California Estate
Tax Calculator

California does not impose a state-level estate tax or inheritance tax. Despite having the highest individual income tax rates in the nation (up to 13.3%), California has not enacted a state estate tax since the federal credit was repealed.

Estates of California decedents face only the federal estate tax.

However, California's high real estate values, concentration of tech wealth, and large retirement account balances mean that a disproportionate number of California estates approach or exceed the federal **$15 million** exemption. Estate tax planning remains a significant concern for California families despite the absence of a state-level tax.

California residents are subject only to the federal estate tax with its **$15 million exemption and 40%** top rate. Portability allows married couples to shelter $30 million.

No state estate tax return filing is required.

As a community property state, California provides a full basis step-up for both halves of community property at the first death under IRC 1014(b)(6). This is one of the biggest tax advantages available to California couples and can save hundreds of thousands in capital gains taxes on appreciated assets like real estate and stock holdings.

California's community property rules are central to estate planning. Correctly characterize assets as community or separate property, particularly for those with property in multiple states or complex compensation packages (stock options, RSUs, deferred compensation).

Commingling can convert separate property to community property, affecting both the estate tax valuation and the basis step-up.

California Proposition 19 (effective 2021) changed property tax reassessment rules for inherited real estate, creating a new planning consideration. Inherited properties exceeding $1 million in assessed value above the current assessment are now reassessed, increasing property tax costs.

This intersects with estate planning when families own multiple California properties or high-value homes. Consider trust structures that optimize both estate tax and property tax outcomes.

California estates may face significant federal exposure. Use this estimator to model federal estate tax, community property step-up, and portability elections.

Free for all jurisdictions.

Because California does not impose a state estate tax, the federal estate tax is the only transfer tax layer. The current federal exemption of $15 million per individual (2025) shelters the vast majority of estates.

However, estates that exceed this threshold face a top marginal rate of 40%, making federal planning essential for high-net-worth California residents.

The Tax Cuts and Jobs Act (TCJA) doubled the federal exemption effective 2018, but this increase is scheduled to sunset after 2025. If Congress does not act, the exemption will revert to approximately $7 million (adjusted for inflation).

For California residents with estates between $7 million and $15 million, this sunset creates a planning window: transfers made now under the higher exemption will not be clawed back, even if the exemption later decreases.

The absence of a state estate tax in California simplifies the analysis — there is no gap between state and federal exemptions to navigate, no separate state return to file, and no risk of double taxation. However, this also means there is no state-level deduction to offset federal liability.

Federal planning tools — marital deductions, charitable deductions, and the unified credit — carry the full weight of estate tax mitigation. Use the California estate tax calculator to model current and post-sunset scenarios, and review the California probate cost calculator to understand full settlement costs.

Federal portability allows a surviving spouse to inherit the deceased spouse's unused estate tax exclusion (DSUE), effectively doubling the available federal exemption to $30 million for married couples. Electing portability requires filing Form 706 for the first-to-die spouse, even if no federal estate tax is owed — a step that is frequently overlooked when no tax appears to be due.

Because California does not impose a state estate tax, there is no state-level portability concern. The federal election is the only one that matters, and it applies automatically to the surviving spouse's estate once made.

This is simpler than in estate-tax states, where the lack of state portability forces the use of bypass trusts to preserve both exemptions.

Despite this simplicity, portability has limitations. The DSUE amount is not indexed for inflation — it locks in at the value of the first spouse's unused exemption at the date of death.

If the surviving spouse remarries and the new spouse dies, the DSUE from the first spouse is lost. For California families with significant wealth, bypass trusts may still be preferable to portability because they provide asset protection, generation-skipping benefits, and inflation-adjusted growth outside the surviving spouse's taxable estate.

Use the executor fee calculator and probate cost calculator to understand the full administration picture when comparing trust structures.

Without a state estate tax, California residents focus planning efforts on the federal layer. The current $15 million exemption provides substantial shelter, but the scheduled TCJA sunset makes it prudent to accelerate planning.

Irrevocable trusts — including ILITs, SLATs, and QPRTs — remove assets from the taxable estate permanently. Once transferred, these assets and their future appreciation are outside the federal estate, regardless of future exemption changes.

Annual exclusion gifts of $19,000 per recipient (2025) remain the simplest estate reduction tool. Married couples can jointly gift $38,000 per recipient through gift-splitting.

Over a decade, a family gifting to four beneficiaries annually removes $1.44 million from the estate with no gift tax return required. Charitable deductions — whether through outright bequests, donor-advised funds, or charitable trusts — further reduce the taxable estate while supporting philanthropic goals.

GRATs and GRUTs (grantor retained unitrusts) transfer appreciation to beneficiaries at minimal transfer tax cost. For California residents holding concentrated stock positions or rapidly appreciating assets, these vehicles are particularly efficient.

Family limited partnerships and LLCs may provide valuation discounts for gift and estate tax purposes, though the IRS scrutinizes these structures closely. Professional valuation and proper documentation are essential.

Model your federal exposure with the California estate tax calculator, or find an estate planning attorney in California for personalized guidance.