Do property taxes increase when you inherit a home?

Do property taxes increase on an inherited home?

When you inherit a home, do the property taxes get reassessed?

Do property taxes increase on an inherited home?

The simple answer is yes. When the County receives notice that ownership has changed on a home, by default a reassessment is triggered. Even more importantly, in some cases property reassessment can be retroactive to the date of death. When this occurs the person inheriting the home can be hit with a massive tax bill.

Can property tax reassessment be avoided on an inherited home?

The good news is yes, property tax reassessment can be avoided on an inherited home. Each month we help our clients avoid having their inherited home reassessed. California has laws that allow you to avoid property tax reassessment on an inherited home if you qualify and transfer the property in accordance with the Board of Equalization requirements. When multiple siblings are involved things can get a little complicated. The California BOE and County Assessors Office will often require that an equal distribution of assets be made to qualify for a full exclusion from reassessment unless specific abilities are granted in the trust. If the distribution is not equalized or if a child contributes their own funds to buyout other child beneficiaries then the property will likely be reassessed as it is considered a sibling to sibling buyout and opposed to a parent to child transfer. California has no laws that allow siblings to transfer property without reassessment, only parents to children or grandparents to grandchildren.

Commercial Loan Corporation has specialized trust loan programs designed to meet all of the BOE requirements to qualify for a parent to child transfer and avoid property tax reassessment on an inherited home. We work directly with your Attorney, Trust Administrator or California Property Tax Consultant to make sure you will avoid property tax reassessment. In fact we have helped hundreds of clients avoid property tax reassessment on an inherited home and have saved California’s over twenty million dollars in the process. We are California’s top Trust & Estate lender and even offer California State Bar approved continuing legal education on the subject.

If you, a client or a member of a trust may be interested in inheriting a home from a parent, we can provide you with a free trust loan benefit analysis. It will let you know how much you would be eligible to save from avoiding property tax reassessment on an inherited home. On average we save our clients over $6,500 each year in property taxes. The process is quick and easy and we can answer any questions that you have. Please complete our trust loan information request form or call us at 877-464-1066.

Mistakes to Avoid When Transferring a Property Tax Base

Irrevocable Trust Loans

California Loans to Trusts

The Right Advice & The Right Trust Loan Lender 

Much to the relief of many Californians who are in the process of inheriting a home from a parent, California Proposition 19 allows you keep a parents low property base on the inherited home in many cases. However, quite often, new homeowners and beneficiaries trigger a property tax hike by accident, and end up facing thousands upon thousands of dollars in property taxes, all due to property tax reassessment. Thankfully that can all be avoided with the right advice and a loan to an irrevocable trust when one is needed. Working with Trust & Estate Attorney’s and Property Tax Consultants, we have helped hundreds of clients take advantage of their Prop 19 & Prop 58 benefit with our loans to Irrevocable Trusts. In fact we have helped clients save over 21 million dollars with our loans.

Due to rapidly increasing property values and California Proposition 13 ( which helps keep property taxes low in California ), we save our average client over $6,500 in property taxes each year by avoiding reassessment on an inherited home. Best of all, the process is easy and every beneficiary wins because you are able to avoid the costly real estate fees involved with selling a home.

The California Parent-to-Child Exclusion

As far as parent to child transfers are concerned, when one beneficiary who is inheriting a home decides to buyout property shares inherited by co-beneficiaries (siblings) – to have complete ownership of the property, it’s easy to misstep and mistakenly trigger property tax reassessment. A parent to child property tax transfer in is line with the effort to  avoid property tax reassessment under Proposition 19’s parent-child exclusion. Therefore a loan to an irrevocable trust working in conjunction with Proposition 19 allows us to transfer property between siblings – buying out property from siblings. In many situations a loan to an irrevocable trust is needed because there is not sufficient cash assets in the trust to make an equal distribution to all child beneficiaries. That is where we come in.

Choosing the Right Trust Lender to Keep a Parent Low Property Tax  Base

Commercial Loan Corporation is one of just a handful of California lenders that will lend money directly to an irrevocable trust with no personal guarantee. We are also the only Trust & Estate Lender in California who works with hundreds of Trust & Estate Attorneys and provides them with California State Bar authorized Continuing Legal Education on the topic of Proposition 19 and lending to an irrevocable trust. If you are a client is in need of a loan to an irrevocable trust, please call us at 877-464-1066. We will answer all of your questions and provide you with a free trust loan benefit analysis.

The California Parent to Child Exclusion From Property Tax Reassessment

Parent Child Exclusion From Property Tax Reassessment

Parent Child Exclusion From Property Tax Reassessment

Commercial Loan Corporation specializes in helping clients qualify for California Proposition 58’s Parent to Child Exclusion from Property Tax Reassessment with our Trust and Estate loans. You may be wondering what the parent to child exclusion from property tax reassessment is. When a parent passes and leaves a child real estate in California, Prop 58 grants the ability for a child to also inherit the parents low property tax base on the property if certain conditions are met and the appropriate documents are submitted correctly to the county tax assessors office.

