Q: My mom owned a house in Los Angeles as trustee with me as successor trustee. She died in 2/24. Must I change the deed?

A: 1. Changing the Deed and Reassessment

When your mom, the original trustee, passed away, as the successor trustee, you typically have the responsibility to manage and eventually distribute the trust's assets according to its terms. Here's what you need to consider regarding the deed:

Transferring the Deed: As the successor trustee, you do not need to change the deed to reflect the new ownership under your name as trustee. The trust document establishes your authority to manage or eventually sell the property, not the deed.

Reassessment Concerns: The succession of trustees in a trust is not a change in ownership that will trigger a reassessment. The trust itself would have to sell or transfer the property to a separate person or entity to trigger reassessment.

2. Filing Tax Returns

You will need to consult a separate tax professional regarding the tax returns. However, if the trust isn't generating income, there will generally not be a need for annual tax returns. You can file a return showing no income to prevent future issues.

A: Based on the information you provided, here are the answers to your questions under California law:

1. Changing the deed:

Since the house was already in the trust with your mother as the trustee and you as the successor trustee, the property should automatically pass to you as the successor trustee upon her death without the need to change the deed. This is one of the main benefits of having a revocable living trust - it avoids probate and allows for a smooth transition of property to the beneficiaries. As long as the trust document is properly drafted and the property was correctly titled in the name of the trust, you should not need to change the deed or risk reassessment.

2. Filing estate tax returns:

Given that the total value of the estate is far below the federal estate tax exemption of $13,610,000 (as of 2024), you are not required to file a federal estate tax return (Form 706). California does not have a state-level estate tax or inheritance tax, so there is no need to file any state-level estate tax returns either.

However, if the trust or estate earned any income (such as rental income or interest) during the period between your mother's death and the distribution of the assets to the beneficiaries, you may need to file a fiduciary income tax return (Form 1041) for the trust or estate. This is separate from the estate tax return and is based on income, not the value of the assets.

It is always advisable to consult with a qualified estate planning attorney or tax professional to ensure that you have fulfilled all necessary legal and tax requirements based on your specific situation.

A: The previous lawyers gave you good information. As I often tell my clients, there’s a legal answer and a practical answer to your question and those answers are often different. Legally, there is no requirement that you change title to your name as trustee. But, some realtors, mortgage companies and others will only accept your name on a deed before you could sign any paperwork related to the property. So, you can try proceeding with your mother’s name as trustee, but don’t be surprised if you need to change it to your name in the future.

A: I want to clarify something in your question which impacts the answer. Your question is around being the successor trustee which is what my colleagues have addressed (no requirement to change the deed to you as the successor trustee).

HOWEVER, you also mention that you are the only heir. If you are asking if you EVER have to change the deed, that is a different question. When you administer the trust, if the trust gives you the house (or the entire estate) outright, then you are going to need to file the appropriate paperwork to put the house in your name (or better, the name of your trust).

Why? Two reasons: 1) If/when you pass away, your heir(s) will need the ability to access/inherit the property. If you haven't done the paperwork, then they have to trace it back to show who has ownership rights, etc. If they can't trace it back in the paperwork, they may have to go to court to get a court order in order to show their right to the property.

2) From a property tax standpoint, the change in ownership has already happened. It happened when your mom (the trustor) passed away. See Rev. & Tax. Code, § 61, subd. (h). "Any interests in real property that vest in persons other than the trustor (or, pursuant to Section 63, his or her spouse) when a revocable trust becomes irrevocable." and rule 462.260 (https://www.boe.ca.gov/proptaxes/pdf/rules/Rule462_260.pdf).

So if in the future either you sell the property or your heirs are trying to get the property, a change in ownership form will be filed and because the change in ownership by law happened when your mom died, the assessor's office will go all the way back to the date of your mom's death when they evaluate reassessment. Which means penalties and interest can be applied.

So what should you do? When you wrap up the trust administration and give yourself the house (or put it in your trust) submit the necessary parent-child exclusion paperwork. You mention it was your mom's residence and now it's your residence. So you should qualify from exclusion from re-assessment. (Form BOE-19-P).

A: 1. DO I have to change the deed at reg/recorder's office and risk reassessment?

No you do not have to for now unless it is too the best interest of the beneficiaries of the trust (and the interests of the trustees are not considered in any decision about the management of the trust unless you are a named beneficiary in the trust).

2. DO I have to file estate tax returns anyway?

The change of ownership already happened. You may be exempt from some sort of taxes. It is unclear if there are other heirs or beneficiaries in this trust. But, you need to consult with a tax attorney and mention that there is no property income and there was a parent-child relationship.

This is merely a discussion of general laws and not legal advice. For legal advice, more specific facts and investigations are needed. I recommend you consult with an attorney for more details.