Property taxes – giving your house to your grandkids (Prop 193)

Normally parents pass their estate to their children, and if their children die before they die, then to their children’s children (their grandchildren). The property goes down the bloodline to lineal descendants. A quick and efficient way to do this is with a revocable living trust.

Most people do not leave property to the spouses of their children (i.e., a son-in-law or daughter-in-law). A possible reason is that if their child dies, the spouse of that child might remarry. The property could end up with an unknown new spouse in a new marriage and never with their grandchildren.

Occasionally grandparents want their real estate to pass directly at death to their grandchild. Whether the property taxes will be affected depends upon whether their child (the parent of the grandchild) is alive. A grandparent cannot skip over his or her living child and transfer property to the living child’s child (the grandchild) without affecting the real property taxes. The rule does not apply if their child is already deceased.

There are reasons not to be concerned about increased property taxes:

(1). If the tax increase is small (because the property did not increase

substantially in value from the time the grandparents bought it); or

(2). The property is desired by the grandchild in spite of any dramatic increase in the property taxes.

 

 

 

Comments are closed.