Quarter 4 Planning: What Every California Family Should Know About Estate Plans

The final months of the year are a natural time to get organized, set goals, and tie up loose ends before heading into January. For California families, Quarter 4 is also one of the best times to review your estate plan. Recent updates to state law, along with upcoming federal tax changes in 2026, make this year-end season especially important.

1. California’s New Simplified Probate Rules (Effective April 2025)

In California, probate can be time-consuming and costly. To help families, the state passed AB 2016, which takes effect April 1, 2025. This law allows heirs to transfer a primary residence valued at $750,000 or less without going through full probate.

Combined with the state’s existing small estate affidavit (for personal property worth under about $184,500), families may be able to transfer nearly $1 million in assets through simplified procedures instead of full probate.

What this means for you: Even with this change, many families will still benefit from a revocable living trust, which avoids probate entirely—no matter the value of the home or other assets.

2. Reviewing Your Core Estate Planning Documents

Quarter 4 is a smart time to review and update key documents:

• Will or Trust: Do your instructions still reflect your wishes? Have you updated beneficiaries and successor trustees?

• Durable Power of Attorney: Who can step in to handle finances if you’re unable?

• Advance Health Care Directive: Does it reflect your current preferences for medical decisions?

• Guardianship Designations: If you have minor children, are your chosen guardians still the right fit?

  
  

Life moves quickly—marriages, divorces, new children, or changes in financial circumstances may all require updates.

3. Federal Estate Tax Exemption Set to Drop in 2026

Currently, the federal estate and gift tax exemption is about $13.99 million per person ($27.98 million for couples). But unless Congress acts, this exemption will drop by half on January 1, 2026.

Why this matters:

• High-net-worth families should consider lifetime gifting strategies in 2025.

• Business owners and families with appreciating real estate may need to adjust trust structures or use advanced planning tools before the window closes.

4. Special Needs Planning Before the New Year

If you are caring for a child or loved one with special needs, Quarter 4 is also a good time to revisit their plan:

• Special Needs Trusts (SNTs) allow you to set aside funds without affecting Medi-Cal or SSI eligibility.

• First-party SNTs (funded with the beneficiary’s own assets) must include a Medi-Cal payback clause.

• Third-party SNTs (funded by parents or relatives) do not require payback, making them more flexible for family planning.

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Confirm that your beneficiary designations (life insurance, retirement accounts, etc.) direct assets to the trust, not to the individual—so government benefits are preserved.

5. A Year-End Estate Planning Checklist

Before the year ends, California families should:

• Review wills, trusts, and beneficiary designations.

• Confirm guardians and successor trustees.

• Ensure real property is properly titled in your trust.

• Consider tax planning opportunities before the 2026 changes.

• Schedule an annual review with your estate planning attorney.

Quarter 4 isn’t just about wrapping up the calendar year; it’s about protecting your family’s future. With California’s updated probate rules on the horizon and federal tax exemptions set to shrink in 2026, now is the time to take action. An updated estate plan ensures peace of mind, safeguards your assets, and supports your loved ones well into the future.