Dear Clients, Friends, and Colleagues of Aaron, Riechert, Carpol & Riffle, APC:
We hope that you are keeping healthy and safe. We rarely send firmwide emails but want to provide you with two important year-end updates.
First, Catherine (Kitty) Raye-Wong will retire on December 31, 2020. Catherine has been an important member of Aaron, Riechert, Carpol & Riffle, APC, since we merged with Raye-Wong and Associates in 2013. We wish Catherine the best in retirement and thank her for her wonderful service over these past years. We will miss working with Catherine and know many of you will feel the same way. Aaron, Riechert, Carpol & Riffle, APC, continues to be available to assist in your legal needs. If you are an existing client of Catherine’s and need our help, please call our main number (650) 368-4662 and we can direct you to the appropriate attorney.
Next, as you may know, Proposition 19 passed in the November election. Proposition 19 affects the transfer of California real property between parents and children. The proposition eliminates much of the parent-child exclusion from property tax reassessment, meaning that children may face higher property taxes for real property they receive from their parents. The parent-child reassessment exclusion will continue for principal residences, but only if the child who inherits the residence moves there. This principal residence exception will also have value limitations. Many of the rules interpreting Proposition 19 will come later. Here is a link to the Board of Equalization’s chart on the changes to the law: https://www.boe.ca.gov/prop19/.
Proposition 19 becomes effective February 16, 2021. You can still act under the old law until February 15, 2021, by gifting property to children now. Please remember that gifts require you to give up control and income from the property and prevent your child from receiving a step up in income tax basis upon your death. Due to these drawbacks and potentially others, you should not consider gifting California real property that you will need or that you expect your children will sell after your death. If you wish to discuss this further, please contact your ARCR attorney to set up a paid consultation. Due to the short window between now and February 15, 2021, we have limited availability and recommend that you contact us right away if you want to further explore your options.
We wish you the best in 2021!
Aaron, Riechert, Carpol & Riffle, APC