The Scaries of Estate Planning (Halloween Edition)

Estate Planning can be scary when big events in your life creep up on you. Here are some examples: you recently got married, you open escrow on your new home, or you just had a baby! Significant life events happen at various times throughout our lives, and it is essential to prepare for your future, and the future of your loved ones. The best way to prepare is through your Estate Planning.

Let’s face it, planning for after your death is often a scary thing to think about. Our morality is inevitable. And, as scary as it may be, you will not always be around to take care of your loved ones. However, you can take care of and support your loved ones through a comprehensive Estate Plan created during your life.

It is important to remember that your planning will give your loved ones’ peace of mind. Estate Planning can be a seamless process that takes away the haunting feeling of things left undone.

At Tresp Law, APC our attorneys make it a priority to ensure our clients’ satisfaction and peace of mind during the Estate Planning process. They are willing to go above and beyond to ensure you are taken care of. Call us any time at 858-248-2779 for a free consultation.

National Estate Planning Awareness Week 2022

This week, October 17 - 23, 2022, is officially National Estate Planning Awareness Week, which highlights the perfect time to become educated about the process of Estate Planning and why it is essential in your lives. Individuals commonly avoid Estate Planning due to being busy, feeling like they can wait until they get older, not wanting to think about death, or thinking they don't have enough assets to worry about. Despite these reasons to put Estate Planning off to the side, National Estate Planning Awareness Week is dedicated to making the public aware of how important it is to plan for the future.

Although it may be scary to plan for incapacity or your death, it is good to know that you are helping your loved ones by making the process easier. Planning also helps with potentially minimizing taxes and expenses, ensuring your privacy is protected, and that assets are distributed according to your wishes.

It is critical to seek counsel from an attorney to guide you through the process, and successfully draft your trust, will, and other planning documents. Our attorneys at Tresp Law, APC will provide an engaging experience where clients feel comfortable with every decision made. Contact us today at 858-248-2779 to schedule a free consultation.

Beware the Dreaded Reassessment

California is unique in many ways, but one of the most unique features of California is the set of laws governing property tax assessments and reassessments of property value. These rules changed within the last couple of years, so now is a good time to examine the current law.

When you purchase real property, the value of the purchase becomes your property tax basis. This tax basis is used to calculate your annual property taxes. Typically, property taxes are 1% of the tax basis value annually, but there are often local add on bonds or taxes that will increase this base percentage a bit.

Proposition 13 (1978) – Property tax basis cannot be increased more than 2% annually unless there is a change of ownership. A change of ownership occurs when a property is sold or transferred.

Proposition 58 (1986) – Property passing from a parent to child (or vice versa) is excluded from reassessment. This means the property tax basis remains the same. There is an unlimited exclusion for the primary residence, and up to an additional $1,000,000 exclusion for commercial and/or investment property

Proposition 193 (1996) – Property passing from grandparent to grandchild (or vice versa) is excluded from reassessment if the middle generation is predeceased. Same as Prop 58, property tax basis remains the same. Same as Prop 58 regarding exclusion limitations.

Proposition 19 (2020) – Prop 58 and 193 exclusions now only apply to transfers of the parent/child’s primary residence and the receiving parent/child must use the property as his/her primary residence. The amount of exclusion is also limited to $1,000,000.

As you can see, Proposition 19 changed many key attributes of the prior law. With the primary residency requirement for the inheriting party, many children will not be able to keep the property inherited by their parents. In addition, it completely eliminated the exclusion for commercial or investment property.Don’t get caught off guard by a reassessment. Contact Tresp Law, APC today to ensure that the value of your home remains with you and doesn’t get consumed by taxes. Call us any time at 858-248-2779 for a free consultation.

Will My Trustee Kick Me Out of My Home?

Does a trustee have to abide by a provision in a trust stating you want to remain in your home until death?

Typically, you are the Settlor or creator of your own trust. During your lifetime, and while you have capacity, you will also be the trustee of your trust. Should you ever become incapacitated, a Successor Trustee or prior Co-Trustee who will become sole-acting Trustee will step up and begin to manage the trust on your behalf. 

Trustees owe fiduciary duties to the beneficiaries. During your lifetime, you are also the beneficial owner of trust assets. Therefore, the trustee will owe their fiduciary duties to you. Part of a trustee’s role is to follow the terms of the trust. If you include a provision in your trust to the effect of your desire to remain in your home until death, a trustee will have to do their best to follow through with that provision. Most often, this will be a considerable cost as there may be mortgage payments, utilities, maintenance, property taxes, HOA fees, etc. to be paid on or in relation to the real property. When you set up and fund your trust, you will want to ensure that your trust has access to sufficient cash in order to allow the trustee to cover expenses related to your residence in an effort to allow you to stay at home as long as possible. This will be an important topic of conversation with your planning attorney to ensure you properly fund your trust! 

Ultimately, a trustee is responsible to you, as a beneficiary. Contact our offices to schedule a consultation with one of our planning attorneys to ensure that your wishes to remain in your home are included in your estate plan. Contact Tresp Law, APC today to consult about any estate planning concerns you may have, including ensuring that you can stay in your home as long as you would like. Call us any time at 858-248-2779 for a free consultation.