How Trump's "Big Bill" Affects Your Estate Plan

On June 1st, CNBC reported that the House has officially passed what’s being dubbed “Trump’s Big Beautiful Bill,” which included language that would permanently extend the current enhanced federal estate tax exemption and even increase it—from approximately $13.99 million per person to $15 million per person. Read the full article here.

So What Does This Mean for You?

Currently, the federal estate tax exemption is scheduled to be cut in half starting January 1, 2026, which means that unless Congress takes action, individuals who pass away in 2026 or beyond could only shield about $7 million from federal estate tax, compared to nearly $14 million today.

But if this new bill becomes law, the $13.99 million Federal Tax Exemption amount exemption would not only be made permanent, it would increase to $15 million per person (or $30 million per married couple with proper planning using portability).

Will the Senate Pass This Bill?

For a Bill to become law in Congress both the House and the Senate have to approve the Bill and then the Bill gets signed into law by the President. So far, the House has approved the Bill - which is a big step. The next step is for the Senate to approve the Bill.

Because Republicans have majority control of the Senate and this is a tax-related Bill - they can use a procedural method to avoid the 60 votes required to stop the Democrats from blocking passage of the Bill through a filibuster. Because of this, it is highly likely that Trump's Big Bill will pass and the Federal Estate Tax Exemptions will be increased to $15M and be made permanent - but we will wait and see.

Illinois Residents and Estate Tax

We will continue to monitor the Senate's passage of this Bill; however, if this legislation is passed, it would offer peace of mind to many higher-net-worth individuals with estates over $7M and married couples with estates over $14M - as the Federal Estate Tax exemption would be increased to $15M for individuals and $30M for married couples using "portability."

However, the Illinois Estate Tax exemption is still only $4 million per person, with no portability between spouses. That means married couples in Illinois still need estate tax-sensitive plans, such as AB Trusts or Disclaimer Trusts, to avoid or minimize Illinois estate tax even though Federal estate tax would not apply to them.

Bottom Line

Although it is highly likely that the Big Bill will be passed by the Senate, we are watching this legislation carefully. Until the Big Bill is passed by the Senate and is signed into law high net worth individuals and married couples need to continue planning as if the extended Federal Estate Tax exemption might sunset.

If you are an Illinois resident and have a net worth of over $4 million (or over $8 million as a couple), regardless of whether the Big Bill is passed, now is the time to:

• Review your estate plan;

• Consider using trusts to manage Illinois estate tax exposure;

• Evaluate gifting opportunities; and

• Ensure your documents are structured to remain flexible regardless of future tax law changes.

For every estate planning client at the Ritchie Law Office, Ltd. we start with a comprehensive Estate Asset Analysis to determine if you you have an estate tax issue to address and if your estate will avoid probate. After that Estate Asset Analysis is completed we then tailor an estate plan to fit your specific needs and make sure you understand that plan with simple diagrams you can reference in the future.

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This article is a service of Attorney Chad A. Ritchie and the Ritchie Law Office, Ltd.

Click Here or call (309) 662-7000 to learn more about Ritchie Law Office, Ltd. and our Estate Planning process, which starts with an initial consultation called our “Ritchie Legacy Planning Session”.

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