07/13/2026
Comment: pdf
Note: Prop 19 also limits what’s excluded from reassessment to base + $1M (adjusted for inflation)
I think that Prop 19 is a sibling relationship killer.
What I mean by this is that it drives an additional wedge between siblings after a parent’s death and it’s worse when they don’t understand the rules.
Last week, I posted some reels on property taxes when someone dies, and there were tons of comments and questions about the parent-child exclusion under Prop 19.
Let me give you an example.
Let’s take a very simple distribution that I along with many estate planning attorneys do for clients: everything in equal share to my two children, and let’s say the trust has just the house.
Before Prop 19 the kids could just inherit a principal residence it and rent it out. And the original tax assessment was preserved. The tax bill basically stayed the same.
Now after Prop 19, the new Parent-Child Exclusion rules require at least one of the kids to move in as their main house, and they have to do so within a year after the date of death. And there is up to a limit in the amount that won’t get reassessed.
So now there’s an incentive to move in.
Let’s say the child who moves in can’t afford to pay the sibling rent. The sibling will say, just buy me out. So they take a cash out refinance and buys the other sibling out. And guess what the county assessor will say? The buy out was a new transfer and the property is now subject to a reassessment, effectively killing the parent child exclusion.
Splitting up a house up was always tricky, but Prop 19 made it even harder.
If you want a short PDF I made about the parent child exclusion in plain English, comment pdf below.
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