diff --git a/app/models/assistant.rb b/app/models/assistant.rb
index 583737761..708c0aabf 100644
--- a/app/models/assistant.rb
+++ b/app/models/assistant.rb
@@ -30,7 +30,13 @@ module Assistant
         Function::GetBudget,
         Function::ImportBankStatement,
         Function::SearchFamilyFiles,
-        Function::CreateGoal
+        Function::CreateGoal,
+        Function::GetTags,
+        Function::CreateTag,
+        Function::UpdateTag,
+        Function::GetCategories,
+        Function::CreateCategory,
+        Function::UpdateCategory
       ]
     end
 
diff --git a/app/models/assistant/function.rb b/app/models/assistant/function.rb
index 4e918cb54..99e4df300 100644
--- a/app/models/assistant/function.rb
+++ b/app/models/assistant/function.rb
@@ -79,6 +79,10 @@ class Assistant::Function
       user.family
     end
 
+    def valid_uuid?(str)
+      UuidFormat.valid?(str)
+    end
+
     # To save tokens, we provide the AI metadata about the series and a flat array of
     # raw, formatted values which it can infer dates from
     def to_ai_time_series(series)
diff --git a/app/models/assistant/function/create_category.rb b/app/models/assistant/function/create_category.rb
new file mode 100644
index 000000000..8d1a6c76c
--- /dev/null
+++ b/app/models/assistant/function/create_category.rb
@@ -0,0 +1,81 @@
+class Assistant::Function::CreateCategory < Assistant::Function
+  class << self
+    def name
+      "create_category"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Creates a new category for the user's family.
+
+        Categories support two levels of hierarchy: a top-level category can have subcategories,
+        but subcategories cannot have children. Provide parent_id (from get_categories) to make
+        a subcategory — it will inherit the parent's color automatically.
+
+        If icon is omitted it is suggested from the name. If color is omitted a palette color is used
+        (ignored for subcategories since color is inherited). Category names must be unique.
+      INSTRUCTIONS
+    end
+  end
+
+  def strict_mode?
+    false
+  end
+
+  def params_schema
+    build_schema(
+      required: [ "name" ],
+      properties: {
+        name: {
+          type: "string",
+          description: "Category name (must be unique within the family)"
+        },
+        color: {
+          type: "string",
+          description: "Hex color code (e.g. #e99537). Ignored for subcategories. Defaults to a palette color."
+        },
+        icon: {
+          type: "string",
+          description: "Lucide icon name (e.g. 'shopping-cart'). Suggested from name if omitted."
+        },
+        parent_id: {
+          type: "string",
+          description: "ID of an existing top-level category to nest under (makes this a subcategory). Use get_categories to find ids."
+        }
+      }
+    )
+  end
+
+  def call(params = {})
+    name = params["name"].to_s.strip
+    return error("name_required", "Please provide a name for the category.") if name.blank?
+
+    color = params["color"].presence || Category::COLORS.sample
+    icon = params["icon"].presence || Category.suggested_icon(name)
+    attrs = { name: name, color: color, lucide_icon: icon }
+
+    if params["parent_id"].present?
+      return error("parent_not_found", "Parent category with id '#{params["parent_id"]}' not found.") unless valid_uuid?(params["parent_id"])
+      parent = family.categories.find_by(id: params["parent_id"])
+      return error("parent_not_found", "Parent category with id '#{params["parent_id"]}' not found.") unless parent
+      attrs[:parent] = parent
+    end
+
+    category = family.categories.new(attrs)
+
+    if category.save
+      { success: true, category: serialize(category), message: "Category '#{category.name_with_parent}' created." }
+    else
+      error("validation_failed", category.errors.full_messages.join("; "))
+    end
+  end
+
+  private
+    def serialize(c)
+      { id: c.id, name: c.name, name_with_parent: c.name_with_parent, color: c.color, icon: c.lucide_icon, parent_id: c.parent_id }
+    end
+
+    def error(key, message)
+      { success: false, error: key, message: message }
+    end
+end
diff --git a/app/models/assistant/function/create_tag.rb b/app/models/assistant/function/create_tag.rb
new file mode 100644
index 000000000..4acffa838
--- /dev/null
+++ b/app/models/assistant/function/create_tag.rb
@@ -0,0 +1,56 @@
+class Assistant::Function::CreateTag < Assistant::Function
+  class << self
+    def name
+      "create_tag"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Creates a new tag for the user's family.
