geoffs2017

[geoffs2017]

A New Threat Arises ~ Critics of Property Tax Relief Look to Unravel CA Proposition 58 with (2020) Prop 19

A Threat to Proposition 58, Parent to Child Exclusion, Arises

If they were keeping both eyes open, most property owners in California were looking, tentatively, for signs on the horizon of any new threat to the popular property tax break known as the “parent to child exclusion” meaning exclusion from having your home, or any other property, reassessed every year at current property tax rates.  Being that this exclusion is the the main foundation  that property tax relief in California is built on, if you were serious about dismantling property tax relief in this state, it would be likely that you’d go after this critical tax break in earnest.

So naturally, at the last moment, when everyone thought they might have  “dodged the bullet” in terms of efforts to dismantle Proposition 13 or Proposition 58 one more time, relentless critics of California Proposition 13 and Proposition 58 decided to add one more measure to the mix, to remove the parent to child exclusion allowed under Proposition 58, from California home owners… A measure they are calling Proposition 19.

No longer being able to avoid property tax reassessment would be a truly devastating event for home owners who depend on extra spendable cash freed up by the money they save from the lack of property tax reassessment.  Losing the parent to child exclusion, in an already hyper-expensive state, would devastate millions of Californians.  Not to mention the possibility of the so-called Split-Roll or “Proposition 15” commercial property tax, which would certainly add to the devastation by raising industrial and commercial property taxes, including apt. building landlords, forcing landlords to raise rents on residential and business tenants…

Or we could talk about trust beneficiaries or estate heirs losing their ability to get  a loan for hundreds of thousands of dollars to an irrevocable trust to buyout siblings who are intent on selling their share of a beloved inherited home, along with establishing a low property tax base made possible by Proposition 13, working in tandem with Proposition 58.  And the list goes on.

Without being partisan or subjective – it’s fairly clear to any reasonable person that would herald in grave economic disturbance, and even disaster, for the entire state, where middle class  and working class people are concerned.   Obviously, many residents in Malibu or   Beverly Hills or Santa Barbara would not be feeling the pinch.  However, we’re not talking about the 1%.  

This brainchild of C.A.R. and the CA Legislature is, if you step back and think about it, not only brazen but also short-sighted, as they are actually looking  to fund special interests with revenue from property taxes — right smack in the middle of a Pandemic.  With over 6.7 million Californians having signed up for unemployment checks, these critics of property tax relief want to remove these universally popular property tax breaks protected by  Proposition 13 and Proposition 58.  Benefits that middle class and working class California families have become   accustomed to, and depend on.

Proposition 58 Particulars Most Californians are familiar with Proposition 58 and the Prop 58 parent to child exclusion. As you know, California Proposition 58 serves to protect folks who owe $8,500 or more in additional property taxes, while they settle their affairs. Prop 58 also allows beneficiaries who wish to keep inherited property in their family to buyout co-beneficiaries’ property shares, through a trust loan, and helps those looking to keep their inherited home also keep a low Proposition 13 protected property tax base their parents paid. And everyone goes away happy, win-win, all the way around. In 1986, to protect families from massive property tax hikes, voters passed Proposition 58, revising the California constitution to ensure transfers of property between parents and children could be executed with the right to avoid property tax reassessment. Under Proposition 58 property of any value, plus additional property with up to a million dollars of assessed value, can be transferred between parents and children without reassessment. However, the chief sponsor of ACA-11 (Proposition 19) the California Association of Realtors (C.A.R.) came along and decided to spoil all these critical win-win protections. C.A.R. assembled enough signatures to get their initiative on the ballot. Apparently, C.A.R. is motivated by their monetary interest in drumming up new home sales, regardless of the fact that the measure creates a multi-billion-dollar tax increase statewide, will throw the entire middle class California economy into chaos, already in turmoil due to the Covid-19 health and unemployment crisis… The 2020 Proposition 19 would look to repeal the 1986 Proposition 58 and impose reassessment of inherited or transferred property within families. The one exception being if the property was used as the principal residence of the beneficiary to whom it was transferred, and that exclusion is even capped. Unintended or Intended Consequences? The Legislative Analyst’s Office (LAO) estimated that the repeal of the “inter-generational transfer protections” guaranteed by the Prop 58 parent to child exclusion, and Proposition 193 grandparent to grandchild exemption would, if passed, cause somewhere between 40,000 to 60,000 families in California to be crippled economically by higher yearly property taxes.

Obviously, most middle class families would be forced to immediately sell an inherited home left to them by a surviving parent. Thus, a serious imposition has been placed on the “right to choose” for countless middle class families… simply so realtors can sell a few more homes on the market.  The trade off does seem to be rather uneven.  If Proposition 19 passes, all those beneficiaries in California will be expected to move in to their parent’s home and make it their primary residence within one year of their surviving parent’s death.   The basis for this measure is unrealistic on its’ face, for a number of reasons… Many beneficiaries are already home owners, and pay out a fair amount of cash every month already to maintain their own mortgage and/or property upkeep. Moreover, if a beneficiary has a large family, and his or her parent’s home is not spacious enough – what alternatives are left for these folks? If Mom or Dad’s home is situated a long distance away from a beneficiary’s place of work, and/or the spouse’s workplace – and perhaps inconveniently far away from their children’s school, adding possibly an additional 60 or 90 minutes on the freeway each way, back and forth every day… What options will these families have to look to?   Critics of property tax relief in California are proposing somewhat unrealistic measures that, although they may look good on paper from a financial perspective,  they fail to incorporate realistic issues and scenarios that exist for regular people with regular lives.

