Trust Loans & Sibling to Sibling Buyouts

Trust Loans

Trust Loans

How inherited property is to be shared by siblings, as stated in writing by parents in a Will, is a logical starting point for an estate.

Avoiding reassessment with irrevocable trust liquidity 

Sometimes, parents leave a larger share to one or two siblings and divides the balance of the estate among remaining beneficiaries. Whenever more than one sibling is left an inheritance involving property, all heirs and/or beneficiaries have to be in agreement as to how to proceed with that property – regardless how large or modest each beneficiaries’ share of the estate is.

When siblings are involved in an irrevocable trust liquidity solution – when you want to buyout siblings’ inherited property shares –  beneficiaries looking to buyout siblings have no choice but to consider the fact that an irrevocable trust loan can furnish liquidity and work in tandem with Proposition 19 to keep property reassessment low.  Something you can’t ignore, or simply walk away from.

You still have to get an appraisal for valuation of your inherited home and come to an agreement on an intra-family selling price. Then get final approval for financing… and distribute proceeds to all siblings wanting to sell out.

Knowing your options, and how to navigate the different stages in the process… is the challenging part.  Which is why you need an excellent trust lender and estate attorney — to help guide you through critical steps.

Beneficiaries looking to keep their inherited home should always get inherited property inventoried,  and valuation finalized… Plus:

•  Always  try to avoid intra-family conflict from reaching litigation, and mediate your estate situation to the point of reaching a cordial and equitable point of communication with your siblings.

•  Try to identify and enlist a reliable, established loan lender as soon as possible – who can project a realistic number with respect to property tax savings, with Proposition 19 working in conjunction with an irrevocable trust loan.

•  Consider all inheritance loan and refinancing options, such as an inheritance cash advance; probate cash advance assignment; trust advance; or irrevocable trust loan in concert with Prop 19. 

Under Prop 19 property tax relief, siblings need to consider:

1. How well all beneficiaries get along, or do not get along – and what the issues are that must be mediated and ironed out if resolution is to be reached…

2. What is agreed upon, with respect to the disposition of an inherited home…

3. How motivated siblings are to resolve problems – in order to reach final disposition of inherited property in a timely manner…

4. Who is insisting on selling off their inherited property shares, and who is determined to retain the family home…

5. When and if all sibling beneficiaries are in agreement, in terms of selling out or keeping inherited property. 

6. And lastly, as most of us know, an irrevocable trust has to be understood as an instrument that is profoundly different than all other trusts.

As we all know, a trust can be revocable, where a trustor can change or terminate the terms & conditions of the trust anytime.
When a trustor passes away a revocable trust becomes totally  irrevocable – no matter what the issues are.  When a trust becomes irrevocable nothing can be revised or changed – real property, beneficiaries and terms & conditions are locked in.  

So when a California irrevocable trust requires liquidation, it can be used in numerous ways that can greatly benefit trust estates, beneficiaries and families in general.

A trust loan is a loan offered typically by specialized private lenders directly to an irrevocable trust.

This type of loan utilizes property from the trust as collateral. To take out a trust loan, trust documents must permit trustees to use trust property as collateral for the loan.

Lenders like banks and credit unions have no interest in “providing liquidity” to irrevocable trusts in the state of California. This is mainly due to the complicated nature of this property tax relief solution, the lack of a personal guarantee, plus the various complex challenges involved in financing of this type. 

Private lenders, like Commercial Loan Corp, or trust loan property tax consultants like Michael Wyatt Consulting, for example, form a bridge for beneficiaries and trustees looking for liquidity in their trust.

As we always see in the final solution, an irrevocable trust can accept a loan for several reasons, the most important being to “furnish liquidity” in conjunction with CA Proposition 19 in order to provide beneficiaries with access to a low property tax base… guaranteeing low property reassessment, most importantly.

Along with enough capital to buyout siblings…  Commercial Loan Corp, for example, provides more cash than a realtor driven buyout with a third party buyer could possibly provide – given their 6% commission structure, transaction fees, fixer-upper costs, and other ancillary charges.  So everyone is able to walk away happy, as a result of a genuine win-win outcome.  And moreover, besides that, many eligible California homeowners are moving quickly on new CA property tax relief opportunities 2022

If you are in the process of inheriting a home, or recently inherited a home and would like to see if you are able to avoid property tax reassessment, you can reach Commercial Loan Corporation at 877-464-1066. Or use the following web form to learn more on trust loans and parent to child property tax transfers. 

CA Property Tax Relief Under Attack

Is CA Proposition 13 Property Tax Relief Under Attack?  

California taxpayers are in particular danger due to the fact that the CA State Legislature and real estate plus other special interests are looking to continue efforts to unravel property tax relief in California simply to accelerate real estate sales and commissions, plus increase overall property tax revenue to state coffers.  Just for the record, Proposition 13 has saved California taxpayers $528 billion.

If critics of property tax breaks unravel Proposition 13 any more than they already have, real-estate-business owned politicians can accelerate property taxes on homeowners by 400%, or north of that figure, by destroying Proposition 13 protections that keep restraints on increases of sales tax with new property tax relief law in California that could add hundreds of billions of dollars, going forward, of new tax revenue from new rules for property tax transfers in California — costing every middle class and working CA family a small fortune in increased property taxes!

The Proposition 13 bullet-proof “2/3 vote requirement” to protect  Californians from greedy, careless or arbitrary property tax hikes has been watered down and severely weakened by those who oppose property tax relief in California, and can easily be further unraveled during this upcoming year. 

Could California See the End of Crucial Property Tax Breaks?

Lifting the 1% or 2% cap on the maximum property tax rate is their next objective. After that, Proposition 13 and $528 billion could be stolen from California taxpayers forever.  Needless to say, this would not be healthy for the state. We could possible see the end of CA Proposition 13 property tax relief — possibly the demise of the parent-to-child exclusion… most damaging of all.  How these politicos and certain members of the real estate community  could support such irresponsible tax hikes on the backs of middle class Californians, is almost impossible to ascertain or understand.  

