The passage of Prop.19 results in the most significant change in inheritance-related law that I have ever encountered in my 32 year estate planning law practice.
If you are reading this article prior to February 16, you are allowed to transfer your house to your children, whether during your life or after your death, without that transfer resulting in a property tax reassessment. In addition, right now, you are allowed to transfer your income-producing property to your children, whether during your life or after your death, without a property tax reassessment if the assessed value of that property is less than $1 million. (Assessed value is the value of the property as it appears on your property tax bill.)
But starting February 16, 2021, those reassessment exclusions go away forever! So, if you plan on leaving your home or income-producing properties to your children after your death, those transfers will result in a significant property tax increase!
This is not an exaggeration designed for business-acquisition purposes. This is not “click-bait”. This is a real-deal sea change. The term “game-changer” is often overused; that, it perfectly describes this development. If your children cannot afford to pay the increased property taxes, they will have to sell the property. Maybe that’s not what you want, or what your child wants.
There are solutions to this problem! But, those solutions involve documents that must be signed and processed prior to February 16. Not a lot of time left. But, they can still be done if you start right now by immediately contacting me, or any other attorney whose main area of practice is estate planning.
By Jeffrey L. Condon
Jeffrey L. Condon of Condon & Condon is located at 3435 Ocean Park Blvd., Suite 108, in Santa Monica. He can be reached by calling 310-393-0701. https://condonandcondon.net