Estate Tax Planning Attorney in West Hills

Estate Tax Planning Attorney in West Hills

The general framework is on estate tax planning in California. Most West Hills households will not owe federal estate tax, and California has none.

There is one issue that comes up here more than in the surrounding neighborhoods, because so many families here are planning across three generations at once.

The tax nobody has heard of

The generation-skipping transfer tax is a separate federal tax on transfers that skip a generation, most commonly a gift or bequest to a grandchild while the child is still living. It exists to stop families avoiding a round of estate tax by passing wealth down two levels at once.

It is separate from the estate tax and has its own lifetime exemption, which for 2026 equals the $15,000,000 basic exclusion amount, and the tax rate is the top estate tax rate, 40 percent (26 C.F.R. § 26.2641-1). The important practical point is that allocating that exemption is not automatic in every situation. Where a trust is involved, allocation is a reporting question that has to be handled deliberately rather than assumed.

For families comfortably below the thresholds this is academic. For families anywhere near them, a plan that leaves shares to grandchildren without anybody thinking about generation-skipping is a plan with an unexamined exposure in it.

Skipping a generation on purpose, and by accident

Families here skip a generation for good reasons: a child who is financially secure and would rather the money went to their own children, or a child whose circumstances make a direct inheritance unwise.

It also happens by accident, usually through a beneficiary designation naming a grandchild on an account, set up years ago and never revisited. The accidental version is the one that causes trouble, because nobody has considered either the tax treatment or the fact that a minor cannot receive the money at all.

Where skipping is deliberate, it should be done through a trust rather than outright, so the timing is controlled and the exemption question is handled at the point it can still be handled. Where it is accidental, the fix is usually a beneficiary designation review, which costs nothing and is the single most under-done task in estate planning.

Where portability matters

For households near the federal exemption, unused exemption transfers to a surviving spouse only if a federal estate tax return is filed at the first death to elect it, even where nothing is owed. Families skip that filing because nothing appears due, and lose it permanently.

The typical 91307 home against the $15 million exemption

The typical home in ZIP 91307 is worth $985,165 (Zillow Home Value Index, August 2026). Set that beside the numbers that decide whether an estate owes federal tax.

Measure	Amount
Federal estate tax exemption, 2026, per person	$15,000,000
Typical 91307 home as a share of one exemption	About 6.6%
California estate or inheritance tax	None

The exemption is per person, so a married couple has two. A house alone won’t reach either one. The tax a house does create is different, and it’s the next section.

The tax West Hills homeowners do pay: capital gains on a sale

Under 26 U.S.C. § 1014(a), property acquired from a decedent takes a basis equal to its fair market value at the date of death. That matters in West Hills, where the house was often bought decades ago. Suppose the parents paid $200,000 (my assumption) and the house is worth $985,165 when the last parent dies. The heirs’ basis resets to about $985,165, and a prompt sale produces little or no taxable gain. A sale in the parents’ lifetime would report a gain of roughly $785,165.

The step-up applies to property that passes at death, so a lifetime gift of the house can lose it. That’s one reason to talk to me before deeding a house to a child. The stepped-up basis in a California trust page covers how a revocable trust keeps the step-up, and community property step-up covers married couples.

What the county sees when a West Hills homeowner dies

The county has no part in estate tax. The events it does handle are property tax events. When a transfer happens by reason of death, including through a trust, the trustee or transferee files a change in ownership statement with the county recorder or assessor within 150 days after the date of death (Rev. & Tax. Code § 480(b)). For a West Hills house that’s the Los Angeles County recorder or assessor.

A deed transferring realty by reason of the death of any person is exempt from documentary transfer tax (Rev. & Tax. Code § 11930). Whether the property tax base resets is a separate question that turns on who takes the house and whether they move in. The Board of Equalization’s filing table gives three years from the date of death or transfer, or until a transfer to a third party if that comes first, to file the parent-child exclusion claim. A child who sells first can lose the exclusion by waiting.

Keep the closing statement from the original purchase and the receipts for improvements. Basis records for a house bought in the 1980s are often gone, and they still matter for any appreciation after the date-of-death value. Gather them early and note what’s missing.

Questions West Hills clients ask

We want to leave something directly to our grandchildren. Is there a tax?

Potentially, and it is a separate one from the estate tax. The generation-skipping transfer tax applies to transfers that skip a generation, and it has its own exemption whose allocation is not automatic in every situation. Below the thresholds it is academic, but near them it needs handling deliberately.

Can we leave something to a grandchild who is still a child?

You can, but not outright, because a minor cannot receive it. Left directly, it goes to a court-supervised guardianship or to a custodian under the California Uniform Transfers to Minors Act (Prob. Code § 3900 et seq.), and the child generally takes it at 18. Through a trust you control both the timing and the terms, and the generation-skipping question gets handled at the same time.

Do we owe federal estate tax?

Almost certainly not. The exemption is $15 million per person in 2026 and California has no estate tax of its own. Very few West Hills households are anywhere near it.

What is portability?

It lets a surviving spouse use the deceased spouse’s unused federal exemption, but only if a federal estate tax return is filed at the first death to elect it, even when nothing is owed.

So what should we actually spend money on?

Making sure the trust is funded, deciding at what ages the next generation receives anything, protecting those shares from divorce and creditors, and keeping beneficiary designations current. That is where the value is at this level.

If my heirs sell the West Hills house right after I die, do they owe capital gains tax?

Usually little or none. Under 26 U.S.C. § 1014(a), their basis is the fair market value at the date of death, so only appreciation after that date is taxed. A gain of several hundred thousand dollars that built up over decades disappears from the calculation.

What do I file with Los Angeles County after a death if the house is in my trust?

The trustee files a change in ownership statement with the county recorder or assessor within 150 days after the date of death under Rev. & Tax. Code § 480(b). The parent-child exclusion is claimed separately, on a form the Board of Equalization publishes.

Will my heirs pay transfer tax when the house is deeded to them?

Not documentary transfer tax. Rev. & Tax. Code § 11930 exempts a deed that transfers realty by reason of the death of any person. A later sale is a different transaction and can owe tax in the City of Los Angeles.