Yet it’s entirely possible that in the state of California we could actually begin to see the unraveling  of third-rail protections supporting low tax rates from parent-child transfers — the end of laws allowing homeowners to avoid steep property tax reassessment  when inheriting property taxes… for so many decades protected so well by Prop 13 and  Proposition 19 (formerly Proposition 58).

These were once unchangeable built-in property tax breaks protecting parents and their children when they be easily able to transfer parents’ property taxes and keep parents property taxes basically forever, in perpetuity. when inheriting a home from Mom or Dad.

Proposition 13 has forced local governments to manage their finances better — one reason the initiative had such overwhelming popular support.  Most cities and counties have been very successful under Proposition 13. If some have failed, the problem was not Proposition 13. It was mismanagement, lack of sensible  planning… and reckless spending.

A Second California Tax Revolt

A Second Tax Revolt will take time, energy, resources. Funding. Organizations such as the Commercial Loan Corporation; the Michael Wyatt Consulting group; the Cunningham Legal law firm; Kevin Kiley’s ACA-9 initiative; and the Howard Jarvis Taxpayers Association are all providing planning and backing for the support and rescue of Property Tax Relief in California… Proposition 13; and the possible return to Proposition 58 with unlimited parent–Child Exclusion rights for homeowners and beneficiaries inheriting property from parents.

Simply some of the reasons the Howard Jarvis Taxpayers Assoc. is launching their “Second California Tax Revolt”, to build and protect property tax relief measures for all Californians, regardless of age, station, or net worth.

It took four million Californians to pass Proposition 13. HJTA hopes to mobilize as many to defend Proposition 13, because that’s what may be needed to keep $528 billion in our pockets — our honest,  hard working California property owning pockets.  And not flowing into mercenary state and county tax collectors’ pockets.  

How Secure is Property Tax Relief for Californians?

Property Taxes in California

Property Taxes in California

Despite Critics, CA Property Tax Relief Is As Popular As Ever  

What all homeowners, property owners and working families inheriting property in California want to know – is whether or not property tax breaks from Proposition 13 and Proposition 19 are guaranteed, during our lifetime, to all California homeowners and beneficiaries inheriting property.

Naturally, this encompasses the ability to transfer parents property taxes, with a protected property tax transfer; the right to keep parents property taxes when inheriting property  property taxes, most frequently through a parent-child transfer, otherwise known as a parent-to-child exclusion.  Always to avoid property tax reassessment, even when it involves a loan to an irrevocable trust, in conjunction with Prop 19 for the transfer of property between siblings, commonly called an “inherited property buyout”, which is often implemented in concert with the right to keep parents property taxes.

So after 44 years of capping property tax increases at 2%, Prop 13 continues to be wildly popular with Californians. And due to the fact that Proposition 13 is a CA Constitutional Amendment, it can only be revised by voter approval.

Howard Jarvis Taxpayers Assoc president Jon Coupal tell us:

Without the two-thirds vote requirement, one of these second-mortgage bonds can now be passed by people who won’t pay the tax and in fact are getting more from the government than they pay in taxes.

After Proposition 39 took away the two-thirds vote protection for these bonds, localities quickly passed almost $30 billion in such bonds — debt that homeowners will be burdened with long after they’ve paid off their homes.  Since then, the two-thirds vote has been repeatedly attacked by a pro-tax coalition that wants to eliminate this protection for more and more kinds of bonds and taxes.

Currently, several proposals are active in the State Legislature to change the state constitution to eliminate the two-thirds vote requirement for other kinds of bonds, and for certain sales and property taxes. If enacted, it will become far too easy to pass all kinds of tax hikes, so the Howard Jarvis Taxpayers Association is actively fighting this legislation.

Special Interest Groups Intent On Unraveling Tax Relief

Wealthy special interest organizations are out there scheming and planning, especially like-minded people in the realtor community that are secretly, and not so secretly, aiming to unravel California property tax breaks – such as the CA Associations of Realtors, who bankrolled Proposition 19,  replacing Proposition 58 in 2021. 

The CA Associations of Realtors donated $40.4 million to their crusade; and $47.57 million total bankrolled this effort to convince Californians with deceptive yet clever public relations and marketing.  Naturally, there were other organizations that chipped in, that do well with state government cash and don’t want homeowners to save big on property taxes, as property tax revenue feeds those organizations and their financial interests.

Proposition 15, the property tax measure, also promoted by the realtor community, was designed to overturn Proposition 13’s commercial property tax protections, and was defeated by a hair. Had it passed, most residential rentals and business rentals, thanks to inflated commercial property taxes from an unraveled Proposition 13, would have gone sky high – taking prices of all goods and services in California with it…and would have carried the future of California with it…. downhill!

Special interest groups such as the Realtor organizations pushing these anti property tax relief efforts, have got to learn that you can’t weaken and in many cases destroy the lives of millions of the  39,538,223 citizens residing in California – simply to benefit 131,551 real estate brokers. Weakening the financial life of millions just to make some realtors and real estate brokers a little wealthier just doesn’t even out.

CA Property Tax Relief Heroes ~ Fighting the Good Fight

This is precisely why folks such as the Howard Jarvis Taxpayer’s Association; Assemblyman Kevin Kiley and his ACA-9 Bill to repeal Proposition 19;  Michael Wyatt Consulting; Devin Lucas Real Estate Law Firm; Commercial Loan Corp led by president Kerry Smith; and others – maintaining an especially courageous effort to control property tax hikes; and keep crippling property taxes capped and equitable for California working families, for both middle class and high net worth homeowners – to keep the California American Dream of home ownership alive, fair, and affordable.

Are Benefits from CA Proposition 19 Mainly for “Elites” in 2022 as the Press Tells Us – or for the Middle Class?

