California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 1 - Inheritance Tax › Article 5 - Specific Exemptions › Section 13805 - California Marital Exemption or Exclusion

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In General. All of the property
				  transferred to the spouse of a decedent who died on or after January 1, 1981 is
				  excluded from the inheritance tax, except where the spouse receives a limited
				  power of appointment over any portion or all of the decedent's property. The
				  spouse of a decedent who died on or after January 1, 1976 and before January 1,
				  1981, is entitled to a marital exclusion and the spouse of a decedent who died
				  on or after April 26, 1950 and before January 1, 1976, is entitled to a marital
				  exemption, either of which applies with respect to property received by the
				  spouse from the decedent pursuant to any transfer subject to the Inheritance
				  Tax Law equal in amount to one-half of the clear market value of the decedent's
				  separate property. However, as to decedents who died on or after January 1,
				  1976 and before January 1, 1981, the exclusion will not apply with reference to
				  separate property which has been converted from community or quasi-community
				  property (see Revenue and Taxation Code Section
				  13805(b)
				  as amended and effective January 1, 1976).
(b) Marital Exclusion as to Decedents Who
				  Died on or after January 1, 1981. All of the property transferred to the spouse
				  of a decedent who died on or after January 1, 1981 is excluded from inheritance
				  tax, except that if a limited power of appointment over any portion or all of
				  the decedent's property is given to the spouse of the decedent, the value of
				  such property is subject to the tax. Where a limited power of appointment is
				  given by a decedent to the decedent's spouse, the value of any interest given
				  other than the limited power of appointment itself is excluded from the tax.
				  For example, if a surviving spouse receives a life estate plus a general power
				  of appointment over the remainder in one-half of the decedent's estate and a
				  life estate plus a limited power of appointment over the remainder in the other
				  one-half, the value of the life estate and general power of appointment in
				  one-half of the estate and the value of the life estate in the other one-half
				  are excluded and the value of the remainder in the one-half of the estate
				  subject to the limited power of appointment is subject to the tax.
(c) Determination of Amount of Marital
				  Exclusion or Exemption as to Decedents Who Died Before January 1, 1981. The
				  exemption or exclusion requires the calculation of the following two factors
				  the lower of which is the dollar amount allowable:
(1) One-half of the clear market value of the
				  decedent's separate property, and
(2) The amount of property received by the
				  surviving spouse which is not excluded (not excluded as community or
				  quasi-community property, the insurance exclusion, etc.)
There is no limitation on the form of transfer to the
					 surviving spouse in order to include the transfer in the calculation of factor
					 (2). Thus life estates are counted in determining the amount of property taken
					 by the surviving spouse.
As to computation of the marital exemption or exclusion
					 involving proceeds of insurance on the life of a deceased spouse payable to the
					 surviving spouse, see Sections
					 13724.1 and
					 13724.2.