Investing in many sources of income that are independent on government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Stocks, forex, and digital currencies are still good investments at this time
Thank you for posting a comment @TianaManeO. You raise some interesting questions. A Certified Financial AdvisorTM can be a great resource when it comes to making investment decisions, especially when they involve saving for retirement and reliance on future (or present) government sourced benefits.
Yeah, I’ve been digging into it too. The whole thing is a bit confusing, though. It seems like there are some big loopholes, but I’m not sure how to take advantage of them.
I was reading that Prop 19 can make it harder to pass down property without getting hit with a huge tax bill. My parents’ house is a big part of our family’s financial plan, and I’m trying to figure out how we can keep it without the taxes going through the roof.
That’s what I’m worried about too, Mike. My folks bought their house ages ago, and with Prop 13, their taxes have stayed low. But now with Prop 19, if we inherit the house, the property taxes could skyrocket. It’s making me wonder what our best move is.
I’ve heard there are some strategies to keep the tax benefits, but they’re pretty specific. If you don’t handle it right, you could end up losing the protections of Prop 13. It’s a lot to think about, especially with all the fine print.
There can be some strategies, like the ones covered in this video. But, you will need competent legal counsel with experience in this area of law. Please see a lawyer before attempting any strategies.
37 years with the Assessor and I have not yet watched all his video. The real core of the change is the HOX requirement (homeowner's exemption). That was the major change that potentially leads to a loss of the tax base. I am in the Commercial/Industrial section and since it effectively removed "us" from the equation, I have not kept up with all the intricate nuances, but I am still informed. Essentially, the parent or the child (depends on the direction of the transfer) must have been getting the HOX and after the change of ownership (yes date of deaths are a change of ownership) the new occupant must apply and receive the HOX within 1 year. Also, the new occupant must apply for the Prop 19 Exclusion so it's a two form process within 3 years. There's also a provision for the Exclusion for 6 months after the Notice from the Assessor. Of course, all these dates and the two forms (Exemption and Exclusion) are confusing so it surely doesn't look taxpayer friendly on the surface. The Assessor will establish a new base year value and it will always be lurking in the background, meaning if the HOX is lost then it will be enrolled at its trended base for the year lost. Pete
What if the transferred property is an income property(multi unit apartment) and it is a specific bequest from the parent’s irrevocable trust? Can the basis be kept from the parent?
@@ocavant Under Proposition 19, if a multi-unit apartment building is transferred from a parent to a child, the portion occupied by the parent and then by the child as their principal residence falls under the Prop 19 property tax reassessment exclusion rules. However, any units not occupied as the principal residence by the child will be reassessed at current market value. Thus, only the part of the property that qualifies as the child’s principal residence avoids reassessment, while the rest is subject to new property tax calculations. Also, if the value of the parent-occupied unit is more than $1M or $1.022M greater than the assessed value, the property will be partially reassessed to the extent of the overage.
@@ocavant Mr. Cunningham gives a good synopsis. Remember the core that I addressed...the HOX. The parent had to live in a dwelling and received a HOX, the child thereafter w/i 1 year has to occupy and receive a HOX. You can only have 1 HOX.
@@CunninghamLegal Remember too that part about current market value...it's always now lurking in the background and any event that causes the removal of the Exclusion will cause it to be enrolled at its trended base.
Thanks for this video! Is there any potential property tax reassessment relief if I own a home that I’m tearing down and building a custom home twice the size?
@Beezb-d9j thank you for your great question. When tearing down a home and rebuilding, that sounds like a major rehabilitation. The California Board of Equalization has guidance on the tax effects of a major rehabilitation www.boe.ca.gov/proptaxes/newconstructionproperty.htm You should check with your local county assessor they should be able to answer your question. Hopefully, your project will be completed ahead of time, under budget and free of hassle :)
Great content. My mother passed away July 2023. My brother, 62 unemployed has been living with Mom in the home in Sacramento for 20 years. The home was left to me because my brother has mental health issues since I am the only one that can handle the estate. My primary residence is in another county in CA. The value of the home is only 500K. Will the home have a reassessment if my brother stays in the home 100% ? He has no where to go and will be homeless if I don’t continue to pay for him to live in the family home. Would I be able to keep the same tax rate under these circumstances and not get reassessed? If this is not the right format, i apologize.
