055: How Will Prop 19 Impact Your Estate Plan on February 16th
Release Date: 02/03/2021
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info_outlineProposition 19 is a ballot measure passed in the November 2020 election in the state of California that significantly changes the property taxes on real estate inherited by children from their parents. And not in a good way. Under this proposition, a parent can only transfer the primary residence (either by gift, by inheritance or by sale) without causing the property taxes to go up. That’s it! Not to mention, the law goes into effect on February 16, 2021, just a few short weeks away. This massive change has left many of our clients and California residents wondering how these negative impacts will affect their estate plan and what they can do in this short window of opportunity to save their families tens or even hundreds of thousands of dollars. Join us as Kirsten Howe discusses the intricate details of this new proposition, the impact on estate plans, and the next steps you need to take now.
Big Three from Episode #055:
- Prop 19 is a time-sensitive issue that may impact real estate inherited by your children after February 16th.
- The only way to maintain a low property tax payment under Prop 19 is if a child keeps an inherited primary residence as their own primary residence.
- Own a vacation home? Be prepared for higher property taxes.
Time-stamped Show Notes:
2:57 – Understanding Prop 19-What is assessed value, and how is it influenced under property tax laws?
4:38 – What does Prop 13 do for assessors?
6:52 – What does Prop 58 mean, and what did it do?
7:57 – What is Prop 19, and what does that mean for a parent to child transfer?
9:06 – If you have a vacation home, here is how Prop 19 affects you.
11:10 – Should you transfer a property?
12:01 – Does Prop 19 apply to you?
13:23 – What if your children don’t want a property?
14:04 – Why is it important to act NOW?
15:43 – What if you pass away after February 16th?
19:22 – If two siblings inherited the parent’s primary residence, can reassessment be avoided if only one sibling moves into the home?
21:35 – What happens to cases in progress right now?
23:00 – Seeing that time is of the essence, will investors be more compelled to sell their rental property sooner?
24:00 – Is there a way to transfer rental properties into an LLC or limited partnership to reserve the assessed tax base?