There is much to consider when planning how best to pass assets to heirs, including potential tax consequences on the transferred assets. For the time being, 2021 federal gift and estate tax exemptions remain at an all-time high ($11.7 million per individual and $23.4 million for a married couple), allowing a large portion of transferred wealth to be excluded from taxation. Further, for Californians there is no additional state inheritance tax, which also helps to reduce the tax burden. With proper estate planning, most assets (excluding retirement accounts) still receive a step-up in basis for income tax purposes when both the first and second spouse die. In addition, many people have established and funded revocable living trusts with primary residences, rental properties, and vacation homes so that these assets may be transferred to heirs without the hassle and costs of probate administration.