The past year has been full of significant developments in estate planning, business law, elder law, and special needs law. To ensure that you stay informed of these legal changes, we have highlighted some of the year’s most noteworthy developments and discussed how they may impact your estate planning, elder law, and business law practices, including
- enactment of the One Big Beautiful Bill Act (OBBBA),
- denial of a deceased spouse unused exclusion (DSUE) claim,
- holding a nursing facility has standing to challenge a resident’s adverse Medicaid eligibility decision,
- issuance of an interim final rule exempting US persons and domestic companies from Corporate Transparency Act (CTA) reporting requirements, and more!
One Big Beautiful Bill Act Enacted, Impacting Estate Planning, Elder Law, Special Needs Planning, and Business-Owning Clients
Pub. L. No. 119-21, 139 Stat. 72 (2025)
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which makes permanent some provisions included in the 2017 Tax Cuts and Jobs Act and includes many new provisions impacting individuals and businesses.
Exemptions and taxes. The OBBBA permanently increases the estate and gift tax exemption amount to $15 million for individuals and $30 million for married couples, indexed annually for inflation using 2025 as the new base year, for the estates of individuals dying and gifts made after December 31, 2025. The OBBBA does not change rules applicable to portability elections, and the lifetime generation-skipping transfer (GST) tax exemption will continue to be equal to the basic exclusion amount.
Other provisions included in the 2017 Tax Cuts and Jobs Act that the OBBBA makes permanent include the following:
- The current tax brackets, with a bottom rate of 10 percent and a top rate of 37 percent
- The doubled standard deduction, which will increase to $15,750 for individuals and $31,500 for married couples filing jointly
- The $750,000 limit for the home mortgage interest deduction
The OBBBA temporarily increases the state and local tax (SALT) deduction from $10,000 to $40,000 (indexed for inflation) through tax year 2029, which will then decrease to $10,000. The OBBBA does not impact the availability of pass-through business entity tax workarounds. The temporary increase phases out for taxpayers with incomes exceeding $500,000. This change applies to taxable years beginning after December 31, 2024.
For individuals who itemize, the OBBBA limits the charitable deduction to contributions exceeding 0.5 percent of their taxable income. For individuals who do not itemize and instead take a standard deduction (and who historically have not been able to deduct charitable donations), the OBBBA allows a charitable deduction of up to $1,000 for individuals and $2,000 for married couples filing jointly.
Long-term care Medicaid, ABLE accounts, and Social Security. The OBBBA includes provisions impacting seniors who may need long-term care in a nursing facility, including the following:
- For applicants seeking Medicaid eligibility for long-term care, the OBBBA amends the home equity exclusion to $1 million, not indexed for inflation, meaning that individuals who would otherwise be eligible for long-term care services under the Medicaid program will not qualify if their home equity exceeds $1 million, effective January 1, 2028. The OBBBA allows states greater flexibility for properties zoned for agricultural use.
- Effective January 1, 2027, the retroactive eligibility period is reduced from three months to two months for traditional Medicaid enrollees.
- The Centers for Medicare & Medicaid Services’ (CMS) Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment final rule, aimed at simplifying Medicaid long-term care enrollment (and other Medicaid processes), is suspended until 2035, effective on the date of enactment.
- The CMS final rule Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting will not be enforced or implemented until September 30, 2034, effective on the date of enactment. Please note that on December 2, 2025, the CMS issued an interim final rule repealing the staffing rule, effective February 2, 2026.
- New funding is provided for home and community-based services and rural hospitals.
In addition, the OBBBA makes the increased limitation on contributions to ABLE accounts permanent and modifies the inflation adjustment to apply to taxable years beginning after December 31, 2025.
The new law also provides an additional standard deduction of $6,000 for individuals aged 65 and older between 2025 and 2028, which begins to phase out for single taxpayers whose modified gross income exceeds $75,000 ($150,000 for married couples filing jointly).