Property Tax Transfer in California

Property Tax Transfer in California

California is the only state in America that provides genuine  property tax relief, as opposed to deceptive tax deferment, to residential and commercial property owners and middle class families – specifically in the form of Proposition 13, and now Proposition 19 – for instance a Prop 19 (Prop 58) parent-child exclusion – along with capping yearly property taxes at 2%… when transferring a parent’s low property taxes to an inherited home,  moving into their old family home as a primary residence, with a comfortable 12-months to settle in.  

The problem is, critics of property tax relief in general continue claiming that these tax breaks are mainly helpful to homeowners that are well off… as they out it, “elite homeowners”. With no statistics to back up this often repeated claim.   We hear quotes such as, “Instead of helping the middle class, property tax relief in California allows a wealthier class of citizens to take greater advantage of their predecessors investments.”  This simply is not accurate.

First, as we all know, wealthy folks make up a small percentage of the general public – and the same simple equation applies to homeowners. In microcosm, the majority of families that take advantage of property tax relief in California, that avoid property tax reassessment, are in fact middle class or upper middle class… Not millionaires as the LA Times or San Fran Chronicle would have you believe.

The same 2% to 3% of ‘haves’ versus the 97% to 98% ‘have-nots’ equation – reflecting stark wealth disparity among homeowners all across California holds true when it comes to using property tax breaks to avoid property tax reassessment – to save money… that middle class and upper middle class residential and commercial property owners do not have to throw around on unnecessary tax hikes!

Can you picture genuinely wealthy families that own multi-million dollar homes (that the press continues to inform us are the only property owners gaining genuine benefit from Proposition 13 and Proposition 19) – taking the time to go through property tax break processes, simply to save a few thousand dollars every year? Families with 7 and 8 or 9 figure incomes? 

We can cast serious doubt on that one.  Yet newspapers like the LA Times and San Fran Chronicle still continue to pitch this in Op-Eds as a realistic scenario. 

Yes, there are wealthy investors out there who did take advantage of Proposition 13 tax breaks, for investment properties that would rent out to tourists.. However, this is a fraction of the general home-owning public, and the bulk of folks using these tax break are middle income and even upper middle income residents. They’re not famous, wealthy celebrities like, for instance, the Bridges family…

The Bridges family.  The one and only tale of a rich and famous family “taking advantage” of property tax relief to rent out fancy homes on the beach to upscale vacationers.  Repeated over and over and over again as a cautionary tale, in the press, curiously without any similar stories bring referenced about any other wealthy family in California. It is curious that not one other family  has ever been named or blamed for this type of inheritance / tax break activity, over 3 decades.

To the sheer joy of County Tax Assessors – Californians without proper counsel from a trust lender or a property tax consultant, or estate attorney,  stumble into anticipated property tax mistakes. Generally caused by not filing deadlines properly, or not comprehending complicated legal subtleties; or by not claiming an exclusion or exemption from property reassessment which is staring them right in face.

Without advice from a property tax consultant like Michael Wyatt Consulting in Corona; or life-saving legal counsel from an extremely experienced trust administration / property tax relief attorney like Partner Rachelle Lee-Warner, Esq. — at the Cunningham Legal law firm. Or a reliable lender specializing in loans to trusts and estates,  like Commercial Loan Corp for example, led by inspirational president Kerry Smith, in Newport Beach… Helping heirs inheriting property with a Prop 19 (Prop 58) parent-child exclusion to establish a low property tax base when inheriting a home – also frequently buying out inherited property shares from siblings (co-beneficaries); or helping with the transfer of property between siblings, with a loan to an irrevocable trust… working in conjunction with Prop 19. 

Experts like this specialize in helping beneficiaries and homeowners save on property taxes, avoiding property tax reassessment  with  Proposition 13 and/or Proposition 19; mainly focusing on Property tax transfer, the right to transfer parents property taxes and keep parents property taxes basically in perpetuity, when inheriting property taxes through a parent-child transfer, typically the  popular Prop 19 (Prop 58) parent-child exclusion.

It’s worthwhile contacting a trusted expert, rather than accidentally triggering property reassessment that may increase your property taxes five-fold or ten-fold. A significant tax hike to say the least!

Let’s use the North Bay area in northern California as an isolated microcosmic example of how it is chiefly middle class and upper middle class property owners that have responded to property tax relief measure Proposition 19, for example…

The North Bay Business Journal informs us:  

California’s Proposition 19 has prompted a seven-fold increase in requests to county assessors to transfer property throughout the North Bay.  Barbara Green, the  Change-of-Ownership Supervisor  in the Sonoma County Tax Assessor’s office, tells us,   “It’s crazy! We’re just catching up….”

….[Thanks to Proposition 19] middle class homeowners in Sonoma, Napa and Marin counties flooded County Tax Assessors with a load of filings. Sonoma County has taken in 917 filings through Feb. 5. The usual rate is 193 for the three-month period when compared to the previous year.  Although a smaller jurisdiction, Napa County’s government offices are in the same boat. Residents put in 175 of the forms to pass down their properties within the family. Marin County has received 600 more property transfer applications than its usual 54 parent-to-child transfers of property….

Proposition 19 allows homeowners over age 55 to keep a better tax rate when they sell one house and buy another. It took effect on April 1 and applies to anywhere in the state. It’s about as far reaching as the housing tax revolt of Proposition 13 that passed 1978.  There is a fever pitch of reaction within North Bay counties… for filing the parent-to-child property transfer.

North Bay banking, accounting & law firms have all been experiencing a huge increase of calls over the past few months from prospects and clients. And we’re not talking about millionaires calling in or strolling into those offices.

CA Property Transfer Benefits Expanded by Proposition 19

Prop 19 Property Tax Breaks

Prop 19 Property Tax Breaks

As most of us know by now, yet it does merit repeating – a parent-child exclusion is not the only key tax break offered by Proposition 19.  California homeowners age 55 plus, or  who are victims of a validated natural disaster such as an earthquake or heavy flooding, or who are extremely disabled – who are looking to transfer their property taxes to a new home now have direct access to additional tax relief options. 

