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From Estate to Legacy: Wealth Transfer & Family-Centered Planning

December 29, 2025 | TS Prosperity Group

Our team at TS Prosperity Group remains steadfast in providing clarity and confidence during times of change. We created the “Preparing for 2026 & Beyond: Tax Code Updates” series is to provide a depth of knowledge from those you’ve come to know and trust, and to view tax updates as more than a policy change--but as an opportunity with fiduciary-focused recommendations to help you DO MORE for your future.

Part Three --“From Estate to Legacy: Wealth Transfer & Family-Centered Planning

This article focuses on how the One Big Beautiful Bill Act (OBBBA) provides clarity around estate tax exemptions and incentives that affect long-term planning, gifting, and wealth transfer strategies. It’s ideal for clients concerned with wealth transfer, complex family situations involving business interests, trusts or charitable giving plans, or retirees who want to ensure their legacy is preserved efficiently.

Estate planning has generally been about two things: protecting what you’ve built and ensuring it is distributed according to your wishes. The results of the OBBBA aren’t just tax changes—they open doors for how individuals and families can transfer wealth, gift during their lifetime, and protect their legacy.

Expanded Estate Tax Thresholds

In 2022, SECURE 2.0 increased the estate tax thresholds, which were scheduled to sunset Dec. 31, 2025. The passing of the OBBBA has made this increased threshold permanent, bumping the 2025 exemption to $15 million and adjusting for inflation in future years. Portability rules remain unchanged, allowing surviving spouses to utilize the unused exemption of their late spouse.

In addition, the generation-skipping transfer (GST) tax exemption also increases to $15 million per person, again indexed for inflation. This is an effective tax strategy for those who wish to “skip” their wealth transfer to grandchildren or multi-level generations.

Added 529 Plan Benefits

Prior to July 5, 2025, 529 Plans were a bit more restrictive in how funds could be spent tax-free. Now, due to tax law updates, expansions have increased flexibility, making these savings vehicles even more favorable for education planning.

As of July 5, 2025, funds can now be used for K-12 education expenses (including tuition, up to $20,000 per year beginning in 2026), curriculum and instructional materials, books and online educational content, tutoring, standardized test fees (SAT, ACT, AP exams), dual enrollment fees (college courses taken in high school), and educational therapies (e.g., occupational, speech, behavioral therapy). These are in addition to previously eligible expenses.

Trump Accounts: Incentivized Saving for the Next Generation

This highly incentivized planning tool is available for all children under age 18. For babies born between 2025 and 2028, there is a special monetary perk from the federal government with a $1,000 seed contribution. The basis of this account provides tax-deferred growth in a low-fee index fund environment, similar to a traditional IRA. Distributions are taxed as regular income (plus a 10% penalty if withdrawn before age 59-1/2, though there are exclusions for penalty-free withdrawals).

The maximum contribution into a Trump Account is $5,000 per child, per family, with no additional deductions available. However, this account, coupled with a 529 plan may be a great wealth transfer strategy for grandparents looking to provide a long-term savings plan without triggering gift reporting.

In addition to the OBBBA providing retirees and business owners an increase in cash flow, having more giving power may mean you can enhance your legacy plans by:

  • Adjusting beneficiary planning in light of reduced income taxation.
  • Reconfigure gifting strategies for future generations while still alive.
  • Leverage trust funding for more tax-efficient transfers to future generations.

If you’re still building toward retirement or managing health care costs, stay tuned for our next post. We’ll cover how tax changes support late-stage savers and healthcare planning.

At TS Prosperity Group, we help clients adapt to changes using our Four Pillars of Financial Planning: investment planning, retirement planning, estate planning, and tax planning. We know that estate planning is more than reducing taxes—it’s about ensuring your wishes are carried out, your loved ones are provided for, and your legacy reflects your values. Now is the best time to review existing estate documents and strategies to remain optimal. Call us today for an estate plan review for peace of mind knowing your legacy is secure and your wealth is working the way you intended.

Investment products offered by TS Prosperity Group are: Not a Deposit • Not FDIC Insured • Not Insured by any Federal Government Agency • Not Guaranteed by the Bank • May Go Down in Value.