Estate Tax Planning in Ventura

Estate Tax Planning in Ventura

California has no estate tax. The federal estate tax applies above the federal exemption, which is $15,000,000 per person and $30,000,000 per married couple as of 2026, permanent under the One Big Beautiful Bill Act (IRC §2010(c)). At that level, most Ventura families are not exposed. But Ventura has a meaningful population of longtime homeowners who have substantial appreciated real estate along the coast and in the hillside neighborhoods, professionals with growing retirement accounts, and some business owners with significant business asset values. Business owners and single residents in particular can be closer to the federal threshold than they realize.

I am an estate planning attorney serving Ventura 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 Ventura.

Coastal real estate and the estate calculation

A Ventura couple with an ocean-view home worth $1.2 million, a combined retirement account balance of $1.8 million, $300,000 in a brokerage account, and $700,000 in life insurance has a combined estate of $4 million. Against the 2026 exemption of $15,000,000 per person, or $30,000,000 for a married couple, they are nowhere near a federal tax problem. But individual estate planning, single residents, and situations where an estate grows well above the individual exemption after one spouse dies require more careful evaluation. For Ventura professionals and business owners with larger estates, or owners of an appreciating business or hillside property portfolio, the federal tax starts becoming a real number worth planning for.

What makes sense for Ventura residents now

For most Ventura families, the estate tax planning moves that make sense are making sure life insurance is owned correctly (if you own the policy, the death benefit is in your estate), reviewing beneficiary designations, and making sure the living trust is properly funded. For those with larger estates approaching the exemption, annual gifting programs, spousal lifetime access trusts, and irrevocable life insurance trusts are worth evaluating. The best time to implement these strategies is before you are clearly over the threshold. This connects to high-net-worth estate planning and asset protection.

Portability and business owners with growing estates

When a Ventura spouse dies without using their full exemption, IRC §2010(c) allows the surviving spouse to elect portability and carry the deceased spouse’s unused exemption forward, effectively giving the survivor up to $30,000,000 in combined exemption at their own death. This election has to be made on a timely filed estate tax return for the first spouse’s estate, even if no tax is due, which is a step that gets missed more often than it should when an estate looks small enough that no one thinks a return is necessary. For Ventura business owners, the harder question is valuation. A business that generates modest annual income can still carry a much higher fair market value once goodwill, real estate, and equipment are counted, and that value belongs in the estate calculation whether or not the business throws off cash. I walk business-owning clients through a realistic estimate of what their business would appraise at, not just what it earns, before concluding they are safely under the exemption.

The marital deduction and stepped-up basis

Two federal provisions do most of the practical work for Ventura families even when no advanced planning is in place. IRC §2056 provides an unlimited marital deduction, meaning assets passing to a surviving spouse, whether outright or through a properly drafted marital trust, are not subject to estate tax at the first spouse’s death regardless of value. IRC §1014 provides a step-up in basis at death, so an ocean-view home purchased decades ago for a fraction of today’s value passes to heirs with its basis reset to fair market value, eliminating the built-in capital gain for income tax purposes. These two provisions are why a well-funded revocable trust, holding title correctly and coordinated with beneficiary designations, resolves most of the estate tax exposure a typical Ventura household actually faces, without any exotic planning.

Questions Ventura clients ask

Does it make sense to give assets to my children now to reduce my estate? Possibly. Annual gifts within the annual exclusion amount reduce your estate without gift tax or reporting requirements. Larger gifts use your lifetime exemption and may trigger gift tax reporting. The strategy depends on your total estate, your income needs, and your family situation.

The exemption is now permanent. Does gifting still make sense? Often, yes, but for different reasons than exemption uncertainty. Gifting still removes future appreciation from your taxable estate, can reduce probate exposure, and lets you see your family benefit from the assets during your lifetime. For most Ventura estates well under $15,000,000 per person, gifting is more about family goals than avoiding a tax that may never apply to you. For larger or fast-growing estates, moving appreciating assets out early still has real value.

How does the step-up in basis interact with estate tax planning? The federal income tax step-up in basis under IRC §1014 is separate from the estate tax but they interact. Assets that receive a step-up at death avoid capital gains tax on appreciation but remain in the taxable estate. Strategies that move assets out of the estate for estate tax purposes may sacrifice the step-up for income tax purposes. The right balance depends on the numbers in your specific situation.

If everything goes to my spouse, is there ever a tax at the first death? Generally no. IRC §2056 provides an unlimited marital deduction for property passing to a surviving spouse who is a U.S. citizen, whether outright or in a properly structured marital trust. The estate tax question typically becomes relevant only at the second spouse’s death, which is why survivor planning matters even when the first spouse’s estate looks straightforward.

What happens if my spouse dies and we never filed anything with the IRS? If the first spouse’s estate did not use the full exemption, the surviving spouse can generally still claim the unused portion through portability under IRC §2010(c), but only if an estate tax return electing portability was filed for the first spouse, even if the estate owed no tax. Missing that filing deadline can permanently forfeit the unused exemption, which is worth checking on for any Ventura client who has lost a spouse in the last few years.

Talk to Eric or call 805-244-5291. I serve Ventura 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.