2026 California Estate Planning Updates | Walnut Creek Attorney

The headlines this year have been about the new $15 million federal estate tax exemption. For most Bay Area families I work with, that is not the change that matters most. What matters more — and what is genuinely new in California estate planning in 2026 — is closer to home, more practical, and has everything to do with how families protect what they have built for the people they love.

Over the 20 years I have practiced estate planning in California, the families who come to me have changed less than you might expect. The questions are the same: How do I protect my spouse? How do I make sure my children are taken care of? What happens if I cannot make decisions for myself? How do I keep my home out of probate? What do I leave behind, and how do I leave it?

What changes is the legal landscape around those questions. Here is what is genuinely new in 2026, and what it means for Walnut Creek, Lafayette, Orinda, Danville, Concord, and East Bay families who want to do this the right way.

The Federal Estate Tax Exemption Increased — and for Most Local Families, It Will Not Be the Biggest Issue

Under the One Big Beautiful Bill Act, the federal estate and gift tax exemption was raised to $15 million per individual and $30 million per married couple, effective January 1, 2026. The exemption is permanent and will be indexed for inflation starting in 2027. The annual gift exclusion remains $19,000 per recipient.

For families with estates approaching the new exemption, this creates real planning opportunities, and we have strategies for that. But for most of the families I sit down with at Absolute Trust Counsel, federal estate tax was never the central concern. What concerns them is California probate, Proposition 19, long-term care costs, and making sure the people they love are protected and not burdened.

The new federal exemption does not change any of that. A higher exemption does not eliminate California probate. It does not address Prop 19 property tax reassessment. It does not protect against the cost of long-term care. And it does not relieve a spouse or child from administering an estate without proper documents in place.

The 2026 Change Most Bay Area Families Should Actually Know About

The most consequential California estate planning change effective January 1, 2026 is the reinstatement of strict Medi-Cal asset limits. For families thinking about long-term care — for a parent, a spouse, or themselves — the rules just changed substantially.

A single person can now have up to $130,000 in countable assets to qualify for Medi-Cal long-term care coverage. A married couple is limited to $162,660. These limits are paired with a 30-month lookback period, meaning gifts or asset transfers made in the 30 months before applying for Medi-Cal can be scrutinized and may disqualify the applicant.

If you have a parent in their 70s or 80s, a spouse with a serious diagnosis, or are thinking ahead to your own potential needs, this matters. Long-term care in the Bay Area runs $13,000 to $18,000 per month. Without planning that begins well in advance, a single illness can drain decades of careful saving in just a few years.

This is the kind of issue most families do not think about until they need to. One of the things we spend a great deal of time on at our firm is planning for incapacity — for the years when you might still be here but unable to make decisions for yourself. These are the kinds of things clients on their own often do not think about, and they are the things that make the biggest difference to families in real life.

The New Probate Shortcuts — and Why They Probably Will Not Help Your Family

Under Assembly Bill 2016, effective for deaths on or after April 1, 2025, California now allows two simplified probate alternatives. The personal property threshold for the Small Estate Affidavit increased to $208,850. And for primary residences valued at $750,000 or less at the date of death, heirs may file a Petition to Determine Succession to Real Property instead of opening a full probate case.

For the typical Walnut Creek, Lafayette, Orinda, or Danville homeowner, this $750,000 threshold is the problem, not the solution. Median home values across most East Bay communities already exceed $750,000, often substantially. The new shortcut simply does not apply.

A properly funded living trust remains the most reliable way to keep your home out of California probate court. If you don’t have an estate plan, the state of California has created one for you in the probate code — and the state of California does not know your family, does not care about saving you taxes, and does not consider the friends or distant relatives or charities that may matter to you.

One additional change worth knowing about, effective January 1, 2026, comes from Assembly Bill 1521. Personal representatives administering an estate now have a fourth mandatory notice requirement under Probate Code Section 9202: if the decedent had any existing child support obligation, the Department of Child Support Services must be notified, with a four-month claims window. For families navigating probate of a recently deceased loved one, this is a procedural change worth knowing about.

