Estate Planning & Probate

Wills & Trust - Trust Administration - Probate

NEWS: On November 3rd, 2020, Property Tax Law was radically overhauled with a Constitutional Amendment (Proposition 19). This law repealed Proposition 58, which had been in place since 1986 and exempted children from reappraisal of real estate (with certain limitations). If you own real estate and desire to pass your property to your children, make an appointment to have your trust reviewed right away. The NEW LAW goes into effect February 16, 2021, there is only a short period of time to make changes.

California Proposition 13, the Tax Limitations Initiative, was on the June 6, 1978 ballot in California as an initiated constitutional amendment. The measure was approved. (From Ballotpedia)

The ballot initiative was designed to: require that properties be taxed at no more than 1 percent of their full cash value shown on the 1975-1976 assessment rolls and limit annual increases of assessed (taxable) value to the inflation rate or 2 percent, whichever was less.

• upon the transfer of properties, allow them to be reassessed at one percent of their sale price and reset the limit on annual increases of assessed value.

• prohibit the state legislature from enacting new taxes on the value or sale of properties.

• require a two-thirds vote of the state legislature to increase non-property taxes.

• require local governments to refer special taxes to the ballot and require a two-thirds vote of electors.

• make the state government responsible for distributing property tax revenue among local governments.

California Proposition 19, the Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment, was on the ballot in California as a legislatively referred constitutional amendment on November 3, 2020. Proposition 19 was approved. (From Ballotpedia)

A "yes" vote supported this constitutional amendment to:

• allow eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment;

• increase the number of times that persons over 55 years old or with severe disabilities can transfer their tax assessments from one to three;

• require that inherited homes that are not used as principal residences, such as second homes or rentals, be reassessed at market value when transferred; and

• allocate additional revenue or net savings resulting from the ballot measure to wildfire agencies and counties.

What this means is that if your child inherits your house, and does not want to live in it, that house will be reassessed for property tax purposes to fair market value. YOU LOSE YOUR PROP 13 PROTECTIONS. If your child wants to live in the property as their primary residence after your passing, they inherit your low tax base. BUT THEY MUST CLAIM IT. Prop 13 tax protection does not happen automatically. The Grandparent to Grandchild exemption from reassessment WILL BE GONE after February 16, 2021.

What can you do? Get to an estate planner and take action before your options are greatly limited. Time is of the essence.

If you do not make your own estate plan, the State of California will do it for you. Make sure your estate planning docs get reviewed at least every five years!

Whether you need a will, a living trust, powers of attorney, or probate, we can advise you. We will make sure you have HIPPA release language and updates in the law on all your estate planning documents.

Guardianships

Guardianships are sought when minors need someone to act "in loco parentis" or in place of the parents. They expire when the minor reaches the age of eighteen.

You can nominate who you would want to apply to be the Guardian of your minor child in a Will.