+
+        Tags are applied to transactions to organize them beyond categories.
+        If color is omitted, one is chosen automatically from the default palette.
+        Tag names must be unique within the family.
+      INSTRUCTIONS
+    end
+  end
+
+  def strict_mode?
+    false
+  end
+
+  def params_schema
+    build_schema(
+      required: [ "name" ],
+      properties: {
+        name: {
+          type: "string",
+          description: "Tag name (must be unique within the family)"
+        },
+        color: {
+          type: "string",
+          description: "Hex color code (e.g. #e99537). If omitted, one is chosen from the default palette."
+        }
+      }
+    )
+  end
+
+  def call(params = {})
+    name = params["name"].to_s.strip
+    return error("name_required", "Please provide a name for the tag.") if name.blank?
+
+    color = params["color"].presence || Tag::COLORS.sample
+    tag = family.tags.new(name: name, color: color)
+
+    if tag.save
+      { success: true, tag: { id: tag.id, name: tag.name, color: tag.color }, message: "Tag '#{tag.name}' created." }
+    else
+      error("validation_failed", tag.errors.full_messages.join("; "))
+    end
+  end
+
+  private
+    def error(key, message)
+      { success: false, error: key, message: message }
+    end
+end
diff --git a/app/models/assistant/function/get_categories.rb b/app/models/assistant/function/get_categories.rb
new file mode 100644
index 000000000..f7bf643d8
--- /dev/null
+++ b/app/models/assistant/function/get_categories.rb
@@ -0,0 +1,36 @@
+class Assistant::Function::GetCategories < Assistant::Function
+  class << self
+    def name
+      "get_categories"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Returns all categories for the user's family, ordered alphabetically by hierarchy.
+
+        Each entry includes id, name, color, icon, parent_id (null for top-level), and
+        name_with_parent (e.g. "Food & Drink > Restaurants"). Use this before creating
+        subcategories or referencing a category by id in update_category.
+      INSTRUCTIONS
+    end
+  end
+
+  def call(params = {})
+    categories = family.categories.alphabetically_by_hierarchy
+
+    {
+      categories: categories.map { |c|
+        {
+          id: c.id,
+          name: c.name,
+          name_with_parent: c.name_with_parent,
+          color: c.color,
+          icon: c.lucide_icon,
+          parent_id: c.parent_id,
+          is_subcategory: c.subcategory?
+        }
+      },
+      total: categories.size
+    }
+  end
+end
diff --git a/app/models/assistant/function/get_tags.rb b/app/models/assistant/function/get_tags.rb
new file mode 100644
index 000000000..b4dfdcd98
--- /dev/null
+++ b/app/models/assistant/function/get_tags.rb
@@ -0,0 +1,25 @@
+class Assistant::Function::GetTags < Assistant::Function
+  class << self
+    def name
+      "get_tags"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Returns all tags defined for the user's family, sorted alphabetically.
+
+        Use this when the user wants to see available tags or before referencing
+        a tag in another operation like create_tag or update_tag.
+      INSTRUCTIONS
+    end
+  end
+
+  def call(params = {})
+    tags = family.tags.alphabetically
+
+    {
+      tags: tags.map { |t| { id: t.id, name: t.name, color: t.color } },
+      total: tags.size
+    }
+  end
+end
diff --git a/app/models/assistant/function/update_category.rb b/app/models/assistant/function/update_category.rb
new file mode 100644
index 000000000..73e50e3b4
--- /dev/null
+++ b/app/models/assistant/function/update_category.rb
@@ -0,0 +1,73 @@
+class Assistant::Function::UpdateCategory < Assistant::Function
+  class << self
+    def name
+      "update_category"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Updates an existing category's name, color, or icon.