Small businesses. The OBBBA includes provisions that impact small businesses. Specifically, these provisions do the following:
- Make the section 199A pass-through deduction permanent and keep the deduction rate at 20 percent
- Permanently restore the 100 percent bonus depreciation for qualified property acquired and used after January 19, 2025
- Allow a section 179 deduction for investment in qualified business equipment and certain other assets and increase the deduction cap from $1.5 million to $2.5 million
- Increase the amount of business interest expenses that can be deducted by removing depreciation, amortization, and depletion deductions from the calculation of adjusted taxable income
- Permit domestic research and development expenses to be deducted in the year incurred, or costs may be capitalized and amortized over the life of the research (at least 60 months)
- Make the excess business loss limitation permanent
- Expand the exclusion of gain recognition for the sale of qualified small business stock
Takeaways: The permanent increase in the estate and gift tax exemption amount eliminates the urgency for clients to use the higher exemption amount before the previously scheduled 2026 sunset. However, attorneys with high-net-worth clients must still advise them regarding tax minimization strategies. Some attorneys may want to encourage clients to use strategies designed to take advantage of the higher exemption amount sooner rather than later, in case a future Congress repeals the new law. Note that on October 9, 2025, the Internal Revenue Service (IRS) released its 2026 exemption and exclusion amounts (see our November 2025 monthly recap).
For applicants seeking Medicaid eligibility for long-term care, the change to the home equity limit will have a noticeable short-term benefit for single clients in a supermajority of jurisdictions throughout the country, where the prior limit was between $730,000 and $750,000. The tightening of the retroactive eligibility scheme, however, will impact both applicants and facilities alike. Elder law attorneys must be prepared during the application process to ensure the best outcomes.
Attorneys and other tax professionals should assist business-owning clients in taking steps to take advantage of the OBBBA’s tax benefits. The new law provides small businesses with additional certainty by making beneficial provisions permanent and providing additional tax advantages designed to encourage investment.
Learn more about the OBBBA by viewing WealthCounsel’s complimentary webinar, “One Big Beautiful Bill Act: What Estate Planning Professionals Need to Know,” presented by Robert S. Keebler, CPA, MST, AEP (Distinguished).
Portability Elections Must Be Timely and Complete to Preserve Access to DSUE
Estate of Rowland v. Comm’r, T.C.M. (RIA) 2025-76 (2025)
Billy Rowland died in January 2018; his wife, Fay, had passed away in April 2016. Because Fay’s estate was valued at less than the basic exclusion amount, it had not been subjected to estate taxes and was therefore not required to file a Form 706; Billy’s estate, however, exceeded taxable thresholds. Therefore, Billy’s estate sought to port Fay’s DSUE amount by filing a Form 706 on Fay’s estate for portability only.
Generally, a Form 706 must be filed within nine months of the decedent’s death, but, under then-current rules, Fay’s executor had obtained an extension to file by July 2017. Fay’s Form 706 was not mailed until December 2017, however, and was not received by the IRS until January 2, 2018, more than five months after the already-extended deadline had passed. Billy’s Form 706 was timely filed in April 2019 and reflected the addition of Fay’s DSUE in his reported applicable exclusion amount.
The IRS issued a notice of deficiency to Billy’s estate, asserting that no DSUE amount was available. It argued that Fay’s estate tax return was not timely filed by the deadline and did not qualify for the safe harbor set forth in the then-controlling Revenue Procedure 2017-34 (which would have rendered it timely had it been complete and properly prepared) because it failed to provide complete descriptions or information about the value of the assets, instead relying on an estimation of gross value. Under Treas. Reg. § 20.2010-2(a)(7)(ii), estimation is permissible for property that passes under a marital or charitable deduction, but Fay’s estate plan made additional distributions; her estate was therefore not eligible to use estimation.
The Tax Court granted partial summary judgment to the Commissioner. It agreed with the IRS that Fay’s estate tax return was not complete and properly prepared in accordance with Treas. Reg. § 20.2010-2(a)(7) because it did not provide valuation information regarding each asset reported on various schedules. The special rule set forth in Treas. Reg. § 20.2010-2(a)(7)(ii), which relaxes valuation reporting requirements, also did not apply to assets that did not pass to Billy or charity or where the value of the assets was needed to determine the value passing from the decedent to a recipient other than the recipient of the marital or charitable deduction property, as was the case here. In this case, 20 percent of Fay’s trust estate was to pass to a charitable family foundation, and one-fourth of her gross estate was to pass to Billy, with the residue passing to various grandchildren. Fay’s estate tax return incorrectly applied the relaxed valuation reporting to all the assets, and by the time the IRS performed its audit, the opportunity for the Rowland estate to seek a Private Letter Ruling (which could have permitted the estate to ask the IRS to accept a corrected return) had passed.