How does Commercial Loan Corporation help in that situation?

Often times when there are multiple children involved and one of those children want’s to inherit the property and keep the parents low property taxes, the county assessors office will require an equal distribution of assets be made to all children. Unfortunately most Trust & Estates do not have sufficient cash assets for an equal distribution to be made and that may result in the inherited home being reassessed. Commercial Loan Corporation can assist clients in that situation. Unlike most California lenders, we specialize in assisting customers with the California Proposition 58 parent to child exclusion from property tax reassessment. In fact, we are one of the only California lenders that will lend directly to an Irrevocable Trust with no personal guarantee from the acquiring beneficiary which is often a Board of Equalization requirement when the property is held in an irrevocable trust and multiple beneficiaries are involved.

If you, a family member or a client of yours is inheriting property and are interested in transferring a parents low property tax base please give us a call at 877-464-1066. We can answer any questions you may have and provide you with a free analysis of how much your might be able to save by taking advantage of the California Proposition 58 Parent to Child Exclusion From Property tax Reassessment.

California Proposition 58 – Avoiding a sibling to sibling buyout

 

California Proposition 58 Qualifications

California Proposition 58 Qualifications

Qualifying for California Proposition 58’s Parent to Child Transfer

When it comes to California Proposition 58, making a mistake can cost you! Prop 58 grants the ability for a parent to transfer real estate to a child and avoid having that property reassessed. That may sound insignificant to some, but it can translate to a dramatic yearly property tax savings. In fact, the clients we assist save on average more that $6,000 per year in property taxes by taking advantage of this Proposition 58 property tax benefit.

In order for a child who is inheriting a home from a parent to qualify for Proposition 58, they must meet specific requirements. One of these requirements is that when there are multiple child beneficiaries involved and one of the children wants to inherit the home, while others wish to receive cash; the child inheriting the home can not use their own funds or personally guarantee the funds used to equalize the distribution. That is where Commercial Loan Corporation can help. Unlike conventional lenders, we provide loans directly to a trust; even an irrevocable trust. This allows our clients to avoid a sibling to sibling buyout which would otherwise disqualify them from receiving a full exclusion from property tax reassessment.

We highly recommend that you work with an attorney or property tax specialist to insure you both qualify and receive your benefit. Call us at 877-464-1066 and we can provide you with a FREE analysis of how much you might be able to save each year in property taxes. We can also put you in contact with a qualified Attorney or California Property Tax Consultant in your area if you require assistance.

CALL 877-464-1066

California Proposition 58 Qualifications

PROPOSITION 58 – CALIFORNIA REVENUE AND TAXATION CODE SECTION 63.1: PARENT-CHILD TRANSFERS

California Proposition 58 Parent to Child Transfer

California Proposition 58 Parent to Child Transfer

California Proposition 58 – Transferring Real Estate & Property Tax Base From A Parent To A Child & The Need For A Loan To Equalize A Transfer. 

On November 4, 1986, the voters of California adopted Proposition 58, which added
subdivision (h) to section 2 of article XIII A of the California Constitution. Subdivision H provides that “purchase” and “change in ownership” do not include the purchase or transfer of a principal residences between parents and children, and that the first one million dollars of the full cash value of all other real property (other than principal residences) between parents and children. Section 63.1 was added to the Revenue and Taxation Code 1 to implement the parent-child exclusion provisions of California Proposition 58 and applies to any purchases or transfers between parents and children that occur on or after November 6, 1986.

The California Board of Equalization who administers Proposition 58 offered guidance to clarify some of the ambiguity of the law. They generated a Questions and Answers document for the California Assessors offices to help them properly handle Prop 58 requests for Parent to Child Transfers and requests to avoid property tax reassessment. California Proposition 58 allows a child to inherit a property from a parent, transferring the home and avoiding tax reassessment. This allows the child to keep the parents low Proposition 13 property tax base. One of the requirements of Prop 58 that the Board of Equalization addressed was the need for an equal distribution to be made when multiple beneficiaries are involved. This information can be found on Page 11 – Question 36 of the board of equalization question and answer document. The document can be located here.

California Proposition 58 Questions and Answers

Or at the California Board of Equalization Website – Located Here

Question 36 from the Board or Equalization addresses the following issue:

“A trust allows for non-pro rata distribution. However, the estate is composed primarily of a house and a small savings account. One child wants the real property and one 15 See Simms v. Pope (1990) 218 Cal.App.3d 472, 477; Domenghini v. County of San Luis Obispo (1974) 40 Cal.App.3d 689, 695. 16 Letter To Assessors 91/08. 17 Estate of Russell (1968) 69 Cal 2d 200. Page 11 REVENUE AND TAXATION CODE SECTION 63.1 QUESTIONS AND ANSWERS child wants cash. To equalize distribution, can the trust encumber the real property with a loan and will the transfer of real property still qualify for the parent-child exclusion?