+
+        Use get_categories first to find the category id. At least one of name, color,
+        or icon must be supplied. Changing a parent's color does not cascade to existing
+        subcategories (their colors are set at creation time).
+      INSTRUCTIONS
+    end
+  end
+
+  def strict_mode?
+    false
+  end
+
+  def params_schema
+    build_schema(
+      required: [ "id" ],
+      properties: {
+        id: {
+          type: "string",
+          description: "ID of the category to update (use get_categories to find it)"
+        },
+        name: {
+          type: "string",
+          description: "New name for the category (optional)"
+        },
+        color: {
+          type: "string",
+          description: "New hex color code (optional)"
+        },
+        icon: {
+          type: "string",
+          description: "New Lucide icon name (optional)"
+        }
+      }
+    )
+  end
+
+  def call(params = {})
+    return error("not_found", "Category with id '#{params["id"]}' not found.") unless valid_uuid?(params["id"])
+    category = family.categories.find_by(id: params["id"])
+    return error("not_found", "Category with id '#{params["id"]}' not found.") unless category
+
+    attrs = {}
+    attrs[:name] = params["name"].to_s.strip if params["name"].present?
+    attrs[:color] = params["color"].to_s.strip if params["color"].present?
+    attrs[:lucide_icon] = params["icon"].to_s.strip if params["icon"].present?
+
+    return error("no_changes", "Provide at least one of name, color, or icon to update.") if attrs.empty?
+
+    if category.update(attrs)
+      { success: true, category: serialize(category), message: "Category '#{category.name_with_parent}' updated." }
+    else
+      error("validation_failed", category.errors.full_messages.join("; "))
+    end
+  end
+
+  private
+    def serialize(c)
+      { id: c.id, name: c.name, name_with_parent: c.name_with_parent, color: c.color, icon: c.lucide_icon, parent_id: c.parent_id }
+    end
+
+    def error(key, message)
+      { success: false, error: key, message: message }
+    end
+end
diff --git a/app/models/assistant/function/update_tag.rb b/app/models/assistant/function/update_tag.rb
new file mode 100644
index 000000000..750b3184b
--- /dev/null
+++ b/app/models/assistant/function/update_tag.rb
@@ -0,0 +1,63 @@
+class Assistant::Function::UpdateTag < Assistant::Function
+  class << self
+    def name
+      "update_tag"
+    end
+
+    def description
+      <<~INSTRUCTIONS
+        Updates an existing tag's name or color.
+
+        Identify the tag by its current name. At least one of new_name or color must be provided.
+        Use get_tags first to confirm the tag exists.
+      INSTRUCTIONS
+    end
+  end
+
+  def strict_mode?
+    false
+  end
+
+  def params_schema
+    build_schema(
+      required: [ "name" ],
+      properties: {
+        name: {
+          type: "string",
+          description: "Current name of the tag to update",
+          enum: family_tag_names
+        },
+        new_name: {
+          type: "string",
+          description: "New name for the tag (optional)"
+        },
+        color: {
+          type: "string",
+          description: "New hex color code (optional)"
+        }
+      }
+    )
+  end
+
+  def call(params = {})
+    tag = family.tags.find_by(name: params["name"].to_s.strip)
+    return error("not_found", "Tag '#{params["name"]}' not found.") unless tag
+
+    attrs = {}
+    attrs[:name] = params["new_name"].strip if params["new_name"].present?
+    attrs[:color] = params["color"].strip if params["color"].present?
+
+    return error("no_changes", "Provide at least one of new_name or color to update.") if attrs.empty?