Takeaways: Reliance on portability as an estate planning tool for estate tax avoidance may be problematic. The Tax Court’s ruling is a stark reminder that substantial compliance with portability filings is generally not sufficient. It reaffirms that Form 706 must be carefully prepared and must include all itemization and valuation details when the relaxed valuation reporting requirements do not apply, for example, when there are bequests expressed as a percentage or fraction of the gross estate or the residuary and their value affects or is necessary to determine the value of property going to a recipient other than a recipient of the marital or charitable deduction property.
Even when it seems that a surviving spouse may not need the benefit of portability, practitioners and advisors may wish to encourage survivors to consider a timely and complete portability filing because assets often grow later in life and survivors may end up with larger estates than they anticipate. Failing to properly prepare and timely file Form 706 to elect portability at the first spouse’s death could be an expensive mistake if the surviving spouse’s estate does not have a sufficient basic exclusion amount available to cover the value of the estate.
Taxpayer Win: Intrafamily Loan Charging Applicable Federal Interest Rate Not a Gift
Estate of Galli v. Comm’r, No. 7003-20, No. 7005-20 (Tax Ct. Mar. 5, 2025)
In 2013, Barbara Galli transferred $2.3 million to her son Stephen in a transaction they called a loan. They signed a simple note dated February 25, 2013, with a term not to exceed nine years and an interest rate of 1.01 percent (which reflected the applicable federal rate (AFR) at that time). Interest was to be paid annually, with a balloon payment of the principal at the end of the term. No gift tax return was filed to report the transaction. Stephen made interest payments according to the loan terms in 2014, 2015, and 2016, and Barbara reported the interest payments as income on her personal income tax returns.
When Barbara died in 2016, the unpaid portion of the loan was reported on the estate tax return, and Stephen inherited the note pursuant to Barbara’s estate plan. The IRS issued notices of deficiency for nonpayment of gift tax (arguing that the loan was, at least partially, a gift) and underpayment of estate tax arising from the transaction, arguing that the note resulted in a taxable gift of the amount of $869,000, valued to reflect the risk of nonpayment, which was previously unreported and subject to estate tax. The IRS asserted that the note did not include certain terms typically used in commercial lending transactions and that there was no proof that Stephen was able to or intended to repay the loan or that Barbara expected to be repaid. It acknowledged that Stephen had made annual payments of interest as required by the terms of the note.
Before the Tax Court, Stephen, as the executor of Barbara’s estate, moved for summary judgment in the gift tax case and partial summary judgment in the estate tax case. He contended that the IRS had not recharacterized the entire transfer as a gift, but only partially as a gift. Stephen argued that the transaction was a loan, not a gift, because the note charged at least the minimum interest required by I.R.C. § 7872(c): Because the AFR was used, the transfer was a pure loan and no gift occurred. Because the transfer was not a gift, Barbara was not required to file a gift tax return reporting it. In addition, it did not have to be reported on her estate tax return as a previously unreported gift.
The Tax Court agreed with Stephen that the IRS was asserting that the $2.3 million transferred was only partially a gift. Further, the court found that the IRS’s papers opposing Stephen’s motion for summary judgment were inadequate because the only proof submitted was a declaration of the uncontested fact that Barbara had not filed a gift tax return reporting the transaction (and she would not have been required to file a gift tax return if it was a loan). Therefore, the court determined that the IRS had not tried to recharacterize the entire transaction as a gift, and even if it had, the proof submitted was inadequate.
Moreover, the court agreed with Stephen’s assertion that below-market interest rates are governed by I.R.C. § 7872. The court cited precedent in which it had determined that section 7872 provides comprehensive treatment of below-market loans for income and gift tax purposes. The loan charged the AFR, so it was not a below-market loan to which section 7872 applies. The court would not recharacterize a loan as a partial gift if it carried a below-market interest rate equal to or above the AFR. Under section 7872, the transaction between Barbara and Stephen was not a gift at all. Accordingly, the court granted Stephen’s motions for summary judgment in the gift tax case and partial summary judgment in the estate tax case.
