At Temmerman, Cilley & Kohlmann, LLP, our San Jose and Danville estate planning attorneys are experts in tax planning. We provide comprehensive tax planning services to ensure our clients avoid or minimize the tax consequences of transfers of real property through wills, trusts, and other instruments. Property taxes should be carefully considered in every estate planning, business planning, or trust administration matter that involves real property.

Our attorneys provide tax planning services to clients throughout Fremont, Walnut Creek, Danville, Santa Clara, San Mateo, Alameda, Contra Costa, Santa Cruz, Monterey, San Francisco, and other counties.

Property Tax Issues Arising During Estate Planning

In California, annual property taxes are calculated as a percentage of a real property’s assessed value. Absent a “change in ownership,” assessors may increase a real property’s assessed value by not more than 2 percent each year. This is favorable to property owners because, historically, real property values have increased by more than 2 percent per year.

However, a “change in ownership” triggers a property tax reassessment and allows the County Assessor to adjust the assessed value of the real property to the current fair market value. The change in ownership rules are complex and confusing. Property owners often inadvertently trigger a reassessment when they create estate plans and instruments, which can cause significant increases in property taxes every year thereafter.

This is especially true for businesses that own real property. A transfer of even as small as a one-percent interest in a business can trigger a reassessment of all of the California real property owned by the entity. Furthermore, the State Board of Equalization now imposes substantial penalties against entities for failing to timely report a change in ownership.

Our attorneys have a thorough understanding of California property tax rules. We help our clients identify whether proposed transfers of interests in real property, or of a business owning real property, may trigger an unwanted reassessment, and we offer planning strategies to avoid or minimize property tax reassessments. We communicate directly with the State Board of Equalization and local assessors to ensure all available exclusions from reassessment are identified and properly claimed, including:

  • Parent-child transfers
  • Grandparent-grandchild transfers
  • Inter-spousal transfers
  • Transfers by persons 55 years or older

Parent-Child Transfers in San Jose

Under California property tax laws, transfers of real property between parents and children are excluded from reassessment. Transfers of real property from grandparents to grandchildren are also excluded if all parents of qualifying grandchildren are deceased as of the date of transfer. Certain property is not reassessed if certain conditions are met and the proper application is timely filed:

  • Transfers of primary residences (no value limit)
  • Transfers of the first $1 million of real property other than the primary residence

Knowledgeable estate planning assistance from expert tax attorneys

Our tax attorneys and estate planning lawyers in San Jose or Danville welcome your inquiry regarding our estate planning services and trust administration tax planning services. For further information, or to schedule a consultation, contact Temmerman, Cilley & Kohlmann, LLP today. Our San Jose and Danville law firm represents clients in Fremont, Walnut Creek, Danville, Santa Clara, San Mateo, Alameda, Contra Costa, Santa Cruz, Monterey, San Francisco, and other counties. Call our San Jose office at 408-998-9500, our Danville office at 408-998-9500 or contact Temmerman, Cilley & Kohlmann, LLP online today.