Estate Tax Planning in LA
Federal Estate Tax & the Exemption Sunset
The federal estate tax exemption sits at $13.99 million per individual in 2025 (effectively $27.98 million for married couples). Under current law, that number is scheduled to drop roughly in half on January 1, 2026 — back to around $7 million, adjusted for inflation. If your estate is anywhere near that range, the planning window is narrowing.
For high-net-worth individuals in LA — entertainment executives, business owners, real estate investors — this isn’t an abstract concern. A $15 million estate that’s fully exempt today could face a $3+ million federal tax bill after the sunset. We work with your estate attorney to structure gifts, trusts, and transfers that lock in the current exemption before it drops.
California Community Property
California is a community property state, which means most assets acquired during marriage are owned 50/50 by both spouses — regardless of whose name is on the account. This has a major tax advantage at death: when one spouse dies, both halves of the community property get a stepped-up basis. In common-law states, only the decedent’s half gets the step-up.
That double step-up can save hundreds of thousands in capital gains taxes on appreciated assets — real estate, stock portfolios, business interests. But you have to maintain the community property character of the assets. Commingling with separate property, moving assets to another state, or putting them in the wrong type of trust can destroy the community property status. We coordinate with your estate planning attorney to make sure the tax benefits are preserved.
Trust Taxation & Gifting Strategies
Irrevocable trusts — GRATs, ILITs, SLATs, and others — are the primary tools for moving assets out of your taxable estate while the high exemption is still available. Each type has different tax treatment, and the income tax consequences of transferring assets to a trust are just as important as the estate tax savings.
Annual exclusion gifting ($18,000 per recipient in 2024, $19,000 in 2025) is the simplest way to reduce your estate over time. Direct payments for tuition or medical expenses don’t count against the exclusion at all. For LA clients with significant wealth, we model the estate tax projections, recommend which assets to transfer and in what order, and prepare the gift tax returns (Form 709) when gifts exceed the annual exclusion.
Why LA Residents Choose Us for Estate Planning
Estate tax planning isn’t something most people think about until they’re prompted by a life event — a sale of a business, a parent’s death, or a conversation with their attorney. By then, some of the most effective strategies are already off the table because they require lead time.
We don’t draft wills or trusts — that’s your attorney’s job. What we do is run the tax numbers, model the impact of different strategies, prepare the fiduciary returns for trusts and estates, and make sure the financial plan and the legal documents actually match. The attorney handles the law. We handle the math.
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