How permanent GST exemptions are reshaping multigenerational estate planning strategies for ultra-high-net-worth families under the OBBBA.
Certainty and Planning
The permanence of the increased generation-skipping transfer (GST) exemption under the One Big Beautiful Bill Act (OBBBA) has materially changed how ultra-high-net-worth families approach multigenerational wealth planning. Under the prior law, uncertainty around the sunset of exemptions encouraged and accelerated gifting and complex structures designed to lock in GST capacity before it disappeared. With a $15 million GST exemption per individual ($30 million for married couples) now set on a permanent footing starting in 2026, families can take a more deliberate, long-term view of dynasty planning.
This added certainty allows families to better align GST strategies with investment horizons, governance objectives and family readiness, rather than tax-driven deadlines. While GST exposure remains a critical consideration for families with wealth above exemption levels, the focus has shifted from urgency to precision. This means determining when and how to deploy the GST exemption, which assets are best suited for multigenerational transfer, and how structures should evolve as family complexity grows and laws continue to change.
Who Needs to Plan? Estate Tax Exposure by Tier
| Wealth Level | Estate Tax Exposure | Planning Priority |
| > $30 million | Significant |
Advanced planning (GRATS, FLPs, sales to grantor trusts, ILITs, dynasty trusts) |
| $15 million - $30 million (married) | Some | Opportunistic transfers, review structures |
| < $15 million (single)/ $30 million (married) | Minimal | Lifestyle gifting, philanthropy |
Impact on Different Wealth Segments
- Over $30 million
Families in this range must continue using sophisticated estate planning tools, such as GRATs, sales to grantor trusts, dynasty trusts and irrevocable life insurance trusts, to mitigate future estate tax burdens. - $15 million - $30 million
Married couples generally remain shielded from estate taxes but may still pursue opportunistic transfers, especially since over time their assets may exceed the available estate, gift and generation skipping tax exemption. - Under $15 million (single) / $30 million (married)
No estate tax exposure. Gifting is primarily about supporting lifestyle or philanthropy.
Shifts in Strategy
One of the most significant changes is the reduced reliance on valuation discounts, such as those used in family limited partnerships or qualified personal residence trusts. For families below the exemption, discounts may now backfire by lowering cost basis and inadvertently increasing capital gains tax exposure at death. For those above the threshold, discounting and other advanced structures remain critical.
Risks and Oversight
Even with higher exemptions, risks remain. The IRS can challenge valuations, potentially increasing tax liabilities. Defined value clauses have become common drafting tools to mitigate this uncertainty. In addition, new rulings, such as Connelly v. the United States (2023) on life insurance in entity buy-sell agreements, underscore the importance of regularly reviewing structures in light of evolving law.
The Role of Liquidity Tools
While the increased exemption makes life insurance less critical as a pure estate tax funding mechanism for many families, it remains valuable for business succession (funding buy-sell agreements) and income replacement. Structuring these arrangements correctly is key to avoiding unintended valuation increases at the corporate level.