+
+    if tag.update(attrs)
+      { success: true, tag: { id: tag.id, name: tag.name, color: tag.color }, message: "Tag updated." }
+    else
+      error("validation_failed", tag.errors.full_messages.join("; "))
+    end
+  end
+
+  private
+    def error(key, message)
+      { success: false, error: key, message: message }
+    end
+end
diff --git a/test/models/assistant/function/create_category_test.rb b/test/models/assistant/function/create_category_test.rb
new file mode 100644
index 000000000..059ca05be
--- /dev/null
+++ b/test/models/assistant/function/create_category_test.rb
@@ -0,0 +1,124 @@
+require "test_helper"
+
+class Assistant::Function::CreateCategoryTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @fn = Assistant::Function::CreateCategory.new(@user)
+  end
+
+  test "to_definition returns correct schema" do
+    definition = @fn.to_definition
+    assert_equal "create_category", definition[:name]
+    assert_not_empty definition[:description]
+    assert_includes definition[:params_schema][:required], "name"
+  end
+
+  test "creates a top-level category with all fields" do
+    assert_difference "@family.categories.count" do
+      result = @fn.call("name" => "Transport", "color" => "#4da568", "icon" => "bus")
+
+      assert result[:success]
+      assert_equal "Transport", result[:category][:name]
+      assert_equal "#4da568", result[:category][:color]
+      assert_equal "bus", result[:category][:icon]
+      assert_nil result[:category][:parent_id]
+    end
+  end
+
+  test "auto-suggests icon from name when omitted" do
+    result = @fn.call("name" => "Groceries", "color" => "#4da568")
+
+    assert result[:success]
+    assert_equal Category.suggested_icon("Groceries"), result[:category][:icon]
+  end
+
+  test "auto-assigns color from palette when omitted" do
+    result = @fn.call("name" => "Mystery")
+
+    assert result[:success]
+    assert_includes Category::COLORS, result[:category][:color]
+  end
+
+  test "creates a subcategory under an existing parent" do
+    parent = categories(:food_and_drink)
+    assert_difference "@family.categories.count" do
+      result = @fn.call("name" => "Fast Food", "parent_id" => parent.id)
+
+      assert result[:success]
+      assert_equal parent.id, result[:category][:parent_id]
+      assert_match "Food & Drink > Fast Food", result[:category][:name_with_parent]
+    end
+  end
+
+  test "subcategory inherits parent color" do
+    parent = categories(:food_and_drink)
+    result = @fn.call("name" => "Sushi", "parent_id" => parent.id)
+
+    assert result[:success]
+    assert_equal parent.reload.color, result[:category][:color]
+  end
+
+  test "soft error when name is whitespace only" do
+    result = @fn.call("name" => "   ")
+
+    assert_equal false, result[:success]
+    assert_equal "name_required", result[:error]
+  end
+
+  test "empty string parent_id is treated as absent, creates top-level category" do
+    assert_difference "@family.categories.count" do
+      result = @fn.call("name" => "No Parent", "parent_id" => "")
+
+      assert result[:success]
+      assert_nil result[:category][:parent_id]
+    end
+  end
+
+  test "soft error when color format is invalid" do
+    result = @fn.call("name" => "Bad Color Cat", "color" => "not-a-color")
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "soft error when nesting a subcategory under another subcategory" do
+    sub = categories(:subcategory)
+    result = @fn.call("name" => "Too Deep", "parent_id" => sub.id)
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "soft error when name is blank" do
+    result = @fn.call("name" => "")
+
+    assert_equal false, result[:success]
+    assert_equal "name_required", result[:error]
+  end
+
+  test "soft error when parent_id does not exist" do
+    result = @fn.call("name" => "Orphan", "parent_id" => "00000000-0000-0000-0000-000000000000")
+
+    assert_equal false, result[:success]
+    assert_equal "parent_not_found", result[:error]
+  end
+
+  test "soft error on duplicate name within family" do
+    existing = categories(:food_and_drink)
+    result = @fn.call("name" => existing.name)
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "cannot use a parent from another family" do
+    other_family = Family.create!(name: "Other", currency: "USD", locale: "en", country: "US", timezone: "UTC")
+    other_parent = other_family.categories.create!(name: "Foreign Parent", color: "#e99537", lucide_icon: "shapes")
+
+    result = @fn.call("name" => "Child", "parent_id" => other_parent.id)
+
+    assert_equal false, result[:success]
+    assert_equal "parent_not_found", result[:error]
+  end
+end
diff --git a/test/models/assistant/function/create_tag_test.rb b/test/models/assistant/function/create_tag_test.rb
new file mode 100644
index 000000000..81b4badc5
--- /dev/null
+++ b/test/models/assistant/function/create_tag_test.rb
@@ -0,0 +1,70 @@
+require "test_helper"
+
+class Assistant::Function::CreateTagTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @fn = Assistant::Function::CreateTag.new(@user)
+  end
+
+  test "to_definition returns correct schema" do
+    definition = @fn.to_definition
+    assert_equal "create_tag", definition[:name]
+    assert_not_empty definition[:description]
+    assert_includes definition[:params_schema][:required], "name"
+  end
+
+  test "creates a tag with name and color" do
+    assert_difference "@family.tags.count" do
+      result = @fn.call("name" => "Vacation", "color" => "#4da568")
+
+      assert result[:success]
+      assert_equal "Vacation", result[:tag][:name]
+      assert_equal "#4da568", result[:tag][:color]
+      assert result[:tag][:id].present?
