Posted by Jimmy on January 07, 2007 at 07:19:20:
This is an estate planning problem. Identify an estate planner in your area. Do not bother going to a living trust attorney. Find a tax attorney who specializes in larger case work. There is a huge body of EP strategies which most LT guys do not understand.
by the way, the use of a family limited partnership or FLLC would NOT necessarily trip a reassessment under Prop 13. if the entity is (initially) controlled 100% by your mom, there is no change in ownership. I did these transactions many times in Contra Costa, San Mateo, Santa Clara, San Francisco and Marin Counties. Only Alameda treated this as a CIO. and the law was changed a few years back, which made Alameda come into compliance with everyone else. Once you mom had relinquished control, you will have a CIO.
one little hazard. you are dancing a fine line between the estate tax and the income tax. a successful FLP will avoid/reduce the estate tax exposure, but it also kills the “step-up in basis at death” for the underlying real estate. whatever partnership interests you inherit will be stepped up. and you can make a 743 election which (sort of) remediates he problem. you will definitely need a good accountant who completely understands these rules ot guide you.