When a person dies, his/her heirs may end up paying a significant amount of cash in order to claim the property delegated them from the testator’s estate. Much of this cash is due for real estate tax. There are ways that a person can minimize the costs his or her successors will presume by taking proactive actions.
Prevent the Probate Process
Preventing the probate procedure can possibly enable successors to prevent needing to pay real estate tax. Additionally, heirs can avoid the inconvenience and expenditure related to the probate process.
Prevent Real Estate Tax Reassessments
Normally when a property transfers ownership, a reassessment is performed. This often triggers there to be additional real estate tax due, pursuant to California’s Proposition 13. Nevertheless, Proposition 58 allows a person to transfer ownership to a child without triggering the change in ownership rule and permitting them to prevent the reassessment. A Claim for Reassessment Exclusion should be timely filed in order to prevent this procedure.
Establish a Trust
Setting up a trust may achieve both objectives discussed above. When property is in a trust, the trust lawfully owns the property. The grantor establishes the trust, a trustee handles the trust and a recipient receives the advantage of the trust. If a living trust, the trust can be utilized for the grantor’s needs throughout his or her life time. Extra directions can go over how the trust funds will be used for the benefit of the recipients.
Individuals who would like support in avoiding property taxes may choose to get in touch with an estate planning lawyer for help and guidance. She or he may have the ability to explain alternatives that are available provided the particular scenarios.