Takeaways: Intrafamily loans are subject to heightened scrutiny by the IRS. In Estate of Bolles v. Commissioner, No. 22-70192, 2024 WL 1364177, at *1 (9th Cir., Apr. 1, 2024), the Ninth Circuit Court of Appeals held that “[i]ntrafamily transactions are presumed to be gifts; for an intrafamily payment to be considered a loan, there must have been a bona fide creditor-debtor relationship between the two parties characterized by a real expectation of repayment and intent to enforce the collection of the indebtedness” (citations omitted). To overcome the presumption that such transactions are gifts rather than loans, lenders must document not only the terms of the loan but also its treatment as a loan (for example, through the execution of a promissory note and charging at least the AFR for interest) and steadfastly demonstrate their expectation of repayment and enforcement of the terms of the loan. In Estate of Galli, Stephen made annual payments of interest as required by the terms of the note, and Barbara included the payments on her personal income tax returns. In addition, no gift tax return was filed to report the transaction, which Barbara and Stephen did not regard as a gift. In contrast, in In re Estate of Bolles v. Commissioner, the Ninth Circuit found that certain payments made by a mother to her son were gifts rather than loans where the son did not make any repayments and signed an acknowledgment that he was unable to repay the amounts transferred (See our May 2024 monthly recap for additional discussion of Estate of Bolles).
Third Circuit Remands Case for Analysis of Free Speech Implications of New Jersey Statute Prohibiting Compensation for Helping Veterans Submit Claims for Benefits
Veterans Guardian VA Claim Consulting LLC v. Platkin, 133 F.4th 213 (3rd Cir. 2025).
Federal law requires those who act as agents or attorneys who assist with Veterans benefits to be accredited and prohibits them from charging for their services before the Department of Veterans Affairs (VA) makes an initial benefits decision, but it does not provide the VA with the power to enforce those rules. To provide an enforcement mechanism, New Jersey passed a law prohibiting any person from receiving compensation (1) for assisting with claims for Veterans benefits except as allowed by federal law and (2) for any services rendered before an appeal of the VA’s initial decision to the Board of Veterans’ Appeals. Under N.J. Stat. § 56:8-228(c), violations are deemed to violate New Jersey’s Consumer Fraud Act, which allows private action.
Veterans Guardian is a national consulting company that, for a fee, provides Veterans with advice on claiming disability benefits. John Rudman and Andre Soto were Veterans in New Jersey who planned to use Veterans Guardian’s services. However, Veterans Guardian stopped doing business in New Jersey due to concerns that its business model violated the New Jersey statute. Veterans Guardian, Rudman, and Soto filed suit against New Jersey’s attorney general in federal district court seeking a preliminary injunction, asserting that the New Jersey law violated their First Amendment rights. The court denied the preliminary injunction, and they appealed to the Third Circuit Court of Appeals.
The Third Circuit examined the entire record independently because the case involved the First Amendment. The court determined that the district court erred in deciding that the New Jersey statute did not implicate the First Amendment and the plaintiffs were unlikely to succeed on the merits. Rather, there was a reasonable probability that Veterans Guardian could show that its services were speech and that the New Jersey law burdened its speech by prohibiting it from charging for that speech.
In addition, the court determined that the case should be vacated and remanded so the district court could determine whether the New Jersey statute, which incorporates federal accreditation requirements, was a neutral licensing scheme regulating professional conduct that would warrant less scrutiny than other professional speech and whether the law was content-neutral based on its effect on speech. The court also remanded the case to the district court to analyze the constitutionality of the two sections of the New Jersey law separately rather than only addressing the provision restricting those who can charge for services to those who are accredited. The court expressed serious doubt about the constitutionality of the statute’s prohibition on charging for counseling before an appeal, stating that it must satisfy some level of heightened scrutiny, which should be determined on remand.
