Cal. Code Regs. tit. 18 § 15556
In the valuation of any property in which a donee is given a present right of enjoyment or possession, no allowance will be made on account of any contingent encumbrance on the property, nor on account of any contingency upon the happening of which the donee's interest might, in whole or in part, be abridged or diminished. If, however, the encumbrance or contingency should become effective after the donee has become possessed, or has entered upon the enjoyment of, the property, and a gift tax has been paid, a refund of tax will be made if an application is filed within six months after the taking effect of the encumbrance or contingency, (see Revenue and Taxation Code Section 16223). The amount of the refund will be the difference between the tax paid on the value of the property without allowance for the encumbrance or contingency, and that which would have been paid on a valuation of the donee's actual interest in the property after the taking effect of the encumbrance or contingency.
NOTE: Reference: Section 15556, Revenue and Taxation Code.
Cal. Code Regs. Tit. 18, § 15556