CA Proposition 58 & the Trust Loan Process: An Interview With Trust Loan Specialist Ken McNabb

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Loans to Irrevocable Trusts in California

Kenneth McNabb is an Account Representative at the Commercial Loan Corporation in Newport Beach, California. We began the interview by asking Ken to address a central issue in this field, namely communicating a rather complex process in very simple terms:

Property Tax Transfer: Hello Ken, how do you disseminate the information you want to get across to prospects and new clients? In order to address financial issues that beneficiaries need to know, to resolve what are often complex financial concerns?

Kenneth McNabb:  I tend to give general information at first, to give potential clients a solid overview… And try to determine exactly how urgent the the financial issues are, that are driving the folks I’m talking to.

Property Tax Transfer: What do you do with a family that appears to be at an impasse, for example cannot agree on the value of an inherited home?

Kenneth McNabb:  When no one in a group of siblings can agree on what the value of a home should be I typically suggest we create a Cost Benefit Analysis and have an appraisal conducted. Plus I make sure I know who wants to sell an inherited property, and who wants to keep the property… and nail down their low Proposition 13 tax base. Everyone wants that low property tax base to be intact forever, of course. Most people do not realize that they can actually save a considerable amount of money by taking out a trust loan to keep a home as opposed to having to pay realtor fees, closing costs and repair costs involved with selling a home.  In fact we save our clients on average more than $40,000.00 when compared to selling a home. That does not include the annual tax savings of over $6,200 by taking advantage of California Proposition 58!


Property Tax Transfer: When in the estate or inheritance timeline do these siblings tend to contact you, contact the firm you work for?

Kenneth McNabb: Some are urgent to get the money right away to buyout siblings…. Some even call us before anyone even passes away! Sometimes it’s a week after the death of a parent… Sometimes it’s a year after someone passes away.

Property Tax Transfer: What is the most important thing in an estate situation like that, that comes to you all mixed up and in conflict?

Kenneth McNabb: The most important thing is the loss of a parent. That’s number one. But also, they all generally agree right at the beginning that they all want to lock down a loan to a trust, to buyout a sibling… to keep an inherited property, and most importantly to make sure they nail down that low Proposition 13 tax base their parents had. Those items are always in the picture as important, even critical, elements. 

Property Tax Transfer: And the next most important thing?

Kenneth McNabb: Well, I suppose that would be – what it means to inherit property from a parent. As maybe a once-in-a-lifetime, singular event.

Property Tax Transfer: Yes, it’s definitely a profound event. Tell me, who do you primarily deal with in your average family group? Typically.

Kenneth McNabb: Not counting the exceptions… Typically, I’m generally dealing with “the captain of the team”. The trust administrator, the person who wants to retain the parents home or oldest sibling. On occasion one of the siblings in an attorney and I will deal with them.

Property Tax Transfer: What does that person, that spokesperson, typically want, most of all?

Kenneth McNabb: I’d have to say that they want to keep the low CA Proposition 13 property tax base. Plus be able to buyout the sibling or siblings who want to sell their shares in that property.

Property Tax Transfer: What about Proposition 58, getting approved, and how it all works in conjunction with a trust loan, besides securing a low CA Proposition 13 property tax base… How do you explain all that? As I see it, this is the key to success in this business. If they don’t “get it” the first time around, they usually just walk away, don’t they? People often push away what they think they can’t understand.

Kenneth McNabb: My job is to make sure they understand this process within the first 30 seconds of the conversation! As usual, I keep everything as simple as possible. I explain Proposition 58 and securing a low CA Proposition 13 property tax base in very, very simple terms… Letting them know, in plain English, without a lot of confusing technical jargon, how an exclusion functions for the property – from parent to child… I always ask them, in simple language, “Would you rather pay property taxes based on the day their parents’ bought the property… Or get hit with a super high current tax base, and pay what would be reassessed now, today…” I suppose you can guess what their choice generally is!

Property Tax Transfer: Right. Doesn’t take a genius to figure that one out!  Everyone wants that low CA Proposition 13 property tax base. Now, although you’re dealing with more or less non-conventional lending issues… How do you deal with non-conventional loan requirements? Where approval is concerned – along the pathway towards final approval for these folks.

Kenneth McNabb: Since we are lending to the trust and not to an individual in most situations, the loan process is very fast and easy.  In fact, we can often close a loan in as little as a week; providing we have received all of the required paperwork. 

