Prop 19 – Will Your Kids Inherit a Big Tax Bill Along with your Home?

from Scott P. Schomer

We want to make sure you understand how Proposition 19 may impact the estate plan we created for you and your loved ones.

California Proposition 19 eliminated Proposition 58’s parent to child exclusion for property tax reassessment when the beneficiary doesn’t use the inherited home as their primary residence.

Under this new law, inherited secondary properties, would be reassessed at current market value. For many people, this will likely result in a HUGE tax bill on inherited home(s) if they
are not used as a primary residence. Heirs will be responsible for continuing to pay the property taxes on their inherited home and on any other properties they own, all at current
market value. This is set to take effect in February of 2021!

This could create a hardship for many children who inherit a home from a parent and may force them to sell the home even if their preference would have been to keep it. This can be especially challenging as many will be coping with the loss of a parent and arranging a funeral. Having the added headache and unplanned expense on top of that could be devastating for some.

Don’t worry… if this does impact you, we may be able to help!

There’s a planning strategy that can safeguard against reassessment without forcing your children to move into your home.

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