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Elderlaw: 08/15/2019

Elderlaw Advocates August 15, 2019



Dear Len & Rosie,

My adopted father built his own home on property in Glen Ellen in 1964. My mother and I contributed substantial labor towards building up the home, road and ranch. My dad always said, “This will all be yours one day. You aren’t just working for me, you’re working for yourself.”

My mom passed away 10 years ago and since then my dad got into a relationship with one of her best friends, who has since moved in. My dad feels that he owes her something for living with him and caring for the place for the past nine years.

Dad says he wants her to be able to live there after he dies for as long as she wants to or unless she remarries. I have no problem with this plan but as far as I know he has not made a will to this effect. He is dragging his feet on legal paperwork.

I am afraid that when he dies, she will claim some sort of squatter’s rights and try to take the place away from me or run up extreme maintenance costs that I can’t cover, forcing me to sell the home. What can I do to guarantee that I will get the house and land as I was promised all these years?

Richard

Dear Richard,

There’s no such thing as common law marriage in California. She’s not his wife. On the other hand, an adopted child is treated as a natural child under the eyes of the law. If your father keeps everything in his name and dies without a will or trust, you will inherit everything through probate. Ordinarily, the only way she would be entitled to any of your father’s assets is if he adds her to the deed to the property or leaves something to her in his will or trust.

However, the girlfriend could claim that your father promised to provide her with a home in return for her taking care of him, but you can do that too. Even though your father never signed a contract obligating him to leave you the home, the work you did for him in reliance of his promise that “all this will be yours someday” can be enforced in court.

The hard part is proving it, because you could lose. The smart thing for you to do is to urge your father to create an estate plan. He ought to have a revocable trust to avoid probate. He can make you the trustee after he dies, and leave his girlfriend the right to live in his home until she dies or gets married. He needs to see an estate planning attorney. If he does not, then all of his assurances to both you and his girlfriend could become nothing other than empty promises and a difficult lawsuit.

Len & Rosie

Dear Len & Rosie,

My rich neighbor told me that her father died last year and that she inherited his multi-million dollar home, and pays less than $4,000 a year in property tax. She’s a CPA, so maybe she knows things that I don’t, but how could this be true? That would mean that I pay more in property tax for my two-bedroom condo than she does for the six-bedroom mansion that she got for free.

Anna

Dear Anna,

It’s likely that your neighbor is telling you the truth. No matter how unfair it seems, these huge discrepancies in property tax exist under California law. Under California’s Proposition 58, parents can pass the family home to their children, and the children can keep the parent’s property tax base. It doesn’t matter whether the home is worth $500,000 or $5,000,000.

If mom and dad purchased a home in 1990 for $200,000, and pay annual property taxes of about $2,500, if that same home is worth $3,000,000 when they die, the children will inherit both the home and the low property tax bill. That’s why your rich neighbor pays less than you for the luxury home she got for free.

And that’s not all. Under Prop 58, parents can also pass $1 million of other real property to the kids with no reassessment – and that one million is not the actual value of the property, it’s $1 million of the “assessed” value of property that shows up on your property tax bill – it’s the Prop 13 value. So if you own a commercial property in San Francisco that is now worth $5,000,000, but the assessed value on your property tax bill is only $400,000, you can pass it on to your children, and they will get your $400,000 property tax base for a multi-million dollar commercial property.

As you can imagine, there are right ways and wrong ways of passing real property to children so that they can take advantage of the Prop 58 exclusion. For example, if you hold your property in a business entity like an LLC, the parent to child exclusion won’t apply. If you want your children to be able to take advantage of the generous Prop 58 laws, be sure to consult an estate planning attorney who has experience in the area.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, Noon-1 p.m. and Sundays, 4-7 p.m. on KGO Radio 810 AM.
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Community Calendar

Oakmont Farmers Market
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25th Annual Starlight Dinner & Auction
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Starlight Dinner & Auction for Mayacamas fire department
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Free Bookmobile coming to town
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Campfire program
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Kenwood Community Church service
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