+    end
+  end
+
+  test "auto-assigns a color from palette when omitted" do
+    result = @fn.call("name" => "Auto Color")
+
+    assert result[:success]
+    assert_includes Tag::COLORS, result[:tag][:color]
+  end
+
+  test "soft error when name is blank" do
+    result = @fn.call("name" => "")
+
+    assert_equal false, result[:success]
+    assert_equal "name_required", result[:error]
+  end
+
+  test "soft error on duplicate name within family" do
+    existing = tags(:one)
+    result = @fn.call("name" => existing.name)
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "soft error when name is whitespace only" do
+    result = @fn.call("name" => "   ")
+
+    assert_equal false, result[:success]
+    assert_equal "name_required", result[:error]
+  end
+
+  test "soft error when color format is invalid" do
+    result = @fn.call("name" => "Bad Color", "color" => "not-a-color")
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "scopes created tag to user's family" do
+    @fn.call("name" => "Scoped Tag")
+    tag = @family.tags.find_by(name: "Scoped Tag")
+    assert tag.present?
+    assert_equal @family.id, tag.family_id
+  end
+end
diff --git a/test/models/assistant/function/get_categories_test.rb b/test/models/assistant/function/get_categories_test.rb
new file mode 100644
index 000000000..7d48462a9
--- /dev/null
+++ b/test/models/assistant/function/get_categories_test.rb
@@ -0,0 +1,62 @@
+require "test_helper"
+
+class Assistant::Function::GetCategoriesTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @fn = Assistant::Function::GetCategories.new(@user)
+  end
+
+  test "to_definition returns correct name and description" do
+    definition = @fn.to_definition
+    assert_equal "get_categories", definition[:name]
+    assert_not_empty definition[:description]
+  end
+
+  test "returns all family categories" do
+    result = @fn.call
+
+    assert_kind_of Array, result[:categories]
+    assert_equal @family.categories.count, result[:total]
+  end
+
+  test "each category includes required fields" do
+    result = @fn.call
+    result[:categories].each do |c|
+      assert c[:id].present?
+      assert c[:name].present?
+      assert c[:name_with_parent].present?
+      assert c[:color].present?
+      assert c[:icon].present?
+      assert c.key?(:parent_id)
+      assert c.key?(:is_subcategory)
+    end
+  end
+
+  test "subcategory is_subcategory is true and has parent_id" do
+    result = @fn.call
+    sub = result[:categories].find { |c| c[:name] == categories(:subcategory).name }
+
+    assert sub.present?
+    assert sub[:is_subcategory]
+    assert_equal categories(:food_and_drink).id, sub[:parent_id]
+  end
+
+  test "top-level category has nil parent_id and is_subcategory false" do
+    result = @fn.call
+    top = result[:categories].find { |c| c[:name] == categories(:food_and_drink).name }
+
+    assert top.present?
