recording house in CALIF after GRANTOR of trust dies

[rigaton]

California is my state and LA is my city and county. MY mom had our house in a revocable trust, with her as the grantor and me as the sole beneficiary. SHE died 4 weeks ago today.

THE house was her only residence for 50+ years and my only residence, too. THE house has a very low tax basis, about $1000, and a value of about $900,000. She owned it outright.

I am sure that I must go to the Registrar/recorder first and then the Assessor. The issue is what documents that I will need for both places; I plan to continue to living in the house and I wish to maintain the low tax basis; therefore, I must be pretty careful with the documents that I submit.

THE Reg/rec and Assessor told me via phone and email, 'DON'T ask us, as we cannot give advice, but go to our websites to read the little info that we have.' I did so and determined that

FOR THE REG/RECORDER, which probably is the first order of business to complete, I likely will need
1. death certif, but a copy or the ORIGINAL?
2. Affidavit of DEATH, perhaps notarized;
3. some form to transfer the title to the REG/rec;
4. A prop 19 exemption exclusion to keep the low property tax rate.

AM I right?

Do I have to prove that the house was my mom's primary residence, was MINE, too, and will be mine in the future? IF so, how?

For the ASSESSOR, I likely will need, according to the website,
1. change in ownership form, BOE 502D.
2. Claim for Reassessment exclusion for parent to child, BOE-58-AH.
3. Boe 266 HOMEOWNER'S exemption.
4. Death certificate--COPY or original?

Does the reg/rec or Assessor want THE FULL trust document?

DOES the reg/rec, Assessor, IRS, and/or CAL FTB want an appraisal of the house?

OH--Do I have to appear in court before a judge to have the trust revoked? I think not, as I am the only heir/person mentioned/beneficiary, and my mom had no debts. ONLY the house, by the way, was in the trust. ALL of her bank accts and stock were in joint; even they HAVE procedures to remove her name, but they are simple and the banks/stock companies already sent me the paperwork and I completed and returned it.

IF I am wrong with any of these steps, I suppose that I could lose the house by registering it incorrectly or I could incur a tremendously high yearly property tax rate, about 1% of $900,000. I have been truly devastated by the loss of my mom; I always figured that I could stay in the house forever, but I never realized that the paperwork had to be such a mystery. I am confident that I can complete all the forms, but I need to know which ones to use!

Thanks!

 

[LdiJ]

California is my state and LA is my city and county. MY mom had our house in a revocable trust, with her as the grantor and me as the sole beneficiary. SHE died 4 weeks ago today.

THE house was her only residence for 50+ years and my only residence, too. THE house has a very low tax basis, about $1000, and a value of about $900,000. She owned it outright.

I am sure that I must go to the Registrar/recorder first and then the Assessor. The issue is what documents that I will need for both places; I plan to continue to living in the house and I wish to maintain the low tax basis; therefore, I must be pretty careful with the documents that I submit.

THE Reg/rec and Assessor told me via phone and email, 'DON'T ask us, as we cannot give advice, but go to our websites to read the little info that we have.' I did so and determined that

FOR THE REG/RECORDER, which probably is the first order of business to complete, I likely will need
1. death certif, but a copy or the ORIGINAL?
2. Affidavit of DEATH, perhaps notarized;
3. some form to transfer the title to the REG/rec;
4. A prop 19 exemption exclusion to keep the low property tax rate.

AM I right?

Do I have to prove that the house was my mom's primary residence, was MINE, too, and will be mine in the future? IF so, how?

For the ASSESSOR, I likely will need, according to the website,
1. change in ownership form, BOE 502D.
2. Claim for Reassessment exclusion for parent to child, BOE-58-AH.
3. Boe 266 HOMEOWNER'S exemption.
4. Death certificate--COPY or original?

Does the reg/rec or Assessor want THE FULL trust document?

DOES the reg/rec, Assessor, IRS, and/or CAL FTB want an appraisal of the house?

OH--Do I have to appear in court before a judge to have the trust revoked? I think not, as I am the only heir/person mentioned/beneficiary, and my mom had no debts. ONLY the house, by the way, was in the trust. ALL of her bank accts and stock were in joint; even they HAVE procedures to remove her name, but they are simple and the banks/stock companies already sent me the paperwork and I completed and returned it.

