Why 2025 Is the Year to Review Your Estate Plan: Key Tax Law Changes You Need to Know

September 26, 2025

By Emily Boothroyd, JD, CFP, CPWA, Wealth Manager and Partner

October is National Estate Planning Awareness Month, making it a great time to learn about how to set yourself and your family up for long-term financial wellness. While estate planning is often mistakenly perceived as something for only high-net-worth individuals need, its utility is broader than many realize. For most individuals, estate plans serve as important guides that support comprehensive wealth management for one’s family, helping to both protect and preserve assets. Despite their significance, only 26% of Americans have an estate plan. In this article, we will explore changes to the current estate tax laws and provide guidance on how to update current plans or create new ones.

Recognizing the Federal and State Tax Impact

The One Big Beautiful Bill Act (OBBBA), which was passed over the summer, has made several estate planning tax exemptions permanent, addressing concerns that these exemptions would expire in 2026. Notably, the Act increased the exemption amount to $15 million per person or $30 million for married couples before state-level taxation applies. However, it’s essential to recognize that state laws may differ from federal laws. For instance, many states are not coupled with federal regulations and have a lower exemption level, which can result in double taxation.

Individuals living in decoupled states should take the lower state exemption into account. Many of these states also do not allow portability, meaning that the unused exemption amount from the deceased spouse cannot be transferred to the surviving spouse automatically. Therefore, it’s advisable to ensure that the estate is balanced between spouses, avoiding concentrations of assets solely in one spouse’s name.

Consulting with an attorney to ensure that you are making informed decisions is vital. A consultation costing approximately $5,000 could save you hundreds of thousands in taxes down the road.

Seizing New Opportunities

While legislative changes may have you questioning your tax strategy, what truly matters is incorporating flexibility into an estate plan.

For individuals who are beneficiaries of a Credit Shelter Trust (or Disclaimer Trust) established through a deceased spouse’s will, this could be a chance to transfer appreciated assets into their own estate. This transfer allows for a second step-up in cost basis. At death, the surviving spouse receives a step-up in cost basis on the estate with a significant opportunity to leverage capital gains. They can then take some or all the funds out of the trust and place them back in their name.

For those who are concerned about the temporary nature of seemingly “permanent” legislation, discussing the option of larger lifetime gifts with your estate planning attorney can still be valuable. Families with higher net worth may want to mitigate the risk of repeal by funding a Spousal Lifetime Access Trust (SLAT) or other trusts now, or by making larger gifts to the next generation.

Beyond Set It and Forget It

Estate planning is often perceived as a one-time process, but it should actually be viewed as an ongoing endeavor that adapts to changes in policies, market conditions, and family dynamics. It’s essential to review your estate planning documents at least once a year. Even if it’s just a quick checkup to confirm that nothing has changed, this step ensures that your documents still reflect your current wishes.

Take stock of all relevant parts of your estate. For family and friends: review changes to your relationships and growing family, such as preparing documents which are specific to the state where your college-aged children attend school. Consider your gifting strategy and intentions: are you comfortable making a larger gift if you’re donating appreciated stock? For business owners, it’s crucial to conduct proper valuations before gifting shares of the company to your children. If you’re using annual gift exclusion amounts, ensure the gift/assignment is worded correctly to avoid valuation disputes. Failing to evaluate your changing financial situation and update your documents could significantly affect capital gains or estate taxes.

Pro tip: Online services like Wealth.com enable the creation of a solid estate plan without the need for in-person appointments during regular business hours, often at a lower cost.

A Five-Step Action Plan to Updating Your Estate Planning Documents

In the next quarter, consider taking the following steps to ensure your estate planning documents are up to date.

Locate and Review: Consider the last time you looked at your documents. Read through the materials and ensure everything is still reflected accurately, particularly your healthcare instructions.
Digitize and Share: Ensure that you, your trustee, and financial advisor have access to both paper and digital copies of your estate plan.
Communicate with Family: Address critical questions related to your estate plan that can help alleviate emotional burdens and prevent misunderstandings, like who is the trustee, and where are the documents stored?
Create a Family Mission Statement and Stewardship Plan: Reflect on your core family values and consider how your inheritance can honor those principles.
Foster a Connection Between Your Attorney and Advisor: It’s important to create a bridge between these two professionals to ensure everyone is on the same page regarding your estate planning.

You don’t need a large estate to benefit from a plan; it simply helps make your loved ones’ lives easier by providing clear instructions for your wishes. While it’s necessary to have the proper documents, nothing replaces the value of having a genuine conversation with your heirs. Discussing your wishes and intentions can lead to meaningful discussions that protect your family and avoid potential heartache. Estate planning can also inspire deeper, more meaningful questions that help families connect. Open communication is crucial, regardless of how well your documents are prepared.

Questions about your estate plan? Connect with an advisor for a complimentary consultation today.