Estate Taxes Are Set to Rise: Why High-Net-Worth Families Must Act Now

The Temporary Nature of the TCJA Exemption

The Tax Cuts and Jobs Act (TCJA) of 2017 temporarily doubled the federal estate, gift, and generation-skipping transfer (GST) tax exemption from $5 million to $10 million per person, indexed for inflation. In 2025, the exemption is set at $13.99 million per person—nearly $28 million for a married couple.

However, unless Congress acts, the exemption will automatically drop back to around $6 million per person in 2026. Some believe a Republican-controlled Congress may extend these provisions or repeal the estate tax altogether, but even a short-term extension doesn’t guarantee long-term certainty.

Smart estate planning doesn’t assume the best-case scenario—it prepares for the worst-case.

The OBBBA and Why It Doesn’t Eliminate Planning Needs

In 2025, Republicans successfully passed the One Big Beautiful Bill Act (OBBBA), which set the estate and gift exemption at $15 million per person ($30 million per married couple), indexed for inflation, and made it permanent. At these levels, only about 0.25% of U.S. households are projected to have a taxable estate.

At first glance, this appears to make estate planning unnecessary for most families. But “permanent” in Washington rarely means permanent. History shows that exemptions and rates change frequently with political priorities and economic pressures. Additionally, avoiding estate taxes is only one reason to plan. High-net-worth families still face exposure to creditor claims, lawsuits, divorce, and family conflict. Asset Protection Trusts, business succession strategies, and properly structured estate plans remain vital—whether or not your estate exceeds the federal exemption.

Why Waiting Is Risky: The Estate Tax Is Constantly Changing

The estate tax has a long and unstable history of being revised, repealed, and reintroduced depending on political priorities and economic pressures:

• 1797, 1862, 1898: Enacted to fund wars, then repealed.
• 1916: A permanent estate tax was introduced during a period of growing wealth inequality.
• 1976–1993: Nine major legislative changes restructured estate and gift tax rules.
• 2001: EGTRRA temporarily repealed the estate tax, only for it to return.
• 2010–2012: Short-term fixes were passed to avoid estate tax chaos.
• 2017: TCJA doubled the exemption—but only for a limited time.
• 2025: OBBBA raised the exemption to $15M per person, but for how long?

With ongoing discussions about cutting the exemption to $3 million, taxing unrealized gains, and tightening loopholes like GRATs and grantor trusts, relying on current rules is short-sighted and risky.

National Debt and Rising Tax Pressure

History shows that higher taxes have often been used to reduce national debt.

• 1945: U.S. debt-to-GDP ratio peaked at 113%. To reduce it, the government set the top income tax rate at 94% and the estate tax at 77%.

• 2024: Debt-to-GDP ratio has exceeded 122%, raising concerns about sustaining today’s historically low tax rates.

Even if exemptions are extended, growing deficits make permanent high exemptions unlikely. Our current 40% estate tax rate and low income tax brackets are statistical outliers in U.S. history.

How Estate Growth Can Outpace the Exemption

Wealthy families often assume they have years to plan. But estate values can grow faster than the exemption—especially in a strong market.

For example, a couple with $13 million today could see that grow to $26M, $52M, or more in a few decades, while the exemption only creeps upward with inflation. The result? A multi-million-dollar estate tax bill.

Proactive Estate Planning: Capture Growth Before It’s Taxed

Powerful tools include:

• Grantor Retained Annuity Trusts (GRATs) – Transfer future growth out of your taxable estate.

• Sales to Grantor Trusts – Lock in current estate values while shifting future appreciation.

• Loans to Irrevocable Trusts – Fuel trust growth with low-interest financing.

• Spousal Lifetime Access Trusts (SLATs) – Safeguard assets while retaining access to income through your spouse.

Modern planning tools—such as powers of substitution and appointment—make strategies highly customizable. However, their effectiveness diminishes as an estate grows and complexity increases. Delaying action reduces flexibility, limits available options, and increases the risk of unnecessary taxation.

How JRC Insurance Group Can Help

At JRC Insurance Group, we specialize in helping high-net-worth clients protect their legacy using tax-efficient insurance, trusts, and advanced estate planning techniques. Whether you’re starting from scratch or seeking a second opinion, we’ll help you:

• Analyze your exposure under current and projected laws.

• Identify strategies that fit your financial goals.

• Implement flexible plans that adapt to future legislative changes.

Don’t wait for Congress to decide your family’s financial future. Contact us toll-free at 855-247-9555 or complete our online form to compare lifetime coverage and discuss advanced estate tax solutions with an experienced advisor.