IF I am wrong with any of these steps, I suppose that I could lose the house by registering it incorrectly or I could incur a tremendously high yearly property tax rate, about 1% of $900,000. I have been truly devastated by the loss of my mom; I always figured that I could stay in the house forever, but I never realized that the paperwork had to be such a mystery. I am confident that I can complete all the forms, but I need to know which ones to use!

Thanks!

I am only going to address the issue of you losing the house. That is not going to happen. You might be forced to sell the house if you cannot afford the taxes, but the money from the sale would be yours. Someone more familiar with the specific issue in CA will have to answer the other questions.

 

[Zigner]

I am only going to address the issue of you losing the house. That is not going to happen. You might be forced to sell the house if you cannot afford the taxes, but the money from the sale would be yours. Someone more familiar with the specific issue in CA will have to answer the other questions.

If things are done correctly, the OP won't see a tax increase. I would suggest that the OP seek professional assistance to make sure this is done correctly. Even if it ends up costing a little bit of money, it's well worth it.

 

[zddoodah]

MY mom had our house in a revocable trust, with her as the grantor and me as the sole beneficiary. SHE died 4 weeks ago today.

Was she also the trustee of the trust? Is title to the house vested in "[your mother's name] as Trustee of the [name of the trust]"? If not, how is title vested? Who is the successor trustee?

I am sure that I must go to the Registrar/recorder first and then the Assessor.

For what purpose would you go to either of those places?

FOR THE REG/RECORDER, which probably is the first order of business to complete, I likely will need
1. death certif, but a copy or the ORIGINAL?
2. Affidavit of DEATH, perhaps notarized;
3. some form to transfer the title to the REG/rec;
4. A prop 19 exemption exclusion to keep the low property tax rate.

AM I right?

I'm still not sure what you are seeking to accomplish. Assuming that title to the house is vested in your mother as trustee of the trust, the successor trustee may (but is not obligated to) record an affidavit of death of trustee. As the form indicates, a certified copy of the death certificate should be attached. The affidavit can be submitted for recording at the Recorder's office on Imperial Highway in Norwalk either in-person or by mail. I'd recommend doing it in person because there may be mistakes with the filing fee or otherwise that could be easily rectified in person.

Of course, if title was never transferred to your mother as trustee, this is not the appropriate thing to do. Also, this all assumes that the terms of the trust allow for the trust to continue and don't require either the sale of the house or the transfer of title to the beneficiary.

Do I have to appear in court before a judge to have the trust revoked?

Huh? Why would you want to do that?

If you're the successor trustee, you really need to confer with a local probate/trust/estate attorney. None of this is a good DIY project, and screwing things up could have expensive consequences.

 

[rigaton]

Thanks for advice. My mom was trustee and I the beneficiary. SHE died. I assume that I have to get the house out of the trust and into my name at the reg/recorder's office and the at the assessor's.

THE house should not need probate, as I am the beneficiary. IF I am wrong, then I guess that I will have to go to court for a reading of the trust. I wrote, 'to have the trust revoked,' but I meant, 'have the trust enforced.' EItHER way, I doubt that a PROBATE court is necessary.


The trust ended with my mom's death. IS the transfer of title to me, as beneficiary, automatic?

I am beneficiary, which I think is different from secondary trustee. can I still use the affidavit of DEATH with certified death certificate to change the title to my NAME as INDIVIDUAL OWNER (THANKS, ZDDOODAH!)? I will call the VAN NUYS REG/RECORDEr TO SEE IF IT CAN BE DONE THERE, RATHER THAN THE MAIN OFFICE IN NORWALK

 

[Zigner]

The point of a trust (in this situation) is that it DOESN'T end at the death of the grantor. There should be a successor trustee listed. That trustee is quite possibly (likely, even) you. If there is no successor trustee, then you have problems. You REALLY need the help of a pro on this one, as you are pretty clueless about this process. That's not a dig or an insult directed at you, it is simply a statement of the fact that you have no idea what you're doing.

 

[zddoodah]

I assume that I have to get the house out of the trust and into my name at the reg/recorder's office and the at the assessor's.

Not yet. Unfortunately, you ignored some of the questions I asked:

1. Is title to the house vested in "[your mother's name] as Trustee of the [name of the trust]"?
2. If not, how is title vested?
3. Who is the successor trustee?

