Buying Out Heirs to an Estate

Situation: A client came to us with a somewhat unique situation. She lived with her grandmother for the last few years before her grandmother passed. Once the estate was settled, the Grandmother had 5 heirs (including my client’s father). The heirs decided to allow my client to purchase the home from the estate. The tricky part was trying to retain the prop 13 tax base of the Grandmother to keep the taxes at a whopping $700/year instead of $6,000/yr! Unfortunately, prop 13 doesn’t allow for skipping generations. They asked us if we knew any other way to figure it out without increasing the property taxes.

Solution: While coordinating with their CPA as well as their estate attorney, we pulled cash out of the parent’s home to buy the property from the estate. Then we had our client purchase the property from her parents, thereby maintaining the prop 13 status and the lower tax base. Getting Started
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