California family offices with clients at or near the $1 billion net worth threshold should be monitoring Proposition 40, the 2026 Billionaire Tax Act, which has qualified for the Nov. 3 ballot and could impose a one-time tax of up to 5% on the net worth of certain California residents if approved by voters. Its structure creates planning issues that family offices may need to evaluate well before any tax is due. The act would determine California residency as of Jan. 1, 2026, but would measure net worth as of Dec. 31, 2026. The tax would apply to individuals with a net worth of at least $1 billion on Dec. 31, 2026. The trust would be independently subject to the 5% tax on its entire net worth, with no separate $1 billion threshold.