I would recommend that you consult an attorney experienced in Prop 19 and Trust Administration immediately. This is something that we can assist with if you don’t already have legal counsel. The big issue here is that you have stated the trust leaves the property to you but that you won’t live there as your residence. Given these facts, the property will likely be reassessed. However, if you brother owns (in trust or otherwise) at least a partial interest in the property under the terms of your mom’s trust, it may be possible to avoid reassessment under these facts. Sometimes people conflate being a trustee of a trust with being a beneficiary. A trust can be written in a way so that your brother is the full or partial “owner” of the property for property tax purposes, but you as trustee totally control the property and your name is on the deed. This can be very confusing for people who aren’t familiar with these arcane rules. Again, this is something that you should review with a lawyer immediately. www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal Such an interesting scenario! Thank you! My family is in a similar circumstance, also in the Sacramento area. My parents are in their 70's and my brother & I are the only future beneficiaries. It would be ideal if, upon my parents' passing, my brother could live in the family home until his death, and then the house could pass to my daughter. (my brother has no children) QUESTION: Would granting a Life Estate to my brother be enough to avoid reassessment?
If a child buys a home from a parent, the other 50% would be considered a gift. Also, the assessor uses “fair market value” not nominal sales price when determining assessment. There's several other considerations, which we can cover in a 1-1 consult if you do not already have a lawyer and are seriously considering a sale. Please consider reaching out! www.cunninghamlegal.com/california-law-offices/contact/
Is it possible for an adult child to inherit the tax base of a parent by moving into the family home, and then transfer it later after they turn 55 years old?
We believe the answer is yes, but it's really not clear. We are working on a similar matter now and will update our UA-cam channel as we get the answers.
Thank you for the video. So can it be your primary residence & you airbnb it a bit each year? Is any rental of inherited property allowed, and if so, how much?
This is a good question, and thank you. The rules aren’t clear, but we know that if the owner no longer qualifies for the Homeowner’s Exemption, that means that the owner of the property would lose the parent to child reassessment exclusion and the taxes would go up.
DePalma Do you mean airbnb to bring in income so the heirs can support the higher property tax while living in it as the primary residence? "Airbnb a bit each year" just enough to cover the increase in property tax.
Adding your name to your daughter's house could lead to a property tax reassessment, depending on how the transfer is handled. Under California's Prop 13, changes in ownership often trigger reassessments unless you qualify for an exclusion, like a parent-child transfer. It's a good idea to meet with an attorney that handles Prop 19 matters to make sure you're on the right track and to explore any available exclusions. If you are not already represented, you can contact our Firm: www.cunninghamlegal.com/california-law-offices/contact/ and we can discuss this transaction.
Let’s wait to see if he adds 100 time more value than planning, earning NICER approved Trusted Advisors 850% more than estate planners. Slowing to turtle safe speed to mentor grantors, monitor trustees and guardians, and referee grantees and beneficiaries.
What happens if the property is in probate and an adult child has been living in the family home and it's their primary home? They file a Homeowners Exemption within a year of the parent's passing. Can they be exemp from reassessment? Are there other forms or steps that needs to be done?
This is a question for your probate attorney. If you don’t have one, you can schedule a consult with us. We would need more information about date of death, who the beneficiaries are under the Will or laws of intestacy, the exact dates, how creditors are to be paid from the estate as well as who ultimately ends up on title to the property and how. Not easy stuff unfortunately. You can contact us here: www.cunninghamlegal.com/california-law-offices/contact/
What about a bequest of an income property(apartment building)from a parent’s irrevocable trust that had a prop 13 basis? Will that get reassessed to current market value?
It depends on when the “change in ownership” (if any)occurred. This is dependent upon the terms of the trust, as written. Without more information, it is not possible to answer this question. You can contact us and we can review it for you: www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal Thanks for the prompt reply. The trust is still in limbo with a fiduciary trustee. DOD was April 2023 of estate owner(Mom). Two sibling beneficiaries. The property in question had an "appraised valued" at DOD 200k more than the residual trust value(two properties and cash) but specifically exempts the specific bequeathed bennificary of the rental building(lets call him sib "A") from equalizing any difference to the residual. In the trust assets there are two other properties, one the former estate owner's(Mom) residence and a second home (that "B" lives in currently sans rent) that is specifically bequeathed to the second beneficiary(sib "B"). Additionally the trust dictates a specified monthly annuity($6K) for only one of the beneficiaries(sib "B" - and they are not happy about that) That property has already been "dispursed/given" to beneficiary("B") obstensively to help(the trustee's words) fund the annuity due to inseficiant funds in the residual trust monies to purchase the specified 6k per month annuity. Questions of unequal distribution prior to a bilateral agreement are in play. Dispute re: trustee fees also, just to throw additional complexity into the mix though the trust makes no mention of division of trustee fees between benificaries. No agreement has been signed between the benificiaries. I will set up a consultation. Thank you so much.
