Steinhart v. Co. of Los Angeles: Transfer of Life Estate is a “Change in Ownership” of Real Property

The Supreme Court of California ruled that transfer of property to a revocable trust of which the transferor is sole beneficiary does not constitute a “change in ownership” triggering property reassessment under California law because the owner is still essentially the same person. However, if that trust subsequently becomes irrevocable due to the death of the original transferor, a change in ownership has occurred because the deceased transferor retains no property rights and the entire fee interest is transferred to the trust beneficiaries. In Steinhart v. County of Los Angeles, 47 Cal. 4th 1298, ___ Cal. Rptr. 3d ___ , 2010 WL 376021(2010) the plaintiff had to pay higher property taxes on a reassessed property even though she had been given only a life estate by the deceased; the Court found that since the entire fee interest was transferred to an irrevocable trust upon the prior owner’s death, a change of ownership had occurred warranting a reassessment.

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H. Jacob Lager

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