Education and Family Planning in a Changing Tax Landscape

As tax policy shifts under the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, affluent families are presented with both new opportunities and challenges in education and family planning. This legislation expands tax-advantaged vehicles and refinements ranging from education savings to credits and deductions, and demands a forward-looking and strategic mindset.

Avidian Wealth Solutions is committed to making sure high-net-worth (HNW) and ultra-high-net-worth (UHNW) families are ready to leverage these developments, helping to minimize tax burdens while planning to enhance generational wealth planning. Want to learn more about how these tax law changes affect your family specifically? Let’s talk.

Changes to education planning

How are student loans changing?

The OBBBA restructures student loan policy significantly. It caps unsubsidized graduate borrowing at $20,500 yearly (with a $100,000 lifetime cap), limits professional degree borrowing to $50,000 per year ($200,000 lifetime), eliminates Grad PLUS loans, and imposes a $257,000 lifetime limit overall. It also revamps income-based repayment and broadens Pell Grants to include workforce training programs.

Consider this

Families can now plan education financing more predictably, avoiding excessive loan burdens by: Preferring funding through 529 or other savings rather than loansFactoring in more restrictive caps when calculating educational cost coverageLeaning on expanded Pell Grants for vocational paths as part of diversified planning

New 529 rules

Additionally, OBBBA dramatically widens the functionality of 529 plans. For example, K-12 eligibility now includes textbooks, tutoring, online platforms, testing fees, dual-enrollment, and educational therapies. Meanwhile, the annual K-12 withdrawal limit doubles from $10,000 to $20,000 per child starting in 2026.

Post-secondary credentials (apprenticeships, WIOA programs, certifications, licenses, training tools) qualify as education expenses. Lastly, ABLE account features become permanent, including rollovers, “ABLE to Work” flexibility, and Saver’s Credit eligibility.

UHNW families might consider

Leveraging the benefits of 529 plans for all phases — private K-12, credentialing, test prep — to preserve liquidity and tax advantagesUsing early K-12 withdrawals strategically, but weigh long-term growth, especially if retirement or other goals competeConsider rollovers to ABLE accounts for beneficiaries with disabilitiesUse credential programs as part of a flexible lifetime education approach

Family planning considerations

What changes are coming to the Child Tax Credit?

OBBBA modestly enhances the Child Tax Credit (CTC) from $2,000 to $2,200 per child, with inflation indexing. However, the refundable portion remains unchanged, meaning net gains may be limited for many families.

The takeaway

While incremental, every dollar counts. Consider working with a tax planning strategist to capture the full value of the CTC via proper income timing and filing structure.

Can you deduct interest on a car loan?

OBBBA introduces an above-the-line deduction for interest on new personal passenger vehicle loans (assembled in the U.S.), up to $10,000 annually. The deduction phases out above MAGI of $100,000 ($200,000 for joint filers) and is available from 2025 to 2028.

Opportunities

For families with income below the threshold, this opens a new avenue for reducing AGI.Structured purchases in low-income years or via gifting can optimize use.Use married-filing-joint strategies to preserve eligibility and deductibility.

Standard deduction and charitable giving

OBBBA makes the expanded TCJA standard deduction permanent (2025 amounts, e.g., $31,500 for married couples); It also allows a non-itemizer’s charitable deduction of $1,000 (single) or $2,000 (joint), excluding donor-advised funds.

Recommendations

With elevated standard deductions, itemizing may rarely be optimal — unless charitable gifts and other deductions exceed.Non-itemizers can now claim a limited charitable deduction; structure giving timing annually to utilize this benefit.For donors and philanthropically active families, consider bunching strategies or use of itemization in alternate years to maximize benefits.

Generational wealth planning

While much of the One Big Beautiful Bill Act focuses on immediate relief through credits and deductions, HNW and UHNW families should also view these changes through the lens of long-term legacy planning. Education funding through 529 plans is not just about covering tuition; it can also serve as a multi-generational wealth transfer vehicle. Grandparents, for example, can make substantial front-loaded contributions that reduce taxable estates while directly benefiting future generations.

Similarly, the adjustments to charitable deductions create new opportunities to align family philanthropy with tax efficiency. Even with limitations on donor-advised funds for non-itemizers, there is value in coordinating charitable giving strategies across trusts, foundations, and direct donations. When layered with family governance planning, these tax-efficient structures can instill shared values and ensure a legacy of both financial stability and social impact.

Finally, it is essential to work these new rules into comprehensive estate and retirement planning. Credits and deductions may feel incremental on their own, but when combined with investment, philanthropic, and succession strategies, they create powerful compounding effects that safeguard wealth for future generations.

Strategic tax planning for UHNW families

Integrating the strategies mentioned above into your existing tax plan for the coming years can be a lot to manage on your own. Working with an experienced wealth advisor who understands the changing tax landscape can help you evaluate opportunities and make informed decisions  in the following areas:

• Education and gift planning, e.g., use 529 contributions as estate planning tools — gifting up to $95,000 per beneficiary front-loaded (five-year election) without gift-tax impact.
• Strategic philanthropy. Coordinate giving by aligning charitable deductions with years where itemizing makes sense.
• Income smoothing, i.e., spreading income across years to remain under deduction phase-outs (e.g. car interest, senior deduction).
• Addressing beneficiary needs through 529 rollovers to ABLE accounts for individuals with disabilities, offering tax and flexibility advantages.

A tax advisor can also help you implement graduated strategies over 2025 – 2028 while certain provisions remain active; plan K-12 and credential fund withdrawals timely; and use year-end planning to optimize deductions and credits, both for AGI reduction and estate/gift tax optimization.

Call Avidian for guidance on tax law changes and strategies that may help reduce your tax burden

The One Big Beautiful Bill Act ushers in challenges and opportunities for tax, education, and family planning. Through expanded 529 utility, adjusted credits, new deductions, and charitable enhancements, affluent families can fine-tune comprehensive strategies to serve both immediate and multigenerational goals.

At Avidian Wealth Solutions, our role is to interpret these developments through a calibrated lens: balancing tax minimization, flexibility, and wealth preservation. By aligning education funding, family planning, and philanthropic commitments within evolving tax frameworks, we help HNW and UHNW families manage compliance and plan to thrive in legacy-building.

Contact an advisor today at one of our locations in Houston, Austin, Sugar Land, or The Woodlands to see how we can assist you.

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• Using an Intra-Family Loan for Tax-Efficient Wealth Transfer

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