ADVANCED PLANNING · CALIFORNIA
Multigenerational And Advanced Planning For California Families
The current gift and estate exemption amount is $15 million. If your estate exceeds that, you may benefit from advanced strategies.
Irrevocable trusts, lifetime gifting and generation-skipping structures for California families whose estates are large enough that federal estate tax is a real number, designed by an attorney who spent over a decade in trusts and estates and in-house at a registered investment adviser.
Estate Exemption vs. Growth
In 2026 each person can pass $15 million free of federal estate tax, and a married couple can pass $30 million. That amount is now permanent and indexed for inflation, and while this recent change removed the deadline everyone was planning around, it didn’t necessarily remove the problem.
Estate tax is still a math problem. Above those figures the federal rate is 40 cents on the dollar, and the exemption grows with inflation while a concentrated portfolio, a California property or a private company grows with the market. Families who are comfortably under the line today are often over it in fifteen years, and by then the growth they wanted to move has already happened inside their estate.
Advanced planning moves that future growth out of your estate while you still control the timing. Through the use of irrevocable trusts, you can shift future growth off your balance sheet while providing for your family. .
California adds two wrinkles most articles skip. This state has no estate tax, so nothing extra is owed here on death, but it does tax trust income where the trustee or a non-contingent beneficiary lives here, at rates up to 13.3 percent. And California law limits how long a trust can run, so a dynasty trust intended to last for generations has to be set up with that in mind from the start. The right strategy can address both of these.
What is included
The What: Advanced Structures
Many families have heard of the estate tax exemption but have never seen the actual dollar figure that might be due based on their specific estate and life expectancy. We can assist with these calculations to help you determine if advanced planning structures make sense for you.
One spouse gifts to an irrevocable trust for the benefit of the other, using part or all of their lifetime gift and estate tax exemption now while the family keeps indirect access to the money. In a community property state these need care: the assets have to be properly characterized as separate property first, and two mirror trusts drafted too much alike can be collapsed by the IRS under the reciprocal trust doctrine. Properly structuring these requires careful drafting.
A policy you own is counted in your estate. The same policy owned by an ILIT is not, and the proceeds are available to trust beneficiaries free of estate tax.
You transfer an asset, take back an annuity, and everything the asset earns above the IRS hurdle rate passes to your children with little or no gift tax used. Well suited to concentrated stock and pre-liquidity positions.
You pay the trust's income tax personally, which is a further tax-free gift to your children every year, and the asset itself grows outside your estate.
A way to move a California home out of your estate at a discounted gift value while you go on living in it.
Allocating your $15 million GST exemption to a trust that supports children, grandchildren and beyond without a transfer tax at each generation. Note that GST exemption is not portable between spouses, so unused exemption is lost if it is not allocated.
Consolidating family assets into an entity, then gifting interests, often with valuation discounts applied.
Annual exclusion gifts of $19,000 per recipient in 2026, direct payments of tuition and medical costs, and 529 funding, coordinated so the reporting is right.
Your financial advisor, CPA, insurance broker and business counsel all work from the same plan. I can coordinate with each of them to make sure you plan makes sense in the broader context of your financial situation.
Trustee duties, annual Crummey notices, appraisals and the filings each structure requires, set out so the plan still works in year ten.
WHY IT'S WORTH DOING
The What: The Value of Moving Growth Out of Your Estate
Move an asset at today's value and every dollar it earns afterward belongs to your family rather than to the estate tax. This is why timing matters more than the size of the gift.
$15 million is indexed, but a portfolio compounding at 7 percent doubles roughly every decade. Exemption used today shelters everything that asset becomes.
Estate tax is due nine months after death, in cash. Families whose wealth sits in real estate or a private company are the ones who end up selling at the worst possible moment.
A properly drafted trust holds the inheritance for your child rather than handing it over. In California, community property makes this matter even more than families.
Trust protectors, powers of appointment, substitution powers and decanting provisions let the plan bend as families and tax law change.
WHO THIS IS FOR
The Who: Planning for Future Generations
Families whose combined estate is approaching or above the federal exemption, including the value of real estate, retirement accounts and life insurance.
Business owners and founders with a liquidity event in sight, where planning before the sale is worth far more than planning after it.
