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Thank you for this VERY interesting quesition. I do not believe we have ever had this one before.
Reviewing proposition 13, I find that there is no disqualification for property held in trust.
I also find that, proposition 58, supports and continues elements of proposition 13, and clarifies that property held in trust is considered eligible property.
2. From the Q&A section of the Franchise board:
"Q Will a reappraisal be required when property is placed in a trust?
A No. In this method of holding title, there is only a reassessment if there has been a change of beneficial interest or control. Revocable trusts such as living trusts are not reassessed
NOTE: There is no reassessed the property goes into the trust. AND there is none even if the trust is revoked and put back into the names of the original trustee(s). It is reassessed when the last of the original trustees dies and the estate is distributed per terms of the trust.
According to: California Real Property Tax Issues with Estate Planning Transfers to Legal Entities and Making Gifts, Part II :
<<2. Trusts. R&TC § 62(d) provide an exclusion from "change in ownership" for transfer to certain trusts, particularly revocable trusts. Rule 462.160(b) list exclusions from change in ownership for transfers to a trust upon the creation of a trust and Rule 462(d) list exclusions upon termination of a trust, both of these including the spousal exclusion referred to above. When a trust is revocable, there is generally no change in ownership upon transfer of the real property to the trust, or upon return of the interest in the real property back to the individual trustor-transferor. In certain situations, interests in real property may need to be returned to the trustors in order to form the legal entity, and there will be no change in ownership upon doing so. >>
I apologize for providing such a complicated answer.
The answer is that you have to wait until you are age 55. This is because you are the beneficial owner and the trust is merely a vehicle of ownership. As soon as you move the property to a new owner not a spouse, a reassessment is done. to take advantage of proposition 55, it has to be within two years (rolling forward) of the date you turned age 55.
My recommendation is to make the closing on your 55th birthday.