Property Tax Transfer: What is the Continuing Legal Education all about? Is that for Trust & Estate attorneys only?

Kenneth McNabb: Commercial Loan Corporation specializes in loans to trusts to help our clients utilize Proposition 58 to keep a parents low Prop 13 property tax base. After doing this for so long, we have become very knowledgeable on California Proposition 58 matters. We partnered with Michael Wyatt, a California Property Tax Consultant that worked in a California Assessors office for over 15 years. Together, we created an authorized Continuing Legal Education course that Attorney’s may take to meet their California continuing legal education requirements.

Property Tax Transfer: Thank you for taking the time to speak with us Ken. If one of our readers needs assistance with California Proposition 58 or has questions about a loan to an irrevocable trust, how may they reach you?

Kenneth McNabb: They can either call us at 877-464-1066 or inquire right on our website.  We are always happy to answer any questions that they are their Attorney may have on the trust or estate loan process.  We can also provide a Free benefit analysis which shows how much each beneficiary will save by using a trust loan to keep a home as opposed to selling it. 

 

PART SEVEN: Coronavirus Crisis in California Motivating Certain Politicians to Push Harder for New Proposition 15 “Split-Roll” Property Tax

Property Taxes During the Pandemic

So let’s wrap this discussion up with a brief recap… and summary.  It  is completely obvious to any reasonable person that even though the new, proposed Proposition 15 commercial & industrial property tax on landlords and business property owners is not aimed at consumers per se – at the end of the day, it is consumers who will pay for this new property tax; paying significantly higher prices for normal everyday goods and services. 

Consumers that have for some time already been struggling with the high cost of living in the state of California… as have residents in, for example, other states at the top of the list of “most expensive states” list…  most expensive American states – such as Hawaii, New York, Washington DC, and Oregon.  States that are this costly to live in do not, and we should repeat do not, need property tax hikes, especially at a time like this when state economies are literally crumbling under the weight of a Coronavirus Pandemic, a tsunami of unemployment, now surpassing 51 million jobless claims nationwide and over 13 million looming evictions; plus a host of other related problematic issues. 

These costs, in California, encompass some of the steepest taxes in the country, including some of the highest gas, income, and sales taxes. In fact, the California Legislature just passed policies that have resulted in residents paying 48% more for electricity than the rest of the nation.  Fact, not opinion.

Adding a new property tax on top of these existing costs will only exacerbate the affordability issue for many Californians. The downside (ironically, there is no upside) of the Proposition 15 business property & industrial facility property tax that Secretary of State Padilla and other powerful political critics of property tax relief in California are not looking at.

We suggest they had better remember we are in the throes of a national Pandemic, with California running particularly high infection rates, and they would do well to start looking at a potentially massive downswing of middle class and working class personal income descent if landlords, business and commercial property owners   abruptly lose their ability to use Proposition 13 to avoid property tax reassessment. At the same time, if business properties have been passed down through family members, countless businesses will be impacted in this fashion, losing their ability to keep parents property taxes and parent to child exclusion in California, when  taking advantage of Proposition 13 and Proposition 58, working through a loan to an irrevocable trust… a Prop 58 transfer of property. 

The great fear is that the next step politicians who oppose Proposition 13 and Prop 58 will take, after opening the door to unraveling property tax relief for businesses, will be to go after property owners’  ability to take advantage of property tax transfer, or the transfer of parents property taxes upon inheriting property taxes in general.  The anxiety running through the state concerns fear that critics of 1978 Proposition 13 now pushing a property tax measure called Proposition 15 (formerly entitled Proposition 13 “Split-Roll” tax) will feel free to go after the right to avoid property tax reassessment, or parent to child transfer and parent to child exclusion in California, if Proposition 15 actually passes in November, 2020.         

Obviously, this will impact all Californians, raising rents, throwing prices of goods and services throughout the state completely off the map of normalcy.  If these folks do not begin looking at this issue more realistically, they are going to step into a deep statewide quagmire of economic quicksand, if this property tax passes in November.

Although politicians on the state level claim that their revised version of the true Proposition 13 property tax relief system, they’re calling “The Split-Roll  Proposition 15” property tax, includes a “small business exemption” that will supposedly fix everything. Don’t believe it.  We suggest you don’t drink the Cool-Aid!  This new property tax on commercial property owners in California will be crippling, to most  businesses and commercial entities, including landlords, in California.  The revised measure supposedly expands the “reassessment exemption” to small business owners with property valued at $3 million or less, up from the initial $2 million threshold.  Sounds like double-talk to most of us. 

