DiPietro Law, LLC has been monitoring several legislative changes at the State and Federal levels, which may impact planning for our clients. Many are asking, how will H.R.w-119th Congress (2025-2026): One Big Beautiful Bill Act (referred to as “OBBBA”) impact my estate and long term care planning? Additionally, States have wrapped up their legislative sessions, making updates which also impact planning.
Estate and Gift Tax
The federal government imposes taxes on gratuitous transfers of wealth made during lifetime, and at death. Taxes are paid by the person making the gratuitous transfer, not the receiver. These taxes, known as the gift, estate, and generation skipping transfer taxes are unified, and are indexed for inflation. For 2025, the lifetime exemption is $13.99 million per individual and $27.98 for married couples. Lifetime gifts made within an annual exclusion, $19,000 per person or $38,000 combined per married couple, do not require the giver to use any part of their lifetime exemption. Generation skipping transfer tax applies a separate tax when gifts exceed the exempted amounts (or are not for excluded purposes, such as tuition or medical expenses) when they are made to a skip person, like a grandchild. The current tax scheme was set to sunset at the end of 2025.
OBBBA seeks to make permanent the foregoing exemptions, which were put in place under the Tax Cuts and Jobs Act of 2017. Therefore, in 2025, the estate tax exemption will rise to $15 million per person, or $30 million per married couple. In summary, the new law maintains the status quo at the federal level, resolving concerns that the 2017 exemptions would fall or change dramatically in 2026.
Delaware does not have a separate estate tax, so Delaware residents continue to plan around the federal rules.
Maryland, however, does have a separate estate tax, and an inheritance tax. While Governor Wes Moore proposed reducing the state estate tax exemption from $5 million to $2 million per individual and $10 million to $4 million for married couples, the proposal was not enacted, and the State exemption remains at $5 and $10 million respectively for single and married individuals. Governor Moore also proposed eliminating the inheritance tax in Maryland, a tax imposed on those receiving an inheritance from a Maryland estate when the relationship between the receiver and decedent is not exempt, but that tax also remains in effect.
Long Term Care Planning
The OBBBA introduces significant changes to Medicaid which may impact both in-home and institutional long term care. Key changes include the following: reduced federal funding through a federal match, less retroactive coverage, and increased frequency of redetermination of eligibility.
Retroactive coverage is a key consideration for individuals transitioning to skilled nursing facilities, who find themselves financially eligible for long term care Medicaid while they wait out the 90 day application review period. Currently, Medicaid would retroactively apply the benefit for 90 days, allowing that applicant to be treated as “Medicaid pending” during the application period. This rule allowed the patient to contribute most of their income (called the “patient pay responsibility”) while the application was pending approval because the program would reimburse the facility at the Medicaid rate retroactively for up to 90 days. The new law reduces the retroactive reach to 30 days. Additionally, those who are deemed eligible currently prove their continued eligibility annually through a redetermination process. The OBBBA causes increased administrative burden by requiring semi-annual redeterminations.
The OBBBA changes highlight a need to properly, and whenever possible, proactively, plan to qualify for long term care Medicaid. Clients contemplating proactive planning often establish an Irrevocable Asset Protection Trust and fund that trust with some of their assets (like their residence) more than 5 years before they or their spouse require long term care. This planning allows clients to establish a nest egg, which will not be penalized as a gift for Medicaid purposes because the gift was made outside of the 5 year lookback, which period has remained unchanged under the OBBBA. Setting aside a nest egg in advance builds in flexibility when a need for care arises. Such flexibility is increasingly more important as changes require strict application of the regulations and shorter retroactive relief.
In addition to helping clients establish and maintain a proactive plan, our elder law team helps clients pivot to what we refer to as crisis planning when an immediate need for care arises. Many individuals will find stricter requirements and shorter retroactive relief easier to navigate with experienced legal counsel. Again, our planning is focused on sheltering assets under the regulations, which allows clients to secure support supplemental to Medicaid benefits, and will help cover new pitfalls like the shorter retroactive reach.
Probate Avoidance
Probate avoidance remains a key planning consideration for people of all socioeconomic backgrounds. For Delaware residents, the probate threshold is $30,000. For Maryland residents the threshold is $50,000 for single decedents, and $100,000 for married decedents. Holistically, creating a well-designed Revocable Trust, and aligning our assets remains the best practice for avoiding the cost, time and paperwork associated with probate.
In the last week of its legislative session, the Delaware State Senate passed the Transfer on Death Act, with an intention to eliminate probate for individuals with very limited assets but for their real property, who may not have means to engage in traditional estate planning. The new law permits non-probate transfers of real estate, giving the owner the ability to designate individuals as beneficiaries to title upon their death. The beneficiaries would have no legal ownership until the current owner passes away. Signing requirements are heightened over traditional deeds, and a particular form is required.
While Transfer on Death deeds may help eliminate probate for a person whose sole asset of value is real estate, transfer on death deeds do not promise probate avoidance entirely, as other assets are included when calculating the probate estate. Transfer on Death deeds would not eliminate the need for beneficiaries to satisfy outstanding liens or encumbrances against the property at death. Top leaders in the State worry that the new law will cause individuals to engage in planning without counsel from a licensed attorney, leading to unintended consequences and contests among heirs. Because the owner retains full access and control of the property during their lifetime, the asset would remain countable for Medicaid planning purposes.
Maryland does not currently recognize transfer on death deeds for real estate.
Death With Dignity Act
In May of 2025 the Delaware Legislature enacted the Death with Dignity Act, also known as the Ron Silverio/Heather Block Delaware End-of-Life Options Act, authorizing a terminally ill adult resident of Delaware to request and self-administer medication to end their life if both the individual’s attending physician, or attending advanced practice registered nurse (APRN) and a consulting physician, or consulting APRN, agree on the individual’s diagnosis and prognosis and believe the individual has decision making capacity, is making an informed decision, and is acting voluntarily. The Death with Dignity Act does not affect advance health care directives, which are separate legal documents our clients create as part of a foundational estate plan to direct future medical care during incapacity, including end of life treatment (often referred to as a living will).
While a similar Bill has been proposed in Maryland, the State has not adopted legislation that would permit a terminally ill individual to end their life
This is meant to serve as a summary of key updates most critical to the planning we help clients to implement so that they have peace of mind that their affairs are in order and their loved ones are cared for. If you believe one of the foregoing updates will impact your planning, you are invited to connect with our team.