In California, a husband creates an irrevocable trust and transfers the family home into it. Under California Proposition 13, does this transfer trigger a property tax reassessment?
Correct Answer
C) Yes, because a transfer to an irrevocable trust constitutes a change in ownership
Under California Revenue and Taxation Code §61 and §62, a transfer to an irrevocable trust generally constitutes a 'change in ownership' that triggers reassessment under Proposition 13. Unlike revocable trusts (where the trustor retains control and the transfer is excluded), an irrevocable trust removes the property from the trustor's control, constituting a true change in beneficial ownership.
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Key Terms:
Related Concepts
A variance is an authorized deviation from the existing zoning ordinance granted to a property owner who demonstrates unique hardship. It allows a use or structure that would otherwise violate the current zoning rules.
Wetlands protection refers to federal and state regulations that restrict development on wetlands — areas where water covers the soil or is near the surface for part of the year. The primary federal authority is the Clean Water Act enforced by the Army Corps of Engineers.
Zoning is the government's division of land into districts with specific permitted uses such as residential, commercial, industrial, or agricultural. It is the most common exercise of police power over private property.
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