One of “us” being the talented, courageous Rob Gutierrez, President of California Taxpayers Association. Mr. Gutierrez says that these supposed “protections” for small businesses aren’t even close to being strong enough to allow these folks to survive – with thousands of jobs for Californians not able to survive in the bargain! More people on the Unemployment Line.

“Because so many small businesses rent as opposed to own their commercial space… higher property taxes on the buildings they rent space in will of course result in more expensive rent for them”, says Mr. Gutierrez… “What that translates into is higher prices for consumers and brick-and-mortar stores. Dry cleaners, grocers, companies that cannot move, will have to find a way to pass these costs on.”

And as usual, who does this get passed on to? That’s right. Us. The consumers.

Faced with higher property taxes, commercial property owners with leases will assuredly be motivated to pass these increased costs on to their tenants.  They’ll have no choice.  For example, the owners of shopping centers or strip-malls, with numerous commercial tenants, if unable to avoid property tax reassessment or parent to child exclusion in California, will without question be compelled to increase rents on their commercial and industrial tenants. Next step, prices on goods and services go up literally overnight.  

So we can only further assume that adding a new property tax to the already heavy burden carried by residents of this great state will only serve to make current economic challenges only more challenging   for regular middle class Californians.  There’s no doubt about it.  Hence the need for California to keep the property tax system as is… Leaving the status quo alone. 

PART FIVE: Coronavirus Crisis in California Motivating State Politicians to Push Unpopular “Split-Roll” Property Tax

Property Taxes In California

As we get close to wrapping up this six part report on the devastating affect the Coronavirus crisis has  had on the California economy, and the housing market throughout the state, let’s clarify one thing – not all the news is negative.  There are positives, or upsides, in view.

California, unlike most other states in America, still provides citizens with property tax relief benefits from Proposition 13 and Proposition  58 with loans to trusts (or loans to irrevocable trusts), the legal right to transfer parents property taxes when inheriting property and inheriting property taxes.

With Proposition 13 and Proposition 58, California gives beneficiaries and property owners the ability to keep parents property taxes no matter how low the base rate is — upon property tax transfer…. with parent to child transfer or, as estate lawyers refer to it, “parent to child exclusion”.  No other state gives citizens property tax breaks anywhere near this type of property tax relief.  So no matter how challenging things get as a result of the current health crisis, Californians can always turn to these property tax benefits for positive options when dealing with inheritance assets such as real property, trust loans, sibling property buyouts and related matters.

Aside from that, there are a series of objective, updated conclusions and assumptions that the California Association of Realtors has recently provided; that they want residential and commercial as well as industrial property owners, and beneficiaries, to be aware of:  

(a) Mortgage rates are expected to remain low, or even go lower, as Coronavirus outbreaks continue nationally, as well as in California.   Therefore, economists anticipate that this will most likely help lower the cost of borrowing money and this is expected to make housing more affordable over the short term, which, if this projection is accurate, will help mitigate some of the uncertainty and negative impact on housing demands in California.

(b) Potential home buyers might be discouraged by increasing uncertainty and fear of oncoming recession. However mortgage rates recently fell to an all-time low of 3.13%. Down from 3.80% at the beginning of the year, representing cost savings over the life of a 30-year loan. These anticipated short-term economic risks are genuine,  however they may be offset by the long-term benefits of lower rates for individual borrowers.

(c) Economic volatility in California may lower demand for luxury housing, as overall household wealth declines; however this volatility may also create unique opportunities for luxury home buyers. With less luxury buyers in the market, there could be opportunities for price discounts for buyers who remain in the high-end market.

(d) Demand from foreign home buyers could be vastly reduced. As domestic buyers generally finance homes in much larger proportions to their foreign counterparts, low rates could be stimulating more domestic demand in California – offsetting the negative impact that typically goes hand-in-hand with foreign buyer demand.

(e) Much of California’s Building Industry materials are purchased from Asian countries such as Japan and China or Malasia. As the Coronavirus crisis disrupts these supply chains, the cost of these materials may increase over the short-term and become limited, thereby increasing cost of construction and reducing the pace of already tightening residential development in 2020 – 2021.

(f) Improved affordability may emerge from lower rates plus fewer new homes being constructed – as the material supply chain is impacted. This may lead to an upward pressure on home prices in California. Unsold inventory is already at low levels, so reduced construction means that is likely to continue – especially if buyers respond to lower rates.

