New Service Transfers California Real Property from Parent’s Trust to Children by Deed and Record

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New service by Deed and Record transfers California real property from Parent’s trust to child. Service reduces real property tax, capital gains tax and transfer tax.

Quit Claim Deed

Deed And Record transfers California real property out of parent’s trust to child. Deed and Record prepares “affidavit death of trustee”, “quit claim deed” and “Claim for Reassessment Exclusion for Transfer between Parent and Child.”

Deed and Record provides new service to transfer California real property out of parent’s trust to child. Deed and Record prepares “affidavit death of trustee,” “quit claim deed” and “Claim for Reassessment Exclusion for Transfer between Parent and Child.” Documents are e-mailed to client for signature. Client returns original signed documents by mail. Deed and Record files these documents with the County. No office visit is needed.

Affidavit Death of Trustee is a declaration, under oath, by the successor trustee. The successor trustee declares the owner of real property has died and attaches a certified copy of the death certificate. The successor trustee further declares he or she is authorized to take control of the real estate property according to the terms of the trust.

The affidavit is filed with the county recorder for the public record. The successor trustee has the authority to take control of the real property. Control is limited to what is directed by the trust. Typically, the trust directs the successor trustee to distribute the real estate property to specified persons.

The quit claim deed transfers real property from the parent’s trust to the children. A quit claim deed does not contain any warranties of title or liens. The successor trustee who “quit claims” real estate simple conveys whatever ownership interest the trust has along with any debt or loans secured by the property. The successor trustee makes no promises and the property is taken “as is.”

Change in ownership of real property in California increases the base for property tax. The property base increase is either the sale price or the market value at date of ownership change. California excludes from base increase the $1 million plus the principal residence of the parents in parent-child transfers. Deed and Record prepares ‘Claim for Reassessment Exclusion for Transfer between Parent and Child’ and files this document with the county assessor’s office.

A transfer to child while the parent is living is a gift. The purchase price paid by the parent adjusted for depreciation and capital improvements, (the basis) transfers with the property. The child assumes the parent’s basis or purchase price in the property. Any future sale will incur a tax on the difference between the parent’s basis and the sales price.

A transfer or inheritance due to death receives a ‘step-up’ in basis. The parent’s purchase price or basis disappears. The new basis is the market value of the real estate on the date of death of the parent. A sale in the future incurs capital tax on the difference between the market value on date of parent’s death and the sales price. An appraisal as of date of death is needed to support the step-up in the event of an IRS audit.

Land and real property transfers incur documentary tax. This tax currently is $1.10 per thousand dollars plus any local government additions. California Revenue and Taxation Code Section 11930 exempts all grants, assigns, transfers or conveys that are gifts or transfers due to death. The quit claim deed must state under penalty of perjury on the face of the deed this exemption to avoid the documentary tax.

Press release is provided by Mark W. Bidwell, a licensed California attorney. Office is located at 4952 Warner Avenue, Suite 235, Huntington Beach, California 92649. Email is Phone number is 714-846-2888.

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Mark Bidwell

Mark W.Bidwell
Kim Nishida
since: 10/2012
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