My dad's home was left to me and it will be my primary residence and so there won't be a reassessment. But what if later on I want to turn it into a rental property? I'm guessing that will trigger a reassessment?
Assuming your father passed away February 15, 2021, or later, you might not face a tax reassessment due to the "parent-to-child transfer" rule, which allows children to inherit property without increasing property taxes, as long as specific conditions are met. However, if you later change the inherited home into a rental property, it will no longer qualify as your primary residence. Under Proposition 19, the tax reassessment exclusion only applies if the property remains the child’s primary residence. Once it becomes a rental, the property taxes likely will go up.
My grandma transferred her home to my dad before her passing pre 2020. My dad was already living in the house and paying property taxes of $50 per year. Within a couple of years they started charging my dad $1,500 a year and now almost $1,900 per year. Now he’s paying late fees and interest on back property taxes. Shouldn’t the property and my dad been protected against the property tax hike? Fyi, the property has never changed. Everything is exactly the same the whole 30 years he’s lived here. Any way to get the property taxes back to $50 pre year? Thank you
It may not be too late to get the prior, lower taxes. Your father should get legal advice as soon as possible. Please contact your attorney, or if you are not represented, reach out to our law firm: www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal the property is probably up more than 5x in value from 30 years ago and people still complain about a couple thousand in taxes. It’s all just greed at this point. Lol
I enjoyed this video very much. I am looking for an answer that I didn't find in it. Prop 19 completely upended my family's estate planning that with had in place for 25 years. The most egregious, I am inheriting my mom's primary residence condo after she passes, it was going to be my primary source of income from renting it out. I can't claim it as my primary residence because the house I live in now is also going to transfer to me upon her passing. Any thoughts?
This is a tough one. There are considerations other than property taxes. Assuming you get an adjusted cost basis on the property after your mom’s passing, the depreciation available to you as an owner may negate the higher property taxes. Of course, if you do not get an adjusted cost basis at your mom’s passing and the property is reassessed, that is the worst of both worlds. We’d be happy to meet with you about this is you are not already represented by a lawyer with respect to this issue. www.cunninghamlegal.com/california-law-offices/contact/
A 55+ person can move their property tax base three times under Prop 19. Since this has to be the primary residence and since a person can only have one primary residence, the rules appear to preclude transferring the Prop 19 base for an individual to two separate properties.
Provided there has been no no divorce or remarriage, this may be an option! Here's what the Tax Code says: "Any son-in-law or daughter-in-law of the parent or parents. For the purposes of this paragraph, the relationship of parent and son-in-law or daughter-in-law shall be deemed to exist until the marriage on which the relationship is based is terminated by divorce, or, if the relationship is terminated by death, until the remarriage of the surviving son-in-law or daughter-in-law.” California Revenue and Taxation Code Section 63.1(c)(3)(C). Please consult an attorney, since this is not legal advice, this is information regarding the California Revenue and Taxation Code.
@@CunninghamLegal Thanks yes I'll consult an attorney but it sounds like the son-in-law would be able to keep the property tax assessment. If there are other heirs and the son-in-law has to buy out their interest in the house to assume full ownership would the house be reassessed on that portion though? thanks
It's very sad. There are many people who have adult children who are disabled or are lower wage earners in cities with very high property values. Prop 19 will force them to sell because they can not afford the new property taxes especially if there is still a mortgage on it. Their income might be higher than the $53k which leaves them in a vulnerable situation.
