Transfers Into or Out of Trusts
- Holding property in a trust does not prevent reassessment. Whether a transfer to or from a trust is reassessable depends on who holds the beneficial interest. If the beneficial interest changes, it may be considered a change in ownership.
- In most cases, transfers into or out of trusts will not be reassessed if the current owner and/or their spouse or domestic partner (registered with the California Secretary of State) is the present beneficiary of the trust.
- If someone other than the property owner or their spouse or registered domestic partner is named as a present beneficiary of the trust, the property will be reassessed.
- Since trust beneficiaries are usually not listed on deeds or other public documents, the Assessor may ask for a copy of the trust to determine who holds the beneficial interest. Trust documents shared with the Assessor are kept confidential and are not public records.
- If you hold property in joint tenancy with someone other than a spouse or registered domestic partner, transferring the property to a revocable trust may break the joint tenancy. This could lead to property tax reassessment. If your property is held in joint tenancy, talk with an attorney or property tax professional before making any title changes. They can help you understand how those changes may affect your property taxes.
Inheritance From Parents or Grandparents
As noted above, holding property in a trust does not prevent reassessment. When a real property owner passes away, the property is reassessed based on the date of death.
In some cases, some or all of the reassessment may be excluded if the property was inherited from a parent or grandparent. Please refer to our Proposition 19 info page or the California Board of Equalization website for more information.
Transfers to Siblings
Transfers between siblings, including inherited interests, are generally subject to reassessment. For example, if you and a sibling inherit equal shares of a property, and you transfer your share to them (with or without a buy-out), the transferred portion will be reassessed.
However, if a parent’s trust does not require a pro-rata distribution, the trustee may give the full property to one sibling and assets of equal value to the other. In this case, you must provide supporting documents to the Assessor for review.
We strongly recommend speaking with an attorney or property tax professional to understand the tax effects of any unequal distributions of inherited property.