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Thanks to: Albertson & Davidson, LLP | Estate Planning
Under California’s Proposition 13, the County Assessor’s office is not allowed to increase the appraised value of property except a small amount each year, unless there is a change in ownership. Proposition 13 is near and dear to the heart of every California real property owner. It ensures that your real property taxes do not increase dramatically just because the value of your home increases over the years. For example, if you bought a home in 1995 for $100,000, but that home is now worth $2,000,000; the county tax assessor is not allowed to value your home at $2 million for real property tax purposes. Instead, the value is limited to $100,000, plus a small percentage equal to the consumer price index or 2%, whichever is less. As such, the real property probably has an appraised value of around $125,000. The real property tax is approximately 1% of the property’s appraised value. In this example, the real property tax on a house valued at $125,000 is $1,250. Whereas, the real property tax on a house valued at $2 million is $20,000. Proposition 13 effectively saves the real property owner around $18,750 in tax ($20,000 – $1,250). That’s a huge savings. When a person dies, and a child inherits the home, the low valuation of the real property can remain intact with the child; provided that, the child files a parent-to-child exclusion form. You see, Proposition 13 allows a child to keep the parent’s tax value of the home. That’s a great benefit to any child. If this did not occur, then the tax assessor would revalue the home to its current value (in the above example, the tax value of the home would go up to $2 million), which then results in much higher real property tax being imposed. As with most good things, however, there’s a catch. The parent-to-child exclusion must be filed within three years of the decedent’s date of death. Failure to do so will result in a supplemental assessment that will charge the higher tax amount for all years when the parent-to-child exclusion was not requested. So must a Trustee file this parent-to-child exclusion form, or is that the duty of the Trust beneficiary? That depends. In the case of a Trust that will distribute real property to the Trust beneficiary quickly (within a matter of a few months) it most likely is the beneficiary’s duty to file the parent-to-child exclusion because the Trust no longer owns the home. If, however, the Trust terms require the real property to be held in Trust for several years, or if the Trustee holds the real property in Trust for several years against the Trust terms, then the Trustee would have the duty to file the parent-to-child exclusion form. Whatever happens, if you are set to receive a house or other real property from your parents, be sure someone…anyone…files a parent-to-child exclusion form. Failure to do so could cost you several thousands of dollars in extra taxes. By the way, if all the children are deceased and real property passes from a grandparent to a grandchild, then the grandchild has the right to the same exclusion. There are certain limitations that apply and it won’t work if the grandchild’s parent is still living. If you are a grandchild set to receive real property from a grandparent, be sure to check with a professional to see if you can obtain these same real property tax benefits.
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Thanks to Susan Raff
The coronavirus has been hard on those who are older and trying to stay in their homes. The financial impact on retirement accounts has been devastating, leaving some unable to make payments. Reverse mortgages are in demand these days and they’ve helped one local family. “The program gives her the necessary funds to stay in her home instead of dipping into her savings,” said Stephen Harris of Farmington. Stephen Harris was worried about his mother losing her home. Like most people, Ellen Harris’ retirement account has dropped significantly since the COVID-19 outbreak. “The best move for her was to look at the reverse mortgage program,” Stephen said.Reverse mortgages give homeowners 62-year-olds or older a line of credit. Families can use it to pay for home healthcare, but many are using it to pay taxes. “They are calling us saying, ‘let me do a reverse mortgage on my home and then I’ll pay myself back once things recover,’” said one loan originator. With a reverse mortgage, you still own on your home, but the federal government lends you money. As long as you pay your homeowners insurance and taxes, your line of credit grows. If the homeowner passes away, the money has to be paid back by the estate with minimal interest. “You can take monthly checks and you can put more money in the line of credit,” says another loan officer. Stephen has lots of stress with helping his mom and trying to comfort his brother who is in the hospital struggling with the coronavirus. His brother is a New York City Police officer who served his country on 9/11. “He was one of the first responders that day,” Stephen said. The coronavirus has certainly taken an emotional toll and a financial one. Small business owners are also using reverse mortgages to keep their businesses from going under. By Guest Writer: Emily Hoda, LAc.
