Estate Tax Planning in Newbury Park

Estate Tax Planning in Newbury Park

Most Newbury Park families are not in federal estate tax territory right now, and I will tell you that directly rather than build up a planning need that does not exist for you. California eliminated its estate tax years ago. The federal exemption is currently high enough that the majority of Newbury Park households are not exposed. But some families are closer than they think when you add up all the pieces, especially in a Conejo Valley market where a home bought decades ago has appreciated substantially and a career at Amgen or another biotech employer has produced a well-funded retirement account. I would rather spend the consultation running your actual numbers than reciting exemption figures that may not apply to you at all.

I am an estate planning attorney serving Newbury Park and all of Ventura County. I do this work over Zoom or phone and sign in person. For the full estate planning overview, see estate planning in Newbury Park.

When Newbury Park families get close to the threshold

A Newbury Park family with a home worth $900,000, a combined retirement account balance of $1.5 million, a $500,000 life insurance policy, and $300,000 in a brokerage account has a $3.2 million estate. Under current law, no federal tax. But if the federal exemption is ever reduced by future legislation, families with estates built up over decades of saving in a Conejo Valley market could start doing math they were not expecting to do. The exemption has moved before, and I do not build permanent plans around a number Congress can change.

What pushes a Newbury Park family closer to the threshold is rarely one single asset. It is the combination of a home that has appreciated for decades, a 401(k) or pension that has compounded through a full career at an employer like Amgen or another Conejo Valley business, term or permanent life insurance bought when the kids were young and never revisited, and a taxable brokerage account built from bonuses or equity compensation. None of those pieces looks large in isolation. Added together, some households in this price range are within striking distance of levels that mattered under prior law, which is exactly why I ask clients to actually total everything up rather than eyeball it.

What planning makes sense now

For most Newbury Park families, the right estate tax move is to make sure beneficiary designations on retirement accounts and life insurance are correct, make sure the living trust is properly funded, and pay attention to how assets are titled. These steps do not require irrevocable trusts or complex strategies. For families with business interests, significant appreciated real estate, or other assets that push the total closer to the exemption threshold, more active planning may be worth evaluating. This connects to high-net-worth estate planning and asset protection planning.

I also encourage married Newbury Park couples to look at how their trust is drafted rather than assume any trust automatically captures both spouses’ exemptions. A trust that simply leaves everything outright to the surviving spouse can waste planning opportunities that a properly drafted trust with the right provisions would preserve, particularly if the couple’s combined estate could approach the exemption threshold after future asset growth. This is a drafting question, not necessarily a complex strategy question, and it costs nothing extra to get right the first time.

The federal law behind the exemption

The current federal estate tax framework changed as of 2026. Under the One Big Beautiful Bill Act, IRC §2010(c) sets the applicable exclusion amount at $15 million per person, a significant increase over the prior law’s roughly $7 million reversion figure that many people had been planning around. Two other code sections matter as much as the exemption number. IRC §2056 provides an unlimited marital deduction, meaning assets passing to a surviving spouse are not subject to estate tax regardless of amount, which is why most married Newbury Park couples do not face any estate tax exposure until after the second spouse’s death. And IRC §1014 provides a stepped-up basis for assets held at death, meaning the embedded capital gain on a long-held Conejo Valley home or investment account disappears for the heirs rather than carrying forward. California itself imposes no state estate or inheritance tax, so everything here is a federal question.

Questions Newbury Park clients ask

Does my life insurance count toward my estate? Yes, if you own the policy. The death benefit of a life insurance policy you own is part of your taxable estate, even though it pays income-tax-free to your beneficiaries. Many people do not realize this until they do the estate calculation. An irrevocable life insurance trust can take the policy out of your estate.

What happens to my IRA when I die? It passes to the named beneficiary and is subject to income tax as the beneficiary withdraws it. It is also part of your taxable estate for estate tax purposes. The 2020 SECURE Act eliminated the stretch IRA for most beneficiaries, so most heirs now have to withdraw an inherited IRA within 10 years. Planning around this matters.

Is there any benefit to planning for estate taxes even if I am not over the exemption? The strategies that would reduce estate tax, like irrevocable trusts and gifting programs, also provide asset protection and can improve the efficiency of wealth transfer. They are not purely tax tools. That said, I will not recommend a complex strategy for a problem that does not exist.

Will the $15 million exemption stay in place? Under current law it is set at $15 million per person for 2026 under the OBBBA, but exemption levels have changed by legislation before and can change again. I do not build permanent plans around a number that Congress could revise. What I focus on is making sure your plan works whether the exemption stays high or drops.

What is stepped-up basis and why does it matter for my Newbury Park home? Under IRC §1014, property you hold at death gets a new tax basis equal to its value on the date of death, which erases the capital gain that built up during your lifetime for income tax purposes. A home bought decades ago for a fraction of today’s Conejo Valley prices can pass to your heirs with no embedded gain, but only if it is still in your name, or your trust’s name, at death rather than sold or gifted away beforehand.

Talk to Eric or call 805-244-5291. I serve Newbury Park and all of Ventura County.

For families transferring a home between generations, the Proposition 19 reassessment calculator can estimate the property-tax impact of a parent-child or grandparent-grandchild transfer.