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  1. #1
    Join Date
    Nov 2016
    Posts
    27

    Default California Prop 19

    My question involves real estate located in the State of: CA

    I hope this is the right forum to ask this question. I didn't know whether I should post this here or the "Estate Planning" sections. Any way.

    Any attorney here familiar with the fine print of Prop 19 that was recently passed in CA?

    The basics: This will impact property passed to heirs now if they don't reside in the property as a primary residence.


    My father has a single-family rental in the bay area that's currently worth 916k according to Zillow.

    The property is in a living revocable trust.

    1. ) Will prop 19 still impact property held in a trust, after the February deadline ( when the law goes into effect)?

    2.) If so, if he transfers the trust to his adult children before that February deadline, could we still use the property as a rental without having the tax reset to market levels?

    Thank you.

  2. #2
    Join Date
    Mar 2013
    Posts
    18,309

    Default Re: California Prop 19

    A quick search of the internet yielded the following:

    1. ) Will prop 19 still impact property held in a trust, after the February deadline ( when the law goes into effect)?
    If your father dies after the law goes into effect, whoever inherits pays the tax if they don't occupy it as their primary residence.

    2.) If so, if he transfers the trust to his adult children before that February deadline, could we still use the property as a rental without having the tax reset to market levels?
    I don't think so.

    It's a change of ownership. It would be subject to the existing law. Here's the full text.

    https://ballotpedia.org/Article_XIII...a_Constitution

    Here's the full text of the changes:

    https://vig.cdn.sos.ca.gov/2020/gene...opl-prop19.pdf

    Read both. If you still can't figure it out, talk to a tax pro or a lawyer.

  3. #3
    Join Date
    Jun 2017
    Location
    California
    Posts
    459

    Default Re: California Prop 19

    You really need to speak with an estate planning attorney. Putting the property in trust will result in a change of ownership when that trust property is transferred to whomever gets it from the trust upon the trustor's passing. That triggers the new tax assessment. The law is a mess and getting good advice quickly is key.

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