For many California families, the home is more than an address. It is where traditions are built, milestones are celebrated, and roots run deep. In Orange County and across Southern California, a home is also often a family’s most valuable asset. When parents want to pass that home on to their children, Proposition 19 has made the process more complicated — and, in some cases, more costly. Understanding how this law works is essential to protecting both your legacy and your children’s financial future.
Before Proposition 19, parents could transfer a family residence to their children while keeping the low property tax assessment under Proposition 13. This meant children could inherit the home and continue paying the same favorable property taxes, even if they did not live there. For many families, this preserved affordability and allowed property to remain in the family for generations.
With the passage of Proposition 19 in 2020, the rules changed significantly. Now, children who inherit a family home may only keep the parent’s low property tax assessment if they move in and use the home as their primary residence — and even then, the protection is limited. If the home’s current market value is more than $1 million above the assessed value, the property will be reassessed, often leading to a sharp increase in annual property taxes. For heirs who cannot or do not wish to live in the home, reassessment is virtually automatic.
The impact has been profound. Families who once expected to pass on property tax savings are now facing unexpected costs. For some children, inheriting the family home is no longer financially sustainable, forcing sales that may run counter to the parents’ wishes. In communities like Newport Beach, Irvine, or Laguna Niguel, where real estate values often rise quickly, even modest homes can exceed the reassessment threshold.
The good news is that with careful estate planning, there are strategies to help families navigate Proposition 19. Some parents explore trusts or gifting strategies; others adjust their plans to account for potential tax consequences or to provide liquidity for future expenses. The right approach depends on each family’s unique assets and goals. What is clear is that ignoring Proposition 19 can lead to unintended outcomes — both financial and emotional.
At Golden Grove Law PC, we work with California families to design estate plans that consider not only who will inherit, but also how the property tax system will impact that inheritance. By addressing Proposition 19 in your planning, you can reduce the risk of burdensome reassessments, protect your children from difficult choices, and preserve the legacy of your family home.
Your home tells the story of your family’s past. With thoughtful planning, it can also remain a foundation for your family’s future.
Whether you're preparing for the future or navigating the challenges of probate or trust disputes, Golden Grove Law PC is here to help. Our estate planning attorneys provide personalized guidance with clarity and care, focused exclusively on estate law.