Ancillary probate and property taxes in California

I selected the topic of Ancillary probate and property taxes in California because it’s a common discussion in my office and much more so since the passage of Prop 19 in California.  Prop 19 ripped the heart out of the parent to child transfer laws in California.  The old rules made it relatively easy for a family, whether living in California or not, to avoid a large increase in property taxes upon death.  However, Prop 19 makes it almost impossible unless one of the children will live in the home and make it their primary residence.

In a day and age where many are trying to make places other than California their primary residence, as we see in places like Incline Village, it doesn’t seem too likely that someone will be arguing to make a California vacation home their primary residence. The property tax savings would have to be huge! Though the new tax could be huge it is a big step to become a California resident! Definitely talk to your tax advisor about that.

Recently I talked to a family whose father died a resident of Canada. He had a nice looking home down in the Palm Springs area. Like so many Canadians he likes to be a snowbird and come down to the states for the winter.  Now days many of those snowbirds stop in Vegas to watch the Vegas Golden Knights play hockey… but we can talk about that another day on another website!

Sadly the change in property taxes will be retroactive to the date of death.  That is, you’ll get a big supplemental property tax bill whenever you do finally notify the county.  You can run but you can’t hide!  So, you could wait five years to do the probate, or ancillary probate (if the decedent resided in another state or country), but eventually you’ll have to do it and eventually you’ll get a big property tax bill.

Let’s get your probate going because there is no time like the present!  If probate is necessary it’s taking about one year minimum right now. Get it started!

-John Palley

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