Takeaways: In addition to New Jersey, several other states, including Illinois, Iowa, Maine, Massachusetts, Michigan, New York, and Washington, have enacted legislation prohibiting persons from receiving compensation for advising or assisting a person regarding any Veterans benefits matter except as allowed by federal law and imposing penalties for violations. The federal district court’s decision on remand in Veterans Guardian regarding the constitutionality of the New Jersey statute’s prohibition on charging for counseling will likely impact the outcome of similar lawsuits brought in other states with similar statutes. If the New Jersey statute is struck down and the constitutionality of the federal scheme is called into question, attorneys may have greater opportunities to assist Veterans with benefits claims, including those for Pension with Aid and Attendance, and charge for services rendered. For additional details about Veterans Guardian, see our May 2025 monthly recap.
Nursing Facility Has Right to Due Process and Standing to Challenge Resident’s Adverse Medicaid Eligibility Decision
In re FT, 572 P.3d 681 (Haw. 2025)
In 2011, Aloha Nursing Rehab Center (Aloha Nursing), a skilled nursing facility, accepted FT as a permanent resident after Hawaii’s Department of Human Services (DHS) determined that she was eligible for Medicaid. FT’s husband, who was her authorized representative, signed an agreement authorizing the release of information and payment of FT’s Medicaid benefits to Aloha Nursing. FT’s husband was declared incapacitated in 2012. The Office of Public Guardian (OPG) was appointed as his guardian
In 2012, DHS terminated FT’s Medicaid benefits after determining that she had a house in a revocable trust and was over the Medicaid income limit. Before the termination of her benefits, FT was declared incapacitated, and the OPG was in the process of being appointed as her guardian. Aloha Nursing was not notified of the termination of FT’s benefits and only became aware of it because DHS ceased making payments to it for her care. The OPG submitted a new application for Medicaid benefits on FT’s behalf, but it was denied. It continued to provide care for FT until her death in 2014. The OPG did not appeal the eligibility determination.
From 2015 to 2016, Aloha Nursing unsuccessfully attempted to get assets from the trust as reimbursement for care it provided to FT between 2012 and 2014. In 2016, it contacted DHS requesting $121,831.99 in reimbursement, but DHS denied both the request and a request for consideration of its denial. Aloha Nursing unsuccessfully sought a hearing with the DHS Administrative Appeals Office (AAO). The circuit court and Intermediate Court of Appeals (ICA) affirmed the denial, ruling that Aloha Nursing lacked standing to challenge the Medicaid eligibility determination because it was not the resident or an authorized representative under section 346-12 of the Hawaii Revised Statutes. Aloha Nursing filed a petition for certiorari, which was granted by the Hawaii Supreme Court.
The Hawaii Supreme Court disagreed with the lower courts’ decisions. It ruled that although the applicable statute and DHS rules provide that only Medicaid applicants or recipients, or their authorized representatives, can challenge Medicaid eligibility decisions, nursing facilities have a constitutionally protected property interest in reimbursement for care provided to residents in reliance on DHS’s Medicaid eligibility determinations. This interest arises from DHS rules providing that DHS must reimburse nursing facilities for care provided to residents who are eligible for Medicaid benefits and begins when the notice of eligibility is issued. According to the court, nursing facilities’ entitlement to reimbursement is not severed when a resident’s eligibility is terminated during their stay. The court noted that nursing facilities are uniquely positioned to appeal adverse Medicaid decisions when the recipient, authorized representative, or public guardian is unable or unwilling to act.
Because Aloha Nursing had a protected property interest in payment for the Medicaid services it provided to FT in reliance on DHS’s initial eligibility determination, it had due process rights under article 1, section 5 of the Hawaii Constitution to notice of actions regarding her Medicaid eligibility that adversely affected its property interests and its appeal rights, as well as an opportunity to be heard.
The court determined that providing nursing facilities with notice of adverse decisions regarding their residents’ Medicaid eligibility does not impose an undue administrative burden on DHS because the information necessary to provide the notice is easily accessible. Further, the court noted that its ruling affected only a narrow category of Medicaid beneficiaries: applicants and beneficiaries already receiving care at a nursing facility. DHS’s failure to provide Aloha Nursing with the required notice violated its due process rights; therefore, its appeal was deemed to be timely.
