Many clients ask us about whether taxes are affected by estate planning. And, well, here’s the lawyer’s favorite answer: it depends. If your estate is under the federal exemption, then the answer is generally no. For example, you will still pay the same amount in property taxes and income taxes, and because of California’s other tax laws, estate planning in general isn’t going to affect them. However, if you have a hefty estate, say over at least $11.58 million, then yes, your taxes are going to be affected by estate planning.

California, like a majority of the states in the United States, does not levy an estate tax on your estate upon your death, or ever, for that matter. Also like a majority of states, California does not levy an inheritance tax if you are inheriting property or assets from a decedent. In addition, California does not apply a gift tax on any gifts given to loved ones.

While this all great, don’t forget that although California does not have these categories of taxes, there is still a federal estate tax applied by the Internal Revenue Service that could potentially be applied to your estate. This tax applies to an estate if it is valued at or over $11.58 million for an unmarried person, or $23.16 million for a married couple. If your married estate is equal to or greater than $23.16 million, it’s important to take advantage of the unlimited marital deduction. This deduction allows you to leave your estate to your surviving spouse without the government levying any federal estate tax on the estate. Keep in mind that, in addition to the federal estate tax, there is also a federal gift tax which essentially states that any amount you gift over $15,000 will be taxed.