Legal Question in Wills and Trusts in California

The inheritance taxes (federal and state) don't start in California until the estate's net value is over $3.5 million, assuming no part of the lifetime gift exemption was used to make large gifts. Above that, estate taxes are 45% of the excess over $3.5 million.

Income taxes are owed (a final tax return for your father), and a fiduciary tax return for the time the estate or trust is open. Talk with a tax advisor, as income tax rates for estates and trusts can be higher than for individuals, and the manner in which you take distributions from annuities and retirement plans can affect income taxes.