Inheritance law in California governs how property, money, and assets are transferred after someone dies.
The rules are shaped by the presence of a valid will or trust, the type of assets involved, and the relationship between the deceased and the heirs.
California follows community property principles, which significantly affect how estates are divided, especially for married couples.
This article covers:
- What is the maximum you can inherit before paying taxes?
- Who is a legal heir in California?
- Is your spouse automatically your beneficiary in California?
- Who comes first in inheritance?
Key Takeaways:
- California has no inheritance tax and no estate tax at the state level.
- Spouses automatically inherit community property but not all separate property.
- Joint and payable-on-death accounts often bypass probate.
- Most inheritances are received months after death, not immediately.
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is the new inheritance law in California?
California’s most recent inheritance law update raised the small estate threshold from about $166,250 to approximately $184,500, allowing more estates to bypass full probate than under the previous limit.
The most notable changes relate to small estate transfers, probate thresholds, and beneficiary designations.
Key updates compared to the past include:
- Higher small estate limit: California increased the small estate threshold, allowing heirs to transfer certain assets without full probate. Previously, many estates required probate even for modest assets.
- Transfer-on-death deeds: California now allows homeowners to pass real estate directly to beneficiaries using a revocable transfer-on-death deed, which was not available under older law.
- Simplified probate procedures: Courts now offer streamlined processes for uncontested estates, reducing time and cost compared to earlier rules.
- Digital assets recognition: Newer laws acknowledge digital assets such as online accounts and cryptocurrencies, which were not addressed under older inheritance frameworks.
While the core intestate succession rules remain similar, these updates make estate settlement faster and more flexible than in the past.
Who are the legal heirs of a deceased person in California?
The legal heirs of a deceased person in California are the surviving spouse or registered domestic partner, children, parents, siblings, and other blood relatives as defined by intestate succession law.
If no qualifying relatives can be identified, the estate may ultimately pass to the State of California through a legal process known as escheat.
What is the order of inheritance in California?
In California, inheritance passes first to the surviving spouse or registered domestic partner; the remaining estate is then distributed to other relatives in the following order under intestate succession law:
- Surviving spouse or registered domestic partner
- Children and their descendants
- Parents
- Siblings and their descendants
- Grandparents
- Aunts, uncles, and cousins
Closer relatives always take priority over more distant relatives. If a higher-priority heir exists, lower-priority relatives do not inherit.
Who inherits when there is no will in California?
When there is no California will, the estate is inherited by the deceased’s closest relatives according to state intestate succession laws.
The outcome depends on whether the deceased was married and whether the property was community or separate property.
- Married individuals: The surviving spouse usually inherits all community property. Separate property is divided between the spouse and children or other relatives, depending on how many exist.
- Unmarried individuals: Assets pass to children first. If there are no children, the estate passes to parents, then siblings, and so on.
These rules apply automatically and may not reflect the deceased’s personal wishes, which is why estate planning is strongly encouraged.
What happens to a bank account when someone dies without a will in California?
When someone dies without a will in California, their bank account may pass directly to a joint account holder, to a POD beneficiary, or enter probate, depending on the account type.
- Joint accounts: Funds usually pass directly to the surviving account holder.
- Payable-on-death (POD) accounts: The named beneficiary receives the funds without probate.
- Solely owned accounts: These accounts become part of the probate estate and are distributed under intestate succession laws.
Banks typically require a death certificate and court authorization or a small estate affidavit before releasing funds.
How much can you inherit in California?
There is no legal limit on how much you can inherit in California. Heirs can receive small or extremely large inheritances based on the size of the estate.
However, the actual amount received may be reduced by:
- Outstanding debts and liabilities
- Funeral and administrative expenses
- Probate costs, if applicable
California does not restrict the value of inheritances, but taxes and fees may affect the final amount received.
What is the maximum amount you can inherit without paying tax?
In California, there is no state inheritance tax, so heirs can generally inherit any amount without paying state-level tax.
Even so, understanding California inheritance law is important to ensure assets are distributed correctly, whether there is a will or not.
Recent updates, such as higher small estate limits and transfer-on-death options, make it easier to settle estates efficiently.
Knowing who qualifies as a legal heir, the order of inheritance, and how property or bank accounts are handled can prevent confusion or disputes.
Proper planning and documentation can save time, reduce stress, and help ensure your loved ones receive your estate according to your wishes.
Community Property vs Separate Property California: Common Inheritance Pitfalls
California’s community property system is one of the most important and misunderstood aspects of inheritance law in the state.
While many assume a surviving spouse automatically inherits everything. This is only true for community property, not separate property.
Community property generally includes income and assets acquired during the marriage while living in California. When one spouse dies, the surviving spouse usually inherits the deceased spouse’s share automatically.
Separate property, however, is treated very differently. Assets owned before marriage, inherited assets, gifts received individually, and property acquired after separation are typically classified as separate property.
These assets do not automatically pass entirely to the surviving spouse and may instead be shared with children or other heirs under intestate succession laws.
This distinction becomes especially important in blended families, second marriages, or cases where one spouse brought significant assets into the marriage.
Without proper planning, a surviving spouse may receive less than expected, while children from a prior relationship inherit a portion of the estate.
Understanding how California distinguishes between community and separate property is essential for avoiding disputes and ensuring assets are distributed according to the deceased’s intentions.
Conclusion
California inheritance law ensures that assets are distributed fairly, whether there is a will or not.
Recent updates, such as higher small estate limits and transfer-on-death options, have made estate settlement faster and more flexible than in the past.
Understanding who qualifies as a legal heir, the order of inheritance, and how bank accounts or property are handled can prevent confusion and disputes.
While most inheritances are received tax-free at the state level, proper planning is essential to protect your loved ones and make the process smoother.
Even if your estate seems simple, taking the time to plan, document your wishes, and review your assets can save time, reduce stress, and ensure your legacy is honored according to your intentions.
For families with significant investments, offshore assets, or prior marriages, a wealth manager often plays a key role in coordinating asset structure and beneficiary planning with California inheritance rules.
FAQs
Is my wife entitled to half my inheritance?
No, in California your wife is not automatically entitled to half of your inheritance, because it is generally considered separate property unless you choose to share or commingle it.
How long do executors have to settle an estate?
Executors in California do not have a fixed deadline, but most estates are settled within 9 to 18 months.
Complex estates or contested cases may take longer.
How long after someone passes away do you receive inheritance?
Inheritance is typically distributed after probate concludes and debts are paid.
This can take several months for simple estates and over a year for more complex ones.
Assets that pass outside probate, such as trust property or payable-on-death accounts, may be received much sooner.
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