The landscape of estate planning changed dramatically on July 4, 2025, with the One Big Beautiful Bill Act. This comprehensive legislation has significant implications for Florida residents, particularly for asset protection strategies and wealth transfer planning.
An estate planning attorney in The Villages from Mortellaro Law can help you understand these changes and adapt your estate plan to maximize protection and minimize tax liability.
Understanding the One Big Beautiful Bill Act
The One Big Beautiful Bill Act (OBBBA) made substantial changes (which are permanent under current law, but the law is always subject to change) to federal estate, gift, and generation-skipping transfer (GST) taxes. This sweeping legislation resolved years of uncertainty that had estate planning professionals and their clients racing against sunset provisions and changing exemption amounts.
Key Provisions Affecting Estate Planning | Estate Planning Attorney in The Villages
Increased Exemption Amounts
The lifetime exemption for estate, gift, and generation-skipping transfer (GST) taxes is now $15 million per person (or $30 million per couple), indexed for inflation. This represents a significant increase from the 2025 exemption of $13,990,000 per individual (at the time of publication of this blog).
The exemption will continue to increase annually with inflation adjustments, providing more predictability for long-term planning. Unlike the 2017 changes, which were scheduled to sunset at the end of this year, the increased exemption is “permanent” and will not sunset.
Preservation of Step-Up in Basis
The step-up in basis at death remains unchanged, preserving a key benefit for heirs. This means that when you inherit property, the tax basis is adjusted to the fair market value at the date of death, potentially eliminating capital gains taxes on appreciation that occurred during the decedent’s lifetime.
Income Tax Bracket Stability
Additionally, the permanence of the 2017 Tax Cuts and Jobs Act (TCJA) income tax brackets provides predictability for long-term planning. This stability allows families to project their tax obligations with greater confidence.
How OBBBA Impacts Florida Asset Protection | Estate Planning Attorney in The Villages
Florida has long been recognized as one of the most favorable states for asset protection, and the OBBBA enhances these advantages for many residents. Understanding how federal changes interact with Florida’s robust asset protection laws is critical for comprehensive estate planning.
Federal Estate Tax Relief for Most Floridians
For unmarried individuals with a net worth less than $15 million (and for married couples with a net worth of less than $30 million), the likelihood of owing federal estate tax after death has decreased significantly, unless such individuals have made significant taxable gifts and used up most of their lifetime exclusion.
This means that many Florida families who previously needed complex estate tax planning strategies may now focus more on asset protection, probate avoidance, and income tax planning rather than transfer tax minimization.
Florida’s Unique Asset Protection Advantages
Florida residents enjoy some of the strongest asset protection laws in the nation, which work in conjunction with the federal changes brought by OBBBA:
Homestead Protection
Florida offers one of the strongest homestead protections in the country. The law protects unlimited amounts of value in the debtor’s Florida homestead property. This constitutional protection shields your primary residence from most creditors, regardless of the property’s value.
Article X, Section 4 provides that a person’s primary residence is generally exempt from forced sale by creditors. This protection applies to properties up to half an acre within a municipality or 160 acres outside municipal boundaries.
Protection Beyond Homestead
Florida law also protects various other assets from creditor claims, including:
- Cash value of life insurance policies
- Annuity contracts
- Retirement accounts and IRAs
- Wages (head of household protection)
- Tenancy by the entirety property (for married couples)
The Shift in Planning Priorities | Estate Planning Attorney in The Villages
For most clients, income tax planning – including basis adjustment at death and the use of non-grantor trusts – will take on greater importance than transfer tax planning. With federal estate taxes no longer a concern for estates under $15 million, attention turns to:
- Protecting assets from creditors and lawsuits
- Minimizing income taxes during life and after death
- Avoiding probate delays and expenses
- Planning for long-term care costs
- Ensuring smooth business succession
Actionable Estate Planning Tips Moving Forward
1. Review Existing Estate Plans
Review existing trust documents with formula clauses, as many credit shelter or GST trusts may no longer provide transfer tax benefits and could even be disadvantageous by denying a basis step-up at the surviving spouse’s death.
Many estate plans created before OBBBA contain provisions designed to minimize estate taxes that may no longer be necessary or beneficial. Outdated planning could inadvertently increase income taxes or create administrative burdens without providing meaningful benefits.
2. Consider Asset Protection Strategies | Estate Planning Attorney in The Villages
With estate tax concerns reduced for many families, now is an ideal time to focus on protecting your wealth from creditors, lawsuits, and long-term care costs. Florida’s favorable laws provide numerous opportunities:
- Maximize homestead protection by properly titling your primary residence
- Consider converting non-exempt assets to protected assets
- Review the titling of bank accounts and investment portfolios
- Evaluate whether tenancy by the entirety ownership is appropriate for married couples
- Assess whether asset protection trusts make sense for your situation
3. Optimize Income Tax Planning
For individuals with estates under $15 million and married couples with estates under $30 million, federal transfer taxes are now a low priority, and income tax planning – including basis step-up strategies and the use of non-grantor trusts – should be reviewed.
Strategies to consider include:
- Structuring trusts to achieve optimal income tax treatment
- Planning charitable giving to maximize deductions
- Coordinating retirement account distributions with other income
- Considering Roth conversions during lower-income years
- Evaluating qualified small business stock opportunities
4. Take Advantage of Enhanced QSBS Benefits
For QSBS acquired after July 4, 2025, the per-issuer gain exclusion cap increases to the greater of $15 million ($7.5 million for married filing separately) or 10x the taxpayer’s basis, indexed for inflation. The minimum holding period for partial exclusions is reduced to 3 years (50% exclusion), 4 years (75% exclusion), and 5 years (100% exclusion).