+    assert_not top[:is_subcategory]
+    assert_nil top[:parent_id]
+  end
+
+  test "scopes to the user's family" do
+    other_family = Family.create!(name: "Other", currency: "USD", locale: "en", country: "US", timezone: "UTC")
+    other_family.categories.create!(name: "Foreign Category", color: "#e99537", lucide_icon: "shapes")
+
+    result = @fn.call
+    category_names = result[:categories].map { |c| c[:name] }
+    assert_not_includes category_names, "Foreign Category"
+  end
+end
diff --git a/test/models/assistant/function/get_tags_test.rb b/test/models/assistant/function/get_tags_test.rb
new file mode 100644
index 000000000..b5c9ba9c7
--- /dev/null
+++ b/test/models/assistant/function/get_tags_test.rb
@@ -0,0 +1,44 @@
+require "test_helper"
+
+class Assistant::Function::GetTagsTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @fn = Assistant::Function::GetTags.new(@user)
+  end
+
+  test "to_definition returns correct name and description" do
+    definition = @fn.to_definition
+    assert_equal "get_tags", definition[:name]
+    assert_not_empty definition[:description]
+    assert_equal "object", definition[:params_schema][:type]
+  end
+
+  test "returns all family tags sorted alphabetically" do
+    result = @fn.call
+
+    assert_kind_of Array, result[:tags]
+    assert_equal @family.tags.count, result[:total]
+
+    names = result[:tags].map { |t| t[:name] }
+    assert_equal names.sort, names
+  end
+
+  test "each tag includes id, name, and color" do
+    result = @fn.call
+    result[:tags].each do |t|
+      assert t[:id].present?
+      assert t[:name].present?
+      assert t[:color].present?
+    end
+  end
+
+  test "scopes to the user's family" do
+    other_family = Family.create!(name: "Other", currency: "USD", locale: "en", country: "US", timezone: "UTC")
+    other_family.tags.create!(name: "Foreign Tag")
+
+    result = @fn.call
+    tag_names = result[:tags].map { |t| t[:name] }
+    assert_not_includes tag_names, "Foreign Tag"
+  end
+end
diff --git a/test/models/assistant/function/update_category_test.rb b/test/models/assistant/function/update_category_test.rb
new file mode 100644
index 000000000..70e83a485
--- /dev/null
+++ b/test/models/assistant/function/update_category_test.rb
@@ -0,0 +1,104 @@
+require "test_helper"
+
+class Assistant::Function::UpdateCategoryTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @category = categories(:food_and_drink)
+    @fn = Assistant::Function::UpdateCategory.new(@user)
+  end
+
+  test "to_definition returns correct schema" do
+    definition = @fn.to_definition
+    assert_equal "update_category", definition[:name]
+    assert_not_empty definition[:description]
+    assert_includes definition[:params_schema][:required], "id"
+  end
+
+  test "updates category name" do
+    result = @fn.call("id" => @category.id, "name" => "Food & Beverages")
+
+    assert result[:success]
+    assert_equal "Food & Beverages", result[:category][:name]
+    assert_equal "Food & Beverages", @category.reload.name
+  end
+
+  test "updates category color" do
+    result = @fn.call("id" => @category.id, "color" => "#6471eb")
+
+    assert result[:success]
+    assert_equal "#6471eb", result[:category][:color]
+    assert_equal "#6471eb", @category.reload.color
+  end
+
+  test "updates category icon" do
+    result = @fn.call("id" => @category.id, "icon" => "pizza")
+
+    assert result[:success]
+    assert_equal "pizza", result[:category][:icon]
+    assert_equal "pizza", @category.reload.lucide_icon
+  end
+
+  test "updates multiple fields at once" do
+    result = @fn.call("id" => @category.id, "name" => "Dining", "color" => "#db5a54", "icon" => "utensils")
+
+    assert result[:success]
+    @category.reload
+    assert_equal "Dining", @category.name
+    assert_equal "#db5a54", @category.color
+    assert_equal "utensils", @category.lucide_icon
+  end
+
+  test "result includes name_with_parent for subcategory" do
+    sub = categories(:subcategory)
+    result = @fn.call("id" => sub.id, "icon" => "coffee")
+
+    assert result[:success]
+    assert_match(/#{sub.parent.name}/, result[:category][:name_with_parent])
+  end
+
+  test "soft error when id is nil" do
+    result = @fn.call("name" => "X")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+
