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The Impact of California Proposition 19 on Estate Planning

In a state known for its rapidly-evolving legal landscape, California Proposition 19 has brought significant changes that carry over into estate planning. Here’s what to know about the implications of Proposition 19 on estate planning strategies and key considerations for California residents navigating this new legal terrain.

What is Proposition 19?

Proposition 19, passed in the November 2020 election, introduces amendments to property tax reassessment rules. While initially focused on property tax changes, its implications extend to how individuals approach their estate planning.

Inter-Generational Transfers

One of the most notable changes under Proposition 19 is the impact on inter-generational transfers, particularly for family homes and other real property. Before Proposition 19, certain transfers, such as those between parents and children or grandparents and grandchildren, could maintain the property’s existing property tax basis. However, Proposition 19 narrows these exclusions.

Limitations on Property Tax Exemptions

Proposition 19 imposes limitations on the transfer of a primary residence’s property tax base. While there are still exemptions for certain transfers, such as when a primary residence is transferred between parents and their children, the rules have become stricter. Understanding these limitations is crucial for effective estate planning.

Estate planners and individuals must navigate the intricacies of Proposition 19 to optimize their planning strategies. This includes assessing the impact on the transfer of family homes, vacation properties, and other real estate assets.

Strategy Adjustments

In light of Proposition 19, estate planning strategies may need adjustments to align with the new regulations. Professionals in the field are advising clients on how to maximize their planning efforts while minimizing the potential tax consequences brought about by these changes.

As California residents struggle with the implications of Proposition 19, estate planning as a whole has undoubtedly shifted. Whether considering the transfer of family homes or other real property, individuals must stay informed about the complexities of this proposition to make well-informed decisions. Consulting with experienced estate planning professionals is very important in adapting strategies to align with the new legal realities introduced by Proposition 19. By staying proactive and well-informed, Californians can continue to navigate the path of preserving their legacy and assets while adhering to the evolving law.

Biddle Law Can Help 

If you are in need of an estate plan or wish to adjust your existing plan, it’s important that you consult with a knowledgeable and experienced California estate planning attorney. He or she can help you navigate the intricate nuances of estate planning and create a plan that meets your unique needs and goals. With the right plan in place, you can look knowing that your interests as well as those of the future generation are protected. 

At Biddle Law, we are here to answer all of your questions and walk you through the entire process. We care about you and want to help honor your goals and wishes in any way we can. To learn more or to schedule a consultation, contact us today!