Over the years, I’ve worked in many places such as hospitals and in HIV clinics, helping people of all kinds with lowered immune function. During this COVID-19 crisis, the fear levels are high and people are turning to many sources for their information. I’ve been treating patients throughout this outbreak since Acupuncture is considered an essential health care service. Since the beginning of “safer at home” implementation, I have so many emotions about coming into contact with people regularly and even touching when there is still so much unknown about how the virus spreads. I wanted to put together a list of things that I have in place to help combat the stress, anxiety, fear and to make sure my immune system is getting all the support it needs. I hope this helps people as they make the transition from the “safer at home” to a safer new reality. B R E A T H W O R K The practice can be done seated or standing with the feet together. Hands are by the sides or on the knees. 1. Deep breathing - 1 minute Inhale and exhale deeply and rapidly through the nose into the lungs and belly. 2. Square Breath - 3 - 5 minutes 10-20 seconds each, 40-60 seconds per 1 breath. Inhale / Hold the breath in / Exhale / Hold the breath out 3. Hold the breath out - 1 - 3 minutes S A L T W A T E R Gargle with warm salt-water morning and night and anytime you return from being out. Every morning, dissolve 1 – 2 teaspoons of salt in 8 oz. of lukewarm water. After a few seconds of gargling, spit the water out. Repeat this process three times. At night soak your feet in warm water with sea-salt several times a week. This will open the meridians that run throughout the body and draw out poisons, you can add lavender and eucalyptus essential oils. E S S E N T I A L O I L S Essential oils help clean the air and can be applied topically as herbal medicine. Here are a few recommendations and brands you can work within the house to take extra precautions when you need to travel. Currently, I am working with Thieves Oil, Lavender, and Eucalyptus. Thieves Oil / Warrior Oil (Arbonne) Traditionally, the original Thieves oil formula consists of these five essential oils: Clove, Lemon, Cinnamon Bark, Eucalyptus Radiata, and Rosemary. I prefer to add 50% lavender oil to this blend. Applications - apply a few drops to the following regions before leaving the house. 1. Nape of the neck - DU 16 2. Bottom of your face mask or under the chin. 3. Bottom of feet - Kidney 1 point 4. In the home via a diffuser H O T W A T E R 6 cups per day 2 am / 2 mid-day / 2 early evening Benefits: - Detoxes body - Keeps mouth and throat hydrated - Hot water helps regulate temperature. H E A L I N G FO O D S & S P I C E S Chai Tea with Star Anise ● 1 gallon of water in a 3-gallon pot. ● 1 teaspoon of crushed whole cloves ● 1 teaspoon of whole black pepper ● 3 teaspoons of crushed whole cardamom pods (or 2 tsp of cardamom seeds) ● 3 long sticks of cinnamon, or 6 short sticks ● 1-3 inches fresh ginger root, sliced (add a bit more ginger if you have the flu) ● 7 whole pieces of Star Anise (do not use the Japanese variety). Once the water is boiling, add the crushed cloves. A few minutes later, add the rest of the ingredients and keep the water at a low boil for approximately 30-45 minutes. The tea can be refrigerated for up to four days and reheated to drink as needed. Clove Tea Bring 16 oz water to a boil and add 1 Tbs cloves and turn off the heat. Let steep overnight. In the morning before eating breakfast swish clove tea around your mouth for 15 seconds and gargle before swallowing. Repeat before going to bed. This mixture makes enough for 2 days. When the body is warm, it is harder to be infected with a virus. In general, it is recommended, for virus prevention, to eat less sweet, sour, and salty foods. It is also a good idea to stay away from cold regions. Ginger Eating warming foods, such as ginger can help to give the body added warmth and heat. If a person has a fever, they can take ginger in a broth or soup to help increase the body temperature and purify any toxins out through sweat. It helps to cover up with a heavy blanket to increase body temperature. Here is a list of other foods that will increase the immune function and help with digestion which is the root of digestion. They can be eaten raw if the stomach can tolerate it or added into or cooked with food. White Onions Garlic Pepper V I T A M I N S Our front line is our immune system. In addition to taking a regular multivitamin, here are a few vitamins that will help support a healthy immune system. If you are already taking them, I’ve included alternative foods and activities that can increase them naturally in your diet and lifestyle. Vitamin C - 1000 Mg - Dark Leafy Greens, Peppers, Broccoli Vitamin D - 5000 IU - Sun exposure 1 - 2 x / day S L E E P We all know sleep is important, but lately, people have not been sleeping well, waking up and not falling asleep, unable to fall asleep. Sleep is imperative to restore the immune system function. In Chinese Medicine, the protective function or “wei qi” retreats from the exterior and goes interior. Most people are sleeping in and going to bed late, while this might be fun on a weekend it can upset normal rhythms. Additionally, many people are having more vivid or scary dreams. Sometimes eating before bed can also create insomnia. I advise my patients when possible to work out in the morning and stop eating around 6 pm. This can help restore natural rhythms and help sleep. |
Mathius Marc Gertz MBA, AFC®, CAPS
Marc has 36 years in financial services and 6 years in teaching.
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