California Estate Tax and Inheritance Tax: What You Owe (2026)

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One of the most common worries when writing a will is taxes. The good news for California residents is simple and worth stating up front: California imposes no state estate tax and no state inheritance tax. The only death tax you might face is the federal estate tax, and it applies only to very large estates.

This guide explains the difference between the two kinds of tax, confirms California's position, walks through the current federal rules, and notes the state proposals that have been floated but never enacted.

Estate tax vs. inheritance tax

These two terms are often confused. An estate tax is charged to the deceased person's estate before anything is distributed, based on the total value of what they owned. An inheritance tax is charged to the people who receive the money, based on what each heir inherits. They are different taxes levied on different parties. California imposes neither.

California has no estate or inheritance tax

California does not collect a state-level estate tax or inheritance tax. The state once collected a limited estate tax that was tied to a federal credit, but that credit was phased out at the federal level, and California's pick-up tax went to zero.2 Today, if you live in Los Angeles, San Diego, San Jose, or Sacramento and leave your estate to your family, the State of California takes no death tax from it. There is also no California gift tax.

Bottom line for California residents: your heirs pay no California estate tax and no California inheritance tax on what they inherit. The only potential death tax is federal, and it applies only to estates above the federal exemption described below.

The federal estate tax in 2026

The federal estate tax is the one tax that can still reach a California estate, but only a large one. For deaths in 2026, each individual can pass up to $15 million free of federal estate tax. This exemption was set by the 2025 federal tax law (the One Big Beautiful Bill Act), which made the higher exemption permanent and indexes it to inflation beginning in 2027.3 A married couple can combine their exemptions, shielding up to $30 million with proper planning.

Value above the exemption is taxed at graduated federal rates that top out at 40%.1 Because the exemption is so high, the overwhelming majority of California estates owe no federal estate tax at all. If your estate is in this range, this is attorney and tax-advisor territory, and you should get professional advice rather than rely on a general article.

TaxApplies to a California estate?2026 detail
California estate taxNoNone imposed
California inheritance taxNoNone imposed
California gift taxNoNone imposed
Federal estate taxOnly above the exemption$15,000,000 per person; top rate 40%

A California state-level tax has been considered, not enacted

Lawmakers have periodically floated a California wealth or estate tax. A 2023 proposal in the Legislature would have created a state wealth tax on very high-net-worth residents, but it did not pass and did not become law.4 As of 2026, no such tax is in effect. It is worth keeping an eye on future legislation if you have a very large estate, but for now the rule remains that California collects no death tax.

What still matters even without a tax

The absence of a state death tax does not mean planning is unnecessary. The real cost most California families face at death is not tax but probate: the court process and its statutory fees, which are calculated on the gross value of the estate. That is why a valid will, and often a living trust, still matter enormously here. Our guides on avoiding probate in California and the California living trust explain how to keep those costs down. And whatever the size of your estate, putting your wishes in writing is what keeps you in control: you can start with our California will builder.

Income tax is a separate matter from death tax. Inherited assets generally receive a stepped-up cost basis, and beneficiaries may owe income tax on certain inherited accounts such as traditional retirement accounts. Those are federal income-tax questions, not California death taxes, and a tax advisor can walk you through them.

Frequently Asked Questions

Does California have an inheritance tax? No. California imposes no inheritance tax, so heirs receive their inheritance free of any California death tax.

Does California have an estate tax? No. California collects no state estate tax. Only the federal estate tax can apply, and only to estates above the federal exemption.

What is the federal estate tax exemption in 2026? $15 million per individual, made permanent by the 2025 federal tax law, with a top rate of 40% on value above the exemption.

Will my heirs owe tax on my California home? Not a California death tax. They generally receive a stepped-up basis, which can reduce capital-gains tax if they later sell. Consult a tax advisor for specifics.

Sources

  1. 1IRS: Estate Tax (rates and rules) (irs.gov)
  2. 2California State Controller: Estate Tax (no California estate tax) (sco.ca.gov)
  3. 3Kiplinger: 2026 Estate Tax Exemption Amount ($15M, made permanent) (kiplinger.com)
  4. 4California AB 259 (2023), proposed state wealth tax (not enacted) (leginfo.legislature.ca.gov)
Max Kuch

About the author

Max Kuch

Max Kuch writes about estate planning, wills and inheritance for California Will Template. He gathers the rules from the California statutes and the leading public data, then explains them in plain, accessible language so anyone can put their wishes in writing.

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Frequently asked questions

Yes, if you finish it correctly. California Probate Code Section 6111 recognizes a holographic will, which is one where your signature and all of the material provisions (the parts that say who gets what) are in your own handwriting. No witnesses are required. Our service gives you a clean, California-specific draft. To make it valid you copy the operative wording out by hand, then sign it. We strongly recommend you also date it, because Section 6111(b) allows an undated holographic will to be challenged if it conflicts with another will and the order cannot be established.

Because that is exactly what makes a holographic will valid under California law. Section 6111 requires that the material provisions and your signature be in your own handwriting. A printed or typed document that you only sign is not a valid holographic will in California and would need witnesses to qualify as a formal will. We give you the full text and a clear guide, so you simply transcribe the substantive parts (names, gifts, executor) in your own hand, sign, and date it.

California has no forced heirship, so you are generally free to decide who inherits. Two protections still apply. California is a community property state, so your surviving spouse already owns one half of the community property regardless of your will. Separately, the omitted spouse and omitted child rules (Probate Code Sections 21610 to 21612) protect a spouse you married, or a child born or adopted, after you signed the will: they may still take a share unless your will shows the omission was intentional. If you truly want to leave someone out, say so clearly in the will.

Keep the original signed handwritten document somewhere safe, such as a fireproof home safe or a bank safe deposit box, and make sure the person you name as executor knows where it is and can reach it. California has no statewide registry for holographic wills. If you prefer an official option, you may lodge the original with the clerk of the superior court in your county for safekeeping during your lifetime. Do not staple, alter, or mark the original after you sign it.

We do not recommend a single joint document. A California holographic will must be in the testator's own handwriting, and one page written by two people creates confusion about whose words are whose and complicates changes later. The clean approach is two separate mirror wills, one written and signed entirely by each spouse, that reflect the same wishes. Our tool produces an individual draft for each of you so you can each write and sign your own.

Yes. You can revise your California will whenever your circumstances change, for example after a marriage, a divorce, a birth, or a move. The safest method is to write a fresh holographic will that revokes all previous wills, then copy it out by hand, sign it, and date it. Dating matters here: if two handwritten wills conflict and one is undated, Section 6111(b) can make the undated one invalid. Destroy the old original once the new one is signed.

No. This service helps you create a valid holographic will for straightforward situations, but it is not legal advice and does not replace an attorney. If your estate is large, you own a business, you have blended family issues, property in more than one state, minor children needing guardianship planning, or you expect a dispute, consult a California estate planning attorney. For many people with simple wishes, a properly handwritten, signed, and dated will is a solid starting point.

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