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Subject:  Re: 401K/IRA in probate Date:  12/11/2018  4:13 PM
Author:  JAFO31 Number:  128267 of 129299


Moi: <<<Color me confused, but why will the estate owe more?>>>

"Since I'm in CA, let me take a shot at that."

Peter, thank you. This post and one of your follow-ups cleared it up for me. California real estate taxes are simply very different than Texas.

"Yes, it has to do with Prop 13. Under Prop 13, only certain heirs can retain the decedent's property tax base. As noted, siblings are not one of the approved heirs. (Children can inherit and keep the property tax base.)"

I was aware that only certain people inherited the Prop. 13 value.

"So as of the date of death, the property taxes increase (I'm assuming an increase in value of the property while the decedent owned it rather than a decrease) because a sibling is the heir."

This would never be an issue in Texas under currently rules. In Texas, properties taxes are based on the value as of January 1, and a subsequent death during the year would not change the assessment. Properties are assessed in the winter/early spring, valuation notices go out, there is a deadline for filing a challenge to the assessed value (May 31, IIRC), protest hearings are held, the Appraisal District certifies value to the various taxing authorities in early fall, the taxing authorities then set their respect tax rates, tax bills are distributed and taxes can be paid between November 1 and January 31 of the following year without be delinquent. Texas does nto have Prop. 13, but we do have homestead exemptions and if the 1/1 Owner had the exemption, then dies in March, and the estate sold the property there would be no re-assessment for such calendar year.

" . . . .

Like her, I am surprised that the title company who issued the title insurance policy for the benefit of the buyer and/or lender didn't insist on a provision for this supplemental assessment in the sale closing. If they didn't do so, they could certainly be on the hook for the assessment. It does sound like vkg is planning to do the right thing and pay the supplemental property tax assessment - which she would have done in the sale closing had everyone been on the ball. Then again, perhaps a close look at the closing settlement statement will show that those taxes were provided for in the closing. There's no way to know for sure without seeing the complete settlement statement and understanding each line on it."

I agree it seems odd that the title company would miss it.

"PS for those who care about the minutiae. In CA, annual property taxes are for the period from July 1 through June 30 of the next year. They are often referred to as something like the 2018/2019 tax bills (which are the current year bills as of the time I'm typing.) The first installment is due Nov 1 and covers the time from July 1 through Dec 31. The second installment is due Feb 1 and covers the period from Jan 1 through June 30."

Thank you for the minutiae, too.

Regards, JAFO
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