No. California does not currently impose an estate or inheritance tax. 

A few additional considerations:

• If you own property in another state that imposes an estate tax, that state’s rules may apply
• Capital gains taxes may still affect inherited assets
• Federal exemption amounts can change

Estate tax planning involves structuring your assets to reduce potential federal estate tax liability.

Common approaches include:

• Using trusts to transfer assets outside your taxable estate
• Making lifetime gifts to reduce estate value
• Coordinating beneficiary designations across accounts

A bypass trust, also called a credit shelter trust, is commonly used by married couples.

Key features:

• One spouse’s assets transfer into the trust at death
• The surviving spouse can access income or limited principal
• Remaining assets pass to beneficiaries after the surviving spouse’s death

This structure helps use each spouse’s federal exemption and reduce overall estate tax exposure.

A charitable remainder trust provides income to a beneficiary for a set period, then distributes the remaining assets to a qualified charity. This structure is often used when you want to support a charitable organization while also managing tax exposure and maintaining an income stream.

Potential benefits include:

• Reduction of your taxable estate
• Income tax charitable deduction
• Deferral of capital gains on appreciated assets
• Continued income for a term of years or for life

A QPRT allows you to transfer a home to beneficiaries at a reduced tax value while retaining the right to live there for a set period. After that term, the property passes to beneficiaries and is removed from your estate.

A GRAT transfers future asset appreciation to beneficiaries with minimal gift tax impact.

Key points:

• Place assets into an irrevocable trust
• Receive fixed annuity payments for a set term, after which remaining assets pass to beneficiaries

The initial taxable gift can be minimal, but you must outlive the term for the strategy to work as intended.

An ILIT keeps life insurance proceeds out of your taxable estate.

How it works:

• The trust owns the life insurance policy
• A trustee manages the policy and distributions
• Proceeds are paid to beneficiaries outside your estate

This can prevent life insurance from increasing your estate tax exposure and provide liquidity for your heirs.

A family limited partnership transfers ownership interests in a business or investment portfolio to family members, often reducing the taxable value of your estate over time.

This strategy is commonly used in business succession planning.

The federal estate tax exemption is the amount you can transfer at death without incurring estate tax. This threshold is set by federal law, adjusted for inflation, and may change based on legislation.

As of 2026, the federal estate tax exemption is $15 million per individual. Married couples may be able to combine their exemptions with proper planning, allowing significantly more to pass free of federal estate tax.

Estates that exceed the applicable threshold may be taxed on the amount above that limit.

Gifting allows you to transfer assets during your lifetime, which can reduce the size of your taxable estate.

Key points:

• You can make annual gifts of up to $19,000 per recipient (as of 2026) without using your lifetime exemption
• Gifts above that amount may count against your lifetime estate and gift tax exemption
• Once transferred, future appreciation of the gifted asset is no longer part of your estate
• Certain payments, such as tuition or medical expenses paid directly to a provider, may not count toward gift limits

Gifting can be a useful strategy if your estate may exceed federal thresholds or if you want to transfer wealth gradually.

Estate tax and inheritance tax are often confused, but they apply in different ways. An estate tax is paid by the estate before assets are distributed, while an inheritance tax is paid by the person receiving those assets.

California does not impose either tax. However, federal estate tax rules may still apply to larger estates.

Even if your estate is below the current federal exemption, planning may still be worth considering. 

Planning may still make sense because:

• Asset values can increase over time
• Tax laws can change
• You may want more control over how assets are distributed
• Certain strategies can simplify administration or avoid probate