Proposition 19 Popular Property Tax Relief Expansion

Some previous tax benefits are now expanded. A transfer by homeowners when purchasing a new, higher priced primary residence, with adjusted numbers to update values, no longer has to be a home of equal or lower value; and a property transfer like this can be implemented up to three times, not merely once as with previous limitations.

Victims of natural disasters verified by the Governor of California no longer have any limits, as far as counties are concerned. There tax breaks can now be used in any of California’s 58 counties, no longer limited to ordinance approved counties as before – and may be utilized between any two counties, from original home to new property.

New Proposition 19 Property Tax Relief Opportunities 

As long as Californians qualify for, and file, their Homeowner’s Exemption or Disabled Veterans’ Exemption inside 12 months of transfer of ownership; plus make an inherited home their principal residence, as opposed to an investment property – they can avoid property tax reassessment.

Moreover, they have plenty of time – 12 months, to move in. Also, family farm transfers are permissible under this exclusion – without having to move in as a primary residence.

However, due to the possibility of triggering reassessment and being hit with current tax rates, it’s critical to enlist the assistance of a trust lender like the Commercial Loan Corp in Newport Beach for instance, to determine if a loan to an irrevocable trust, in conjunction with Proposition 19 tax breaks, will serve as a reliable means to keep an inherited home from parents with a low Proposition 13 protected property tax base. 

There is also a superior financing solution available to buyout siblings who wish to sell their inherited property shares… at a much higher price than an outside buyer would offer, thanks to the elimination of a realtor managing the process, and their 6% fee, plus pricey legal costs; etc.

Keeping a Low Property Tax Base With an Irrevocable Trust

It’s crucial to enlist the help of a tax attorney, or a property tax consultant, or a trust lender, to find an alternative tax avenue –     to avoid egregious tax hikes at current reassessed rates.  For example, a CA family home assessed today at $50,000 – with a yearly property tax of $600 – could actually be re-assessed today at $750,000 – with an annual tax burden of $9,000!

An experienced trust lender can help middle class families with an irrevocable trust, working in conjunction with Proposition 19 and Prop 13, to establish a low property tax base, and even buyout property shares from co-beneficiaries.  We’re talking about homeowners that have on average less than $700 in the bank at any given time; who don’t  have deep pockets… who need to avoid severe property tax increases, with the danger of possibly losing a beloved house due to an inability to pay for such yearly taxes.

Even a regular trust, like a Qualified Personal Residence Trust,  permits  a parent to transfer a primary residence to a trust that allows that residence to be occupied by that parent for a set amount of years. At the close of that set number of years, the residence transfers back to the heir and when that heir becomes the sole owner, they qualify for a parent-to-child exclusion, as a primary home owner.

CA Property Tax Relief Options With Trust Lenders

Besides assisting beneficiaries with a parent-child exclusion and a low parental property tax base, a trust lender will help sibling co-beneficiaries looking to sell inherited property with trust loan funding that will provide them with far more cash than an outside buyer would offer – otherwise known to realtors and attorneys as “buying out a sibling’s share of inherited property” or a “sibling to sibling property transfer” as well as a “transfer of property between siblings”.

A seasoned property tax consultant like Michael Wyatt Consulting or a trust lender specializing In loans to trusts and estates such as Commercial Loan Corp, for example, can help families inheriting real estate in California to fully understand how to safely avoid property tax reassessment, plus how to transfer parents property taxes on a standard Proposition 19 property tax transfer when inheriting property taxes.  Likewise, how to keep parents property taxes basically forever, utilizing a parent-to-child transfer and a parent-child exclusion under Prop 19. Prior to 2021, a parent-child exclusion was strictly under the auspices of the wildly popular Proposition 58.

Again, this is where a trust lender comes in very handy (frequently referred by a property tax consultant or an estate lawyer – to insure that each critical step along the way is taken correctly, keeping a low property tax base; avoiding property reassessment.

Establishing a Low Property Tax Base in California

Property Taxes in California

Property Taxes in California

Establishing a Low Property Tax Base ~ Who to Turn to in 2022

It’s always interesting, with respect to estate funding and inheritance financing, how different schools of thought come up with different solutions for saving money on property taxes, for out-of-the-box funding solutions against inheritance assets, and for mortgage capitalization. 

Name brand name lenders, setting the tone  for most lenders in California, such as Quicken Loans, e-Loan,  Wells Fargo and Bank of America – are admittedly all high-end, reliable finance-information and lending sources.  Yet – when it comes to important income tax or property tax matters, or inheritance funding solutions – their editors and writers, talented as they may be, still only nibble around the edges on anything but the most conventional, largely ineffective solutions. 

For example, where tax relief is concerned these firms typically dance around the critical issues associated with property tax exemptions, establishing a low property tax base, or avoiding property tax reassessment – when inheriting a home in any of the  58 counties in California. So who do we turn to for help?

Many property owners embrace basics, and enlist assistance from established property tax experts such as Rachelle Lee-Warner, Esq. — well known Partner, Managing Attorney & Trust Administration / property tax relief expert at Cunningham Legal. Or trusted property tax consultant Michael Wyatt, President of Michael Wyatt Consulting in Corona. Or a reliable trust lender like Commercial Loan Corp, led by inspirational CEO, Kerry Smith in Newport Beach – specializing in irrevocable trust loans, avoiding property tax reassessment and establishing a low  property tax base – for middle class California families… guiding them through while showing them all the new advantages that Proposition 19 offers.  Perhaps not as generous as Proposition 58 might have offered… however, lowering property taxes to a greater degree than you might think.

Avoiding Poor Solutions and Time-Wasters 

With regards to lowering property taxes — these are typical solutions from “expert websites” that homeowners might not want to take very seriously, or avoid completely…

  • Limiting your “home improvement” projects;
  • Researching nearby neighborhoods for pricing and home values;
  • Asking uninformed young attorneys or relatives (to save money) if you qualify for tax exemptions;
  • Walking around your neighborhood with your Tax Assessor;
  • Checking your tax bill for inaccuracies;
  • Getting a second, third and fourth opinion from unproven  Assessors and property tax consultants;
  • Meeting with your local Tax Assessor to convince him/her to revise your tax bill;
  • Researching and filing a property tax appeal challenge with your County Tax Assessor without a professional property tax appeal firm – on your own, simply to save money.