Also, rather than assume that house needs to be transferred from the trust to you (as beneficiary), can you confirm that (by reading the trust instrument)?

THE house should not need probate, as I am the beneficiary.

If title to the house is vested in the trust (by being titled to "[name], as Trustee of the [name of the trust]," then that is the reason why the house is not part of the probate estate.

IF I am wrong, then I guess that I will have to go to court for a reading of the trust. I wrote, 'to have the trust revoked,' but I meant, 'have the trust enforced.' EItHER way, I doubt that a PROBATE court is necessary.

There's no such thing as a "reading of [a] trust" (or a will). If your mother's trust is an ordinary revocable trust that was set up for the purpose of avoiding probate, and if title to the house has been vested in the trust, then I agree that probate court should not be necessary. However, acting based on assumptions is often a bad idea. If you have a copy of the trust instrument, then there's no reason to assume. However, if title was not vested in the trust, then something called a Heggstad petition will probably be necessary.

The trust ended with my mom's death.

No it didn't.

IS the transfer of title to me, as beneficiary, automatic?

No.

I am beneficiary, which I think is different from secondary trustee.

A beneficiary and a trustee are different things. However, it is possible for the same person to be both the/a trustee and the/a beneficiary.

can I still use the affidavit of DEATH with certified death certificate to change the title to my NAME as INDIVIDUAL OWNER (THANKS, ZDDOODAH!)?

No.

You REALLY need the help of a pro on this one, as you are pretty clueless about this process. That's not a dig or an insult directed at you, it is simply a statement of the fact that you have no idea what you're doing.

Yup. And, by the way, when my sister died and I was left as successor trustee of her trust, I hired a trust attorney to help me with the process.

 

[rigaton]

THIS situation is more complicated than I imagined. I thank you for your patience and pointed questions.

--at the reg/recorder's office, the HOUSE is registered as
MARY JONES (MY MOM's alias for this site), trustee of the MARY JONES trust. (THAT Is exactly what you predicted!)

--I found the copy of the trust. The trust says

NAME OF TRUST
the MARY JONES (MY MOM) trust, dated november 3, 2023.

primary trustee
I (MY Mom) designate myself primary trustee.

successor trustee
I designate JOHN (ME, for this example) as successor trustee. my successor is to assume my duties as trustee upon my resignation or death.

primary beneficiary
I designate myself as primary beneficiary; upon my death, my successor trustee shall take charge of the assets.

Plan of distribution upon my death
1. PAY my debts. 2. THE net proceeds are then given to my son JOHN, the successor trustee.


--Maybe the trust did not end at my mom's death. IF it did not end, then perhaps I do not have to go to reg/recorder and assessor to change the docs; conversely, how can she, now deceased, legally own property?


--If I were to die without having changed the title, then NOBODY would get the house until the court decided, unless my reasoning is wrong. I am the only person who was mentioned in the trust, as I am her only heir/relative.

 

[LdiJ]

THIS situation is more complicated than I imagined. I thank you for your patience and pointed questions.

--at the reg/recorder's office, the HOUSE is registered as
MARY JONES (MY MOM's alias for this site), trustee of the MARY JONES trust. (THAT Is exactly what you predicted!)

--I found the copy of the trust. The trust says

NAME OF TRUST
the MARY JONES (MY MOM) trust, dated november 3, 2023.

primary trustee
I (MY Mom) designate myself primary trustee.

successor trustee
I designate JOHN (ME, for this example) as successor trustee. my successor is to assume my duties as trustee upon my resignation or death.

primary beneficiary
I designate myself as primary beneficiary; upon my death, my successor trustee shall take charge of the assets.

Plan of distribution upon my death
1. PAY my debts. 2. THE net proceeds are then given to my son JOHN, the successor trustee.


--Maybe the trust did not end at my mom's death. IF it did not end, then perhaps I do not have to go to reg/recorder and assessor to change the docs; conversely, how can she, now deceased, legally own property?


--If I were to die without having changed the title, then NOBODY would get the house until the court decided, unless my reasoning is wrong. I am the only person who was mentioned in the trust, as I am her only heir/relative.

As the successor trustee, you have the authority (if mom's debts are all paid off) to distribute the house to yourself, which would allow the deed to be put into your name. You can also, as the successor trustee, deed the house to yourself as the trustee (the way that it was deeded to your mom as the trustee). There is a difference between it being deeded to you, and being deeded to you as the trustee.

