At Botti & Morison, we are committed to keeping our clients informed about the latest developments in estate planning and tax laws. The recent changes brought about by Prop 19 have had significant negative impacts on estate planning for our clients. Virtually every one of our clients regrets that Prop 19 has passed. Our clients want to know what can be done about it. What follows is what can be done by you.
The Howard Jarvis Taxpayers Association (HJTA) is taking a significant step to address these issues with an Initiative Constitutional Amendment set for the November 2024 Ballot. Following, we explore what this initiative entails and how it aims to restore the benefits our clients have enjoyed for decades prior to Prop 19.
Prop 19’s Impact on Estate Planning
Proposition 19, which barely passed in 2020, substantially changed California’s property tax laws. Most people who voted for it – or failed to vote at all – did not realize its consequences. While it did introduce some positive elements, such as the ability to transfer property tax benefits to a new home for a narrowly defined group of people, it also had dramatic and unadvertised negative consequences. Specifically, it curtailed the intergenerational benefits provided under widely popular Prop 58, allowing parents to transfer their homes and limited other properties to their children without a significant property tax reassessment. As a result, our client’s ability to leave their family home or cherished, multi-generational vacation property to their family has been dramatically reduced by the effects of Prop 19.
As a result of Prop 19, most of our client’s children have faced the difficult choice of selling inherited properties to avoid substantial property tax increases. Others have been reassessed, leading to financial challenges in maintaining their family homes. In response to these concerns, the Howard Jarvis Taxpayers Association has taken action to restore the rights and benefits that were lost by our clients with the passage of Prop 19.
The HJTA’s Initiative: Restoring Rights
The HJTA’s initiative, known as the “Repeal the Death Tax Act,” is designed to address these issues and restore Californians’ constitutional rights. Specifically, it aims to:
Restore Parent-Child Transfer Rights: The initiative seeks to reinstate the right for parents to transfer their homes and limited other properties to their children without triggering a massive reassessment. This restoration would provide much-needed relief for families looking to pass down their homes to the next generation.
Retroactive Relief: The initiative not only aims to bring back the benefits of Prop 58 but also provides retroactive relief for those adversely impacted by Prop 19. This means that those who have already faced property tax increases due to Prop 19 may have the opportunity to have their former base-year value under Prop 13 restored to their property. This is a significant feature that will undo the wrongs of Prop 19.
Take Action Now: How to Support the Initiative
If you’re interested in supporting the HJTA’s initiative to Repeal Prop 19, you can take action by downloading the official legal petition to put this initiative on the November 2024 ballot. To access the petition and find detailed instructions on downloading and submitting it, visit the HJTA’s website. You can also share this blog article on social media using the icons above or copy and paste it to share via email with other individuals who share your belief that Prop 19 should be repealed.
We understand the importance of staying informed about changes in estate planning and tax laws that can affect our clients. The HJTA’s initiative to Repeal Prop 19 represents a significant effort to address the issues created by Prop 19. We encourage you to explore this initiative further and take action to support its placement on the November 2024 ballot. If you have any questions or need assistance with your estate planning, please don’t hesitate to contact us, call 877-585-1885, or attend one of our upcoming free workshops.
Your estate planning needs are our top priority, and we’re here to help you navigate these complex legal matters. We have six offices throughout Central and Southern California to serve you.
Christopher E. Botti, Esq., Certified Specialist in Estate Planning, Trust and Probate Law State Bar of California Board of Legal Specialization