Prop 19 Consequences

The Effect of the Passage of Proposition 19 on Trust Holders and California Residents

As with everything, there are Prop 19 consequences. Unfortunately, the California Voters, by approving Proposition 19, got rid of the inheritance property tax exclusion for everyone, even those with or without a trust.

Prop 19 Consequences

As of mid-February, 2021, no inherited property will be able to keep the original property tax but will have a higher property tax. We still get the raise in basis on the property, eliminating Capital Gains Tax after the owner dies, but not the property tax benefit.

Some of the Prop 19 consequences mean that, basically, we now receive either the “raise” in basis and get rid of capital gains tax, or you can give the property during your lifetime in some cases and keep the property tax benefit – but not both. One option to keep the property tax benefit and the raise in basis of the property benefit is to hold the house in an FLP or LLC, so that there is no transfer to cause the property tax to change.

The attorneys with Beyer, Pongratz, and Rosen have vast experience with every aspect of estate planning, probate, and business structuring. We are here to help! Give us a call to get started 916-369-9750 or contact us online to set up a FREE consultation. We look forward to working with you.