For Florida entrepreneurs and business owners, these enhanced benefits create significant opportunities for tax-efficient wealth building and exit planning.
5. Don’t Procrastinate Despite “Permanence.”
Given political uncertainties, rising federal debt, and the likelihood that tax priorities will shift with each new administration, there is no guarantee that the increased exemptions will not be reduced in the future.
While OBBBA’s provisions are labeled “permanent,” they remain subject to future legislative changes. However, high net worth individuals should not assume they have unlimited time to plan; rather, they should take advantage of the next two years to implement prudent taxable gift planning and estate tax reduction strategies before a potential future change in control of Congress occurs, which could result in legislation impacting the provisions in the OBBBA.
6. Coordinate Federal and State Planning | Estate Planning Attorney in The Villages
Florida does not impose a state estate tax or inheritance tax, which is a significant advantage. However, comprehensive planning must still address:
- Probate avoidance through proper trust planning
- Asset protection from creditors and lawsuits
- Long-term care planning and Medicaid considerations
- Business succession planning
7. Update Beneficiary Designations
Many people focus on wills and trusts but overlook beneficiary designations on retirement accounts, life insurance policies, and other assets. These designations supersede your will and can undermine your estate plan if not properly coordinated.
Review all beneficiary designations to confirm they align with your current wishes and overall estate plan, particularly in light of OBBBA’s changes.
Estate Planning FAQs
Q: With the higher exemption amounts, do I still need an estate plan?
A: Absolutely. Estate planning addresses far more than just estate taxes. Even with the increased exemptions, you still need to plan for asset protection, probate avoidance, incapacity, guardianship of minor children, business succession, and long-term care. In Florida, proper estate planning also maximizes the state’s exceptional asset protection laws.
Q: How does Florida’s homestead protection work with federal estate planning?
A: Florida’s homestead protection shields your primary residence from most creditors regardless of value, but the property’s value still counts toward your federal estate for tax purposes. Proper planning can preserve homestead protection while also achieving estate tax efficiency when necessary. The homestead can be titled in your name or in a revocable living trust without losing protection.
Q: Should I make large gifts now to use my increased exemption?
A: The answer depends on your individual circumstances. For estates well below $15 million, making large taxable gifts may not provide estate tax benefits and could create unnecessary gift tax reporting obligations. However, for high-net-worth individuals, strategic gifting can still be valuable. An estate planning attorney can help you evaluate whether gifting strategies make sense for your situation.
Q: What happens to my existing credit shelter trust now that the exemption is higher?
A: Credit shelter trusts (also called bypass trusts or family trusts) were designed to maximize the use of estate tax exemptions. With higher exemptions, these trusts may no longer be necessary and could actually be disadvantageous by preventing a basis step-up at the surviving spouse’s death. Your estate plan should be reviewed to determine whether these provisions should be modified or eliminated.
Q: Can OBBBA’s provisions be changed by a future Congress?
A: Yes. While OBBBA’s provisions are described as “permanent,” any future Congress can pass new legislation modifying or repealing these provisions. That’s why acting now to implement planning strategies is important, particularly for high-net-worth individuals who could benefit from making gifts under the current exemption amounts.
How an Estate Planning Attorney in The Villages Can Help
At Mortellaro Law in The Villages, Florida, we provide comprehensive estate planning services that integrate the latest federal tax law changes with Florida’s powerful asset protection statutes. Our attorneys work closely with clients to develop customized strategies that address their unique goals and circumstances.
We help Florida residents with:
- Comprehensive Estate Plan Review and Updates: Our team analyzes your existing estate plan in light of OBBBA’s changes, identifying provisions that may no longer serve your interests and recommending modifications to optimize your plan.
- Asset Protection Planning: We help you leverage Florida’s exceptional asset protection laws to shield your wealth from creditors, lawsuits, and long-term care costs. This includes homestead planning, trust structures, and strategic asset titling.
- Tax-Efficient Wealth Transfer Strategies: Whether your estate is above or below the federal exemption amount, we develop strategies to minimize taxes, preserve wealth for your beneficiaries, and achieve your legacy goals.
- Business Succession Planning: For business owners, we coordinate estate planning with business succession strategies, including leveraging enhanced QSBS (Qualified Small Business Stock) benefits and structuring ownership to protect both business and personal assets.
- Trust Administration and Probate: We guide executors and trustees through the administration process, addressing both federal and Florida law requirements to efficiently settle estates and distribute assets.
- Medicaid and Long-Term Care Planning: We help families plan for potential long-term care needs while preserving assets and maintaining eligibility for benefits when appropriate.
Take Control of Your Estate Plan Today
The One Big Beautiful Bill Act represents a significant shift in estate planning, creating both opportunities and challenges for Florida residents. While the higher exemption amounts provide relief for many families, comprehensive planning remains essential to protect your assets, minimize taxes, and achieve your goals.
Contact Mortellaro Law today to schedule a comprehensive estate planning consultation. Our team will review your current situation, explain how OBBBA affects your planning, and develop strategies tailored to your unique circumstances. Whether you need to create a new estate plan, update existing documents, or implement advanced asset protection strategies, we’re here to help you achieve peace of mind and financial security.
