Estate Tax Planning in Oxnard

Estate Tax Planning in Oxnard

California has no estate tax. The federal estate tax applies above the current exemption level. For most Oxnard families, the federal tax is not a current problem. For agricultural landowners whose families have held Oxnard area farmland for decades, the estate may be much larger than they realize, and federal estate tax planning is not hypothetical for them. Between strawberry fields, citrus groves, and vegetable operations across the Oxnard plain, land that cost a fraction of its current value decades ago can now push a family estate well past the exemption without anyone in the family realizing it.

Beach and coastal properties in Oxnard add a second, less obvious category of appreciated value. A family that bought a modest coastal property decades ago may find it has appreciated alongside the farmland, and combined with an agricultural family’s business assets or a port-related business, the total estate value can climb faster than the family expects. I look at the whole picture of what a family owns, not just the most obvious asset, before concluding there is or is not an estate tax problem.

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

Agricultural land value and estate tax exposure

Oxnard area farmland is some of the most productive and highest-value agricultural land in California. Families who farmed here in the 1960s and 1970s paid far less per acre than that land is worth today, and in some cases the estate value of the land alone can approach or exceed federal exemption levels. A family that has 30 acres of Oxnard farmland worth $200,000 per acre has a $6 million estate in land alone. Add the farmhouse, equipment, business assets, and other property and the numbers can climb further. Under IRC §2010(c), the federal exemption is $15 million per person as of 2026 under the One Big Beautiful Bill Act, which shields most Oxnard estates today, but a large multi-generational agricultural family with land held across several owners, or one that has not planned for how the exemption might change again, cannot assume this stays comfortable forever.

Special use valuation for agricultural property

The Internal Revenue Code includes a special use valuation provision for qualifying agricultural property that allows the property to be valued based on its use as farmland rather than its highest and best use development value. This can significantly reduce the taxable estate value. Qualifying for this provision requires meeting specific criteria about who has owned and materially participated in the farming operation. For Oxnard families with qualifying property, this is an important planning tool. For business asset protection, see asset protection planning. For succession of the farming operation, see business succession planning.

The marital deduction and stepped-up basis

Two other federal provisions matter as much as the exemption amount for Oxnard landowning families. IRC §2056 allows an unlimited marital deduction, meaning property passing to a surviving spouse is not taxed at the first death regardless of value, which buys time to plan before the tax actually comes due at the second death. IRC §1014 provides a stepped-up basis at death, meaning heirs who eventually sell inherited farmland are taxed on the gain from the date-of-death value forward, not from what the family originally paid decades ago. For land that has appreciated as dramatically as Oxnard farmland has, that basis step-up is often worth more to the family than any other single provision in the tax code, which is one more reason a forced lifetime sale to avoid a future tax should be a last resort, not a first move.

Why the exemption number should not drive complacency

The federal exemption has moved substantially over the past two decades, up and down depending on the legislation in effect at the time. The current $15 million figure under IRC §2010(c) reflects the most recent law, but a plan built assuming that number never changes again is a plan built on an assumption Congress has repeatedly proven wrong. For Oxnard families whose land value already sits in the multiple millions, I build plans with enough flexibility to adjust if the exemption drops in the future, rather than plans that only work under today’s number.

Questions Oxnard clients ask

My family has farmed this land for fifty years. Would we have to sell it to pay estate tax? Not necessarily, but only if proper planning is done in advance. A sale to pay estate tax is one outcome for families who have not planned. Installment payment of estate tax on qualified business interests, special use valuation, and other strategies can prevent a forced sale. But these require advance planning, not emergency action after death.

What if the land is held by multiple family members already? Shared ownership among siblings or cousins adds complexity but does not eliminate the need for planning. The estate tax applies to whatever share of the property the deceased person owned. Each owner’s share is part of their taxable estate.

Is there a California agricultural property tax exemption related to estate planning? Proposition 19, which took effect in 2021, changed California’s property tax transfer rules for family transfers significantly. It is not an estate tax exemption, but it affects how agricultural property transfers to family members without triggering reassessment. I will explain how these rules apply in your situation.

If my spouse and I leave everything to each other first, does that solve the tax problem? It defers it. IRC §2056’s unlimited marital deduction means nothing is taxed at the first spouse’s death, but the full value is still in the surviving spouse’s estate at the second death unless further planning is done. For a couple with substantial agricultural land, using both spouses’ exemptions through proper trust planning usually matters more than relying on the marital deduction alone.

Do I need to worry about this if my estate is well under the exemption today? Probably not urgently, but land values in the Oxnard area have moved quickly before and can again. A periodic review, every few years or after a significant change in land value, is enough for most families. What I do not recommend is assuming a number calculated once will still be accurate a decade later.

Talk to Eric or call 805-244-5291. I serve Oxnard 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. For high-value estates that combine land with a business, see high-net-worth estate planning in Oxnard and the estate planning mistakes guide.