(g) The situation in California remains fluid, and conditions could deteriorate beyond the current severity of the virus outbreak. Yet if   current economic forecasts of modest declines in GDP growth are realized, the effects of lower rates should help offset the effects of a slow economy with increased economic uncertainty so  California could still experience improved home sales and prices this year.

It’s clear that the Coronavirus is having, and will continue to have, a material impact on the California economy, and in particular the housing market through 2020 on into 2021… However, it is also safe to say that this is not necessarily the right time to panic.

The effect of lower rates will help to offset some of these movements in the housing market, and forecasts of economic growth by the California Association of Realtors and other organizations have been revised in a  downward direction, but only by tens of basis points – not hundreds.

The situation in California remains fluid; therefore C.A.R. along with attentive and realistic economists at the Public Policy Institute of California or Howard Jarvis Taxpayers Association, and other responsible organizations, will certainly be closely monitoring all of these property matters and financial issues… and will be providing all of us with accurate data, as updated information continues to develop and surface.   

>> Click Here: To Continue to Part Six…

PART THREE: Coronavirus Crisis in California Motivating State Politicians to Push Unpopular “Split-Roll”Commercial Property Tax

California PropertyTax

The Proposition 15 “Split-Roll” property tax would force many California businesses, owned by business property owners and renters alike, to literally go out of business, or relocate to a state that actually  welcomes business investment and doesn’t believe in stifling businesses with egregiously high commercial property taxation.   

The California Legislative Analyst’s Office has repeatedly warned state and local politicians that if this new property tax ballot initiative passes the entire state will most likely experience increases with respect to business operating costs all across California… and that this is also likely to influence business owners in terms of deciding whether or not to spend good money after bad in this state, or to simply pack it up and call it a day… and relocate to another state.   This is, one might say, not an attractive picture to envision for such an important state as California. 

This Split-Roll tax that California politicians want does not include any form of accountability or watchdog measures to protect California taxpayers…  There are no cost controls, no fixed requirements to produce transparency in order to avoid corruption or illicit over-spending while no one  is minding the store! 

These Split-Roll property tax supporters, typically critics of property tax relief at all costs, even removed a stop-gap on administrative expenses — so government management staffers can waste this new tax cash on overhead such as salary increases, lavish benefits and vacations, and such… with no limits or checks and balances whatsoever.  Let’s face it, something is entirely wrong with this picture.

Moreover, this property tax initiative will change the official tax assessor’s process of review for all types of properties — from a solid objective system to an arbitrary up and down mess, as we had prior to 1978 in California.  That sort of arbitrary, unpredictable tax system will lead to subjective, unpredictable property assessments. Endless, expensive legal appeals; and a rising tide of overspending on the bureaucratic side.

Let’s face it, additional property tax revenue at this level is not even needed… California taxpayers have payed into and built a Mount Everest high mountain of state and local tax cash since Proposition 13 began.  More than $240 billion just this year alone!  Next year, our competent Governor Newsom predicts a budget surplus of $21 billion!

Since Proposition 13 passed in 1978, local tax revenue (adjusted for inflation) has gone up by nearly 55%. That equals approximately $90 Billion in new spending requirements, even after another 17 million residents are added to the mix, along with accelerated cost of living in California.

These property tax revenues are not needed to accomplish what must be accomplished in this state.  California has all-time high revenues coming in, plus a significant surplus.  The type of surplus, for example, Bill Clinton would have solidified, were it not spent by the spendthrift administration that followed him.  A similar surplus formula is in motion in California as well, since the state’s local inbound government revenue is at a record high level. 

In fact, when Proposition 13 was passed into law in 1978, allowing heirs of estates and trust beneficiaries to transfer parents property taxes, with a parent to child transfer, upon inheriting property from parents, hence inheriting property taxes at a low base rate – local property tax assessments were over $6 Billion!  In fact, California state economists now confirm that local property tax has increased by over $19 Billion over the past ten years; starting at $50 billion in 2008–2009 during the  recession, to nearly $69 billion by 2019.

At any rate, beneficiaries and heirs of estates were all of a sudden   able to keep parents property taxes instead of suffering devastating tax hikes from arbitrary reassessment.  In fact, being able to avoid  property tax reassessment altogether.  While maintaining parents’ low Proposition 13 property tax rate and in 1986 with the advent of Proposition 58 and being able to buyout property shares inherited by  co-beneficiarties, being able to retain that low tax base forever after any property tax transfer from parents, which estate attorneys still refer to as a parent to child transfer or “parent to child exclusion” — which you are also most likely familiar with by now.       

