How the 2026 Estate Tax Changes Affect Your Estate Plan (Thanks to the One Big Beautiful Bill)
Why the Law Just Changed Your Timeline
Every once in a while, tax law changes hit the headlines in a way that forces families to sit up and ask: “Does this affect me?”
For North Carolina families, the One Big Beautiful Bill (OBBB), passed in 2025, is exactly that kind of change. Beginning January 1, 2026, the federal estate and gift tax exemption increases to $15 million per person ($30 million for married couples). And, it’s set to remain that high, indexed for inflation going forward.
That’s good news. But it’s not the whole story. Bigger exemptions don’t mean estate planning goes away. They mean you have new choices. And, if you don’t make them, the law (and the probate court) will make them for you.
A Garner Family’s Wake-Up Call
A couple I’ll call Tom and Linda live just outside Garner. Tom owns a landscaping business, and Linda worked for years as a Wake County teacher. Together they’ve built about $5 million in assets: their home, retirement accounts, life insurance, and the business.
When they first came to me, their neighbor had scared them into thinking that if they died after 2025, half their estate would disappear to taxes. That was based on the old law when the exemption was set to fall roughly in half.
But the OBBB changed that story. Tom and Linda’s estate won’t face federal estate tax at current levels. Instead, their bigger risk is family conflict and probate delays if something happens suddenly. Together we shifted their plan:
Created a revocable trust to avoid probate,
Built a buy-sell plan for the business so employees weren’t left stranded,
Updated powers of attorney and healthcare directives so Linda wouldn’t face court hearings if Tom became incapacitated.
The result: less stress about “what if,” more focus on protecting each other and their kids.
The 2026 Estate Tax Rules — Plain Language
Here’s what actually changes January 1, 2026:
Federal estate & gift tax exemption: $15 million per individual, indexed for inflation
Married couples: $30 million with proper planning or portability election
GST (generation-skipping) exemption: Aligned at $15 million
Top estate tax rate: Still 40%
Sunset avoided: The feared 2025 “cliff” was eliminated; higher exemptions are permanent — unless Congress changes them again.
What This Means for North Carolina Families
1. Fewer Estates Will Pay Federal Estate Tax
Most families in Garner, Raleigh, or Cary will not face federal estate tax with these higher exemptions. That’s a relief. But don’t confuse fewer taxable estates with less need for planning.
2. State-Level Risks Still Exist
North Carolina does not impose its own estate tax. But we do have probate. And, probate in Wake or Johnston County is public, time-consuming, and costly. Without proper planning, your heirs can be stuck waiting months to access funds or sell property.
3. Medicaid & Long-Term Care Still Threaten Savings
Even if federal estate tax isn’t your issue, nursing home costs can be. Medicaid rules in North Carolina have strict spend-down requirements, and without planning, families can lose homes or savings to long-term care costs. Bigger federal exemptions don’t protect you from that.
4. Gifting Opportunities Are More Flexible
The old pressure to “use your exemption before it disappears” is gone. That means you can be thoughtful:
Use trusts to protect children from creditors, divorce, or overspending.
Gift business interests gradually, instead of in one rushed transfer.
Combine charitable giving with estate planning to reduce income and estate taxes.
Story Two: Why Waiting Cost One Raleigh Family
Contrast Tom and Linda’s success with Barbara’s story. Barbara delayed estate planning because she thought the new exemptions meant she could “wait until later.” But when she had a sudden health crisis, her children were forced into guardianship proceedings just to access her checking account. By the time they hired an attorney, she had already lost decision-making power, and her family was paying thousands in legal fees just to untangle basics.
The lesson: laws can change, but incapacity and probate don’t wait.
The Psychology of Why People Delay (and Why That’s Costly)
People don’t act because they don’t see themselves as the hero of the story. They’re overwhelmed by complexity. People act when they trust authority and see scarcity. Stories persuade us more than charts.
So here’s the truth:
Complexity: You don’t need to understand every page of the OBBB . You need a guide who does.
Authority: As a North Carolina estate planning attorney, I’ve helped dozens of local families navigate exactly this issue.
Scarcity: Your window to plan is before a health crisis, not after. Once incapacity strikes, your choices shrink.
Three Smart Steps to Take in 2025–2026
Audit Your Plan
List assets, review deeds, check beneficiaries, and write down your family goals. If your last estate plan is older than five years, schedule a review.Update Core Documents
Wills, revocable trusts, healthcare directives, and powers of attorney are the backbone of your protection. Outdated or missing documents cause the biggest problems — not taxes.Strategize for Growth & Care
If your estate is under today’s exemption but could grow above it, or if you worry about nursing home costs, it’s time to consider trusts, gifting strategies, or Medicaid planning.
Local Example: Joan from Garner
Joan, a retired teacher with $2 million in assets, came to me thinking the estate tax exemption increase meant she was “off the hook.” We walked through her goals: protecting her house for her daughter, avoiding probate, and making sure bills could be paid if she became incapacitated. Joan left with a revocable trust, updated beneficiary designations, and a plan for long-term care. She didn’t need advanced tax shelters but she did need peace of mind.
Bottom Line
The 2026 estate tax changes give families more breathing room at the federal level. But they don’t erase the need for careful planning. Probate, incapacity, and Medicaid costs remain real risks. The smartest move is to use this moment while exemptions are high and before a crisis strikes to update your plan.
Ready to Take Action?
If you’re ready to make sure your estate plan matches today’s law and your family’s needs, here’s how I can help:
Call my office at (919) 336-4219 to schedule a discovery call
Schedule a free discovery call with me using the below link.
Don’t wait until “later” becomes “too late.” Let’s protect your legacy together.
