Death and Property Taxes – Trustee Responsibilities

By Kent Meyer, Assessment Protection Network

We keep getting questions about Proposition 19 and how the parent to child exclusion was impacted. The parent to child exclusion was modified effective February 16, 2021. It severely restricted the parent to child exclusion originally effective November 6, 1986. It’s now referred to as the “Intergenerational Transfer” exclusion.

A much more concerning issue came to our attention when the law was modified that few people are aware and can end up being very costly.

Before and after the law was modified, children were required to apply for the exclusion within three years of the transfer. If the transfer is due to the parents’ death, the trustee is required to notify the Assessor of the death within 150 days.

The heirs are also required to file the exclusion before they sell the property.

If they were not reassessed before the three years has passed or prior to selling the property, they have six additional months from the time they receive a notice of supplemental or notice of escape assessment.

This is where it could become very costly, especially if the property is sold.

Under the new law, if a child did not occupy the property as their primary residence, they are not eligible for the exclusion and all property tax bills must be paid. No refunds will be
processed. If the parents died prior to February 16, 2021, refunds could be processed under very specific conditions.

If the property was sold and the Assessor was not informed of the death, the notices and bills will be mailed to the last address known by the Assessor, typically the parents’ old residence. If the notices and bills are forwarded, it could take more than six months to receive. If they are not forwarded, they may never be received.

The bills will then become a lien. This lien is not against the property but against the trustee of the estate, often one of the children. The liens are usually discovered when the child attempts to obtain a loan to purchase or refinance their own home. The lien could be in the tens of thousands of dollars.

The Assessor also determines the fair market value of the property. This value can be appealed. But the appeal must be filed within 60 days of the notice. The additional six‐month statute is only applicable to filing the parent to child exclusion.

If your parents are deceased and property is still held in their name or the name of their trust, you should consider contacting a qualified property tax specialist or an attorney.

*Kent Meyer is a property tax specialist that worked in an Assessor’s office for 17 years and has been representing property owners in front of Assessment Appeals Boards for six years as a taxpayer representative. He can be contacted at kmeyer@apntax.com or via the Assessment Protection Network website at www.apntax.com.