Missouri Estate Plans May Need an Update After the OBBBA: Review Your Trusts, Beneficiary Designations, and Inherited Retirement Accounts

For years, federal estate taxes were a primary consideration when creating an estate plan. Many high-net-worth individuals and families implemented sophisticated trust strategies designed to reduce potential estate tax liability. However, the landscape has changed significantly following the enactment of the One Big Beautiful Bill Act (OBBBA), which permanently increased the federal estate tax exemption to approximately $15 million per individual.

While this expanded exemption reduces federal estate tax concerns for many families, it also creates a new challenge: older estate plans may contain provisions that no longer align with a family’s current financial goals. As a result, reviewing your estate plan with an experienced Missouri estate planning attorney has become more important than ever.

How the OBBBA Impacts Existing Estate Plans

Many estate plans created under prior federal estate tax laws were designed around lower exemption amounts and anticipated future changes in tax law. With the higher exemption now made permanent under the OBBBA, some planning strategies may no longer provide the benefits they once did.

For example, aggressively funded Spousal Lifetime Access Trusts (SLATs), bypass trusts, and credit shelter trusts may inadvertently restrict access to assets or create administrative burdens that outweigh their current tax advantages. Estate plans containing formula clauses tied to prior exemption amounts or sunset provisions should be carefully reviewed to ensure they still accomplish the client’s objectives.

A comprehensive estate plan review can help determine whether trust provisions should be modified, updated, or simplified to better reflect current laws and family circumstances.

Are Your Trusts Properly Funded?

Even the most carefully drafted trust cannot accomplish its goals if it has not been properly funded.

An unfunded trust generally cannot avoid probate, protect beneficiaries, or direct the distribution of assets according to your wishes. Unfortunately, many individuals sign trust documents but never complete the critical step of transferring ownership of assets into the trust.

Common assets that may require retitling include:

• Real estate
• Bank accounts
• Brokerage accounts
• Non-retirement investment accounts
• Certain business interests

If you are a client of Beck, Lenox & Stolzer Estate Planning & Elder Law, LLC, you received funding instructions with your estate planning documents. If you have not yet completed the funding process, now is an excellent time to review your assets and ensure they are properly titled.

Beneficiary Designations Can Override Your Estate Plan

Many valuable assets pass directly to beneficiaries outside of probate. These include:

• Life insurance policies
• 401(k) plans
• IRAs
• Annuities
• Payable-on-Death (POD) accounts
• Transfer-on-Death (TOD) accounts

Because these assets transfer by contract, beneficiary designations often take precedence over the instructions contained in a will or trust.

It is surprisingly common for outdated beneficiary designations to create unintended consequences. Former spouses may remain listed as beneficiaries, children may be named directly when a trust would provide better protection, or no beneficiary may be designated at all.

Reviewing beneficiary designations annually and after major life events can help ensure your estate plan functions as intended.

Special Considerations for Inherited 401(k)s and IRAs

Retirement accounts require particular attention because of ongoing changes in federal law.

The SECURE Act significantly altered the rules governing inherited retirement accounts. Most non-spouse beneficiaries who inherit a 401(k) or IRA must fully distribute the account within ten years of the original owner’s death. In addition, the IRS has resumed enforcement of required minimum distribution (RMD) requirements for certain inherited retirement accounts.

Failing to comply with these distribution rules can result in costly tax consequences and penalties.

If you have inherited a 401(k) or IRA, it is important to work with both financial and legal professionals to develop a distribution strategy that minimizes taxes and coordinates with your overall estate plan.

Estate Planning and Tax Planning Should Work Together

Effective estate planning involves more than transferring assets after death. It should also incorporate thoughtful tax planning during your lifetime.

For individuals who do not need their annual required minimum distributions, qualified charitable distributions (QCDs) may offer significant benefits. In 2026, eligible individuals may transfer up to $111,000 directly from an IRA to qualified charitable organizations while potentially reducing taxable income.

Likewise, gifting strategies, trust planning, retirement account distributions, and charitable giving should all be coordinated to maximize benefits and avoid unintended tax consequences.

Review Your Estate Plan Before Problems Arise

Changes in federal law, family circumstances, and financial conditions can all affect the effectiveness of an estate plan. Outdated trust provisions, unfunded trusts, incorrect beneficiary designations, and inherited retirement accounts subject to RMD requirements can create unnecessary complications and expenses.

A periodic review with a Missouri estate planning attorney can help ensure your estate plan continues to protect your family, preserve your assets, and accomplish your goals under current law.

Frequently Asked Questions

1. How did the OBBBA change estate planning?

The One Big Beautiful Bill Act (OBBBA) permanently increased the federal estate tax exemption to approximately $15 million per person. As a result, many estate plans designed to minimize federal estate taxes may need to be reviewed and updated to ensure they still meet the client’s goals.

2. What is a SLAT trust, and should I keep mine?

A Spousal Lifetime Access Trust (SLAT) allows one spouse to transfer assets out of their taxable estate while still providing indirect access to those assets through the beneficiary spouse. While SLATs remain valuable planning tools, some trusts created under prior tax laws may warrant review following the OBBBA’s increased exemption amounts.

3. What happens if my trust was never funded?

An unfunded trust generally cannot avoid probate or control the distribution of assets. Assets intended to be owned by the trust must be properly retitled or transferred into the trust for the trust to function as intended.

4. What should I do if I inherit a 401(k) or IRA?

Inherited retirement accounts are subject to complex tax and distribution rules. Most non-spouse beneficiaries must withdraw the entire account within ten years. Consulting with an estate planning attorney and financial advisor can help you avoid penalties and develop a tax-efficient distribution strategy.

New clients, contact Beck, Lenox & Stolzer Estate Planning & Elder Law, LLC for all of your estate planning needs by booking a call: https://beckelderlaw.essworkshop.com/book-a-call/

Reference: Financial Advisor (May 11, 2026) “Clients’ Wills May Be Outdated Despite $15 Million Federal Estate Tax Exemption”