Estate Planning, Elder Law, and One Big Beautiful Bill

Congress recently passed what is being called the “One Big Beautiful Bill,” a sweeping piece of legislation that makes permanent changes to federal estate and gift taxes—but also imposes significant cuts to Medicaid-funded programs that affect seniors and families caring for aging loved ones.

Permanent Estate and Gift Tax Cuts

The bill permanently extends the historically high estate and gift tax exemption levels. Previously scheduled to expire at the end of 2025, the exemption amount—currently over $13 million per person—has now been locked in permanently and indexed for inflation. For married couples, this means the ability to transfer over $26 million at their death without estate taxes. This means that almost all families will continue to avoid federal estate and gift taxes. Further, Texas does not have a state estate or gift tax.

What does this mean for you? Your planning may be more complicated than necessary. In 2001 the estate tax exemption amount was $675,000 without the ability to easily double that

number for spouses. That number gradually climbed throughout the early 2000s and then starting in 2010 we began to see historic leaps in the exemption amount and sweeping changes in other estate and gift tax policies. If your estate plan was created during that time period, it is likely out of date. Your plan may use taxable estate strategies that not only are no longer needed but may also cost your estate significantly more and be more complex to administer at your death. It may be time to simplify your estate plan – a welcome idea!

Medicaid Cuts That May Affect Long-Term Care Planning

The bill also includes Medicaid cuts that will disproportionately affect older adults, caregivers, and families with limited resources. The legislation reduces federal funding for Home and Community-Based Services (HCBS)—the programs that help elderly individuals receive care at home rather than in nursing homes. These programs are already very limited in Texas and will likely to continue to become more and more limited. Nursing home Medicaid will continue to be a choice available to families who are ready for their loved ones to be placed in a facility.

Another key change under the bill is that Medicaid eligibility must now be renewed every six months instead of once per year. More frequent renewals with an already overworked system will mean more opportunities for errors, delays, or missed deadlines, which could result in interruptions or loss of coverage. It will be more important than ever to stay organized, track deadlines, and work closely with an elder law attorney to ensure continuous eligibility and avoid costly gaps in coverage. The Toups Law Firm is actively working on expanding our renewal protocol to prepare for these new requirements.