However, you honestly need a sit down consult with a local probate attorney to ensure that you understand what needs to be done to ensure that you don't end up with higher property taxes.

If mom's debts are not paid off (or can't be paid off with other assets) then the house will have to be sold, her debts paid off, and the rest of the money distributed to you, based on the way things are apparently worded.

 

[zddoodah]

Maybe the trust did not end at my mom's death.

It definitely did not end.

IF it did not end, then perhaps I do not have to go to reg/recorder and assessor to change the docs

It's not urgent, but at some point, you should record the affidavit of death of trustee. Why? Because, eventually (whether in a few months or in many years), you're going to transfer title of the property to someone (either yourself or a buyer). Since the current deed presumably transferred ownership from "Mary Jones, an unmarried woman, to Mary Jones, Trustee of the Mary Jones Trust" (or something to that effect), the affidavit will demonstrate that you're now the appropriate person to execute the transfer document.

conversely, how can she, now deceased, legally own property?

According to you, she doesn't (and, at the time of her death, didn't) own the property. Rather, the trust owns the property.

If I were to die without having changed the title, then NOBODY would get the house until the court decided, unless my reasoning is wrong.

Someone will get it. We don't have enough information to determine who will get it. One would need to read the trust instrument and your will (if you have one) and know your full family situation. However, it doesn't matter for present purposes.

What you need to do now is make a decision about whether you can/should leave the house in the trust or whether you must/should transfer title into your name (or the name of a trust you create. In order to make this decision intelligently, you should retain the services of a local trust/estate attorney (who can also assist you with the minutiae of administering and/or winding up the trust). I suggest you make sure the attorney you retain is knowledgeable about the tax issues that will come into play if/when you transfer the house out of the trust. Note also that you'll need to file both 2023 and 2024 income tax returns for your mother and (at least) a 2024 return for the trust (obviously, the 2024 returns won't have to be filed until next year). You'll likely need a CPA or other appropriate tax professional to assist you with that.

You can also, as the successor trustee, deed the house to yourself as the trustee (the way that it was deeded to your mom as the trustee).

That wouldn't happen. According to the OP, the house is currently titled to "Mary Jones, Trustee of the Mary Jones Trust." Since the OP has become the trustee of that trust, all that is needed is the affidavit of death of trustee (which I linked earlier in the thread). A deed transfer to the OP, as trustee, would likely create a big mess.

 

[rigaton]

The REPLIES ARE quite eye-opening, for which I am grateful. The depth of my ignorance or naievete is remarkable.

1. I should file an Affidavit of Death of trustee at REG/recorder's office. I can download the form from the Reg/recorder's website (https://www.lavote.gov/docs/rrcc/documents/affidavit-of-death-of-trustee.pdf) and then have it notarized. THE form seems easy to complete.

2. I could transfer the title to myself simultaneously or in a few years. I HAVE no plans to sell. I would transfer the title to myself as individual; that is, I would not create another trust. DO you know the form that I would need for that transaction?

3. My mom did not have debts, so that part of the trust ('Pay off debts first') is inapplicable.

4. My mom had income via pension and soc sec for 2023 and part of 2024, so I will file FED and CAL income tax returns for both years. I read a little about the topic and learned that I should mark 'deceased' at the top of the forms and then sign MY name to them when I complete them.

5. THE ISSUE of an income tax return for the trust in 2024 is surprising, as the trust did not have anything in it but the house. DID the house make money because it may have appreciated from the date that the trust was formed in early 11/23 to my mom's death in middle of 2/24?

6. IF the appreciation on the house is a taxable event, despite my not selling the house, I guess that I would need an appraisal of the value of the house from 11/23, which I have, and from 2/24, which I have yet to acquire.

7. IF the house did not make money via appreciation or if appreciation is only an issue if the house is sold, then perhaps I do not have to file IRS form 1051; that is, if the net income from the trust is 0, is filing necessary?

8. Does the same logic from statement 7 apply to CALIFORNIA?

THANKS

 

[STEPHAN]

What you are trying to do is not a DIY issue. You need to talk to an experienced professional. That money will be well invested.

 

[zddoodah]

THIS situation is more complicated than I imagined

That's why you should engage legal counsel. Even a smart attorney in your situation would engage legal counsel. It's just not a good DIY project.