There are a couple of ways around the limitations of Prop 19 and these include the co-tenancy exclusion. If this affects you it may be worthwhile to speak with a lawyer at CunninghamLegal if you aren’t represented with respect to this issue: www.cunninghamlegal.com/
3:00 : Of course, with higher interest rates, even if you keep your cost basis, odds are that you‘ll be paying a higher mortgage if you move. Hence, why fewer boomers are moving, and less supply on the market. ):
So we already had the benefits of moving the tax base anywhere in the state, prior to prop 19? Then they just added the moving the tax base for seniors into the ballot wording of prop 19, mentioned that it’d create millions for “schools” & slid in at the end of the ballot description that inheritors wouldn’t maintain the same property tax base? This was a greedy, money grab by the state of CA…it makes it extremely hard to retain a family property & forces the property to be reassessed at market value, if the inheritors want to rent it….and now, with extra property tax, they can’t offer a lower priced property, but are forced to charge higher than market value rent. CA knew what they were doing & I hope they get taken to court & have to overturn or put back onto the ballot, with clear verbiage stating that “voting yes will increase rents significantly, state wide”…
California voters voted for this change. If you don't like it, you're free to sell your property at the market value and take your money to another state. Also this does nothing to change rents. Landlords ALWAYS charge rent at the market price.
@@CunninghamLegal thank you for the video for your response… Do you by chance know if anybody is suing the state of California to have this revoked, repealed or to be voted on again?
That has been a criticism of vacant homes with low Prop 13 taxes. Prop 19 helps those people transfer their property tax base to a new home, freeing up the “relinquished” home to a new occupant.
Why SHOULD they have incentive to sell?! They should be able to keep the homes their parents worked their tails off to buy/keep. Often times adult children are a PART of helping their parents process of building their estate, just to inherit it and not able to keep it be because property taxes went from 10,000 to 50,000 annually. It’s NOT right.
@@dianepidgeon9403 Thank you for you comment. Many many people share your perspective on how property taxes work after passage of Prop 19. The protections that families had of Prop 13 when it comes to children inheriting from their parents have largely gone away.
The people who love Prop 13 often benefit from low taxes. Those who purchased recently also benefit in that taxes are limited to 1% of value at purchase - and those taxes themselves can only go up 2% a year even of property goes up more than that!
Can you move a property from a revocable trust into an LLC and setup LLC with multiple owners below 50% ownership to avoid any assessment now and in the future?
This is a two-part question. These rules are different if the LLC is an “original owner.” That is, if the property is reassessed when the LLC acquires the property, the LLC is an original owner. When the property is initially transferred to an LLC, as long as the proportional interest remains the same, there should be no reassessment. If a trust owns the property 100% and the trustee transfers the property to the LLC, and in exchange gets all the shares of the LLC, this is a proportional interest transfer. No reassessment. However, if the LLC is NOT an original owner of the property, it can get complicated. If control of the entity passes to another owner, or more than 50% of the shares change hands, the property is 100% reassessed.
Sorry. I'm nitpicking here 🙂 At time stamp of 27:35 where you talk about the difference between 1.5 mil and 200k is 300k. You said "taxes go up $3000k or more" When it should be; The new property taxes will go "up TO" $3000k or more. The way you formed the phase makes it sound like your new taxes will be an additional $3000k from what they are now. Then really, the new taxes are now $3000k or more. I know, nitpicking (sorry) :)
Investing in many sources of income that are independent on government paychecks is the prudent thing that everyone should be thinking about right now, especially given the global economic crisis. Stocks, forex, and digital currencies are still good investments at this time
Thank you for posting a comment @TianaManeO. You raise some interesting questions. A Certified Financial AdvisorTM can be a great resource when it comes to making investment decisions, especially when they involve saving for retirement and reliance on future (or present) government sourced benefits.
Great video, It’s got me thinking about how it’s going to affect my family, especially with the changes to Prop 13.
Yeah, I’ve been digging into it too. The whole thing is a bit confusing, though. It seems like there are some big loopholes, but I’m not sure how to take advantage of them.
I was reading that Prop 19 can make it harder to pass down property without getting hit with a huge tax bill. My parents’ house is a big part of our family’s financial plan, and I’m trying to figure out how we can keep it without the taxes going through the roof.
That’s what I’m worried about too, Mike. My folks bought their house ages ago, and with Prop 13, their taxes have stayed low. But now with Prop 19, if we inherit the house, the property taxes could skyrocket. It’s making me wonder what our best move is.
I’ve heard there are some strategies to keep the tax benefits, but they’re pretty specific. If you don’t handle it right, you could end up losing the protections of Prop 13. It’s a lot to think about, especially with all the fine print.
