Sweeping legislative changes can understandably create questions, particularly when they affect deeply personal decisions involving family, assets, health care, and legacy. The One Big Beautiful Bill Act (OBBBA), signed into law in July, includes significant tax and health-care provisions that may affect estate planning. Understanding the changes now gives Texas families an opportunity to revisit their plans, protect flexibility, and make informed decisions for the years ahead.

Higher Federal Estate and Gift Tax Exemptions

Beginning January 1, 2026, the federal estate and gift tax exemption increases to $15 million per individual and $30 million for married couples, with annual adjustments for inflation. This change resolves prior uncertainty about whether the exemption would be reduced after 2025.

For families with substantial assets, the larger exemption may create additional room for thoughtful lifetime gifts, transfers to trusts, and longer-term wealth-transfer planning. Even so, higher exemption amounts do not eliminate the need to review wills, beneficiary designations, powers of attorney, and other core estate planning documents.

Most Estates Will Not Owe Federal Estate Tax

With the increased exemption, only about 0.25% of estates are expected to owe federal estate tax. That is welcome news for many families, but federal estate tax is only one consideration in a complete estate plan.

State-level estate or inheritance taxes may still matter for families with property, business interests, or beneficiaries in other states. Texas does not impose a state estate tax, but multi-state assets can complicate estate administration. A San Antonio attorney can help identify whether another state’s rules may affect your family or property holdings.

Estate, Gift, and GST Tax Rules Otherwise Remain Intact

Apart from the higher exemption, the basic structure of federal estate, gift, and generation-skipping transfer (GST) taxes remains unchanged. The OBBBA retains key provisions originally established under the 2017 Tax Cuts and Jobs Act rather than replacing the existing transfer-tax framework.

That continuity can be helpful, but it should not be mistaken for a one-size-fits-all solution. Trusts may still be valuable for managing assets, protecting beneficiaries, planning for children, preserving privacy, and supporting an orderly transfer of property. Glavy Law helps San Antonio families evaluate how their wills, trusts, and related documents work together under current law.

Medicaid Changes May Affect Long-Term Care Planning

The OBBBA includes approximately $1 trillion in federal Medicaid cuts, along with new work or volunteer requirements and stricter eligibility reviews. These changes could make it more difficult for some individuals to qualify for Medicaid support, including assistance that can be important for long-term care.

Long-term care planning should be addressed before a health crisis occurs. Families may want to consider private long-term care insurance, available savings and income sources, asset-protection strategies, and the authority granted through powers of attorney. Planning early can offer more choices than waiting until care is urgently needed.

Medicare Costs Could Become a Larger Planning Concern

The law delays certain Medicare cost-sharing assistance rules until 2034 and could lead to as much as $490 billion in Medicare cuts if PAYGO rules are triggered. Although the ultimate effect will depend on how these provisions are implemented, families should be prepared for the possibility of higher out-of-pocket costs and fewer participating providers.

Health-care expenses can quickly change the financial assumptions behind an estate plan. Reviewing insurance coverage, beneficiary arrangements, retirement distributions, and liquidity for future care needs can help make a plan more resilient.

A Temporary Social Security Tax Benefit

The OBBBA also creates a temporary deduction of up to $6,000 for eligible individuals age 65 and older, or up to $12,000 for eligible married couples. The deduction is subject to specific income thresholds and may allow more seniors to have Social Security benefits treated as untaxed for federal income-tax purposes.

Because this provision expires in 2028 unless Congress renews it, it should be viewed as a short-term planning opportunity rather than a permanent source of retirement income. A coordinated review of retirement withdrawals and tax planning may help families use the benefit thoughtfully.

Practical Steps to Take Now

The best response to changing law is usually a careful review, not a rushed decision. Consider whether your current plan still reflects your assets, family relationships, health-care preferences, and goals for the next generation.

• Review your will, trusts, beneficiary designations, and asset titling.
• Confirm that financial and medical powers of attorney remain current.
• Evaluate long-term care funding options before care becomes necessary.
• Consider the tax consequences of major gifts, business succession, and transfers of real estate.

FAQ

Does the OBBBA eliminate the federal estate tax?

No. The federal estate tax remains in place, but the exemption rises to $15 million per person and $30 million per married couple beginning in 2026, subject to annual inflation adjustments.

Do I still need an estate plan if my estate is below the exemption?

Yes. Estate planning is about more than federal estate tax. A complete plan can address who receives your property, who can make decisions if you become incapacitated, guardianship choices for minor children, probate concerns, and the administration of your estate.

Does Texas have an estate or inheritance tax?

Texas does not currently impose a state estate or inheritance tax. However, other states may impose taxes or administrative requirements when you own property or conduct business outside Texas.

How could Medicaid changes affect my family?

The new federal cuts, eligibility reviews, and work or volunteer requirements could make Medicaid support harder to obtain for some people. Families should consider how private insurance, savings, and asset-protection strategies fit into their long-term care plans.

When should I update my estate planning documents?

A review is appropriate after a major legal change, as well as after marriage, divorce, a birth or death in the family, a significant change in assets, a move, or a health diagnosis. Glavy Law provides thoughtful, personalized estate planning guidance for individuals and families in San Antonio.

The OBBBA brings complexity, but it also provides a meaningful opportunity for proactive planning. By reviewing estate documents, long-term care plans, and tax strategies now, you can better position your family for changing circumstances. Glavy Law can help you assess your unique financial and family situation and develop a practical path forward.