Beware the Dreaded Reassessment

California is unique in many ways, but one of the most unique features of California is the set of laws governing property tax assessments and reassessments of property value. These rules changed within the last couple of years, so now is a good time to examine the current law.

When you purchase real property, the value of the purchase becomes your property tax basis. This tax basis is used to calculate your annual property taxes. Typically, property taxes are 1% of the tax basis value annually, but there are often local add on bonds or taxes that will increase this base percentage a bit.

Proposition 13 (1978) – Property tax basis cannot be increased more than 2% annually unless there is a change of ownership. A change of ownership occurs when a property is sold or transferred.

Proposition 58 (1986) – Property passing from a parent to child (or vice versa) is excluded from reassessment. This means the property tax basis remains the same. There is an unlimited exclusion for the primary residence, and up to an additional $1,000,000 exclusion for commercial and/or investment property

Proposition 193 (1996) – Property passing from grandparent to grandchild (or vice versa) is excluded from reassessment if the middle generation is predeceased. Same as Prop 58, property tax basis remains the same. Same as Prop 58 regarding exclusion limitations.

Proposition 19 (2020) – Prop 58 and 193 exclusions now only apply to transfers of the parent/child’s primary residence and the receiving parent/child must use the property as his/her primary residence. The amount of exclusion is also limited to $1,000,000.

As you can see, Proposition 19 changed many key attributes of the prior law. With the primary residency requirement for the inheriting party, many children will not be able to keep the property inherited by their parents. In addition, it completely eliminated the exclusion for commercial or investment property.Don’t get caught off guard by a reassessment. Contact Tresp Law, APC today to ensure that the value of your home remains with you and doesn’t get consumed by taxes. Call us any time at 858-248-2779 for a free consultation.

Will My Trustee Kick Me Out of My Home?

Does a trustee have to abide by a provision in a trust stating you want to remain in your home until death?

Typically, you are the Settlor or creator of your own trust. During your lifetime, and while you have capacity, you will also be the trustee of your trust. Should you ever become incapacitated, a Successor Trustee or prior Co-Trustee who will become sole-acting Trustee will step up and begin to manage the trust on your behalf. 

Trustees owe fiduciary duties to the beneficiaries. During your lifetime, you are also the beneficial owner of trust assets. Therefore, the trustee will owe their fiduciary duties to you. Part of a trustee’s role is to follow the terms of the trust. If you include a provision in your trust to the effect of your desire to remain in your home until death, a trustee will have to do their best to follow through with that provision. Most often, this will be a considerable cost as there may be mortgage payments, utilities, maintenance, property taxes, HOA fees, etc. to be paid on or in relation to the real property. When you set up and fund your trust, you will want to ensure that your trust has access to sufficient cash in order to allow the trustee to cover expenses related to your residence in an effort to allow you to stay at home as long as possible. This will be an important topic of conversation with your planning attorney to ensure you properly fund your trust! 

Ultimately, a trustee is responsible to you, as a beneficiary. Contact our offices to schedule a consultation with one of our planning attorneys to ensure that your wishes to remain in your home are included in your estate plan. Contact Tresp Law, APC today to consult about any estate planning concerns you may have, including ensuring that you can stay in your home as long as you would like. Call us any time at 858-248-2779 for a free consultation.

Will Your Estate Planning Documents Hold Up When You Pass?

The best way to ensure the answer to this question is a resounding “Yes!” is to hire experienced estate planning attorneys at Tresp Law, APC. Estate planning is an ever-changing legal landscape, and the applicability of these laws to your individual situation depends on a multitude of factors. The professionals at Tresp Law are here to help you navigate this often-impenetrable terrain.

 Here are some of the most common estate planning pitfalls that our team at Tresp Law, APC can help you avoid:

• Not creating an estate plan at all.

  We get it! Nobody likes thinking about this kind of thing. We don’t want to contemplate illness or an untimely death. We think we’ll have plenty of time, we’ll handle it “later.” But how does the old saying go? Hope for the best, plan for the worst. Do your loved ones a favor and make sure they are well provided for, both financially, and by ensuring that that probate or trust administration process is as smooth and painless as possible.

• Not updating your estate planning documents after major life changes.

  Marriage, children, divorce, your children becoming adults, moving to a different state – make sure your estate is up to date!

• Not making arrangements for the future of your minor children.

  So you have your financial affairs in order, but what happens to your minor children if you and your spouse are gone? Once again, this is not something anyone ever wants to envision. And it feels like an impossible choice – no one will ever be the perfect fit to replace you. But back to grandma’s wise words – better to be safe than sorry. This counts for fur-babies too!

• Not having a power of attorney, advanced health care directives, release of confidential medical records, etc.

  Not only do we need to plan for death, we also need to plan for incapacity. These documents will allow your loved ones to get around HIPAA and manage your affairs with minimal headache should you no longer be able to do so.

• Trying to “DIY”.

  Attempting to avoid all of the potential pitfalls above and many more without professional help is a risky endeavor. Instead, let us help you!

The moral of the story is, call Tresp Law,  APC today at (858) 248-2779 to assure your estate planning documents will hold up.

Signs of Elder Abuse

In the state of California, the Legislature recognizes that elder adults may be subject to abuse, neglect, abandonment, and that the state has a responsibility to protect them. For this purpose, an elder is defined as someone aged 65 or older. Elder abuse can be both criminal and civil under California law. Under civil law, elder abuse is defined as neglect, financial or physical abuse, abandonment, isolation, abduction, or other treatment that results in harm, pain, or mental suffering to an elder. Elder abuse can also be the deprivation by a care custodian of goods or services necessary to avoid physical harm or mental suffering. Undue influence is also a form of elder abuse. Each form of elder abuse can be further described by a host of factors and circumstances. In the criminal context, elder abuse occurs when a person is aware that the victim is an elder and inflicts physical pain or mental suffering on the elder. Criminal elder abuse also occurs when a person willfully or knowingly causes or permits an elder to be placed in a situation that endangers their health. 

There are many ways to recognize a situation where elder abuse may be occurring, some of which may be dependent upon the type of abuse experienced. When the elder may be suffering physical abuse or neglect, the following may be an indication of abuse: unexplained weight loss, bedsores, malnutrition, painful reactions when touched, bruises, skin abrasion, broken bones, or teeth. Signs of possible financial elder abuse could include strange banking or financial transactions, unexpected estate planning changes, money missing from accounts, or missing possessions. Indicators of abuse by a caregiver or family member may include the elder not being able to speak for themselves, social isolation or restriction from certain activities, or conflicting explanations of incidents, to name a few. Some elders may also experience or exude additional signs of elder abuse, including anger, confusion, defensiveness, depression, being withdrawn, fear to talk openly, and so forth. 

There are several persons that are mandated to report elder abuse, including any licensed staff of a public or private facility that provides services or care for elders, as well as any dependent adult caretaker, health practitioner, or employee of protective services agency. The list is quite extensive. Despite the list of specific, required reporters, anyone should report elder abuse when they know or suspect it to be occurring by contacting their local authorities.

If you have questions about potential elder abuse or fear that a loved one is suffering from it, we are here for you. Call Tresp Law, APC today at (858) 248-2779 to schedule a consultation and assure your family is in great hands.