The most simplified answer is that California does not have a gift tax or an inheritance tax. However, as always, there are factors that affect the analysis. Income in the form of an inheritance - be it from a Revocable Living Trust, a Will, or an Irrevocable Trust for example - may be taxed if the money given should have had taxes paid on it by the person giving the gift. This is called Income in Respect of a Decedent. This may be money received by the decedent that he or she has not had a chance to pay taxes on due to their death, or certain retirement plans or accounts. California does technically have a Death Tax, but as of 2005 it has been effectively eliminated.
Certain California rules still may be applicable to Gift and Death taxes depending on the date of a person’s death. Also, there may be other reasons a tax may be imposed, depending on the situation. As usual, please consult an attorney or tax professional for advice on your particular situation.
Please see the rest of my Blog for more on California and Federal Estate Tax
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Thank you for reading!
William Daniel Powell
Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California. Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.
This document is for informational purposes only. Nothing in this is to be considered legal advice. Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship. If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction. I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.