You’ve probably seen the headlines about the new federal tax law, the “One Big Beautiful Bill Act.” When tax laws change, it’s only natural to wonder: “How does this affect me? Does this complicate my estate plan?”
At Greg Varner and Associates, our mission is to provide clarity and peace of mind. We want to cut through the noise and explain what this new legislation means for your family and your legacy.
The short answer? For the vast majority of our clients, the news is good. The changes to the federal estate tax are not a cause for concern.
The “Sunset” That Wasn’t: What We Were Worried About
For several years, we’ve been advising clients based on the tax law passed in 2017. That law gave Americans a very high exemption from the federal estate tax—the amount of money you can leave to your heirs without paying federal tax. However, this high exemption was temporary and scheduled to be cut in half at the end of 2025—a “sunset,” as it was called.
This approaching deadline caused uncertainty. Many clients were rightly concerned that their estates might suddenly face a significant tax bill.
What the New Law Actually Did: Good News for Families
The new “Big Beautiful Bill” has put those fears to rest. Instead of letting the exemption get cut in half, the new law made the high exemption permanent and even increased it.
As of 2026, the federal estate and gift tax exemption is set at $15 million per person.
For a married couple, this means you can pass on a combined $30 million to your heirs without ever worrying about federal estate tax. This amount will continue to be adjusted for inflation in the coming years.
The Bottom Line for Your Estate
For our clients and for most families in Alabama, this is fantastic news. The federal estate tax simply does not apply to you. With an individual exemption of $15 million, if your assets are below this threshold, you will not be subject to this tax. Given that most of our clients have estates valued well below $5 million, you can confidently check this worry off your list.
And What About Alabama Taxes? Even More Good News.
We often get asked about state-level taxes. Here’s another piece of great news: Alabama does not have an estate tax or an inheritance tax.
This means that your estate will not be taxed by the state of Alabama before it is distributed to your heirs, and your loved ones will not be taxed by the state when they receive their inheritance.
So, Why Do You Still Need an Estate Plan?
This is the most important part. Estate planning is not just about avoiding taxes. It’s about ensuring your wishes are carried out and your family is protected. A well-crafted estate plan allows you to:
Direct Your Assets: Make sure your property and savings go to the people or charities you choose.
Protect Your Children: Name a guardian for your minor children.
Plan for Incapacity: Designate trusted individuals to make financial and healthcare decisions for you if you become unable (a key part of Elder Law).
Avoid Family Disputes: Prevent disagreements and costly legal battles over your property, including complex issues like heirs’ property.
Streamline the Process: Minimize the time, stress, and expense of probate for your loved ones.
Don’t let confusing headlines distract you from what truly matters—protecting your family’s future.
Implementation Snapshot
Federal Estate Tax: Not a concern for estates under $15 million per individual ($30 million per couple).
Alabama Estate/Inheritance Tax: Does not exist.
Action Item: Your focus should be on creating or updating your core estate planning documents (Will, Power of Attorney, Healthcare Directive) to reflect your current wishes and protect your family.
If you have questions about your estate plan or want to ensure your family is protected, please call Greg Varner and Associates today. We are here to help.
