Estate Tax Planning in Westlake Village

Estate Tax Planning in Westlake Village

Westlake Village is one of the few communities in this region where federal estate tax planning is not purely hypothetical. Median home values start around $1.3 million and run well above that for lakefront, golf course, and view properties. Add significant retirement accounts, investment portfolios, life insurance, and business interests, common among the executives, entrepreneurs, and entertainment professionals who live here, and a Westlake Village estate can approach the federal exemption level, 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. Business owners whose company value keeps growing, single residents, and anyone with assets outside California are the ones most likely to face a real tax problem.

I am an estate planning attorney serving Westlake Village and all of Ventura County. I do this work over Zoom or phone and sign in person. California has no estate tax, which is one advantage. The federal tax, however, can be substantial at the wealth levels common here. For the full estate planning context, see estate planning in Westlake Village.

Who in Westlake Village actually has an estate tax problem

A single person with a $1.5 million lakefront home, a $2 million investment portfolio, a $1.5 million retirement account, and a $2 million life insurance policy has a $7 million estate. At the 2026 exemption of $15,000,000 per person, no federal tax, with room to spare. The math changes for larger estates. A married couple with a $20 million combined estate is still under the $30,000,000 married exemption, but only if the surviving spouse’s executor files the portability election after the first death. Skip that filing, and the survivor is left with only their own $15,000,000 exemption against a $20 million estate, a real and avoidable tax problem. Entertainment industry and finance professionals in Westlake Village who had liquidity events, hold significant equity positions, or own businesses worth several million are the ones most likely to need this kind of planning.

Strategies that actually reduce the taxable estate

A spousal lifetime access trust removes assets from both spouses’ taxable estates while the surviving spouse can still benefit from the trust during their lifetime. A grantor retained annuity trust is effective for transferring appreciated assets: the grantor retains an annuity for a fixed term and the remaining value at the end passes to heirs with minimal gift tax. An irrevocable life insurance trust removes the death benefit from the taxable estate entirely. Annual gifting programs use the annual exclusion amount to systematically move wealth to the next generation. Charitable structures can reduce estate tax while meeting philanthropic goals. The common thread is that all of these take time to implement correctly and work better when started early.

Why the marital deduction is not automatic

A common assumption is that a surviving spouse never faces estate tax on the first spouse’s assets. That is generally true because of the unlimited marital deduction, but only for a spouse who is a U.S. citizen, and only if the estate plan is drafted to take advantage of it correctly. For a Westlake Village couple where one spouse is not a U.S. citizen, the unlimited marital deduction does not apply automatically, and a qualified domestic trust or other planning is needed to defer tax on the first death. This is a detail that gets missed in generic estate plans and matters enormously for the international families and executives who relocate here for work. A qualified domestic trust holds the assets for the non-citizen spouse’s benefit while deferring the tax until distributions are made or the surviving spouse eventually passes, which is a very different result than losing the marital deduction outright.

The window to act

The $15,000,000 exemption is permanent, but for growing estates the most effective planning is still done early. Strategies that move appreciation out of the estate into irrevocable structures work best when assets are still at lower values, before a business or investment portfolio grows into taxable territory. Waiting until you are clearly over the threshold often means you have missed the most efficient opportunities. This overlaps with high-net-worth estate planning and connects to asset protection because the same irrevocable structures often serve both purposes.

What federal tax law actually provides

IRC §2010(c) sets the applicable exclusion amount at $15,000,000 per person in 2026, permanent under the One Big Beautiful Bill Act, and it is this exclusion that shields most Westlake Village estates from any federal tax at all. IRC §2056 provides the unlimited marital deduction for property passing to a surviving spouse who is a U.S. citizen, which is what allows most married couples to defer tax entirely until the second death, as long as the plan is drafted to use it. And IRC §1014 provides a stepped-up basis for inherited assets, meaning an heir who sells an inherited investment or business interest generally pays capital gains tax only on appreciation after the date of death, not the full gain accumulated during the decedent’s lifetime. That basis step-up is often as valuable to a Westlake Village family as the exemption itself, particularly for appreciated stock, business interests, and investment property.

Questions Westlake Village clients ask

Is this worth planning for if I might not be over the exemption? The strategies that reduce estate tax usually also reduce probate exposure, reduce liability exposure, and create better wealth transfer structures regardless of the tax outcome. Good planning is not wasted if the tax problem never materializes.

What happens if I give assets away and then need them back? Irrevocable transfers are final. That is why spousal lifetime access trusts are structured to allow access through the spouse rather than directly. The question of liquidity and access is central to designing any irrevocable structure, and I address it directly in every plan.

Do I need a separate attorney for business interests and a trust attorney for the estate plan? Often yes, for the corporate side of a business valuation or a buy-sell agreement. I handle the estate and trust side and coordinate with business attorneys where needed.

Does my heir owe capital gains tax on the full value of an inherited asset? Generally no. Under IRC §1014, inherited assets typically receive a stepped-up basis to fair market value at death, so an heir who sells shortly after inheriting pays little or no capital gains tax on the appreciation that occurred during your lifetime.

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

See also high-net-worth estate planning and living trust planning for Westlake Village. 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.