Death of Real Property Owner
Under Proposition 13, a death is considered a change of ownership, because the real property passes from the deceased person to his or her estate. Because the Assessor must review all changes of ownership for possible reappraisal, this office receives a list each week of all persons who die in Napa County from the Health Department and all probate filings. Unless the trustee of a trust notifies us of the death of a trustor or beneficiary, late discovery of the death can generate up to eight years of escape assessments.
If the deceased owned real property, we are required to send out a Change in Ownership Statement to find out who the heirs are for that real property. Once the heirs are known, we can then determine if the property qualifies for an exclusion from reappraisal or whether we must reappraise the property.
If the property passes to a spouse or if the spouse retains a life estate in the property, there is no reappraisal until the death of the spouse. If the property passes to children, the change of ownership may be excluded from reappraisal if the appropriate Claim for Exclusion is filed with our office. If the property passes directly from grandparent(s) to grandchild(ren), there may be an exclusion if the intervening generation are all deceased or, if stepparents or in-laws, remarried.
If the decedent held the property as a partner in a partnership or shareholder in a corporation, the interspousal exclusion still applies if the spouse inherits. However, a partnership or corporation is not a "parent" and therefore the parent-to-child exclusion cannot be claimed. Depending on the percentage of ownership transferred by the death, a 100% reappraisal of the property may be required.
If the decedent has owned the property for many years and the heir(s) do not qualify for the interspousal, parent-to-child or grandparent-to-grandchild exclusions, there can be a substantial increase in the value of the property, as a new base year is established as of the date of death of the decedent. It is important to remember that the date of death is the event date for reappraisal, not the date of distribution of the trust or final distribution of the estate through probate.