Thank you for using the forum. My name is ***** ***** I hope to assist you today.
I reviewed your conversation above, and while I am concerned that the majority (2/3s) of this transfer ultimately will result in a property tax reassessment (and therefore, before making this transfer, I would strongly recommend meeting with a local attorney to discuss further strategies - I can go over much of the "general information" associated with this, but you will want a local tax attorney to review the matter for you).
Just to confirm a couple of issues:
- Did your brother and sister in law own the property 100%, or did they own it as joint tenants with your mother?
- (I am assuming they owned it with your mother, but I do not want to try to give you information based on an assumption)
- If your mother still owned a portion, that portion would pass to you under the parent/child transfer and remain at the existing Prop 13 rate - so your remaining dispute would be limited to the 2/3s ownership of your brother and sister in law.
- Did your brother and sister in law use the property as their primary residence?
- If so, when was the last time they used it as their primary residence?
- When your mother passed away, did she have a trust established?
- (I believe you noted that there was a will, but a trust provides a very different vehicle for dealing with assets)
- Transferring the property back to the estate in probate requires payment of some bona fide debt or obligation (the BOE may be concerned if you are fabricating one) - if probate has already closed, you would be forced to reopen probate, again, this is a very complex operation at this point - may not be perfect, and you are definitely going to want counsel (in this case a probate attorney with at least some experience (if not a lot) in tax law (this is usually not a hard combination of skills to find, just make sure that you do your due diligence when hiring counsel). If there is no contest to this action, it usually will keep costs down, but ensuring that you actually have the facts to support it will take a review of your specific case file (which I cannot do on this forum).
Understand that this transaction carries risk, the way in which you describe the property ownership does not create a very clear path to utilizing Prop 13 tax protection, and there is a very good chance that you are going to have the property reassessed.
So, prior to engaging in these very complex legal maneuvers, evaluate what the cost of the increased tax liability may be, against the cost of the proposed legal process, and then make a business judgment decision as to whether or not pursuing this is worthwhile (i.e. is it worth a shot to try to keep the tax debt down, or are we going to spend a bunch of money and end up with a higher tax liability anyway).
I am not telling you not to attempt these steps - and there is nothing wrong with using legitimate legal mechanisms to try to reduce your tax liability, but I am trying to caution you not to lose sight of the cost/benefit analysis at the outset (I have had clients who refuse to do this and ended up paying me much more than they save simply because they want to prove a point). But, I also know that different communities in our state have had property value increases so great that it is worth at least trying one or more of these steps to keep a Prop 13 tax assessment in place.
And once again, if your mother still owned 1/3 of the property, that 1/3 would remain at the current Prop 13 assessment value.