Checking for inaccuracies, or getting a second opinion isn’t a bad suggestion.  But walking through your house with your local Tax Assessor?  Researching prices around your neighborhood? With all due respect to the financial websites that hand out this kind of advice, these suggestions would be laughable – if they weren’t so serious.  Limiting your home improvement projects – to lower your property taxes? 

Effective Solutions with a Tax Professional or a Trust Lender

We will never be free from property taxes while we own our own home, but one does need to be on the there are a few simple “tricks” you can use to lower your property tax bill, as certain websites claim. 

We can investigate comparable homes in our neighborhood for “discrepancies”. Never making any changes to our property exterior right before a tax assessment, as this can increase the value of our property; hence increase our property tax bill.

Or, we can stroll around our house and chat with our Tax Assessor during our yearly assessment. That makes a lot of sense. Lastly, we can look for local and state exemptions, and, “if all else fails, write up and file a tax appeal to lower our property tax bill”  so suggests a well known financial site.  Listen, if we’re going to file a property tax appeal with a County Tax Assessor, we’d be a lot better off doing it through a professional property tax appeal firm.

If we want to address this issue seriously, and not simple throw silly and unrealistic suggestions out there simply to see what sticks – we have to look at realistic opportunities to take advantage of. 

For example, if we’re an heir of an estate, or a trust beneficiary inheriting a house from our Mom or Dad – and the house is in an irrevocable trust – a loan to an irrevocable trust from a trust lender is likely required if the trust does not contain sufficient cash to make an equal distribution to all of the co- beneficiaries looking to sell off their inherited property shares. This is frequently taken advantage of by beneficiaries, perhaps like yourself, who intend to keep a home inherited from a parent at the original low property tax base.

A loan to an irrevocable trust makes it possible to buyout inherited property shares from co-beneficiaries and greatly speeds up the trust distribution process. A trust loan also saves a great deal of money when you compare selling the family home through a realtor or broker receiving a 6% commission, plus legal fees, and other closing costs.

Inheriting Parents’ Home While Keeping Their Low Property Tax Base

Bottom line, avoiding property tax reassessment  and establishing a low property tax base by transferring property taxes, are property tax relief benefits available to all property owners in California, protected by Proposition 19 & Proposition 13. This should always be taken full advantage of.  You can transfer parents property taxes when inheriting property and inheriting property taxes – and keep parents property taxes basically forever, establishing a low property tax base with Prop 19 benefits as well as taking advantage of a trust loan buyout of property inherited by siblings. Why not?  It’s your right.  Plus, there is no better time than the present to become better acquainted with the parent to child property tax transfer.

This type of property tax transfer is at the foundation of property tax relief for all Californians, generally through a parent to child property tax transfer on an inherited home – usually referred to as a Prop 19 parent-child transfer or parent-to-child exclusion… all the way to a transfer of property between siblings through a loan to an irrevocable trust, in conjunction with Proposition 19 – with an entire year to settle in to an inherited principle residence, or multiple residence (although only one heir is actually required to lock this tax relief benefit in). As long as the parent leaving that property to heirs resided there as a principle residence as well – which is usually the case anyway.      

Using a Trust Loan to Establish a Low Property Tax Base

Buying out sibling property shares while keeping your inherited home at a low Proposition 13 tax base is a popular avenue for many families.  Not only that, if your siblings are receiving funds from an irrevocable trust to sell their inherited property shares, they would receive far less money getting cash from an outside buyer, as opposed to funds from an irrevocable trust. The costs associated with preparing a home for sale, expensive realtor fees, and potential closing costs associated with selling an inherited home can be incredibly expensive.

When a trust loan is used to facilitate a trust distribution, each beneficiary receives an average of an additional $15,000.00 in distribution when compared to selling the home. The person keeping the family home also benefits – saving $6,200+ per year in property tax savings – simply by avoiding property tax reassessment on a nice old inherited home from Mom and/or Dad.

Voters passed CA Proposition 19, just squeaking by with a handful of votes from confused voters in Nov of 2020, and the tax measure became active on April 1, 2021. If you want to intake good advice and avoid mistakes, have property tax experts carefully walk you through Proposition 19, and Proposition 13.

Most middle class and upper middle class California homeowners probably have heard about Proposition 19, the new property tax law that allows seniors and disabled homeowners to keep their current property tax rate when they sell their home and buy a new one. But they may not know how to apply this new law when moving to a new home.

It’s the state’s largest expansion of property tax benefits in decades, basically allowing qualified homeowners to take their Proposition 13 tax base with them anywhere in the state, no matter the price of their new home.

Helping California Middle Class Homeowners Avoid Property Tax Reassessment

Under Prop. 13, tax hikes are capped at 2% a year, meaning the longer you own your home, the lower your property taxes relative to the market value of your home. But some homeowners lose their Proposition 13 tax break when they sell their old home and see their new tax jump to the full market value of their new one.

If you are 55 years or older, a person with a severe disability or a victim of wildfires or natural disasters, you can move to any home in the state, regardless of the home’s price. Your tax is unchanged up to the value of your old home. If your new home costs more than your old one, you pay an additional amount based on the market value over your old home’s price.

When you’re used to a low property tax bill, it can be a shock to your monthly expenses when buying a replacement home includes a huge property tax increase – especially if you have lived in your current home for many years.

Some older middle class homeowners feel trapped because they can’t leave their current home, even if it no longer fits their needs, because they are on a fixed income like Social Security, or a modest pension or military retirement, and can’t afford to move. Taking advantage of Proposition 19 may appear challenging.  But as time passes, more and more tax assessors are providing online links to forms and resources to help homeowners understand how to benefit from these new property tax rules and regulations.

