By Kevin Luu, Co-Founder and Chief Learning Officer. Reviewed on 2026-09-30.
Parents of young children in California or Washington need five things in place: a will that names a guardian, a funded revocable living trust (or a clear reason not to have one), up-to-date beneficiary designations, a durable power of attorney, and an advance healthcare directive for each parent. The two states differ mainly in cost and tax. California probate charges fees set by statute on the gross value of the estate, which is why most California parents use a trust. Washington has cheaper probate but its own estate tax, with an exclusion of $3,076,000 or $3,000,000 in 2026 (depending on the date of death) that a paid-off house, vested RSUs and a term life policy can cross.
This page explains how the rules work; it is not legal advice. Your documents should be drafted by a California or Washington estate attorney.
The estate planning checklist for parents of children under 12
The table below is the full set, with the state detail that changes how each one works.
| Document | What it does | California note | Washington note |
|---|---|---|---|
| Will | Names a guardian for the children and an executor; directs anything not already in the trust or passing by beneficiary form | Assets that pass only under a will go through probate, with statutory fees (Prob. Code 10800, 10810) | Probate is usually simpler with nonintervention powers (chapter 11.68 RCW) |
| Pour-over will | A short will that sends anything left outside the trust into it | Standard companion to a living trust; still used to nominate the guardian | Same function; pairs with a Washington revocable trust |
| Revocable living trust | Holds the house and accounts during life; a successor trustee manages and distributes them without probate | Main tool for avoiding probate on a Bay Area or Los Angeles home | Useful for privacy, incapacity and out-of-state property; can hold a credit shelter trust for the state estate tax |
| Guardian nomination | Tells the court who should raise the children if both parents die | A parent may nominate a guardian in a signed writing, usually the will (Prob. Code 1500, 1502) | The court appoints a parent’s nominee from a probated will or sworn declaration unless that is against the child’s interest (RCW 11.130.215) |
| Durable power of attorney | Lets a named person handle money and paperwork if a parent is incapacitated | Covers accounts the trust does not hold, such as a 401(k) or payroll issues | Governed by the Uniform Power of Attorney Act (chapter 11.125 RCW) |
| Advance healthcare directive | Names who makes medical decisions and records your wishes | Statutory form in Prob. Code 4701 | Health care directive under chapter 70.122 RCW, plus a separate healthcare power of attorney |
| Beneficiary designations | Direct 401(k)s, IRAs, HSAs and life insurance straight to the named person or trust | These pass outside the will and outside probate | Same; retirement accounts, and life insurance you own, still count in the Washington gross estate |
| Letter of wishes | A non-binding letter to the guardian and trustee about how you want the kids raised and the money used | Not filed with any court | Not filed with any court |
Naming a guardian: the person who raises the kids vs the person who controls the money
The guardian nomination is the reason parents of young children cannot skip a will, even if everything else sits in a trust. In California, a parent can nominate a guardian of the child’s person and of the child’s estate in a signed writing, and the nomination stays effective after the parent’s death (Cal. Prob. Code 1500 to 1502). In Washington, the court appoints a guardian nominated by a parent in a probated will or a sworn declaration unless the appointment would be contrary to the child’s best interest (RCW 11.130.215).
Three decisions come up in almost every family:
- Separate the caregiver from the money. The sister who would be a wonderful parent may not be the right person to manage $2 million of life insurance proceeds. Many families name her as guardian and a different person, or a professional, as trustee of the children’s trust.
- Name backups. Name at least one alternate guardian and one alternate trustee. A single name fails if that person divorces, moves abroad or becomes ill.
- Agree as a couple. In California, one parent’s nomination generally works only if the other parent nominates or consents in writing to the same person, or the other parent has died or cannot legally consent (Prob. Code 1500). Decide together, then sign.
How the children’s share is actually held (a trust that pays for school and releases money at ages you choose, instead of a lump sum at 18) is covered in our guide to leaving money to minor children.
Will or living trust? Why most California parents use a revocable trust
A revocable living trust is a document you create, fund and control while you are alive. You are the trustee. You can change it at any time. When you die, a successor trustee you picked takes over and follows your instructions without a probate case.
The trust only works if it is funded. Signing the trust document does nothing for a house that is still titled in your own names. Funding means:
- Recording a new deed that moves the home into the trust.
- Retitling brokerage accounts, including the account where vested RSU shares are delivered, into the trust’s name.
- Leaving 401(k)s and IRAs in your name and naming the spouse first and the trust (or the children’s sub-trust) as contingent beneficiary. Retirement accounts are not retitled into a revocable trust.
- Checking again after every refinance, home purchase or new account. A refinance is a common moment for a house to fall out of the trust.
