Why You Still Need an Estate Plan After OBBBA
SAX Wealth Advisors welcomes Tamara Paulun, Director of Advanced Planning and Trusts, and shares why estate planning remains essential—even with higher federal exemptions.
Recently, there has been a big fuss over the increased lifetime exemption moving up to $15 million (which can be combined to allow $30 million of exemption for married couples) under the One Big Beautiful Bill Act (“OBBBA”). Though, the change didn’t actually affect that many people. Having a current estate plan in place remains extremely important. Below, I outlined several financial and legal reasons why that’s the case. At the end, I’ve included a couple “bonus” incentives that I’ve observed over the course of my work.
State Estate Taxes
While OBBBA eliminated federal estate tax concerns for many individuals, twelve states and DC currently have an estate tax at the state level. The state thresholds can be much lower—ranging from $3 million (taxed up to 35%) in Washington to $15 million (taxed at 12%) in Connecticut. In addition, some states have so-called “cliff” provisions, which tax the entire estate if the value is even one dollar over the threshold. There is also no portability at the state level.
What this means is that, while your assets may not place you in line for paying estate taxes at the federal level, if you live in one of the states with a state estate tax, a good portion of your estate may go to your state government, instead of your heirs. Doing some planning in advance of your demise can eliminate or dramatically reduce this result.
Probate Avoidance
Estate taxes aren’t the only expensive part of dying. The cost to administer even a small estate can easily exceed $10,000. Larger estates can top $300,000, depending upon complexity and the state where it is administered. In addition, some states charge a probate inventory fee, which is an additional fee assessed based on the value of assets that pass through probate.
Probate proceedings are also public. I know of very few people who want their neighbors knowing who is getting what from their estate. This unwanted publicity can be avoided with proper planning and may include a trust and/or properly completing beneficiary designations.
The probate process can also be very lengthy and result in delayed distributions to your heirs. These delays result from technical filing requirements, clogged court dockets, and creditor claims periods (which generally range from 3-9 months). There are some situations where probate can provide benefits, but those should be weighed and managed against the foregoing.
Incapacity
Not everything in an estate plan is about dying. Properly-drafted powers of attorney—both for finance and for healthcare—allow you to select an agent to act on your behalf with respect to financial and healthcare decisions, respectively, while you’re alive. Typically, these agents step in when there is an incapacity or a disability that prevents you from being able to act.
Without valid powers of attorney, a guardianship proceeding in court may be required. In that case, a judge selects who gets to make those decisions on your behalf.
Guardianship for Minor Children
Should you meet an untimely demise, a valid will allows you to select a guardian for your minor children and dependents. Similar to the above, this enables you to choose the best person for this role, not a judge in a guardianship proceeding. Importantly, it also allows you to have advance conversations with the potential guardians about how you might like your children to be raised if you are no longer living.
Specific Health Care Choices
Using advanced directives or living wills, you can provide specific instructions regarding end-of-life healthcare choices. These would include things like whether you desire mechanical ventilation (breathing machine), artificial nutrition and hydration (feeding tube), organ and tissue donation, and so forth. Without these documents, your loved ones will be left to guess what you might have wanted in those situations.
Conversations and Calm
These last two items are not related to any legal or financial benefits. In my mind, though, they are perhaps the most compelling reasons for completing your estate plan.
First, I have found in my career that engaging in estate planning very often serves as a catalyst for conversations on topics that are most often avoided. The planning process creates space for reflection and contemplation that often get pushed to the side during our busy days. This opens the door to talking with those most important to you about what you want the end of your life to look like and what your wishes are around how inheritances might be handled by your beneficiaries. It also allows an opportunity to explain any disparate gifts or bequests made in your plan to prevent resentment and fighting after you are gone. It allows you an opportunity to share family legacy and values that you want to pass down to the next generation.
Finally, planning is a way to leave a sense of order and calm as a final gift to your loved ones. When you pass away, it will be stressful and hard for those you leave behind. By engaging in planning now, you can greatly reduce this and instead leave a plan for things to be handled orderly and professionally, allowing your loved ones to focus on what matters most—honoring your memory and being there for each other.
If any of this resonates with you or is something you’d like to learn more about, give us a call. We’re here to help.
Sincerely,
Tamara M. Paulun, JD, CTFA
SAX Wealth Advisors, LLC
389 Interpace Parkway, Ste 3
Parsippany, NJ 07054
Meet the Author
Hi. I’m Tamara Paulun. I’m SAX Wealth Advisors’ new Director of Advanced Planning and Trusts. I like to tell people I’m a recovering attorney. I loved practicing law, but I hated billing in 6-minute increments. It stalled conversations and led clients to be hesitant to ask questions or bring up concerns that could have opened the door to really great advice. Moving into the financial services industry and away from providing legal advice has allowed me to have more in-depth conversations with clients and to develop relationships that couldn’t exist under the 6-minute model.
My goal is to partner with your advisor to bring additional estate planning and trust ideas into your conversations. I want you and your family to feel confident and supported as you have these discussions and make decisions about your future and your legacy. Please feel free to reach out to your advisor if you’d like to schedule a time to talk.
Disclosures
Information is current as of March 2026 and is subject to change. This article is provided solely for educational purposes and does not constitute legal or tax advice. No attorney-client relationship is created by reading this article or contacting SAX Wealth Advisors, LLC in response to it. Estate planning involves complex legal, tax, and financial considerations that vary based on individual circumstances and state law. Readers should consult with their own qualified estate planning attorney, tax advisor, and financial professional before making any decisions regarding their estate plan.