A lawyer friend was asking how to fix this mess: his clients had added their only child to the title as a Joint Tenant. Their child died, and the property automatically passed back to the parents, but thanks to Prop 19, one-third was reassessed. Prop 19 was passed four years ago by voters who thought they were helping seniors. Instead, many seniors end up harmed.
Under Prop 19, real estate is reassessed on death unless it goes from parent to child and the child lives in the house. Here the child passed away, so the property was reassessed. For this family, it was devastating. The property is now worth 1.3 million, and with the reassessment of over $3000, the tax increase makes the family home almost unaffordable to keep.
The family thought this would be the easiest way to pass their estate when they died. Their DIY mistake has cost them money. Some possible fixes were suggested, but all of them will cost more than the fees for a Living Trust, and the fixes might not work, costing the family over $3000 a year for as long as the parents keep the house.
You don’t know what you don’t know. They didn’t know that Prop 19 would impact them. They didn’t expect their daughter to die before them. As a Certified Specialist in Trusts, Probate, and Estate Planning, I spend many hours learning about all the things that could happen, and laws like Proposition 19.
If you want to make sure you don’t make a mess and pass your estate at death as easily as possible, give me a call.
