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In a continuing legal education presentation for MyLawCLE, Murtaugh LLP attorney John P. Hannon III examines California’s property tax framework and the planning strategies available to preserve favorable property tax assessments, minimize unnecessary tax exposure, and avoid costly mistakes.
Drawing on his experience in estate planning, trust administration, and taxation, Hannon explains how Proposition 13 and Proposition 19 affect the transfer and ownership of California real estate. He also addresses the often-overlooked property tax implications of business transactions, commercial leases, and changes in ownership involving trusts and legal entities.
Key Topics Covered in the Presentation
Proposition 13 and Proposition 19: Hannon explains the protections established under Proposition 13 and the significant changes Proposition 19 introduced to intergenerational property transfers. He discusses the limitations on parent-child reassessment exclusions and the importance of planning when transferring a family residence to the next generation.
Trusts and Estate Planning: The presentation explores how revocable and irrevocable trusts are treated for property tax purposes, including how trust provisions and beneficiary designations can inadvertently trigger reassessment following a death.
Real Estate Ownership Through Legal Entities: Hannon examines the rules governing property held through LLCs, partnerships, and corporations. He explains how changes in control, transfers of ownership interests, and the original co-owner rules can affect property tax assessments, along with strategies for structuring real estate ownership to preserve favorable assessed values.
Commercial Leases and Property Transfers: Long-term leases, lease modifications, and transfers of real property can carry unexpected tax consequences. Hannon discusses circumstances that may trigger reassessment and considerations for allocating responsibility for increased property taxes.
Reporting Requirements and Reassessment Appeals: The presentation addresses filing obligations, critical deadlines, and the procedures available to property owners who wish to challenge a reassessment.
Throughout the program, Hannon uses practical examples to demonstrate how careful transaction structuring and proactive planning can protect property owners from unintended financial consequences.
Watch the Presentation
For attorneys, financial advisors, real estate professionals, and property owners navigating California’s complex property tax laws, this presentation offers valuable insight into the relationship between property ownership, estate planning, and long-term tax exposure.