Probate in California: what it costs on a Bay Area house
If a California estate goes through probate, the executor and the executor’s attorney are each entitled to a fee set by statute: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000 and 1% of the next $9,000,000 (Prob. Code 10800 and 10810). The fee is figured on the appraised value of the estate “without reference to encumbrances.” A mortgage does not reduce it.
Worked example: a $2,000,000 probate estate in California
Assumptions: a Palo Alto family’s home appraised at $1,800,000 with a $1,200,000 mortgage, plus a $200,000 brokerage account in the parents’ names. Retirement accounts and life insurance have named beneficiaries, so they stay out of probate. No trust was funded. The gross probate estate is $2,000,000, although the family’s equity in those assets is only $800,000.
| Slice of the gross estate | Rate | Executor fee | Attorney fee |
|---|---|---|---|
| First $100,000 | 4% | $4,000 | $4,000 |
| Next $100,000 | 3% | $3,000 | $3,000 |
| Next $800,000 | 2% | $16,000 | $16,000 |
| Next $1,000,000 | 1% | $10,000 | $10,000 |
| Total | $33,000 | $33,000 |
Combined statutory fees: $66,000, before court costs and appraisal, on an estate with $800,000 of equity. A family member serving as executor can waive the executor fee, but the attorney fee remains. A funded trust would typically have kept the house out of probate entirely. California’s small-estate affidavit only applies when the estate is no larger than $208,850 for deaths on or after April 1, 2025 (Prob. Code 13100), and the court petition for a primary residence only applies to a home worth $750,000 or less (Prob. Code 13151; Judicial Council, Probate Code 890 adjusted amounts). A Bay Area home will usually exceed both.
California has no state estate tax or inheritance tax; no California estate tax return is required for deaths after December 31, 2004 (California State Controller). For California parents the trust is about probate cost, delay and privacy, not tax.
Washington parents: community property, nonintervention probate and wills
Washington is a community property state, so most property earned during the marriage belongs to both spouses equally (RCW 26.16.030). Probate is generally lighter than in California: Washington has no statutory percentage fee schedule, and a personal representative granted nonintervention powers can usually settle the estate without court approval for each step (chapter 11.68 RCW).
That makes a will-based plan workable for some Washington families. Many still use a revocable trust, for three reasons: it keeps the estate private, it lets a successor trustee act if a parent is incapacitated, and it is a clean place to build the credit shelter trust described next. The Washington estate tax, not probate, is usually what decides the design.
The Washington estate tax: a $3 million exclusion that RSUs and a house can cross
Washington taxes the estates of its residents above an exclusion amount of $3,076,000 for deaths from January 1 to June 30, 2026, and $3,000,000 for deaths on or after July 1, 2026. For deaths on or after July 1, 2026, the rate on the Washington taxable estate (the amount above the exclusion, after deductions) starts at 10% and rises to 20% above $9,000,000 (WA DOR estate tax tables). A return and payment are due nine months after death (WA DOR).
Two details catch Washington families:
- No portability. “Washington law does not have, nor does it incorporate, the federal provisions of portability for estate tax” (WA DOR estate tax FAQ). If everything passes to the surviving spouse, the first spouse’s $3,000,000 exclusion is simply lost.
- Life insurance counts. A policy on your life that you own is part of your gross estate (same FAQ). A $2,000,000 term policy bought to protect the kids can push an otherwise modest estate over the line.
Worked example: a $5,000,000 Bellevue household
Assumptions: an Amazon executive and a physician in Bellevue with two children, ages 4 and 7. One parent has died and left everything to the other outright. The surviving parent then dies on or after July 1, 2026, owning home equity of $1,400,000, a brokerage account with vested RSU shares of $900,000, 401(k)s of $700,000 and a $2,000,000 term policy on their own life that they own. Debts, funeral and administration costs are ignored to keep the arithmetic clear.
| Everything to spouse outright | Life policy owned by an irrevocable trust | Credit shelter trust at first death | |
|---|---|---|---|
| Gross estate at second death | $5,000,000 | $3,000,000 | $3,500,000 (assumes the first parent’s half of the $3,000,000 community assets, $1,500,000, went into the credit shelter trust) |
| WA exclusion (deaths from July 1, 2026) | $3,000,000 | $3,000,000 | $3,000,000 |
| WA taxable estate | $2,000,000 | $0 | $500,000 |
| WA estate tax | $240,000 ($100,000 on the first $1,000,000 plus 14% of the next $1,000,000) | $0 | $50,000 (10% of $500,000) |
The first column is what many Washington families have by default: simple wills that leave everything to each other. The $240,000 comes straight out of what the children receive. The other two columns show the two designs an estate attorney usually discusses. An irrevocable life insurance trust owns the policy so the payout is not in either parent’s estate (a transfer of an existing policy generally needs to happen more than three years before death to work, IRC 2035). A credit shelter trust, written into each spouse’s revocable trust or will, uses the first spouse’s exclusion instead of losing it. The surviving spouse can still receive income from it and money for the children’s needs. Used together, the two designs would bring this family’s Washington tax at the second death to $0 ($1,500,000 in the survivor’s estate, under the $3,000,000 exclusion). For deaths from January 1 to June 30, 2026, the first column’s estate would owe $238,600 under the table in force then, because the exclusion and rates differ. Always check the date of death against the DOR table.
