Estate Planning After the OBBBA: What Families and Advisors Need to Know

Aug 14

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, is more than just another piece of tax legislation. It’s a sweeping set of changes that will reshape how families, high-net-worth individuals, and their advisors think about estate planning, Medicaid eligibility, and retirement strategy.

At Mirena and Company, we help clients and law firms anticipate, not just react to, changes in the law. The OBBBA is a clear signal that proactive planning is no longer optional. It’s essential.

A Permanently Higher Estate and Gift Tax Exemption

Perhaps the most headline-grabbing change in the OBBBA is the permanent increase in the federal estate, gift, and generation-skipping transfer (GST) tax exemption:

$15 million per individual
$30 million per married couple
Adjusted annually for inflation, effective January 1, 2026

This removes the uncertainty that surrounded the scheduled 2026 reduction under prior law. For high-net-worth families, it’s an unprecedented opportunity to transfer wealth without triggering the federal estate tax.

However, it’s important to remember: state-level estate taxes still apply in many jurisdictions, often with much lower exemption amounts. A family’s federal estate tax relief does not automatically mean their estate will escape state taxation.

Medicaid Changes That Could Reshape Long-Term Care Planning

For middle-income families, Medicaid is often the backbone of long-term care planning, especially for nursing home and assisted living costs. The OBBBA makes sweeping changes that could make qualification more difficult:

$1 trillion in federal Medicaid funding cuts over the next decade
Work or volunteer requirements of 80 hours per month for U.S. citizens receiving benefits
More frequent eligibility checks and stricter income and asset limits
Narrower definitions of covered services

These changes mean strategies like asset protection trusts, spend-down planning, and private long-term care insurance will become even more critical for families who want to preserve wealth while securing care.

Social Security Tax Changes and Retirement Planning

The OBBBA introduces a new, temporary tax deduction designed to reduce the tax burden for many retirees:

Up to $6,000 for individuals and $12,000 for couples age 65+
Available for incomes under $75,000 (or $150,000 for couples filing jointly)
Applies to all income, not just Social Security
Phases out at higher incomes

The result? The percentage of Social Security beneficiaries paying no federal income tax rises from 64% to 88%. However, the lowest 20%—already tax-exempt—will see no change. This deduction expires after 2028, so planning to capture it while available is important.

Medicare Program Adjustments and Cost Considerations

The OBBBA also changes the Medicare landscape in ways that could affect healthcare costs for seniors:

Delays implementation of two finalized rules for cost-sharing assistance until October 2034
If PAYGO budget rules are enforced, up to $490 billion in Medicare spending cuts could take effect by 2034
Potential impact: reduced provider reimbursements and higher out-of-pocket costs for beneficiaries

This makes integrated healthcare and retirement income planning more important than ever.

Strategic Takeaways for Attorneys and Families

At Mirena and Company, we believe legal and financial planning should evolve in lockstep with the law. The OBBBA creates both opportunities and risks:

Review and update estate plans now to take advantage of the permanently higher exemption before future political shifts.
Coordinate with state-level planning to mitigate estate taxes where local exemptions are lower.
Reassess Medicaid eligibility strategies to address new restrictions and protect against funding cuts.
Integrate retirement tax planning to leverage the temporary Social Security deduction.
Incorporate healthcare cost projections into retirement plans, accounting for potential Medicare changes.

Why This Matters Now

The OBBBA is not just another tax bill. It’s a recalibration of the rules that govern wealth transfer, retirement income, and healthcare coverage. Families and their advisors who move early to adapt will be positioned to protect more assets, reduce tax exposure, and create financial stability across generations.

At Mirena and Company, we provide white-glove, end-to-end planning that integrates estate law, tax strategy, Medicaid eligibility, and retirement planning. Our deep understanding of both high-net-worth planning and middle-income family needs allows us to deliver solutions that are as practical as they are strategic.

If you or your clients are ready to review your estate, Medicaid, or retirement strategy in light of the OBBBA, our team is ready to guide you through the next steps.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified professional before taking any action.

About Mirena and Company:
We are a nationally recognized advisory firm helping plaintiff attorneys and their clients maximize recoveries through strategic tax planning, litigation finance expertise, and operational insights.

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