So vote your conscience in November.  We suggest you vote “No to Proposition 19”.

Information and Trust Loan Funding

For more details on the C.A.R. originated Proposition 19 effort to turn back the clock on property tax relief in California, you can go to CaliforniaProposition58.org For more information on trust loans working in concert with Proposition 58, go to Commercial Loan Corp   Or to apply for a trust loan and speak to an account representative, go to “Apply for a Trust Loan”… Simply to read up on Prop 13 and Prop 58 parent to child exclusion, as well as on critics of property tax relief in California,  plus the Covid-19 effect on real estate throughout the state – please go to the article: Coronavirus Crisis is the Last Thing the California Real Estate Market Needed!

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Fighting Back During Probate

During probate there is always one heirs who is getting shafted by he greedier heirs,  And that one heir has limited options if she doesn’t have deep pockets. If siblings are trying to steal from you – what options do you have?

Borrowing a large sum, inheritance loans or inheritance funding, credit cards, or digging into personal savings, to hire their own estate lawyer – is what so many heirs and beneficiaries opt for these days – if they don’t have great credit or high cash flow, which most middle class heirs do not – to hire their own estate lawyer to protect their estate assets – to oppose and/or expose a sibling or whichever co-heir they feel is taking advantage; or trying to take more than their fair share of assets out of the estate. This is how bad it’s gotten. And I see this occurring, repeatedly.

Heirs using their savings, if that exists, or borrowing from their own inheritance, with an inheritance advance, often called an inheritance loan or probate loan, from an inheritance funding company or fast inheritance lenders – to get inheritance cash during probate to hire that attorney to protect their inheritance from dishonest heirs. I have worked around beneficiaries and heirs of estates for 20 years – and I’d say 50% of those estates contain heirs who have hired their own attorney early in the probate process because they simply don’t trust the other heirs, or the executor, or the probate attorney… And, interestingly enough, turn into “experts” overnight on inheritance financing, and inheritance loans, researching sites like https://www.loanstart.com/blog/inheritance-loan or with articles on Websites like https://www.myinheritancecash.com/ I think this type of research on probate and inheritance law, and inheritance loans, prepares them enough to talk to an inheritance funding company with confidence, with some basic knowledge of probate advance rates, and how the estate & probate process works… so they can get themselves a decent rate and a good deal… to be able to walk off with enough funds to hire a great attorney and whatever else they feel they need to do with that new-found money.

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Property Taxes & Trust Loans

If you're inheriting property in trust or a probate estate, in California... and  your trustee signs off on your trust loan, you should be good to go.  The process usually takes seven  to ten days.  As long as there are no problems with the property title and your trustee is cooperative.  This is really based, at the core of it, on Proposition 13 tax benefits, with its’ 2% tax cap.  Working in concert with California Proposition  58 -- regarding property transfer from your parents -- your basic property tax transfer…inheriting property taxes associated with the real property your parents left you.  Therefore, to qualify for  your Proposition 58 property tax benefit -- avoiding property tax reassessment -- you always want to make sure you keep parents  or grandparents (Prop 193) property taxes by  getting  a bridge loan from a trust lender –  so "even distribution” can be made in the transaction. 

I suggest you conduct a little formative, beginning  research at a website such as: https://assessor.saccounty.net/ExemptionExclusion/Pages/ExclusionsMoreInfo.aspx     Another site that outlines this process, and  digs deeply into California Proposition 13 and Proposition 58 is  https://propertytaxtransfertrusts.com   You can also read up on a trust lender website  that provides loans to trust beneficiaries or loans to probate estate heirs, for example, at:    https://cloanc.com/category/prop-58  This type of inheritance  financing info will come in handy, as you're more likely to be approved by a trust lender than from a similar "probate cash advance", inheritance funding company that provides heirs and beneficiaries with cash advance assignments.

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Trust Loans, for Beneficiaries of Real Property Who Need Fast,  Immediate Funds from an Estate or Trust Fund... and Do Not Have Time to Deal with Declines!

What about   something less conventional, like a trust loan?  That is, if you're inheriting property, and  you live in California.  And     your trustee signs off on your loan to a trust,  approving your loan against the real estate you're expecting from your parents. Usually taking around 7 to 10 days, up to 2 weeks.  As long as there are no problems with title and the trustee is cooperative.  And, your house is in California. It’s all about tax benefits coming from the 2% cap from California Proposition 13… and Prop 58 regarding property transfer from your parents, and property tax transfer… inheriting property taxes.  So, in order to qualify for Proposition 58 property tax benefits, while taking advantage of  your Proposition 13 property tax cap of 2%, by avoiding property tax reassessment -- you can keep parents property taxes by  getting  a bridge loan to  a trust, or to a probate estate, from a trust lender –  so "even distribution” can be made in the transaction.  

This can be researched at: https://assessor.saccounty.net/ExemptionExclusion/Pages/ExclusionsMoreInfo.aspx     Another site that outlines this process, and  really gets into California Proposition 13 and how Proposition 58 is used in concert with Prop 13 is:  https://propertytaxtransfertrusts.com    Or an  actual trust lender that provides loans to trust beneficiaries or loans to probate estate heirs, like https://cloanc.com/category/prop-58   This type of financing is even more out-of-the-box than "trust advance"  or "probate loan", inheritance funding companies, that give heirs and beneficiaries cash advance assignments.  With greater odds of being approved.