Year-End Estate Planning Checklist for 2026: Gifts, the New Estate Tax Exemption and Holiday Family Talks

General information, not legal advice. Attorney advertising. Reading this article does not create an attorney-client relationship. See the important information at the end of this article.

What changed for estate planning in 2026?

The biggest change is at the federal level. For years, families heard that the federal estate tax exemption would be cut roughly in half at the start of 2026. That did not happen. The One, Big, Beautiful Bill Act, signed in July 2025, amended Internal Revenue Code § 2010 and set the basic exclusion amount at $15,000,000 per person for 2026, with inflation adjustments beginning in 2027. The IRS confirmed the 2026 figures in Revenue Procedure 2025-32. The generation-skipping transfer (GST) tax exemption is also $15,000,000 for 2026.

Other key numbers stayed the same or rose modestly. The annual gift tax exclusion remains $19,000 per recipient for 2026, the same as 2025. For California probate, the small-estate limit under Probate Code § 13100 is $208,850 for deaths on or after April 1, 2025.

What has not changed: California still has no state estate tax and no state gift tax, and a San Diego home titled in your individual name still generally goes through probate when you die unless it is held in a funded trust or passes by another non-probate method.

How much can I give away tax-free in 2026?

For 2026, you can give up to $19,000 to any number of people without using any of your lifetime exemption and without filing a gift tax return, as long as the gifts are “present interest” gifts (the recipient can use the money now). The annual exclusion is per calendar year, so gifts you want to count toward 2026 must be completed by December 31, 2026.

• Married couples can elect “gift splitting” and together give $38,000 per recipient. Gift splitting generally requires filing IRS Form 709 even though no tax is owed.
• Tuition and medical payments made directly to a school or medical provider are excluded from gift tax without limit and don’t count against the $19,000 (Internal Revenue Code § 2503(e)). Writing the check to your grandchild instead of the university does not qualify.
• A spouse who is not a U.S. citizen can receive up to $194,000 in 2026 under the annual exclusion (instead of the unlimited marital deduction available for citizen spouses). See our page on estate planning for non-U.S. citizens.
• 529 plan contributions count as present-interest gifts for annual exclusion purposes.

Gifts above $19,000 to one person are not automatically taxed. They generally require a Form 709 and reduce your $15,000,000 lifetime exclusion, but no gift tax is due until total lifetime taxable gifts exceed that amount. For most San Diego families the real questions are practical ones: Can we afford to give? Will a gift affect a child’s financial aid or a relative’s public benefits? Should a gift to a minor go into a trust or custodial account rather than outright?

Do I need to worry about the federal estate tax?

Most families do not. With a $15,000,000 basic exclusion per person in 2026, very few estates owe federal estate tax. A married couple can potentially shelter twice that amount, because a surviving spouse may use the deceased spouse’s unused exclusion (“portability”) — but only if the executor files a timely and complete estate tax return (Form 706) for the first spouse to die, even when no tax is owed.

That portability election is easy to overlook. If your parent or spouse has died recently, ask an attorney or tax advisor whether filing Form 706 makes sense. Larger estates, business owners and families with significant real estate appreciation may still benefit from tax planning, and the exemption is “current law” — Congress can change it again.

Why review beneficiary designations before year-end?

Retirement accounts (401(k)s, IRAs), life insurance, annuities and payable-on-death bank accounts pass to the person named on the beneficiary form — not according to your will or trust. Outdated designations are among the most common estate planning problems we see:

• An ex-spouse still named on a life insurance policy or 401(k).
• A deceased parent named as beneficiary, which can send the account into probate.
• A minor child named directly, which may require a court-supervised guardianship of the estate to manage the money.
• No contingent beneficiary at all.

Open-enrollment season and year-end statements are a good time to log into each account and check. If you have a living trust, ask whether some accounts should name the trust and others should name individuals — the right answer depends on the account type and your family.

Is my living trust actually funded?

A trust only avoids probate for assets that are titled in the trust. If you refinanced your home, opened a new brokerage account or bought property since you signed your trust, those assets may be outside it. A quick year-end review:

• Is your San Diego home deeded to you as trustee of your trust? (A refinance sometimes takes the home out of the trust.)
• Are new bank and investment accounts titled in the trust or tied to it by a beneficiary designation?
• Do your successor trustees, agents and guardians still make sense?
• Has there been a marriage, divorce, birth, death or move since you signed?

If a loved one has already passed and an asset was left out of the trust, California offers court procedures that are often simpler than full probate. See How much does probate cost in California? for why that matters, and our trust administration page for what successor trustees do next.

How do I talk with my aging parents about their estate plan over the holidays?

Thanksgiving is often the one time adult children and parents are in the same room. You don’t need to ask what your parents own or who gets what. The most useful questions are about whether a plan exists and whether it works:

1. “Do you have a will or a trust, and where is it?” Knowing where the original documents are can save weeks later.
2. “Who have you named to handle things if you can’t?” That means the successor trustee, the agent under a durable power of attorney, and the health care agent in an advance health care directive.
3. “When was it last updated?” A plan signed decades ago may name people who have died or moved away, or may predate a move to California.
4. “Is the house in the trust?” An unfunded trust is a common and costly gap.
5. “Would you like help reviewing it?” Offering help, rather than pushing, keeps the conversation respectful.

A few tips: pick a quiet moment rather than the dinner table, frame it around your parents’ wishes and avoiding court, and include siblings so no one feels left out. If your parent has no plan at all, our guide on what happens if you die without a will in California explains the default rules. If a parent’s capacity is already declining, act promptly — a person must have legal capacity to sign estate planning documents, and without them a family may need a court conservatorship.

Irina meets with clients in English and Russian, and adult children are welcome to join a parent’s consultation with the parent’s permission.

A year-end checklist for San Diego families

• ☐ Make any planned annual exclusion gifts (up to $19,000 per recipient) by December 31, 2026.
• ☐ Pay tuition or medical bills for family members directly to the institution if you want them excluded from gift tax.
• ☐ Check beneficiary designations on every retirement account, life insurance policy and payable-on-death account.
• ☐ Confirm your home and major accounts are titled in your living trust.
• ☐ Make sure your will nominates guardians for minor children.
• ☐ Update your durable power of attorney and advance health care directive, and give copies to the people named.
• ☐ If a spouse died recently, ask about a portability election on Form 706.
• ☐ Talk with aging parents about where their documents are and who is in charge.
• ☐ Schedule a free estate plan review if your plan is more than a few years old.

Sources: IRS Revenue Procedure 2025-32 (2026 basic exclusion, GST exemption, annual exclusion and non-citizen spouse exclusion); IRS Form 709 and instructions; California Probate Code § 13100.