There can be some strategies, like the ones covered in this video. But, you will need competent legal counsel with experience in this area of law. Please see a lawyer before attempting any strategies.
Your videos are well done and very informative. Thank you!
Thank you!
37 years with the Assessor and I have not yet watched all his video.
The real core of the change is the HOX requirement (homeowner's exemption). That was the major change that potentially leads to a loss of the tax base. I am in the Commercial/Industrial section and since it effectively removed "us" from the equation, I have not kept up with all the intricate nuances, but I am still informed.
Essentially, the parent or the child (depends on the direction of the transfer) must have been getting the HOX and after the change of ownership (yes date of deaths are a change of ownership) the new occupant must apply and receive the HOX within 1 year. Also, the new occupant must apply for the Prop 19 Exclusion so it's a two form process within 3 years. There's also a provision for the Exclusion for 6 months after the Notice from the Assessor. Of course, all these dates and the two forms (Exemption and Exclusion) are confusing so it surely doesn't look taxpayer friendly on the surface.
The Assessor will establish a new base year value and it will always be lurking in the background, meaning if the HOX is lost then it will be enrolled at its trended base for the year lost.
Pete
Thank you for your comment. This certainly has gotten more confusing for taxpayers…and frustrating.
What if the transferred property is an income property(multi unit apartment) and it is a specific bequest from the parent’s irrevocable trust? Can the basis be kept from the parent?
@@ocavant Under Proposition 19, if a multi-unit apartment building is transferred from a parent to a child, the portion occupied by the parent and then by the child as their principal residence falls under the Prop 19 property tax reassessment exclusion rules. However, any units not occupied as the principal residence by the child will be reassessed at current market value. Thus, only the part of the property that qualifies as the child’s principal residence avoids reassessment, while the rest is subject to new property tax calculations. Also, if the value of the parent-occupied unit is more than $1M or $1.022M greater than the assessed value, the property will be partially reassessed to the extent of the overage.
@@ocavant Mr. Cunningham gives a good synopsis. Remember the core that I addressed...the HOX. The parent had to live in a dwelling and received a HOX, the child thereafter w/i 1 year has to occupy and receive a HOX. You can only have 1 HOX.
@@CunninghamLegal Remember too that part about current market value...it's always now lurking in the background and any event that causes the removal of the Exclusion will cause it to be enrolled at its trended base.
20:30 : Common Prop 13 Issues. Found it most useful to start here, then look at the rest of the video. Thanks!
Thanks for sharing! We'll keep that in mind for the next video.
Thanks for this video! Is there any potential property tax reassessment relief if I own a home that I’m tearing down and building a custom home twice the size?
@Beezb-d9j thank you for your great question. When tearing down a home and rebuilding, that sounds like a major rehabilitation. The California Board of Equalization has guidance on the tax effects of a major rehabilitation www.boe.ca.gov/proptaxes/newconstructionproperty.htm You should check with your local county assessor they should be able to answer your question. Hopefully, your project will be completed ahead of time, under budget and free of hassle :)
Great content. My mother passed away July 2023. My brother, 62 unemployed has been living with Mom in the home in Sacramento for 20 years. The home was left to me because my brother has mental health issues since I am the only one that can handle the estate. My primary residence is in another county in CA. The value of the home is only 500K. Will the home have a reassessment if my brother stays in the home 100% ? He has no where to go and will be homeless if I don’t continue to pay for him to live in the family home. Would I be able to keep the same tax rate under these circumstances and not get reassessed? If this is not the right format, i apologize.
I would recommend that you consult an attorney experienced in Prop 19 and Trust Administration immediately. This is something that we can assist with if you don’t already have legal counsel. The big issue here is that you have stated the trust leaves the property to you but that you won’t live there as your residence. Given these facts, the property will likely be reassessed. However, if you brother owns (in trust or otherwise) at least a partial interest in the property under the terms of your mom’s trust, it may be possible to avoid reassessment under these facts. Sometimes people conflate being a trustee of a trust with being a beneficiary. A trust can be written in a way so that your brother is the full or partial “owner” of the property for property tax purposes, but you as trustee totally control the property and your name is on the deed. This can be very confusing for people who aren’t familiar with these arcane rules. Again, this is something that you should review with a lawyer immediately. www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal Such an interesting scenario! Thank you! My family is in a similar circumstance, also in the Sacramento area. My parents are in their 70's and my brother & I are the only future beneficiaries. It would be ideal if, upon my parents' passing, my brother could live in the family home until his death, and then the house could pass to my daughter. (my brother has no children) QUESTION: Would granting a Life Estate to my brother be enough to avoid reassessment?
