Prop 19 – Part Two

 

 

 

Dear Monica: Should I transfer properties to my children before Prop 19 is effective to preserve the property tax rules under the old law? Gerry M.

 

Dear Gerry: This is a most important question many parents are asking right now. If you transfer your property(ies) to your children now, you should get advice on whether you should do this in the form of a trust, a limited liability corporation, or some other legal form. And you should understand if changing the ownership will restrict you from selling the asset in the future should you need the money. If you do transfer assets to your children now you also need to know if this will trigger taxes that would not otherwise be owed right now such as estate taxes.

 

There are many more questions too such as can you keep the tax base on your main residence if you have moved to an assisted living facility but have kept the house? If you have more than one child do they all have to move into the main residence to continue with the same tax basis? Even some county tax assessors don’t know how to administrate under these new rules. You should seek legal advice now to understand the options available to you.