Point being — an egregious property tax increase in California in Nov. 2020 from a Split-Roll tax, through the decidedly deceptive stripping down of  the 1978 Proposition 13 tax cap protection for commercial property owners — avoiding property tax reassessment for business and commercial as well as manufacturing facilities, office buildings, malls, multi-rental properties, so on and so forth.

Basically, this type of property tax relief unraveling is just simply not needed by local California government revenue collectors, in order to maintain a sound economy going forward, for the state of  California.

>> Click Here: to Continue to Part Four…

 

PART FOUR: Irrevocable Trust Distribution Loans

Irrevocable Trust Distribution Loans

Stronger Family Security With Lower Property Taxes

As beneficiaries and heirs in California inherit family real estate, they are also inheriting property taxes. They generally transfer parents property taxes; taking advantage of property tax transfer – which attorneys often refer to as parent to child transfer or parent to child exclusion… thanks to Proposition 13; and Proposition 58 which also enables beneficiary buyout of sibling property shares.

Regrettably, siblings in California who are trying to keep property left to them by parents, frequently find themselves involved in emotional and financial conflict with co-beneficiaries who wish to sell their inherited property to an outside buyer.

Fortunately, many siblings looking to retain that type of emotionally based property for their family will often be able to buy out beneficiaries looking to sell their property shares with the help of a trust lender providing a loan to an irrevocable trust, typically referred to as a beneficiary buyout of sibling property shares. 

As many Californians know by now, a trust loan, working in concert with CA Proposition 58 tax relief, makes it possible for beneficiaries to sell shares of their inherited property, also called a “beneficiary buyout of sibling property shares”, which is typically just buying out a sibling’s share of an inherited house, maybe with an acre or two of land – or, as real estate lawyers refer to it, “the transfer of property between siblings” or “sibling to sibling property transfer” – by lending money to an irrevocable trust – typically from a seasoned California irrevocable trust loan lender, commonly called trust lenders, simply specializing in trust loans of all sizes.     

Property tax transfer benefits furnished by CA Proposition 58, provides a parental property transfer tax break typically called “parent to child transfer”… whereas CA Proposition 193 provides the same type of tax relief, only for grandparent to grandchild property tax transfer – while California Proposition 13 maintains their parents low property tax base, capped at 2% for beneficiaries, thankfully avoiding property tax reassessment at current tax rates basically forever, which adds up to significant numbers over the years and decades.

Beneficiaries, with these sort of inherited property conflicts, are usually motivated to save on property taxes, and generally enlist the help of a known trust lender in California that is experienced with loans to irrevocable trusts, plus utilizing California Proposition 13 and the Proposition 58 property transfer tax break. Exactly as the O’Neil family wished to do, as it happens with the help of a company called Commercial Loan Corporation.

If qualified, and over 55 years of age, many property owners involved in this exact process can also apply a significantly lower tax rate to a secondary dwelling, as long as they own the initial inherited property for 2 years or longer.

Rules, Regulations and Critical Steps for Irrevocable Trust Loans – in Concert with California Proposition 58 or Proposition 193:

1. Deciding who will keep the property
2. Determining final trust loan amount
3. Loan to trust/estate is executed
4. Trust lender equalizes cash distribution to beneficiaries
5. Property is transferred to acquiring beneficiaries name
6. Parent child exclusion is filed, avoiding property tax reassessment
7. Five to seven day trust funding turnaround is expected
8. The trust loan is repaid, finalizing a win-win family agreement
9. No Hidden Fees

An Alternative Lending Solution for Heirs and Beneficiaries

Both beneficiaries featured here, of the O’Neil family, discovered the Commercial Loan Corp with the help of their real estate attorney. They were both extremely motivated to get a $267,000 trust loan underway as quickly as possible.

The personal issue that appeared to motivate the initial call to the trust lender, besides saving money on property taxes, is the fact that both beneficiaries have wanted to keep this property in the family for a long time – to pass the property on to a daughter, enabling that daughter to keep the property as well. She wouldn’t be able to afford this property if the taxes went up, so it was essential that they reserved a low Proposition 13 driven property tax base.