Great info TU👍🏼
Thanks! 👍
Can child buy house for 50% off market value? What issues would pop up?
If a child buys a home from a parent, the other 50% would be considered a gift. Also, the assessor uses “fair market value” not nominal sales price when determining assessment. There's several other considerations, which we can cover in a 1-1 consult if you do not already have a lawyer and are seriously considering a sale. Please consider reaching out! www.cunninghamlegal.com/california-law-offices/contact/
Is it possible for an adult child to inherit the tax base of a parent by moving into the family home, and then transfer it later after they turn 55 years old?
I believe so
We believe the answer is yes, but it's really not clear. We are working on a similar matter now and will update our UA-cam channel as we get the answers.
Thank you for the video. So can it be your primary residence & you airbnb it a bit each year? Is any rental of inherited property allowed, and if so, how much?
This is a good question, and thank you. The rules aren’t clear, but we know that if the owner no longer qualifies for the Homeowner’s Exemption, that means that the owner of the property would lose the parent to child reassessment exclusion and the taxes would go up.
DePalma Do you mean airbnb to bring in income so the heirs can support the higher property tax while living in it as the primary residence? "Airbnb a bit each year" just enough to cover the increase in property tax.
If my daughter is going to add me to her house will it be the change of the ownership and be subject to reassesment ???? Thank you 🤗😊
Adding your name to your daughter's house could lead to a property tax reassessment, depending on how the transfer is handled. Under California's Prop 13, changes in ownership often trigger reassessments unless you qualify for an exclusion, like a parent-child transfer. It's a good idea to meet with an attorney that handles Prop 19 matters to make sure you're on the right track and to explore any available exclusions. If you are not already represented, you can contact our Firm: www.cunninghamlegal.com/california-law-offices/contact/ and we can discuss this transaction.
Let’s wait to see if he adds 100 time more value than planning, earning NICER approved Trusted Advisors 850% more than estate planners. Slowing to turtle safe speed to mentor grantors, monitor trustees and guardians, and referee grantees and beneficiaries.
You're doing God's work! Thanks for the update.
Thanks for leaving a comment!
What happens if the property is in probate and an adult child has been living in the family home and it's their primary home? They file a Homeowners Exemption within a year of the parent's passing. Can they be exemp from reassessment? Are there other forms or steps that needs to be done?
This is a question for your probate attorney. If you don’t have one, you can schedule a consult with us. We would need more information about date of death, who the beneficiaries are under the Will or laws of intestacy, the exact dates, how creditors are to be paid from the estate as well as who ultimately ends up on title to the property and how. Not easy stuff unfortunately. You can contact us here: www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal Thank you for responding. I will schedule a consult.
What about a bequest of an income property(apartment building)from a parent’s irrevocable trust that had a prop 13 basis? Will that get reassessed to current market value?
It depends on when the “change in ownership” (if any)occurred. This is dependent upon the terms of the trust, as written. Without more information, it is not possible to answer this question. You can contact us and we can review it for you: www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal Thanks for the prompt reply. The trust is still in limbo with a fiduciary trustee. DOD was April 2023 of estate owner(Mom). Two sibling beneficiaries. The property in question had an "appraised valued" at DOD 200k more than the residual trust value(two properties and cash) but specifically exempts the specific bequeathed bennificary of the rental building(lets call him sib "A") from equalizing any difference to the residual.
In the trust assets there are two other properties, one the former estate owner's(Mom) residence and a second home (that "B" lives in currently sans rent) that is specifically bequeathed to the second beneficiary(sib "B"). Additionally the trust dictates a specified monthly annuity($6K) for only one of the beneficiaries(sib "B" - and they are not happy about that) That property has already been "dispursed/given" to beneficiary("B") obstensively to help(the trustee's words) fund the annuity due to inseficiant funds in the residual trust monies to purchase the specified 6k per month annuity. Questions of unequal distribution prior to a bilateral agreement are in play. Dispute re: trustee fees also, just to throw additional complexity into the mix though the trust makes no mention of division of trustee fees between benificaries. No agreement has been signed between the benificiaries.