RSUs are why this matters so much for this group. A family that vests $600,000 a year and holds the shares can cross $3,000,000 in net worth well before the youngest child is in middle school.
The federal estate tax at $15 million: why it rarely applies to this family
For 2026 the federal basic exclusion is $15,000,000 per person, made permanent and indexed from 2027 by P.L. 119-21 (IRC 2010(c); IRS: What’s new, estate and gift tax). The claim that it would drop to about $7 million in 2026 is out of date. Federal law does allow a surviving spouse to use the first spouse’s unused exclusion if an estate tax return is filed to elect portability (IRS: Estate tax). For a household with $3,000,000 to $20,000,000, federal tax is usually not the planning driver. In Washington the state tax is. In California the driver is probate.
Beneficiary designations: 401(k), life insurance and why not to name a minor
Beneficiary forms override your will. A 401(k) that still names a former partner, or names no one, can undo a careful plan. Review every account once a year and after any birth, marriage, divorce or job change:
- 401(k), 403(b), IRA, HSA and deferred compensation plans at each employer, including old employers.
- Group life insurance through work and any individual term policy.
- Brokerage transfer-on-death designations, if the account is not in the trust.
Do not name a young child directly. A minor cannot take control of the money, so a court may need to appoint someone to manage it, and it can end up in the child’s hands at the age your state sets rather than the age you would choose. Naming the children’s trust as beneficiary lets the trustee manage it under your instructions. The rules for inherited retirement accounts are their own topic; see our guide to 403(b) inheritance rules.
Powers of attorney and healthcare directives for both parents
A serious illness or accident can leave a parent unable to act for months, and a will does nothing while you are alive. Each parent needs a durable financial power of attorney and an advance healthcare directive. Name each other first and a trusted adult second. Make sure the agent can reach the accounts that sit outside the trust, such as the 401(k) and the payroll portal where RSUs and ESPP are managed. Give copies to the agents and your physicians.
The letter you leave with the plan: what the guardian and trustee should know
The documents above say who gets what. They do not say how you think. A guardian raising a 6-year-old and a trustee deciding whether to pay for a gap year both need more than legal text. A short letter of wishes can cover:
- How you want the children to learn about money: allowance, saving, giving, and when they should start working.
- What the trust money is for, and what it is not for, in your words.
- Where every account, policy and login lives, and who your attorney, CPA and adviser are.
- The values behind your choices of guardian and trustee.
As Kevin Luu puts it: “Your kids will inherit your money. Will they inherit your judgment?” This letter is the first entry many families add to their FamilyKnowledge® Library, the written record of family decisions that the children read as they grow up. Update it when you update the documents.
Common mistakes we see in plans for young families
- A trust signed but never funded, so the house still goes through probate.
- Washington couples with simple “all to my spouse” wills and an estate over $3,000,000, which wastes one exclusion.
- Beneficiary forms that name minor children directly or have not been updated since before the kids were born.
- Documents from another state that were never reviewed after moving to California or Washington.
Frequently asked questions
Do we need a trust if we rent in California?
Maybe not for probate. If your only assets outside beneficiary forms are a small brokerage account and a car, the estate may fall under California’s $208,850 small-estate limit (deaths from April 1, 2025). You still need a will to name a guardian, and many parents use a trust to hold life insurance for the children. The answer changes the day you buy a home.
Does the Washington estate tax apply if we move to California?
Washington taxes estates of people domiciled in Washington, and nonresidents who own Washington real estate or tangible personal property there (WA DOR). A family that moves to California but keeps a Seattle rental could still owe Washington estate tax on that property. Ask your attorney to review both states’ rules before and after a move.
Your next step
Pull out whatever documents you have and fill in the checklist table above: which rows exist, when they were signed, and who is named. Then take the gaps to a California or Washington estate attorney. If you want help seeing how your RSUs, insurance and accounts add up for the Washington exclusion, or how the plan fits with taxes and the rest of your finances, the Age Five Family Office™ at Bright Advisers starts with a Tax & Wealth Assessment. More on how we work with families on this is on our estate planning and family governance pages, and our list of questions to ask an attorney can help you prepare for that meeting.
This is general education, not legal or tax advice, and the right plan depends on your family’s full picture and your state’s law at the time you sign.