Estate Planning for High-Net-Worth Families in Newport Beach

Key Takeaways

• The estate tax exemption will rise to $15 million per individual in 2026, but advanced planning is still essential to avoid the 40% estate tax on wealth above that threshold.
• Tools like irrevocable trusts, IDGTs, GRATs, and LLCs allow high-net-worth families to reduce taxes and control how wealth is passed down.
• Legacy planning involves more than money—it’s about preserving family values, sharing personal stories, and protecting loved ones with tailored structures.
• Local expertise in Newport Beach and surrounding Orange County is crucial to building an estate plan that aligns with California laws, family dynamics, and real estate portfolios.
• Families with international assets, business interests, or unique dynamics (like blended families or special needs beneficiaries) need especially careful, customized estate plans.

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Understanding the Landscape: What Makes High-Net-Worth Estate Planning Different?

Romelia DeDe Soto, an experienced Estate Planning Attorney in Newport Beach, explains that planning for high-net-worth families involves more than setting up a basic trust and will. These families often have complex portfolios that include a blend of real estate, business interests, and financial investments.

The 2026 estate tax exemption will increase to $15 million per person, but anything above that will be taxed at a steep 40% rate. That means a married couple can shield up to $30 million—but only with proper planning. DeDe notes that for high-net-worth individuals in Newport Beach, Huntington Beach, and Irvine, planning around these thresholds is critical.

And the complexity doesn’t stop there. “You want to look at estate tax, income tax, and the age and goals of the people doing the planning,” DeDe explains. “What kind of control do they want to maintain during their lifetime? What kind of legacy do they want to leave behind?”

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New Tax Exemptions and Smart Gifting Strategies

With so much fluctuation in the tax code over the years, many families are unsure how to proceed. DeDe clarifies that starting in 2026, the estate tax exemption will be set at $15 million per individual. Anything over that is subject to a 40% estate tax—making it vital to plan proactively.

A simple but powerful tactic? Gifting.

Each individual can give $19,000 annually to children, grandchildren, or other beneficiaries without triggering a gift tax return. For a couple, that’s $38,000 per recipient per year. These gifts can be funneled into irrevocable trusts or college funds, effectively reducing the size of the taxable estate while providing for future generations.

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Advanced Strategies to Reduce Estate Taxes

Estate planning for high-net-worth individuals goes beyond revocable trusts. DeDe outlines several advanced tools:

• Irrevocable Trusts: Used to remove assets from the taxable estate while still benefiting future generations.
• Intentionally Defective Grantor Trusts (IDGTs): Transfer appreciating assets out of the estate while retaining favorable income tax treatment.
• Irrevocable Life Insurance Trusts (ILITs): Hold life insurance policies outside the estate, providing beneficiaries with tax-free liquidity.
• Grantor Retained Annuity Trusts (GRATs): Transfer future appreciation to heirs with minimal gift tax impact.
• Bypass Trusts and QTIP Trusts: Used between spouses to maximize tax savings while ensuring blended families are treated fairly.

Each tool is selected based on the client’s family dynamics, asset types, and personal goals. “It’s not one-size-fits-all,” says DeDe. “We look at how much control you want to keep, what income you need, and what kind of future you envision.”

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Keeping Control While Planning for the Future

A common concern for affluent clients is maintaining access to their wealth while planning for succession. DeDe frequently recommends using LLCs (Limited Liability Companies) to hold real estate or business assets. These entities can be structured with multiple members, allowing for family participation while keeping control with the managing partner—often the original owner.

“These structures let you continue benefiting from the assets while slowly transferring control,” she explains. LLCs also offer asset protection benefits and can be a smart way to prepare for generational transitions.

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Legacy Planning: It’s More Than Just the Money

For many families in Newport Beach, legacy planning isn’t just about assets—it’s about preserving values, stories, and vision. DeDe encourages clients to think about what they want future generations to remember.

Tools like recorded interviews, legacy letters, or structured storytelling allow families to document how their wealth was created, the challenges they faced, and what truly matters to them. These narratives become part of the legacy alongside financial assets.