Accepted assessed value of the inherited property was $400,000. Annual property tax savings was estimated to be $1,970. One beneficiary wanted to keep the property, with the other beneficiary looking to sell to an outside buyer, however both siblings appeared to get along well and basically agreed on all key points, of both minor and major importance – and after no time at all agreed to keep the property, as soon as Senior Account Executive Tanis Alonso from Commercial Loan Corporation explained the tax savings and the trust loan and Proposition 58 combined process to them, in simple easy-to-understand terms.

Both siblings agreed that their positive childhood memories were attached to the house they were inheriting, and this was important to retain, and maintain, for both siblings emotional and financial well being.

Bottom line, the cost of selling the property outright to an outside buyer would have been $24,000. Cost to the O’Brien family using the Commercial Loan Corp loan-to-trust process (i.e., not having to sell the property), while happily being able to keep their parents beloved  home forever, at a low yearly tax rate, which is only $10,602. Savings for the O’Brien siblings was a significant $13,398.

If you have questions about a loan to an irrevocable trust, you can reach Tanis Alonso at 877-464-1066.

PART TWO: Why is California the Only State Where Trust Loans Can Equal Low Property Taxes for Life?

CALIFORNIA TRUST LOANS

Newbies in the trust loan and Proposition 58 property transfer and inheritance process learn the rules & regulations from their trust lender of choice – more often than not choosing the Commercial Loan Corp in Newport Beach, statistics tell us, for whatever reason…  Avoiding property tax reassessment on an inherited property, with the CA Proposition 58 & 13 property tax transfer – subsequently  inheriting parents property taxes – establishing significant tax relief for residential and/or business real estate.

Folks that are new to this process also learn very quickly, when they start wondering what it might cost of they used their own cash (if they actually have that much in the bank), that there is more to using a trust loan than at first appears, with respect to tax savings, but also saving of process costs and fees as well. That is often the most interesting part…

Those beneficiaries looking for a loophole, where they can possibly avoid the cost of a trust loan – find out rather quickly, and abruptly, that it will cost them nearly twice as much using their own money – and that a trust loan used in this way is literally the only way to provide themselves with enough cash to enable each heir or beneficiary the ability to receive an equal portion of the assets of a trust or estate inheritance.

They all find out that in fact this is not only the best way to go – it’s the only way to go! They all discover that this trust loan process  allows siblings to keep a family home without all the stress and cost of spending their own funds, without an expensive real estate law firm or pricey 6% realtor, they find out they can now transfer at a much lower cost – and with much lower property taxes.

And, at the same, beneficiaries discover this approach allows beneficiaries looking to sell out to get the cash they wanted from a sale, yet without having to go through all that stress and trouble and expense to sell their inherited property to a typically greedy buyer looking to negotiate them down to a much lower selling price. The obligatory price negotiation.  So you wind up spending more – and profiting less.

All around, this is a much more affordable way to go. Well, look at the numbers – you have a realtor you need to pay 6% to, right? You have a real estate attorney you need to pay $500 per hour to, correct? Plus, other incidental fees and outlays. And in the end, selling to a buyer, you wind up with far less cash in your pocket than you would going down the trust loan / Proposition 58 avenue. 

People new to trusts being used in this fashion, understand right away that their ability to keep parents property taxes and to transfer parents property taxes means they will be inheriting property taxes as a basic Proposition 13 property tax transfer, parent to child transfer,  or parent to child exclusion, that will end up saving them tens of thousands of dollars, if not hundreds of thousands of dollars, in the long run. 

Trust loans, working alongside CA Proposition 58 makes it possible for beneficiaries to sell shares of inherited property, called a beneficiary buyout of sibling property shares, while avoiding property tax reassessment.  generally buying out a sibling’s share of an inherited house – or, as real estate lawyer refer to it, “the transfer of property between siblings” or “sibling to sibling property transfer” – by lending money to an irrevocable trust – typically from an irrevocable trust loan lender, commonly called trust lenders, specializing in trust loans.          

In fact, on average, beneficiaries typically save more than $6,200 annually in property taxes – year after year, basically forever – simply by taking advantage of the tax break afforded by Proposition 58, and preserving parents low Proposition 13 property tax base – a basic CA Proposition 58 & 13 property tax transfer. Never forgetting that the trick is to choose the right trust lender… and the right real estate or estate attorney to guide you through the process.

The convenient thing about a trust lender like Commercial Loan Corp is that with a company like them, you don’t need to depend the extra money on a lawyer, as you get all those extra services in a package, basically at no extra cost.