I will set up a consultation. Thank you so much.
My dad's home was left to me and it will be my primary residence and so there won't be a reassessment. But what if later on I want to turn it into a rental property? I'm guessing that will trigger a reassessment?
Assuming your father passed away February 15, 2021, or later, you might not face a tax reassessment due to the "parent-to-child transfer" rule, which allows children to inherit property without increasing property taxes, as long as specific conditions are met. However, if you later change the inherited home into a rental property, it will no longer qualify as your primary residence. Under Proposition 19, the tax reassessment exclusion only applies if the property remains the child’s primary residence. Once it becomes a rental, the property taxes likely will go up.
@@CunninghamLegal Thank you sir 🙏
My grandma transferred her home to my dad before her passing pre 2020. My dad was already living in the house and paying property taxes of $50 per year. Within a couple of years they started charging my dad $1,500 a year and now almost $1,900 per year.
Now he’s paying late fees and interest on back property taxes. Shouldn’t the property and my dad been protected against the property tax hike?
Fyi, the property has never changed. Everything is exactly the same the whole 30 years he’s lived here. Any way to get the property taxes back to $50 pre year?
Thank you
It may not be too late to get the prior, lower taxes. Your father should get legal advice as soon as possible. Please contact your attorney, or if you are not represented, reach out to our law firm: www.cunninghamlegal.com/california-law-offices/contact/
@@CunninghamLegal the property is probably up more than 5x in value from 30 years ago and people still complain about a couple thousand in taxes. It’s all just greed at this point. Lol
I enjoyed this video very much. I am looking for an answer that I didn't find in it. Prop 19 completely upended my family's estate planning that with had in place for 25 years. The most egregious,
I am inheriting my mom's primary residence condo after she passes, it was going to be my primary source of income from renting it out. I can't claim it as my primary residence because the house I live in now is also going to transfer to me upon her passing. Any thoughts?
This is a tough one. There are considerations other than property taxes. Assuming you get an adjusted cost basis on the property after your mom’s passing, the depreciation available to you as an owner may negate the higher property taxes. Of course, if you do not get an adjusted cost basis at your mom’s passing and the property is reassessed, that is the worst of both worlds. We’d be happy to meet with you about this is you are not already represented by a lawyer with respect to this issue. www.cunninghamlegal.com/california-law-offices/contact/
Can the 56+ person buy more than one property at Prop 13 rates after selling the primary residence under Prop 19?
A 55+ person can move their property tax base three times under Prop 19. Since this has to be the primary residence and since a person can only have one primary residence, the rules appear to preclude transferring the Prop 19 base for an individual to two separate properties.
What if the heir is a son in law. Can he keep the parents property tax rate if he lives in it? thanks
Provided there has been no no divorce or remarriage, this may be an option! Here's what the Tax Code says: "Any son-in-law or daughter-in-law of the parent or parents. For the purposes of this paragraph, the relationship of parent and son-in-law or daughter-in-law shall be deemed to exist until the marriage on which the relationship is based is terminated by divorce, or, if the relationship is terminated by death, until the remarriage of the surviving son-in-law or daughter-in-law.” California Revenue and Taxation Code Section 63.1(c)(3)(C). Please consult an attorney, since this is not legal advice, this is information regarding the California Revenue and Taxation Code.
@@CunninghamLegal Thanks yes I'll consult an attorney but it sounds like the son-in-law would be able to keep the property tax assessment. If there are other heirs and the son-in-law has to buy out their interest in the house to assume full ownership would the house be reassessed on that portion though? thanks
It's very sad. There are many people who have adult children who are disabled or are lower wage earners in cities with very high property values. Prop 19 will force them to sell because they can not afford the new property taxes especially if there is still a mortgage on it. Their income might be higher than the $53k which leaves them in a vulnerable situation.
There are a couple of ways around the limitations of Prop 19 and these include the co-tenancy exclusion. If this affects you it may be worthwhile to speak with a lawyer at CunninghamLegal if you aren’t represented with respect to this issue: www.cunninghamlegal.com/
3:00 : Of course, with higher interest rates, even if you keep your cost basis, odds are that you‘ll be paying a higher mortgage if you move. Hence, why fewer boomers are moving, and less supply on the market. ):
This is typically especially true if a mortgage is in the mix.
