Tax
Oct. 26, 2026
For estate planners, Prop 40 rewrites rules for measuring wealth
California's proposed Proposition 40 billionaire tax would upend traditional estate planning strategies by imposing new rules for valuing trusts, gifts and closely held businesses, creating significant tax exposure and compliance challenges for wealthy individuals.
For decades, a successful estate plan could be measured by how effectively and creatively it used the existing tax code and regulations to reduce a taxable estate. If Californians enact Proposition 40 in November, familiar estate-minimizing techniques would give little or no relief from this new "one-time tax" for the state's wealthiest individuals. Under the proposition, irrevocable grantor trusts funded with completed gifts, large charitable gifts made after Oct. 15, 2025, ...
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