So if you’re in that position right now, and need to make some wise decisions, as to sell or not to sell, as Shakespeare might have put it – start educating yourself with dense but well organized official gov. info, and Click Here: California State Board of Equalization Website.  You can also Click Here: for a top notch niche Proposition 58 info site Or  for  well vetted, easy to understand and highly specialized information on  trust loans, Proposition 13 & Prop 58 ~ Click Here  However, there are only a few first-class Websites like this. You might also look further  here, on this site, with one of the many blog articles or interviews that address what you want to look into, and apply it to your own scenario,  starting with: Transferring Property Taxes in California  (Click Here)

PART ONE: Why is California the Only State Where Trust Loans Can Equal Low Property Taxes for Life?

TRUST LOANS

In every American state but one, in all 3,143 counties in America,  trust funds have the reputation for being a rich person’s tool for deferring and/or lessening taxes…  And that one state where trust beneficiaries have more options, are in fact actually able to receive or assign funds outside the “normal” distribution schedule, with trust loans for a buyout of sibling property shares, for example – is California and all its’ 58 counties.   

Despite the fact that beneficiaries of  trusts in California are totally blocked by a Spendthrift Clause that is written into most California trust funds, therefore are unable to get an inheritance cash advance assignment – they can, with the help of the California  Proposition 58 tax break, if they are inheriting real property from parents, inheriting parents property taxes capped at 2% thanks to CA Proposition 13 – get a large  trust loan to work with.

As most of us know, beneficiaries in California have the right to  buy out co-beneficiaries’ (typically siblings) shares in an inherited property through a loan to an irrevocable trust.  Siblings that, for example, refuse to retain an inherited property, and are inflexibly intent on selling to an outside buyer.  Moreover, the same access to additional distribution options like a trust loan, exist for business property owners as well… Which is why there has been so much push-back against the co-called  2020 “Proposition 13” business property tax being floated  out there for California property owners to vote on.  As you can guess, this is not a popular tax!

That is precisely why so many people love owning property, and residing in, the state of California. If you’re inheriting property in California from your parents, and it’s in trust, as we mentioned,  even if the ever-present Spendthrift Clause prevents you from obtaining a probate advance or inheritance cash advance assignment from a standard inheritance advance company – you can always set yourself up with a low tax rate for your inherited property… plus get cash from a trust loan within five to seven days generally.

Every other state in the union should, by all rights, have property tax breaks similar to Proposition 13 and Proposition 58, for parent to child transfer of property, or Proposition 193, for grandparent to grandchild property transfer

However, California is, sadly, the one lonely state where you can avoid property tax reassessment, capped at 2% with Prop 13… Plus keep parents property taxes and transfer parents property taxes, inheriting parents property taxes at super low base rates. With the ability to use Prop 58 property tax transfer, with, as real estate lawyers usually call it, “a parent to child exclusion”.  Why?  We imagine it’s simply a matter of lack of leadership to pave the way, and put pressure on local politicians, as Howard Jarvis did in the mid to late 1970s –  hitting paydirt with the CA Proposition 13 tax break in 1978! The history of which can be found here.

So the great thing about inheriting property in California is that you can not only buy out beneficiaries share of an inherited house – you can also keep that contested property from parents, with a trust loan, and wind up paying incredibly discounted property tax as long as you retain that property – plus apply the same tax break to a secondary property as well, if you’re in that position, and can afford to upkeep that home or property as well.  As discussed on business sites such as Commercial Loan Corpwith articles and interviews that dig into trust loan issues using Proposition 58 as a tax break solution

As you most likely already know, this makes it possible for a beneficiary to buyout  shares of inherited property from another sibling, or co-beneficiary – which lawyers call “a beneficiary buyout of sibling property shares” – or “buying out a sibling’s share of an inherited house” – or, as realtors refer to it, the “transfer of property between siblings” or “sibling to sibling property transfer”. Always through an irrevocable trust loan lender you feel comfortable with, that you know specializes in trust loans, various uses of trusts, estates, and inheritance assets.

And the catch is, that you always need a trust lender to help you determine and assemble all the complex requirements needed to get approved for the California Proposition 58 equal distribution process. The trouble is, it doesn’t happen by itself – something that many beneficiaries don’t fully understand, when they start out down the road with this process.

>> Click Here to Continue to Part Two…

PART THREE: Coronavirus Crisis is the Last Thing the California Real Estate Market Needed!

