel or a business law firm can help determine how these changes interact with your broader financial and estate planning structure.

Medicare Budget Impact

Key Medicare cost-sharing assistance rules are now delayed until 2034, and possible cuts of up to $490 billion may occur if PAYGO rules take effect. These reductions could lead to higher out-of-pocket costs or fewer available providers. Planning early with guidance from an estate planning attorney or business succession planning attorney can help mitigate the effects of future cost shifts.

Estate and Gift Tax Exemption Increase

Beginning January 1, 2026, individuals may transfer $15 million—and couples $30 million—without triggering federal estate tax, with annual inflation adjustments. This welcome clarity replaces years of uncertainty surrounding potential phased reductions. For families with business interests, this is an ideal time to work with a mergers and acquisitions attorney or contract attorney to explore gifting strategies, business transfers, or succession planning.

The OBBBA may introduce complexity, but it also creates meaningful opportunities for proactive estate planning. Whether you operate a business, own real estate, or manage multigenerational assets, working closely with an estate planning attorney, business litigation attorney, real estate law firm, or corporate law firm can help ensure your plan remains strong and adaptable. Now is the time to review your long-term care strategy, tax structure, and estate documents to protect your family's future and preserve your legacy.