 

Helpful Contact Info for a Property Tax Transfer on an Inherited Home

Property Tax Transfer in California

Property Tax Transfer in California

Commercial Loan Corp – (877) 756-4454 – cloanc.com

As most property owning Californians are aware in 2021, both time-honored and new cost-cutting property tax breaks are accessible to home owners over age 55, who have a severe disability, or who are verified victims of a natural disaster or forest-fire – as far as new property tax breaks are concerned.

Moreover, when inherited property is in an irrevocable trust and additional cash is required to make fair and equal distribution to all beneficiaries determined to sell their inherited property shares – a trust lender like Commercial Loan Corp is where such beneficiaries go for irrevocable trust funding, along with getting help from the firm to work in conjunction with Proposition 19; to insure inheriting a low property tax base, to avoid property tax reassessment both in the short and long run.

This process also allows beneficiaries looking to keep an inherited home to buyout inherited property from siblings at much higher rates than any outside buyer would offer, given that there is no realtor involved, with their 6% fee; and no pricey legal bills and ancillary costs associated with an outside property sale. It costs beneficiaries less in every respect with a Proposition 19 trust loan from Commercial Loan Corp, then it does if they were to use their own cash to complete the property transfer process, to insure inheriting a low property tax base.

Senior Account Manager – trust loan and property tax relief specialist – Tanis Alonso recently shared her viewpoint on this process with us recently. She explained as follows:

Let’s say a property value is currently one million dollars and the current tax base is $1,200. If they were to get reassessed at current value that would be around $11,000 annually. By someone keeping the property and obtaining a trust loan to properly buy out their siblings that allows the beneficiary that is keeping the property to keep parents property taxes, to retain 100% of the Proposition 13 tax base that was paid by their parents and keep that low property tax base of $1,200.

This of course creates much greater affordability than if they were to improperly buy out their siblings and have that property reassessed. The loan to trust goes hand in hand with the Proposition 58 property tax transfer system, creating enough liquidity to equalize distributions, not sell, and allow a beneficiary to keep their parents property with their low property tax base.”

Michael Wyatt Consulting – (951) 264-6152 – michaelwyattconsulting.com

For 25 years well known California property tax specialist Michael Wyatt has managed countless real estate transactions that have had various unintended results. Property owners either did not have the benefit of an estate attorney, or the folks advising them were unfamiliar with property tax relief and assessments, property tax law, tax breaks and their consequences.

Mr. Wyatt started Michael Wyatt Consulting to help advisors and clients avoid unintended consequences, by structuring their real estate for property tax cost savings and avoiding crippling property tax reassessment.

The firm provides services for the decline in value of properties; for base year value transfers for property owners; plus the Transfer of Base Year Value for homeowners age fifty-five or older; as well as severely and permanently disabled residents and Change in Ownership Exclusions.

There also is Interspousal Transfers, Inheriting a Low Property Tax Base; Parent to Child Property Tax Transfer; Family Joint Tenancy and Inter Vivos Revocable/Family Trusts; the Proposition 19 (formerly Prop 58) Parent-to-Child Exclusion and Grandparent-Grandchild Exclusion (Propsition 193); the New Construction Builders’ Exclusion; plus Exempt Property; Eminent Domain & Condemnation –

To be clear, Condemnation is the process a government or private entity uses to legally acquire property. Authorities can condemn properties through eminent domain to seize property from their owners. Eminent Domain allows a property to be seized for public use such as highways, railways, airports, powerlines, and pipelines.

Mr. Wyatt tells us:

Commercial Loan Corporation loans to trusts give our clients several invaluable benefits. Their terms can be a lot more flexible than an institutional lender like Wells Fargo or Bank of America. Also, Commercial Loan Corp is self funded, and that’s basically why they can extend easier terms to clients. Compliance for both commercial and residential property owners is far less strict. Commercial Loan Corp doesn’t charge any fees up-front, that’s another great benefit. Plus, they don’t require paying interest on their trust loan in advance.

The speed of their trust loans is much faster, typically five to seven days instead of two or three weeks. And if you sold a property outright, without using a trust loan, you have closing costs, legal fees; a commission; etc. It gets very expensive. Going with a firm like Commercial Loan Corp – all costs are offset, unless you plan to keep a property for 2 or 3 years or less. Then it doesn’t make sense. But generally you’re looking at keeping that property for seven or more years, as a rule.”

Cunningham Legal – (949) 386-1340 – www.cunninghamlegal.com

Rachelle Lee-Warner Partner & Managing Attorney for Estate Law and Trust Administration at Cunningham Legal, although a well known Trust and Estate Attorney, also functions to a some degree as a property tax consultant. No matter how many people she helps, Miss Warner never loses sight of the fact that no two cases—or people — are alike; and sums up her role as follows:

I want to be known as an attorney who treats each client like they are my only client. Each situation is unique and each client deserves to be heard and offered the assistance we can provide. I often meet with clients who are in the midst of stressful and emotional situations. Whether it be the declining health or loss of a loved one, my goal is to be a voice of reason, a calm presence, and an encourager through the process. Helping these clients gives me purpose in my career.”

“One of my clients was in hospice care and had an A/B trust with property in the B Trust carrying significant gain since her husband had passed away,” offers Rachelle as an example. “If left intact, her daughters would pay hundreds of thousands in capital gains taxes. I was able to get an ex parte petition filed and granted within two days to eliminate the capital gains taxes for her daughters. My client died a few days later, and her daughters were so grateful we sprung into action to save them money and give their mother peace in her last few days.”

After two pivotal events in my life — becoming a mother and losing a parent — my perspective shifted events helped shape me to understand more clearly the perspective of my clients and my clients’ needs.”

What’s Good for California? Property Tax Revenue… or Property Tax Relief?

Property Taxes in California

Property Taxes in California

2021 forward, those in leadership roles in the state of California really should to get one thing straight. Middle class homeowners, working families, and even upper middle class property owners – which accounts for most of the state, frankly – do not need more property   tax hikes, and they do not need to be reaching deep into their pockets to be sending yet more tax revenue to the state; especially during a virulent pandemic, where middle class property owners are not getting any richer, nor (as the saying goes) are they getting any younger.
 