DeDe shares that she’s helped clients capture these stories through video or audio recordings. “There’s always a story behind success,” she says. “And sharing that helps shape the next generation in meaningful ways.”

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Navigating Sensitive Family Dynamics

When a family includes someone with a disability, addiction, or mental health challenge, planning becomes even more critical. DeDe urges clients to be candid: “The more I know, the better I can protect your loved ones.”

Options include:

• Special Needs Trusts for beneficiaries who cannot manage funds themselves.
• Discretionary Trusts that provide benefits without direct access.
• Controlled distributions that ensure beneficiaries are supported without enabling harmful behavior.

DeDe emphasizes that families should feel safe discussing the “hard stuff.” Protecting the vulnerable often means tailoring the plan to their specific needs—not just dividing assets equally.

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Protecting Assets from Divorce and Creditors

When transferring wealth to children or grandchildren, clients often ask how to keep the inheritance in the family—especially during divorces or lawsuits. “Everyone wants their legacy to follow the bloodline,” says DeDe.

Here are some tools she recommends:

• Irrevocable Trusts that restrict beneficiary control.
• Prenuptial and Postnuptial Trust Clauses to insulate assets from future spouses.
• Spendthrift Provisions that prevent misuse or garnishment.

While no strategy is 100% lawsuit-proof, these protections offer a strong layer of security for high-value assets like real estate, business interests, and investment portfolios.

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Planning for International Assets and Dual Citizenship

For high-net-worth individuals with overseas property or dual citizenship, estate planning can become significantly more complex. “Each country has its own inheritance laws,” DeDe cautions. “U.S. planning won’t necessarily apply abroad.”

Her advice? Work with professionals who understand both domestic and foreign requirements. Depending on the jurisdiction, clients may need to create estate plans in both countries to ensure compliance and proper execution.

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Business Succession: Planning for Continuity or Exit

Many high-net-worth families in Orange County own successful businesses—but passing them on requires forethought. According to DeDe, one of the biggest mistakes is failing to include the next generation in the conversation.

“Do your children even want to run the business?” she asks. “Sometimes the answer is no, and that changes the whole plan.”

Whether the goal is to transition leadership or sell the business, early discussions and clear documentation are essential. Business succession should be integrated into the larger estate plan to preserve wealth and minimize tax impact.

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Charitable Giving as Part of the Estate Strategy

Families with philanthropic goals have additional planning options. DeDe helps clients create structures such as:

• Charitable Remainder Trusts
• Donor-Advised Funds
• Private Foundations

Whether clients want to make donations during their lifetime or after death, these tools allow for meaningful giving while potentially reducing taxable estate size.

“It all depends on what kind of impact you want to make—and when,” says DeDe.

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The Most Common Mistakes Affluent Families Make

After nearly 20 years serving clients in Newport Beach, Huntington Beach, and Irvine, DeDe has seen a pattern: many families skip the basics.

“You can’t build a skyscraper without a foundation,” she says.

That foundation includes:

• A revocable living trust
• A will
• Powers of attorney
• Proper QTIP and bypass trust language for married couples
• Correct titling of assets

Too often, clients focus on advanced tools like IDGTs and LLCs without solidifying the basics first. Fixing these oversights after a death is not only stressful—it can be expensive or even irreversible.

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Why Local Expertise Matters in Newport Beach

Estate planning is deeply personal—but it’s also geographic. DeDe’s extensive experience in Orange County gives her insight into the local court system, real estate market, and high-net-worth demographics.

“I know how fast the courts move, what documentation they want, and what common pitfalls to avoid,” she shares.

Her team at The Soto Law Group is trained across probate, estate planning, conservatorships, and trust litigation—ensuring clients get comprehensive guidance from start to finish.

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Need Help with Estate Planning in Newport Beach?

If you or your family are navigating complex estate planning needs—whether that means transferring wealth, protecting assets, planning business succession, or just getting your foundation in place—The Soto Law Group is here to help.

Speak with a trusted Estate Planning Attorney in Newport Beach today. Call (949) 945-0059 or schedule your consultation online at https://www.thesotolawgroup.com/contact-us-newport-beach-lawyers.

Your legacy deserves to be protected—with precision, compassion, and care.

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