So we already had the benefits of moving the tax base anywhere in the state, prior to prop 19?
Then they just added the moving the tax base for seniors into the ballot wording of prop 19, mentioned that it’d create millions for “schools” & slid in at the end of the ballot description that inheritors wouldn’t maintain the same property tax base?
This was a greedy, money grab by the state of CA…it makes it extremely hard to retain a family property & forces the property to be reassessed at market value, if the inheritors want to rent it….and now, with extra property tax, they can’t offer a lower priced property, but are forced to charge higher than market value rent.
CA knew what they were doing & I hope they get taken to court & have to overturn or put back onto the ballot, with clear verbiage stating that “voting yes will increase rents significantly, state wide”…
California voters voted for this change. If you don't like it, you're free to sell your property at the market value and take your money to another state. Also this does nothing to change rents. Landlords ALWAYS charge rent at the market price.
You have correctly identified that passage of Prop 19 has many unintended consequences. Thank you for your comment.
@@CunninghamLegal thank you for the video for your response… Do you by chance know if anybody is suing the state of California to have this revoked, repealed or to be voted on again?
@@DePalma. There may have been a lawsuit filed after Prop 19 was passed but its been a few years since we have heard anything about that case.
This prop covered 2 issues and that is illegal
I’m glad they eliminated it. Had all these people not living at homes with extremely low property taxes sitting on them with no incentive to sell.
That has been a criticism of vacant homes with low Prop 13 taxes. Prop 19 helps those people transfer their property tax base to a new home, freeing up the “relinquished” home to a new occupant.
@@CunninghamLegal With the same low tax rate? To the new occupants? Or am I misunderstanding your statement?
Why SHOULD they have incentive to sell?! They should be able to keep the homes their parents worked their tails off to buy/keep. Often times adult children are a PART of helping their parents process of building their estate, just to inherit it and not able to keep it be because property taxes went from 10,000 to 50,000 annually. It’s NOT right.
@ I’m talking about properties that sit without any occupants.
@@dianepidgeon9403 Thank you for you comment. Many many people share your perspective on how property taxes work after passage of Prop 19. The protections that families had of Prop 13 when it comes to children inheriting from their parents have largely gone away.
Repeal Prop 13!
Prop 13 is the only good thing that CA law has going for it…
Um...no.
@@anilomd right?! No way it should be repealed lol
own or rent. your screwed if you think that's a great idea.
The people who love Prop 13 often benefit from low taxes. Those who purchased recently also benefit in that taxes are limited to 1% of value at purchase - and those taxes themselves can only go up 2% a year even of property goes up more than that!
Property Tax is a fraud. You don't own your property if it is taxed. Don't pay the yearly taxes and you lose your property.
Sell your property then and live in an RV.
@@joshn2342323
Wrong answer.
Property taxes ARE real and you are correct - if you don’t pay then you lose your property.
Can you move a property from a revocable trust into an LLC and setup LLC with multiple owners below 50% ownership to avoid any assessment now and in the future?
This is a two-part question. These rules are different if the LLC is an “original owner.” That is, if the property is reassessed when the LLC acquires the property, the LLC is an original owner.
When the property is initially transferred to an LLC, as long as the proportional interest remains the same, there should be no reassessment. If a trust owns the property 100% and the trustee transfers the property to the LLC, and in exchange gets all the shares of the LLC, this is a proportional interest transfer. No reassessment.
However, if the LLC is NOT an original owner of the property, it can get complicated. If control of the entity passes to another owner, or more than 50% of the shares change hands, the property is 100% reassessed.
@@CunninghamLegal Thank you. Appreciate the reply. I'll pass on the info and recommend they contact your firm.
Sorry. I'm nitpicking here 🙂 At time stamp of 27:35 where you talk about the difference between 1.5 mil and 200k is 300k. You said "taxes go up $3000k or more" When it should be; The new property taxes will go "up TO" $3000k or more. The way you formed the phase makes it sound like your new taxes will be an additional $3000k from what they are now. Then really, the new taxes are now $3000k or more. I know, nitpicking (sorry) :)
Thank you for your comment. In the example, the Base Year” value increased by $300K, resulting in $3K more in property taxes per year.