With so many people still furloughed, reduced to part-time work, or “temporarily” laid off… with more folks than you might think at 100% unemployed status… with a fair amount of companies shrinking their work force, with some even going completely out of business or leaving the state to set up shop in a nearby state where taxes are lower and property less expensive, plus lower overall cost of living. 

Therefore, with survival at the top of most peoples’ list, middle class families in California are not particularly interested in reading about all the billions going into the state coffers as a result of new property tax measures, in editorials and articles in local newspapers…

On the contrary, homeowners are far more interested in saving money through long-term, time tested California property tax breaks – often with information provided by seasoned property tax consultants like Michael Wyatt Consulting in Corona, and attorneys with decades of property tax relief expertise such as Rachelle Lee-Warner, Esq. at Cunningham Legal trust administration, estate-law firm in Auburn; or estate & trust lenders like Commercial Loan Corp in Newport Beach.

These firms help beneficiaries that are inheriting property from a parent save many  thousands of dollars every year by taking advantage of a (formerly Proposition 58) Prop 19 parent-child exclusion – working in conjunction with an irrevocable trust loan, making it possible to avoid property tax reassessment – buying out sibling property shares while keeping your inherited home at a low Proposition 13 tax base – buying out co-beneficiaries that are looking to sell off their inherited property shares for substantially more cash than an outside buyer would offer, which is the extra bonus. 

Firms like this will guide families through a Prop 19 parent-child exclusion and property tax transfer when inheriting property taxes, with the ability to transfer parents property taxes and keep parents property taxes through the parent-child transfer.

Every property owner and beneficiary should have reliable access to a firm that can lend money to an irrevocable trust – typically a trust loan lender.  Every  property owner in California should also have access to property tax appeals and property tax reduction, from boutique property tax relief companies. 

When we read local news or editorials, we’re encouraged to think about how wonderful all the extra property tax revenue is for California, and how helpful it is for local firemen and school boards, and how fortunate it is for realtors and well connected companies with special interest construction contracts.  Neither commercial property owners and homeowners don’t have the luxury of thinking about the state government’s terrific success at driving more tax revenue into the coffers from well disguised property tax hikes!

All property owners in California should have locked in rights to keep their yearly property taxes low, and when inheriting a home from parents and inheriting parents’ property taxes — to establish a low property tax base that will last literally forever. This is the most important safety net middle class and even upper middle class residents and beneficiaries have in the state of California… and should be focused specifically on taking advantage  that, not on the states’ fabulous increases in property tax revenue.

Financial Firms Help Californians Lower Property Taxes & Stabilize Financial Standing

Keep a low property tax base on an inherited home

Keep a low property tax base on an inherited home

Help From Property Tax Specialists – Bridging the Wealth Gap

Important cities responsible for growing jobs and driving opportunities that generate revenue for consumers, such as Los Angeles, San Diego, San Jose, San Francisco, Long Beach and Anaheim – have all experienced population shrinkage since 2020, due in part to shrinking real estate possibilities as well as unreliable employment, fluctuating sales conditions and unstable economic conditions overall.

Some financial services companies are looking to help reverse this trend and contribute to building a more positive economic and business environment for residents to thrive in, rather than struggle in.

Contributing time and effort towards helping beneficiaries that are inheriting property yet are in danger of falling prey to increased property taxes and limitations to property tax breaks – some financial services companies include middle class and upper middle class families in their suite of services, as opposed to just focusing on wealthy families as many investment, lending and wealth management firms do.

Examples of property tax professionals who are more open to helping middle class Californians are specialists like Advanced Tax & Estate Planning, Trust Administration attorney Rachelle Lee-Warner, at Cunningham Legal, Michael Wyatt Property Tax Relief  Consulting, or Estate & Trust Lending firm Commercial Loan Corp – all who do in fact include middle and upper middle class families in their wide range of property tax services. 

These firms, and others, are now seeking broad, proactive ways to reach and assist middle class and upper middle class homeowners and beneficiaries expecting to inherit business property or a home from parents, yet find themselves to be victims of financial bias… unable to enlist the help of high-end property tax experts due to their middle class, or rather non-wealthy, financial status.

Free Property Tax Savings Estimate & Consultation

To help preserve net worth for middle class families, the trust lending firm mentioned above recently decided to offer a free consultation & estimate for property tax savings to California middle class and upper middle class homeowners and beneficiaries, as well as affluent residents, all who want to avoid property tax reassessment by keeping parent’s low property tax base… locking in the same low tax rate their parents enjoyed.

Property tax firms are looking to help residents work around obstacles associated with a Proposition 19 parent to child property tax transfer on an inherited home, and is well known for providing ways to save new homeowners and heirs of estates and trusts thousands of dollars in annual property taxes. They are also assisting beneficiaries with applications for trust loans to buyout siblings that are also inheriting property but wish to sell their shares.

This type of consultation helps residents to evaluate, in-depth, the benefit of a loan to an irrevocable trust, and various financial options associated with property tax transfers in California – plus buying out co-beneficiary siblings who are looking to sell their share of an inherited property. Moreover, going through a trust lender  you trust; keeping your parent’s low property tax base when inheriting a home

Firms like Commercial Loan Corp work with families to help them preserve their modest financial security; alongside their attorney, accountant or property tax consultant; and assist family members and beneficiaries by helping them avoid property tax reassessment at current market rates, and determine through in-depth consultation how much a family can expect to save on property taxes,

On average this saves more than $6,200 per year, per beneficiary; as well as weighing costs and benefits of a trust loan working alongside Proposition 58 – now for all intensive purposes having morphed into Proposition 19. This enables a simple buyout of inherited property from co-beneficiaries, providing them with more money than an outside buyer would furnish them with; while keeping parents’ low property tax base.

