Planning your estate isn’t just about deciding who gets what—it’s about preserving your legacy and minimizing the tax burden on your loved ones. While California does not impose a state-level estate tax, your estate may still be subject to federal estate taxes, especially if its value exceeds the federal exemption. At Schneiders & Associates, LLP, we help California families implement strategic estate plans that reduce or eliminate unnecessary tax exposure and maximize what passes on to future generations.
If you want to protect your heirs from costly estate taxes, it’s never too early—or too late—to begin.
Understanding Estate Taxes
Estate taxes are levied on the total value of a person’s assets at the time of death. As of 2025, the federal estate tax exemption remains high—$13.61 million per individual (2024 figure, subject to inflation adjustments). However, this threshold is scheduled to revert to roughly $6.4 million in 2026 unless Congress takes action. Assets above that threshold may be taxed at rates up to 40%.
California does not currently impose an estate or inheritance tax, but that could change in the future. Federal thresholds may also revert to lower levels in coming years unless Congress acts. That’s why proactive planning is essential.
Use the Lifetime Gift Tax Exemption
One of the most effective ways to reduce your taxable estate is by making lifetime gifts to your heirs. The IRS allows:
- Annual exclusion gifts of up to $19,000 per recipient (as of 2025) without affecting your lifetime exemption.
- Larger gifts that “use up” part of your federal lifetime exemption—but reduce the size of your estate.
By giving during your lifetime, you remove the gifted amount (and its future appreciation) from your taxable estate. Our attorneys can help you create a structured gifting plan that aligns with your goals.
Establish an Irrevocable Trust
Trusts are powerful tools for minimizing estate taxes. An irrevocable trust removes assets from your estate, placing them in a legal structure outside your control (and outside of the IRS’s reach upon death).
Types of tax-efficient trusts include:
- Irrevocable Life Insurance Trusts (ILITs): keep life insurance proceeds out of your taxable estate.
- Grantor Retained Annuity Trusts (GRATs): pass appreciating assets to heirs with minimal tax.
- Charitable Remainder Trusts (CRTs): provide income during your life, with the remainder going to charity (reducing estate value).
- Qualified Personal Residence Trusts (QPRTs): transfer a home to heirs at a reduced gift value.
At Schneiders & Associates, LLP, we tailor trust strategies based on your asset mix, family dynamics, and charitable intentions.
Make Use of the Marital Deduction
Married couples can take advantage of the unlimited marital deduction, which allows you to leave any amount of assets to your spouse free of estate tax. But that’s only part of the picture.
To fully utilize both spouses’ exemptions, consider a credit shelter trust (or bypass trust). This allows the first spouse’s exemption to be preserved—preventing the surviving spouse’s estate from growing too large and becoming taxable.
We help California couples design trusts that honor family wishes while maximizing tax savings.
Use a Family Limited Partnership or LLC
Transferring business or investment assets into a Family Limited Partnership (FLP) or Limited Liability Company (LLC) can provide valuation discounts for estate tax purposes. These entities also allow you to maintain control over assets while gradually transferring ownership to your heirs.
With proper structuring, you can:
- Reduce the appraised value of transferred interests (via lack of control and marketability discounts)
- Minimize gift and estate taxes
- Protect assets from creditors
Our attorneys will guide you through setup, valuation, and compliance to ensure IRS scrutiny is avoided.
Leverage Charitable Giving
Charitable donations can reduce both your current income taxes and your estate tax burden. Options include:
- Charitable lead trusts (CLTs)
- Donor-advised funds
- Outright bequests to qualified charities
Strategic philanthropy allows you to support causes you care about while keeping more wealth in your family line. Schneiders & Associates, LLP can help design a giving plan that aligns with your values and tax objectives.
Keep Your Estate Plan Up to Date
Estate tax laws—and your financial situation—change over time. Regularly reviewing and updating your estate plan ensures your documents are optimized under current federal laws and reflect your wishes.
We recommend reviewing your plan every three to five years, or sooner if there’s a major life event like:
- Marriage or divorce
- Birth of a child or grandchild
- Sale of a business
- Significant change in wealth
Start Planning with Confidence
At Schneiders & Associates, LLP, we help high-net-worth individuals, business owners, and families throughout California protect their legacies and minimize estate taxes through proactive, personalized legal strategies. Our team brings deep knowledge of federal tax law, trust structuring, and wealth transfer planning.
Protect What You’ve Built
You worked hard to build your wealth—don’t let unnecessary estate taxes diminish your legacy. Let Schneiders & Associates, LLP help you develop a strategic estate plan that preserves more of your assets for the people and causes you care about most.
Contact us today to schedule a confidential consultation with one of our experienced California estate planning attorneys.
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