Legal Question in Real Estate Law in California
Joint Tenancy best option? (CA)
My parents have owned a piece of rural property for many years. My father has passed away and my mother wants to give this property to me. I am concerned that the $400/yr property tax will be increased dramatically when reassessed without Cal. Proposition 13 protection. I was considering using Joint Tenancy with right of survivorship as a tool to avoid increased tax exposure while maximizing my flexibility of how and when to dispose of the property. Is this the best choice for transfer of the property?
2 Answers from Attorneys
Re: Joint Tenancy best option? (CA)
One of the first things you should do is sit down with an estate planning attorney. If you inherit the property from your mom in a living trust, you will get a full step up in basis for the purposes of capital gains tax when you go sell the property.
There are too many variables to cover in this forum to give you a more detailed response. Transferring the property via joint tenancy could also result in gift tax to you, so you should see a tax adviser. Any potential increase in properties might be the least of your problems if you don't do things the right way.
Re: Joint Tenancy best option? (CA)
Generation-to-generation transfers of real property usually escape reappraisal and reassessment, whether by gift, will, or living trust. So, property taxes should be the least of your concerns. A far bigger issue is the future capital gains tax liability you would face if you acquired the property as a gift or below-market sale, vs. inheriting it via will or trust. Joint tenancy is generally not the best solution and hardly any situation warrants its use.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
