What Is Proposition 19?

Join Thomas Binetter, an associate attorney at the Law Offices of Hollander and Hollander, as he delves into the impact of California’s Proposition 19 on your estate plan. Discover why Prop 19 could affect your living trust and learn about a game-changing solution – the Life and Legacy Trust.

What is Proposition 19? How does it affect my estate plan? Does it affect my living trust? Do I need to make additional considerations based on the effect of Proposition 19?
Proposition 19 was a prop that came in in February 2021. And a lot of people were blindsided because it was attached to a firefighter relief bill. And most people didn’t even know it was there. But with 50.048% of the vote, it passed. What does that mean? Prop 19 is good law in the state of California.

What is prop 19?

Well, if you recall what Prop 13 was, a child would inherit the property tax basis of their parents property when they passed away. That would ensure that they would pay the same property taxes that their parents paid at the time of transfer. That is no longer the case. Under Prop 19, when you pass away, your children will unfortunately have to pay reassessed property taxes. In other words, the property taxes on your home will be reset to the fair market value as at the date of your passing. The effect? You might have purchased your property many, many years ago with a very low property tax basis. Now, your property might be worth much, much more. And lo and behold, your property taxes can jump up five times, 10 times, even more than what you’re paying right now. That can force your children to sell your property that you want them to keep. Why? Because they do not have the liquid funds to pay those property taxes. This is a crucial problem for individuals that want to gift their home, gift their property to their children, and ensure that their property stays with the family for multiple generations.

So, what can I do about this?

I have a living trust. My trust says that my assets go to my children. Is that enough? Well, no, because under the provisions of your trust, the asset, your property, comes out of the trust and gets distributed to your children at the time of your passing. That is when Prop 19 occurs.

But what happens if there was an alternative?

What happens if there was a way to keep the asset in trust and preserve the property tax basis for multiple generations? Well, there is. Here at the Law Offices of Hollander and Hollander, we’ve developed in house a proprietary trust called a Life and Legacy Trust. It has been developed by our special counsel who has been practicing in estate planning and real estate for over 40 years in the Bay Area. It is based on old fundamental principles, and it is designed to preserve the property tax basis of your home over multiple generations. It is an incredible product. It has saved countless homes, saved countless legacies, and that is why it is called the Life and Legacy Trust.

If you are interested in learning more, and seeing how the Life and Legacy Trust can bring tremendous value to your estate planning, please get in touch with us at the Law Offices of Hollander and Hollander.