Thaddeus Farrell, Account Manager at Commercial Loan Corp, offers an Insider’s Viewpoint on Estate & Trust Lending

We guide beneficiaries through a process that will maintain their parents’ low property tax base. Usually siblings that want to retain inherited property from parents come to us first, generally after being referred to us by a law firm. Middle class families that can’t afford to pay reassessed taxes on an inherited home… Which pretty much sums up most families these days…

… property reassessment can cripple a family financially. I look at it like this – expenses are a part of life, and when you inherit a family home, if the property is reassessed at current rates, those expenses will usually go sky high. Most middle class people can’t afford to pay that type of tax hike. They want to take advantage of Proposition 19 and a trust loan, transferring CA Property Taxes from a Parent to an Heir tax break, to avoid property tax reassessment, and move into an inherited home within a year as a principle residence, which was their parents’ principle residence formerly protected by Proposition 58 and Prop 13.

Siblings inheriting a home have two options. They can sell or keep their inherited property. In other words, your family has to make up their mind – what they want to do, sell or keep. Selling it is far more expensive. By keeping the home, each beneficiary receives approximately $15,000 extra in a cash trust distribution when compared to selling the home because they avoid costly realtor and real estate sale expenses. The child beneficiary keeping the inherited home winds up saving on average $6,200 in yearly property taxes.”

Where to get help from Property Tax Savings professionals

Families, beneficiaries, or their attorneys, who want to take advantage of Commercial Loan Corp’s Free Consultation for Property Tax Savings and/or speak to attorney Rachelle Lee-Warner about Proposition 19, at Cunningham Legal; or perhaps discuss the facts with Michal Wyatt Consulting, in terms of keeping parent’s low property tax base; or to receive a trust loan to buyout co-beneficiaries’ property shares, and learn more about keeping parents’ low property tax base when inheriting family property – can call (877) 756-4454 and set up a free evaluation in person or over the phone.

Working With An Irrevocable Trust Lender

Irrevocable Trust Lenders

Irrevocable Trust Lenders

First, let’s go back over the key elements involved in the most popular trust loan beneficiary-conflict solution available in California.  It’s worth mentioning that California is still the only state in America where you can avoid property tax reassessment at current rates; capped at 2% taxation basically as long as you own property inherited from parents… thanks to 1978 CA Proposition 13. 

And this is where we get into trust liquidity – something a lot of folks in California don’t really understand. California business property and residential property owners, in addition to having the right to keep parents property taxes, and transfer parents property taxes upon inheriting property, and then inheriting property taxes at the low Proposition 13 two-percent tax rate maximum – can maintain a low property tax transfer rate basically forever, through a parent to child transfer, or “parent to child exclusion”, as long as all tax relief requirements have been met, usually with the assistance of an experienced irrevocable trust lender.  

Additionally, Californians even have the right to apply for the same tax break on a secondary property inherited from parents.  Approval is a formality only. No only that, as a California property owner you can buyout as many siblings as you like; that is to say, as many co-beneficiaries as there are who wish to sell their inherited property shares – as long as you are approved for the appropriate amount of funding to a trust loan, from your trust lender… And as long as the co-beneficiaries are fully committed to selling out through a trust loan, rather than accepting less money from a third-party outside buyer – while you keep the same inherited property from your parents, financed through the trust loan, avoiding property tax reassessment for that point on, establishing and maintaining a low Proposition 13 property tax base.

Elements that drive this process are worth researching, to understand the subject better and simply to be able to work more effectively with a trust lender… Many of these process elements are covered in detail on the California State Board of Equalization website, focusing on various relevant components within Proposition 58 among others.  Or you can research heavily detailed business sites such as Commercial Loan Corp, the brainchild of forward-thinking CEO Kerry Smith;  or info-blogs such as Medium.com,  or perhaps  the Trust and Estate Loans micro-site; or the Property Tax News blog…  Trust loans working in accord with Proposition 19 make it possible for heirs and beneficiaries to sell their shares of inherited property, a co-beneficiary buyout of sibling property shares – as realtors put it, “the transfer of property between siblings”, and “lending money to an irrevocable trust“ – typically from an irrevocable trust loan lender.

Commercial Loan Corporation in Newport Beach, CA appears to be the “favorite flavor” of the decade, where trust lenders are concerned, as they specialize in taking full advantage of all Proposition 19 property tax relief benefits for clients; helping beneficiary siblings avoid property tax reassessment, while making sure they transfer parents property taxes correctly, when inheriting property taxes from parents, a business facility, home and/or land; abruptly inheriting property taxes that have to remain low, simply to free up some needed cash; in order to keep up a reasonable lifestyle, what with the cost of living in California these days.  

You also want to be careful, to work with a trust lender that has a great deal of experience with this process… To make sure that beneficiaries and  property owners take full advantage of the right to keep parents property taxes, with a low Proposition 13 tax base.  No other state in America even comes close to providing this sort of property tax relief. And property taxes in this country, for the most part, are high for a middle class and working class families. No other state gives residents the ability to use a CA Proposition 58 or California Prop 13 type of property tax transfer, with parent to child transfer, or as lawyers like to call it, “parent to child exclusion”.

The fact is, we need to know how to work with a professional trust lender to be able to use tax breaks as efficiently as possible, that as Californians we are fortunate enough to have access to.  Moreover, every property owner in every state should know how to work with an irrevocable trust lender to buy out a beneficiary’s share of inherited property; and basically understand how a sibling-to-sibling property transfer or co-beneficiary buyout of sibling property works in California.

Bottom line, every state in this country should have trust lenders to work with  to take advantage of residential and commercial property tax relief solutions similar to Californian property tax breaks such as CA Proposition 13, and now Proposition 19 – enabling property owners to keep parents property taxes, at a low 2% capped tax base from Prop 13… along with property tax transfer benefits still in effect from CA Proposition 58; enabling the transfer of property between siblings, or, more specifically, allowing a co-beneficiary buyout of sibling property, paying them cash to not sell out, while you get to keep your parent’s house and/or land at that super low Proposition 13 protected tax base.

If you are in need of a loan to an irrevocable trust, please completed this form and we will have a representative from Commercial Loan Corporation contact you; or you may call them at 877-464-1066: