California Has No Estate Tax. Why You Still Need a Trust

Does California have an estate tax?

No. The California State Controller’s Office says a California Estate Tax Return “is not required to be filed for decedents whose date of death is after December 31, 2004.” The state tax once rode on a federal credit. The IRS ended that credit, and the state return went with it.

That is good news. It is not the whole story. Many Bay Area families hear “no estate tax” and conclude they need no plan. A plan does more than manage tax.

What about the federal estate tax in 2026?

For 2026, the federal basic exclusion amount is $15,000,000 per person, according to the IRS. Most estates fall below that line. Federal rules can change, so check the current figure with your attorney each year.

Here is how the two taxes compare:

If your family’s total estate is well under the federal figure, tax may not drive your plan. Many other things still can. You may want a federal estate tax exemption review every few years, because the figure moves.

What is probate, and why do families try to avoid it?

Probate is the court process that transfers property after someone dies. California’s courts describe it as “the legal process that you must follow to transfer or inherit property after the person who owned the property has passed away.”

In a probate case, a judge appoints a personal representative. That person collects the property, pays the bills and distributes what remains to the heirs or beneficiaries. Depending on the amount and type of property, you may or may not need to go to court.

Families often want to limit court involvement for practical reasons. Court steps take time, and a relative may need to wait for approval before acting.

A will alone does not always avoid this. The California courts say a person’s estate “may need to go through probate even if they had a will.” A pour-over will sends leftover assets to a trust. Ask your attorney whether those assets would still go through court. See our glossary entry on probate for more.

What can a trust do that a will cannot?

A revocable living trust is a legal arrangement you can change while you are alive. You name who manages the assets, who benefits, and when. Families use trusts so they can settle affairs with less court involvement.

A trust only controls what is placed into it. Your attorney will explain how to title your home and accounts, and how beneficiary designations on retirement accounts fit. That coordination is where many plans fail.

Here are the common reasons families plan with a trust. They are not tax reasons:

Ask your attorney which of these apply to you. Not every family needs the same documents.

Does Prop 19 change the picture for a California home?

Yes, for property tax. Even with no state estate tax, a parent’s home can carry a low property tax value that a child may lose on transfer. Prop 19 sets the rules. We cover them in Prop 19 and the family home and in our guide to passing on a California home.

A trust can name who receives the home. It does not remove the Prop 19 rules. Bring both topics to your attorney at the same meeting.

How do faith and legacy fit into the plan?

Luke 12:48 teaches that much is required from those who are given much. Proverbs 13:22 speaks of leaving an inheritance to the next generation. A trust is a tool for both. It can direct gifts to the ministries you care about. It can also set the terms for what your children receive.

Documents alone do not pass on values. A conversation with your family helps. Our guide on preparing heirs and legacy conversations gives you a place to start.

What should you do this year?

1. List what you own, where it is titled, and who is named on each account.
2. Find your current will, trust, power of attorney and health care directive. Note the date of each.
3. Check beneficiary designations on retirement accounts and life insurance.
4. Write down what you want for your home, your giving and each child.
5. Book time with an estate planning attorney to review it all.

Use our California estate planning checklist to organize the list. This post is general education, not legal or tax advice. Ask your own attorney and CPA about your case.

Next step

Seek First’s Trust & Estate Planning service includes an estate planning attorney on the team and works with your plan across taxes, investments, insurance and goals. Book a free 20-minute call at /contact or call (866) 398-4044.