Further, the court ruled that nursing facilities have a due process right to an opportunity to be heard in a DHS contested case hearing addressing an adverse eligibility determination if either the resident, as the applicant or beneficiary, or their authorized representative is unwilling or unable to appeal the decision. DHS is required to provide the Medicaid applicant or recipient with an administrative appeal of an adverse decision; thus, requiring it to provide a contested case hearing to a nursing facility is not an undue burden. Aloha Nursing therefore had a due process right to a contested case hearing.
The court also held that nursing facilities have standing to appeal adverse eligibility determinations affecting residents admitted with Medicaid benefits because of their protected property interest in reimbursement and due process right to a contested case hearing. Accordingly, Aloha Nursing had standing to request a contested case hearing addressing the termination of FT’s Medicaid benefits. The court determined that its decision should be prospective but would also have limited retroactive effect; that is, it should apply to the parties in the decision and to all similarly situated nursing facilities with cases on direct review or not final as of the date of the decision.
The court vacated the lower court judgments and remanded the case to the AAO for a hearing on the merits.
Takeaways: Nursing facilities in similar circumstances should use In re FT as an example of how a facility may seek appeal and remedy for Medicaid recipients with an adverse eligibility decision when no authorized person is willing or able to challenge the decision. This may provide an avenue for nursing homes to safeguard their solvency, thereby providing a continuing source of care for Medicaid enrollees.
Treasury Exempts Domestic Companies and US Persons from CTA Reporting Requirements
Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 31 C.F.R. Pt. 1010 (Mar. 26, 2025)
On March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule limiting enforcement of the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements to foreign reporting companies and exempting domestic reporting companies and US persons. However, some domestic companies had already submitted their BOI reports. In testimony before Congress, FinCEN Director Andrea Gacki stated that FinCEN intends to delete the data submitted by those companies once a new final rule is issued in late 2025.
Takeaways: Despite the 2025 reintroduction of bills to repeal the CTA, it remains the law. Proponents of the CTA have questioned the US Department of the Treasury’s legal basis for exempting domestic small businesses and US persons from compliance with its reporting requirements. If the CTA is not repealed, a future administration that favors it may decide to enforce its requirements against domestic reporting companies and US persons. FinCEN has indicated that a new final rule will be released before the end of 2025.
FTC Withdraws Notices of Appeal, Acceding to the Vacatur of the Non-Compete Clause Rule
On September 5, 2025, Federal Trade Commission (FTC) Chairman Andrew Ferguson and Commissioner Melissa Holyoak announced that the FTC withdrew its notices of appeal in Ryan, LLC v. FTC, No. 24-10951 (5th Cir.) and Properties of the Villages v. FTC, No. 24-13102 (11th Cir.), acceding to the vacatur of the April 2024 Non-Compete Clause Rule. The rule banned most noncompete covenants in the employment context.
However, Ferguson and Holyoak expressed the FTC’s intention to initiate enforcement actions against individual instances of unreasonable noncompete agreements that violate section 5 of the FTC Act, which prohibits unfair competition. On September 4, 2025, the FTC launched a public inquiry to encourage employees and others to share information about the use of noncompete agreements for possible future enforcement actions. Further, on September 10, 2025, the FTC issued a warning letter to several large healthcare employers and staffing firms advising them to review noncompete agreements to ensure any restrictions imposed are reasonable.
Takeaways: The FTC’s abandonment of its appeals formally ended its efforts to implement the Non-Compete Clause Rule. At the state level, the law addressing the enforceability of noncompetition covenants has been dynamic over the past several years, with some states imposing additional restrictions and others creating presumptions of enforceability under certain circumstances. A few states—California (Cal. Bus. and Prof. Code §§ 16600, 16600.1), Minnesota (Minn. Stat. § 181.987), North Dakota (N.D. Cen. Code § 9-08-06), and Oklahoma (15 Okla. Stat. § 219A)—have enacted statutes completely banning noncompete clauses in employment under most circumstances. However, Kansas recently enacted Kan. S.B. 241, an employer-friendly statute that identifies circumstances in which nonsolicitation agreements are presumed to be enforceable (see our May 2025 monthly recap). Similarly, Florida enacted H.B. 1219, entitled the Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act, which creates presumptions of enforceability for certain garden leave and noncompete agreements (see our June 2025 monthly recap).