Why Proposition 19 Still Matters More Than Most Bay Area Families Realize

For most local homeowners, the largest tax exposure in estate planning is not federal estate tax. It is California property tax under Proposition 19.

Since February 2021, Prop 19 has fundamentally changed how property tax basis transfers between parents and children. The parent-child exclusion that allowed children to inherit a home at the parent’s existing assessed value has been dramatically narrowed. In most cases now, when a parent passes a home to a child, the home is reassessed at full market value — which for many East Bay families means a property tax bill that can rival a second mortgage.

A home purchased in Walnut Creek for $400,000 in 1995 may now be worth $1.8 million, with an annual property tax of around $5,500 based on its original assessed value. If that home transfers to a child after the parent’s passing without proper planning, that child may face an annual property tax bill of $20,000 or more — sometimes making the home effectively unaffordable.

There are strategies that work, and they require active planning around when and how property transfers happen, whether the child intends to use the home as a primary residence, and how the trust is structured. Doing nothing under Prop 19 is one of the most expensive mistakes we see at our firm.

What Estate Planning Actually Looks Like When It Is Done Right

There is a lot of information available about estate planning. Online forms, software, generic templates, articles like this one. For some families, that information feels like enough. For others, the risk of overlooking an important detail or missing something feels too great.

I understand both perspectives. Many of the clients we work with came to us after starting on their own. They were comfortable researching, comfortable making informed decisions, and ultimately decided that for something this important — protecting their spouse, their children, their home, their savings — they wanted to work with people who do this every day.

A good estate plan in 2026 for a Bay Area family does several things at once. It protects your home from California probate court using a properly funded revocable living trust. It documents your wishes for incapacity through a durable power of attorney, an advance health care directive, and a HIPAA authorization. It addresses Prop 19 exposure with clear-eyed planning around how property transfers to the next generation. For families with potential long-term care needs, it considers Medi-Cal eligibility planning well before the 30-month lookback window matters. And for the families approaching the federal exemption, it accounts for the more sophisticated structures appropriate at that level.

But the plan is not just the documents. The plan is the funding, the family conversations, the property titling, the beneficiary designations, the regular reviews. An unfunded trust is a plan on paper, not a plan in practice. Even if you already have an estate plan, chances are it can be made better. Laws change. Families change. Priorities change. One of the best things you can do for the people you love is keep your estate plan up to date.

How We Work

Our estate planning process starts with one meeting. Clients come in and meet with us, and by the end of that meeting they will know exactly what we are going to do, how long it will take, and what it will cost. There are no surprises and no pressure.

What we have learned over 20 years of practice is that families want to be treated as people, not as a stack of papers to be processed. Every client is different. Some come in with one specific concern — what happens to my stuff after I die. Almost always, we uncover something they had not even thought about. The conversation goes places they did not expect, and they leave with a plan that addresses things they did not know to ask about.

The clients who do best with us share a few things in common. They want to take care of their families. They want to do things the right way, following a process and a system. They appreciate being walked through every step so they understand what they are signing and why. They are not looking for the cheapest option, and they are not in crisis or litigation. They are planning, thoughtfully, for the people they love.

If that sounds like you, we would welcome a conversation.

For Walnut Creek and East Bay Families

If you live in Walnut Creek, Concord, Pleasant Hill, Lafayette, Orinda, Moraga, Danville, San Ramon, or anywhere across the East Bay, the 2026 estate planning landscape has changed in ways that almost certainly affect your family — but probably not in the ways the headlines suggest.

The federal estate tax exemption increase is not a reason to skip estate planning. The Medi-Cal asset limit reinstatement is a reason to plan further in advance than ever. The new probate shortcuts will not help most local homeowners because home values exceed the threshold. And Prop 19 continues to be the largest tax exposure for most local families.

At Absolute Trust Counsel in Walnut Creek, our team works exclusively with California families on estate planning, trust administration, probate, Medi-Cal planning, and special needs planning. For over 20 years, my focus has been on helping East Bay families build plans that actually work in practice — not just plans that look good on paper.

If you have questions about how the 2026 changes affect your family, or if you have been thinking it might be time to put a plan together, the next step is a short discovery call. We will help you make those decisions, and we will get it done.