+  test "whitespace-only name is treated as absent, returns no_changes" do
+    result = @fn.call("id" => @category.id, "name" => "   ")
+
+    assert_equal false, result[:success]
+    assert_equal "no_changes", result[:error]
+  end
+
+  test "soft error when color format is invalid" do
+    result = @fn.call("id" => @category.id, "color" => "not-a-color")
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "soft error when category not found" do
+    result = @fn.call("id" => "00000000-0000-0000-0000-000000000000", "name" => "X")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+
+  test "soft error when no changes provided" do
+    result = @fn.call("id" => @category.id)
+
+    assert_equal false, result[:success]
+    assert_equal "no_changes", result[:error]
+  end
+
+  test "cannot update a category from another family" do
+    other_family = Family.create!(name: "Other", currency: "USD", locale: "en", country: "US", timezone: "UTC")
+    other_cat = other_family.categories.create!(name: "Foreign", color: "#e99537", lucide_icon: "shapes")
+
+    result = @fn.call("id" => other_cat.id, "name" => "Hijacked")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+end
diff --git a/test/models/assistant/function/update_tag_test.rb b/test/models/assistant/function/update_tag_test.rb
new file mode 100644
index 000000000..e86cd6445
--- /dev/null
+++ b/test/models/assistant/function/update_tag_test.rb
@@ -0,0 +1,91 @@
+require "test_helper"
+
+class Assistant::Function::UpdateTagTest < ActiveSupport::TestCase
+  setup do
+    @user = users(:family_admin)
+    @family = @user.family
+    @tag = tags(:one)
+    @fn = Assistant::Function::UpdateTag.new(@user)
+  end
+
+  test "to_definition returns correct schema" do
+    definition = @fn.to_definition
+    assert_equal "update_tag", definition[:name]
+    assert_not_empty definition[:description]
+    assert_includes definition[:params_schema][:required], "name"
+  end
+
+  test "params_schema enumerates family tag names" do
+    schema = @fn.params_schema
+    assert_includes schema[:properties][:name][:enum], @tag.name
+  end
+
+  test "updates tag name" do
+    result = @fn.call("name" => @tag.name, "new_name" => "Updated Name")
+
+    assert result[:success]
+    assert_equal "Updated Name", result[:tag][:name]
+    assert_equal "Updated Name", @tag.reload.name
+  end
+
+  test "updates tag color" do
+    result = @fn.call("name" => @tag.name, "color" => "#6471eb")
+
+    assert result[:success]
+    assert_equal "#6471eb", result[:tag][:color]
+    assert_equal "#6471eb", @tag.reload.color
+  end
+
+  test "updates both name and color at once" do
+    result = @fn.call("name" => @tag.name, "new_name" => "Both Updated", "color" => "#db5a54")
+
+    assert result[:success]
+    assert_equal "Both Updated", @tag.reload.name
+    assert_equal "#db5a54", @tag.reload.color
+  end
+
+  test "soft error when tag not found" do
+    result = @fn.call("name" => "Nonexistent Tag", "new_name" => "X")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+
+  test "soft error when no changes provided" do
+    result = @fn.call("name" => @tag.name)
+
+    assert_equal false, result[:success]
+    assert_equal "no_changes", result[:error]
+  end
+
+  test "soft error when lookup name is empty string" do
+    result = @fn.call("name" => "", "new_name" => "X")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+
+  test "empty string new_name is treated as absent, returns no_changes" do
+    result = @fn.call("name" => @tag.name, "new_name" => "")
+
+    assert_equal false, result[:success]
+    assert_equal "no_changes", result[:error]
+  end
+
+  test "soft error when color format is invalid" do
+    result = @fn.call("name" => @tag.name, "color" => "not-a-color")
+
+    assert_equal false, result[:success]
+    assert_equal "validation_failed", result[:error]
+  end
+
+  test "cannot update a tag from another family" do
+    other_family = Family.create!(name: "Other", currency: "USD", locale: "en", country: "US", timezone: "UTC")
+    other_tag = other_family.tags.create!(name: "Other Tag")
+
+    result = @fn.call("name" => other_tag.name, "new_name" => "Hijacked")
+
+    assert_equal false, result[:success]
+    assert_equal "not_found", result[:error]
+  end
+end