California real estate investors whose portfolios have appreciated well past their basis and who need to consider how that growth affects their estate.
Families with concentrated single-stock positions, restricted stock or pre-IPO equity who need to consider estate and gift tax planning before a liquidity event.
Anyone who has already used part of their exemption and wants to know what is left and what to do with it.
Parents who want to provide for children without handing over a lump sum at twenty-five, while building a structure that can provide support with appropriate safeguards.
Grandparents planning for generations beyond their own children and looking for structures that can preserve family wealth across multiple generations.
Clients whose financial advisor or CPA has said the estate tax is becoming an issue and who need the legal structures to go with that advice.
People with an existing irrevocable trust that no longer matches the family or the tax law it was written under and who need to evaluate whether changes are appropriate.
HOW IT WORKS
The How: How We Work Together
We cover what you own, how it is held, who is involved in the business, and what you want the next twenty years to look like. You leave knowing what is worth doing and in what order.
I review the operating agreements, the buy-sell, the cap table and the existing plan, and I map who is affected by what.
Some of this work has deadlines attached, particularly anything before a sale. You get a recommended order with the reasoning and the trade-offs set out, developed with your CPA and advisor.
Trusts drafted, entities formed, agreements revised, appraisals obtained, and the assets actually moved.
When you are ready, the plan is explained to the people it affects, with you in the room.
Businesses, families and tax law all move. I'll be here to review and update whenever needed.
WHY WORK WITH ME
How I Can Help
Most estate planning attorneys understand the structures. Fewer have watched them meet a real portfolio.
I’ve spent over a decade in estate planning, first at an established California law firm and then in-house at a registered investment adviser. My experience shapes how I work. I’ve seen which structures integrate with a family's investment strategy and which ones quietly fight it: the GRAT funded with the wrong asset, the ILIT nobody maintained, the trust whose situs created a state income tax bill nobody had modeled. This why I love working with my client’s advisors to see the whole picture.
I am admitted in California and New York, and I have been named to Best Lawyers: Ones to Watch in Trusts and Estates. I work directly with your financial advisor and CPA rather than around them, because these structures only work when the legal, tax and investment pieces fit together.
I keep my practice deliberately small; you’ll work with me each step of the process, from initial consultation through signing.
FREQUENTLY ASKED QUESTIONS
Common Questions Before Booking
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It depends on where your estate will be, not where it is. The exemption is permanent and indexed now, so the old 2026 deadline is gone. What has not changed is that a growing estate can overtake an inflation-adjusted exemption. If your estate is above roughly half the exemption today, or you own something likely to appreciate sharply such as a business or California property, it is worth modeling. Everything above the exemption is taxed at 40 percent, due in cash within nine months of death.
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A revocable living trust avoids probate but doesn’t impact your estate tax liability, because you still own everything in it. An irrevocable trust removes assets from your estate, which is what creates the tax benefit, and in exchange you give up direct ownership. Based on your net worth, you might need both: the revocable trust as the foundation, and one or more irrevocable trusts layered on for tax and asset protection.
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Often, yes, such as in the case of a spousal lifetime access trust. You make a gift to a trust for your spouse's benefit, so the assets leave your estate while your spouse can still receive distributions. Two cautions apply in California. Community Property has to be properly converted to separate property before the gift, or the transfer doesn’t do what you intended. And if both spouses create trusts for each other that look too similar, the IRS can treat them as cancelling out under the reciprocal trust doctrine, which undoes the planning. Both are drafting problems with drafting solutions.
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Not forever. California's statutory rule against perpetuities, at Probate Code section 21205, allows a trust interest to vest up to 90 years after the trust is created. Several other states permit trusts to run for centuries or indefinitely, which is why long-term family trusts are often established with a trustee and governing law outside California. That decision also affects state income tax, since California taxes trust income based on where the trustee and the beneficiaries live.
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Proposition 19 changed this significantly. A child who inherits a parent's primary residence can keep the parent's assessed value only if the child makes it their own primary residence within one year and files the homeowners' exemption claim in time, and even then only upto about $1 million above the parent's assessed value.
Rental properties, second homes and commercial property are reassessed to market value on transfer, which can multiply the annual tax bill. Planning for this is separate from estate tax planning and is often the larger number for California families.