California residents face unique challenges in wealth transfer planning due to high property values, progressive income and property taxes, but no state-level estate tax. Here’s how OBBBA reshapes the landscape:

  1. Federal Estate/Gift/GST Tax Exemptions Permanently Raised

    OBBBA permanently raises the federal estate, gift, and generation-skipping transfer (GST) tax exemptions to $15 million per person ($30 million per married couple), effective January 1, 2026, and ties them to inflation thereafter
    Although California doesn’t impose its own estate tax, many residents’ estates exceed even these enhanced thresholds. That means more flexibility to leverage advanced strategies like lifetime gifting, trusts, and multigenerational plans while still enjoying asset protection and flexibility.

    At Tyre Law Group, our attorneys help high-net-worth Californians design and implement these strategies—ensuring your wealth is preserved and transferred efficiently while protecting your family’s legacy.

  2. Temporary SALT Deduction Cap Increase—Strategic Leverage for Californians

    From 2025 through 2029, OBBBA raises the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 (indexed annually), before reverting in 2030.
    For high-tax states like California, this shift unlocks potent planning strategies—especially for those establishing multiple non-grantor trusts. Each trust is its own taxable entity and, if its AGI stays under $500,000, it can claim its own SALT deduction. The result? A multiplied deduction opportunity across several trusts

  3. Still More Than Just Taxes—Why Estate Planning Matters

    Despite larger exemptions, estate planning remains critical:
    Asset Protection & Flexibility: Trust structures still help shield assets from creditors, divorce, and other risks—imperative in California’s community property environment
    Estate Reduction & Control: Irrevocable trusts, family limited partnerships, charitable remainder trusts, and other vehicles let you transfer appreciating assets tax-efficiently and maintain control.
    Revisiting Existing Trusts: Updating trustee powers or considering community property trusts can optimize stepped-up basis and adapt to legislative shifts.

    Tyre Law Group ensures your estate plan is not only current but also resilient—built to adapt as both federal and California laws evolve.

  4. Important Planning Windows and Watchouts

    Act Now on SALT Advantages: The increased SALT deduction is temporary. Strategies that harness this benefit must be implemented within the 2025–2029 window .
    Permanent Doesn’t Mean Forever: Although the exemption hike is permanent, legislative reversals are possible down the road.

Conclusion

The OBBBA offers huge opportunities for Californians—but it’s not a “set-it-and-forget-it” scenario. Smart planning now can yield decades of benefits, especially amid shifting tax landscapes and state regulations.

With decades of combined experience in estate planning, legacy planning, and trust law, Tyre Law Group is uniquely positioned to guide California families through these changes—helping you protect what you’ve built, reduce tax burdens, and secure your legacy for future generations.