Answer: Yes. When a trustee has the power to distribute trust assets on a pro rata or non-pro rata basis, the distribution of real property to one child qualifies for the parent-child exclusion if the value of the property does not exceed that child’s interest in the total trust estate. A trustee who elects to make a non-pro rata distribution may equalize the value of the other beneficiaries’ interests in the trust assets by encumbering the real property with a loan and distributing the loan proceeds to the other beneficiaries.18 However, a loan cannot be made by any of the beneficiaries of the real property to the trust in order to equalize the trust interests. Such loan would be considered payment for the other beneficiaries’ interests in the real property resulting in a transfer between beneficiaries rather than a transfer from parent to child, which would disqualify the transfer from the parent-child exclusion.

This is where Commercial Loan Corporation can assist you. A conventional loan can not be used in this situation, since conventional lenders will not lend directly to a trust or estate, and the BOE requires that the loan not be made to the beneficiary but instead to the trust or estate. We are one of the only California lenders that will lend directly to a trust or estate, as opposed to a beneficiary. Our loan enables the beneficiary who is inheriting the property from a trust or estate to avoid a transfer between beneficiaries.  This helps them qualify for the Proposition 58 Parent to Child Transfer, enabling them to keep a parents low Proposition 13 tax base. Our average client saves over $6,000 a year in property taxes by taking advantage of their Prop 58 property tax benefit. We will even lend to an irrevocable trust.

If you, a family member or a client may be interested in a loan to help assist with Proposition 58, please call us at 877-464-1066 and we can assist you.

 

Lending To A Home In A Trust – USC Trust And Estate Conference

USC Trust And Estate Conference

USC Trust And Estate Conference

Lending To A Home In A Trust In California

Please visit our table at the USC Gould School of Law 44th Annual Trust & Estate Conference on 11/16/2018. Mike Riggs & Tanis Alonso will be available to answer all of your questions on lending to a property held in a trust and how to preserve a property tax base on an inherited property in California. We will be hosting a table at the event from 7:AM to 3:PM and look forward to seeing your there. Exhibit hours are from 7:00 a.m. to 3:00 p.m. in the California Ballroom Foyer. The Ballroom Foyer is located on the 2nd floor. Exhibit tables are located in close proximity to the general sessions.

Loans To Trusts & Estate Properties

If you will not be able to attend the event, but have questions on loans to trusts and properties in a probate estate, please call us at 877-464-1066. We can assist you in understanding how you or a client can benefit from California Proposition 58 by transferring a parents low property tax rate to a child inheriting a home. Commercial Loan Corporation specializes in providing loans to property held in a trusts, including irrevocable trusts so that this can be accomplished. Our trust loans are Prop 58 compliant and allow for an equal distribution of the trust to be made using third party funds.

Click here for a link to use USC Gould School of Law Trust & Estate Flyer for details on how to attending and visit our booth on Loans to Trusts in California.

Loans To Trusts – Trust and Estate Conference.pdf

Orange County Bar Event – Costa Mesa, CA

Orange County Bar Association Event

Orange County Bar Association Event, Costa Mesa, CA

Join Commercial Loan Corporation on October 10th, 2018 at the upcoming Orange County Bar Association event. The Orange County Bar Association Trust & Estates Section Presents “SO YOU THINK YOU CAN NEGOTIATE? Learn Skills and Techniques Leading to Successful Resolutions” at 5:30PM on 10/10/2018 in Costa Mesa, CA.

Mike Riggs, Senior Account Executive at Commercial Loan Corporation will be on hand to answer any questions you have on our Trust & Estate Loans. Commercial Loan Corp specializes in lending to Family Trusts and Estates in Probate. If you are unable to make the event, please call us at 877-464-1066. Our team can review a loan scenario with you or a client to see if they might benefit from one of our Trust & Estate loan programs. Often times, our trust and estate financing is used to equalize a trust or estate distribution to take advantage of Proposition 58 and avoiding property tax reassessment on a home that was inherited from a parent.

Our specialized Trust & Estate finance programs can help a client distribute their trust faster, provide cash for legal fees and save money! Our Trust Loans are typically less expensive than selling a home. That means more money for the beneficiaries and we can fund a Trust or Estate Loan in as little as 7 days!

On average we save our clients over $6,000 a year in property tax payments by avoiding property tax assessment on an inherited property. If you are looking for a loan to a Irrevocable Trust, Family Trust or Estate, please call us at 877-464-1066 for additional details or a free benefit analysis.