California Real Estate and the Coronavirus

With 50 million plus people having signed up for Unemployment in the USA,  that means  not working, and counting, thanks to the Coronavirus financial Tsunami sweeping across the United States, and most of the world, every single state in this country should have property tax transfer rights, to keep parents property taxes,  with their Proposition 13 protected property tax base.  In other words, maintaining the legal right to transfer parents property taxes to the property they inherit, whenever inheriting property taxes, regardless of the value of the property they receive.

Basically, in every state, we should have low tax base for home owners when inheriting a home and/or land from parents, from Proposition 13 tax breaks and Proposition 58 property transfer tax discounts, with Proposition 13 protected property tax base; always avoiding property tax reassessment.  This would help so many struggling middle class and working class Americans right now; during a Pandemic that unfortunately is going to be with us for some time.  Even if we get a vaccine soon.  

Were it not for Proposition 13 and Proposition 58 in California,  property taxes would be prohibiting many home owners from both retaining a home they have bought, as well as real property they may have inherited. 

With property taxes in 49 other states making life so difficult for so many home owners during normal times… when you examine the hardships property taxes are causing property owners throughout the United States during an economic depression caused by an out of control Pandemic… you have to come to the conclusion that something must be long-term.  All the more reason for genuine property tax relief to be installed immediately in states sinking deeper into recession, and even depression, month after month.  With no let up in sight.  

It’s not always about making more, its often about spending less.  And property taxes cut deeply into peoples’ savings every year when it comes time to pay those taxes.  With no payment plan allowed!  Especially during a Pandemic and ensuing economic crisis.  So you either come up with the cash, or lose your home!  And with so many home owners out of work during the Covid 19 crisis – and with so many more to come, surely  property tax relief would certainly be one solution to consider as a national disaster relief option for lawmakers  in Washington…. if they could be forced by massive public opinion to focus on long-term solutions.

And this issue of property tax relief touches so many situations and financial activities.  For example, in California it’s stunning to see how so many beneficiaries and heirs of trusts and estates opt for a loan to an irrevocable trust from a trust lender, so they can buyout property shares from other beneficiaries, usually siblings – saving a great deal of money on initial transfers of  property.  Plus retaining parents property taxes with Proposition 13 protected property tax base – allowing beneficiaries who do not wish to sell out, to keep a beloved home inherited from parents they love, which middle class beneficiaries typically, otherwise, could never afford to keep, due to tax hikes & property taxes reassessed at current rates. Thus saving tens of thousands of dollars in property tax breaks on inherited property from parents – basically forever. 

We don’t realistically expect passive Lawmakers or Senators  to consider this immediately, as they clearly aren’t giving the plight of their constituents much thought – however some could be working on this a little harder, with a little more imagination – swapping out all those cliches for a little more action!

Heirs in every state should be able to keep parents property taxes, transfer parents property taxes when inheriting property taxes from inherited property. And this includes any type of property tax transfer, as we’ve mentioned here already with parent to child transfer, or as lawyers call it, “parent to child exclusion”.   There should be a state tax break every American property owner has a right to, no matter what state he or she resides in. The public in the Midwest and down South should be thinking about that, and hammering away at their representatives in Washington, instead of obsessing on guns and political red herrings.

Home owners and beneficiaries in every state right now are suffering like everyone else… as bread lines accelerate  in many states, everywhere, especially in those Midwestern and Southern states.  In every state, property owners should be able to use a trust loan to resolve inherited property conflicts, just as they can in California between beneficiaries, working with CA Proposition 58 – enabling co-beneficiaries in every state in the union to sell shares of inherited property, a beneficiary buyout of sibling property shares… while avoiding property tax reassessment. generally buying out a sibling’s share of an inherited house – as realtors call it, “transfer of property between siblings” or “sibling to sibling property transfer” – lending money to an irrevocable trust from a trust lender… Just like in California.

Besides one short lived effort, and thank goodness for it, to help middle class and working class Americans to bridge the gap between personal disaster and paying a few bills – our national Congress must develop a more realistic, long-term initiative to help the country more than simply for a month or two, with $1200 or $2400.  No one is quite sure exactly what that entails…

However, we’re all sure about one thing.  This country needs something to help citizens move forward with less anxiety and fear… and it’s clear that lowering, and perhaps deferring, property taxes is one solution that, although it might not put new dollars in the pocket of Americans,  it certainly would help home owners and business or commercial property owners financially, lowering property taxes, through tax relief hopefully similar to the California  1978 Proposition 13 and 1986 Proposition 58 property tax relief measures.  These are perfect models to mirror,  in every state and county throughout the United States of America.

>> Click Here to Continue, for Part Four…