FAMILY WEALTH TRANSFER SERVICES

Editor’s note: This is an extract from a comprehensive briefing sent in October to Evercore Wealth Management clients. Planning is tailored to the unique circumstances of individuals and families. Please contact your Wealth & Fiduciary Advisor to discuss these topics.

The One Big Beautiful Bill Act, or OBBBA, passed into law on July 4, 2025, extended and expanded tax provisions originally set to expire after 2025 and added several new measures. Highlights include:

• Preservation of current individual income tax rates
• Enhanced standard deductions
• Tax relief for high earners in high-tax states
• Support for business growth through sustained deductions and expanded incentives
• Elevated gift, estate, and GST tax exemptions starting in 2026
• New 2/37th limitation on itemized deductions and 0.5% limitation on charitable deductions starting in 2026
• New charitable deduction for taxpayers who take the standard deduction and do not itemize starting in 2026 — $1,000 for individuals and $2,000 for married couples filing jointly

Additional changes under the OBBBA may have implications for charitable giving, retirement planning, and long-term estate strategies — making 2025 and into 2026 a pivotal time for proactive tax planning.

Related Strategies:

Income Taxes

• Consider Tax Timing. Accelerate income into the current tax year and delay deductions to 2026 if your income tax rates will be higher next year — but be sure to consider the new 2/37th itemized deduction limitation and 0.5% charitable deduction limitation that take effect in 2026 (as discussed in more detail in this article). You may want to defer income if you expect to be in a lower tax bracket in 2026.

• Review Tax-Loss Harvesting. Offset capital gains by selling investments with unrealized losses before year-end. Your Evercore Wealth Management team regularly reviews your investment portfolio for tax-loss harvesting opportunities. We can also assist with a review of outside portfolios.

• Utilize Carryover Losses. Prior-year loss carryovers enable a portfolio to be diversified or rebalanced with tax efficiency. Gains from the repositioning may be offset by the loss carryovers, minimizing tax.

• Review Required Minimum Distributions. Confirm that required minimum distributions (“RMDs”) from all retirement accounts were made. Missing an RMD could result in significant penalties. Owners of traditional IRAs and beneficiaries of inherited IRAs who are age 70½ or older also may want to consider qualified charitable distributions in lieu of RMDs (as discussed in more detail in this article).

Gift, Estate, and Generation-Skipping Transfer (GST) Taxes

• Take Advantage of Current Valuation Discounts. Estate-planning transfer strategies, such as gifting privately held stock or family partnership interests, may include valuation discounts for lack of control and/or marketability. Discounts allow for more efficient utilization of your estate and gift tax exemptions, increasing the amount you can gift. Future regulations or legislation could limit such intra-family discounts.

• Make Annual Exclusion Gifts. The annual exclusion gift limit for 2025 is $19,000 per donee, which does not count against the lifetime exemption amount — currently, $13,990,000 per person in 2025. For example, a married couple can give a combined $38,000 to each of their children — or any other individual, for that matter. The limit is applied annually without using the lifetime gift, estate, and GST exemption. Regular gifting using annual exclusion gifts can help reduce the size of a taxable estate. Generally, annual exclusion gifts do not require the filing of an IRS Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return unless there is spousal gift-splitting or affirmative allocation of GST exemption.

• Direct Payments of Medical and Qualified Education Expenses. Direct payments to a qualified educational institution or a medical provider on behalf of a donee are not subject to gift or GST tax and do not count against the annual exclusion gift limit or lifetime exemption amount.

Charitable Giving

• Donate Appreciated Stock. Donating low-basis, long-term stock to a donor-advised fund, private foundation, or public charity could qualify you for a full fair market value deduction — if you itemize for tax purposes and avoid capital gains tax on the sale.

• Bunch Gifts. Individuals with total deductions near the standard deduction amount can “bunch” charitable contributions into 2025. By contributing to a donor-advised fund, you can then direct those funds to different charities in future years. Concentrating gifts in one year may result in you exceeding the standard deduction threshold so that you can itemize deductions to realize a tax benefit. The standard deduction can then be used in the following year. This avoids a series of years where the charitable gifts are nondeductible. In 2026, charitable deductions are subject to two new limitations where the charitable deduction is reduced by 0.5% of your adjusted gross income in addition to a 2/37ths limitation on itemized deductions — that is, taxpayers in the highest 37% tax bracket will only be able to use deductions as if they were in the 35% bracket. These new limitations can also be mitigated by accelerating charitable gifts into 2025.

• Review Charitable Donations to Certain Private Colleges and Universities. An increased tax applies at some of these institutions that have significant endowments. Large, one-time donations to endowments may increase the tax, decreasing your impact. Individuals with multi-year gift commitments may instead consider donating to a donor-advised fund or creating a charitable trust to provide committed funds over time.

• Make Qualified Charitable Distributions from IRAs. Individuals age 70½ or older can make qualified charitable distributions (“QCDs”) directly from traditional IRAs to public charities (but not to donor-advised funds). The QCD limit is currently $108,000 per individual, which is adjusted annually for inflation. A QCD excludes income from your tax return, rather than providing a deduction, which could be more efficient for tax purposes to minimize the 3.8% net investment income tax and to increase the impact of your other deductions subject to income driven phaseouts. In addition to owners of traditional IRAs, beneficiaries of inherited IRAs who have reached age 70½ or older can also make QCDs.

• Review Named Retirement Account Beneficiaries. Review your beneficiary designations on your traditional IRAs and retirement plans. To the extent that you have philanthropic goals, consider naming a charity as a beneficiary. Unlike distributions to individual beneficiaries, distributions from retirement accounts to charities are generally nontaxable.

Starting in 2026

• New Charitable Deduction for Nonitemizers of $1,000 for Single Filers and $2,000 for Joint Filers in 2026. If you don’t itemize your deductions for tax purposes, the new tax bill allows you to take the standard deduction and claim a charitable deduction of up to $1,000 for single filers and $2,000 for joint filers starting in 2026. Therefore, it may be more tax efficient for many nonitemizers to wait until 2026 to donate to charity to receive the benefit of the new deduction.

• Permanent Increase of Federal Transfer Tax Exemptions. The federal gift, estate, and GST tax exemptions are “permanently” increased to $15,000,000 on January 1, 2026, and annually adjusted for inflation — which means that they are no longer automatically subject to reduction after 2025, unless changed by future legislation. This change preserves the ability for individuals to make large lifetime gifts by utilizing higher exemption amounts. Individuals with large taxable estates may better leverage the exemption amount by acting earlier.

Justin Miller is a Partner and the National Director of Wealth Planning at Evercore Wealth Management. Brandon Frandsen and Paula Stumne are Managing Directors and Wealth & Fiduciary Advisors. They can be contacted at, respectively, [email protected], [email protected] and [email protected].