Is there a California estate tax? The short answer is no. California does not impose a state estate tax. When you die as a California resident, no state agency will assess a tax on your estate based on its value at death.
For the vast majority of California families, that also means no federal estate tax, though understanding exactly where the federal threshold sits, and what changed recently, is worth your time.
What California Does and Doesn’t Tax at Death
California abolished its estate tax in 1982 and has not reinstated one since. The California Franchise Tax Board, which administers the state’s major tax programs, collects personal income tax and corporate franchise tax, not estate tax.
There is no California inheritance tax either. That means your beneficiaries will not owe the state a percentage of what they receive from you.
States With Estate Taxes
A dozen states do have state-level estate taxes, and some of the exclusions are relatively low.
Massachusetts applies a state estate tax to estates above $2 million. Oregon taxes estates above $1 million, a threshold that has not been adjusted for inflation in years and now captures a wide range of middle-class estates in that state.
Washington state has an estate tax with rates that can reach 20 percent. These are the other nine states that have estate taxes:
- New York
- Illinois
- Minnesota
- Connecticut
- Maryland
- Vermont
- Maine
- Rhode Island
- Hawaii
Out-of-State Property
California’s favorable position doesn’t automatically extend to property you own elsewhere. State estate taxes follow the situs of real property, meaning where it sits, not where you live.
If you own a vacation home or rental property in Oregon, Oregon’s estate tax applies to that property regardless of your California residency. With Oregon’s $1 million exemption, a cabin or investment property could push an otherwise uncomplicated estate into taxable territory there.
Hawaii, a popular destination for California families with vacation homes, is another case in point. The exempt amount or exclusion is $5.49 million, and the rates span from 10% to 20% depending on the overall size of the estate.
This is a planning consideration that catches people off guard. Your California estate plan may be perfectly structured for California purposes, but leave an out-of-state property entirely unaddressed from a tax standpoint.
An attorney familiar with multi-state estate planning can identify that exposure and help you address it before it becomes your family’s problem.
The Federal Exemption and What Just Changed
At the federal level, the estate tax applies only to estates that exceed the applicable exemption amount. It sat at a record high of $13.99 million in 2026, and it was reinforced by recent legislation.
The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently set the federal estate tax exemption at $15 million per individual, effective January 1, 2026.
Married couples can shield up to $30 million using portability, a mechanism that allows a surviving spouse to use any unused portion of the deceased spouse’s exemption. The exemption will continue adjusting for inflation in future years and no longer carries a sunset date.
Before this legislation passed, the exemption was set to drop to roughly $7 million per person at the end of 2025 under the sunset provisions of the 2017 Tax Cuts and Jobs Act. That cliff no longer exists.
For most California families, including those with substantial home equity, retirement savings, and investment accounts, the $15 million threshold means federal estate tax is not an immediate concern.
Estate Tax Efficiency Strategies
Sonoma County and the broader Bay Area have produced significant wealth across real estate, business ownership, and equity compensation. People with estates that approach or exceed $15 million need planning strategies specifically designed to reduce federal estate tax exposure.
Options include irrevocable trusts structured to move appreciating assets out of the taxable estate, charitable planning vehicles, and annual gifting programs that take advantage of the $19,000 per recipient annual exclusion.
These strategies work best when implemented early, while assets have room to grow outside the taxable estate. The annual exclusion allows you to give $19,000 to any number of individuals each year without using any of your lifetime exemption or owing gift tax.
Proposals Worth Watching, But Not Yet Law
Periodically, California legislators and advocates have floated proposals for a state estate tax or wealth tax. As of 2026, a ballot initiative called the 2026 Billionaire Tax Act is gathering signatures.
If it qualifies for the November 2026 ballot and passes, it would impose a one-time excise tax on California residents with a net worth of at least $1 billion. The measure faces significant legal challenges and uncertain voter support.
This is not an estate tax, and it is not the law. Nothing currently on the books or realistically close to becoming law imposes a California estate tax on ordinary estates.
That said, the political environment around wealth taxation in California is worth monitoring for families with substantial assets.
Practical Estate Planning in California
For most Sonoma County families, an estate tax is not a concern. However, there is another consideration that is a factor for everyone.
Probate is looming if you use a will, and it comes with drawbacks. California’s probate process is court-supervised, time-consuming, and based on fees calculated from the gross value of the estate.
A home worth $900,000, a modest investment account, and a few other assets can produce statutory attorney and executor fees exceeding $30,000, distributed to a proceeding that may take a year or more to close.
With a fully funded revocable living trust, you can bypass probate entirely. The trust owns your assets, so the court has nothing to supervise. And your successor trustee can act immediately after your death.
Privacy is preserved. Fees are avoided. For most California families, that is where the real estate planning work lies.
The absence of a California estate tax is genuinely good news. The planning work that remains, protecting your estate from probate, coordinating out-of-state property, and positioning assets for the next generation, is just as important.
Let’s Get Started!
To schedule a consultation at our Petaluma, CA estate planning office, give us a call at 707-769-9975 or send us a message through our contact page.
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