With multi-generation family businesses as the core of our membership, we know estate planning is a key area of concern for our members. Wading through the red tape to sustain a business past the first generation and adequately preparing for estate taxes are daunting tasks. Which is why it is our mission is to accurately and efficiently educate our members on how to best plan for the future of their businesses, their personal wealth and their families.

Through our network of technical advisors including estate attorneys, CPAs and other professionals, we are able to offer, at a minimum, quarterly opportunities to review current laws legislation and best practices. Oftentimes, we collaborate with the Family Business Association of California (FBA) which represents family businesses at the legislature and in the courts statewide to overcome regulatory and economic obstacles, to ensure our family businesses are valued.

Our colleagues at FBA are currently working on a key estate planning issue, one that has the impact to affect up to 60,000 California families each year, the repeal of Proposition 19. The legislation, titled Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment, passed in the general election in November 2020 with just over 51% of the vote.

The proposition is a constitutional amendment to Prop 13 that allows seniors, the disabled and those facing loss due to wildfire to buy a new home without an increase in property taxes. At first glance, and what proponents were counting on, the new law was supposed to shelter those in need from higher taxes. However, an unintended consequence, or perhaps one not realized by voters, is that it disproportionately impacts the ability of middle-income families to leave their homes to their children or grandchildren. In many cases, after the business, family home or farm and other properties are reassessed, the beneficiaries are forced to sell to accommodate the higher annual tax bill.

Bob Rivinius, executive director of FBA says, “The Death Tax is cruel and unfair. When the children can’t come up with the cash to pay the new annual property tax bill, they are forced into an unwanted sale. Lost are California family businesses that took decades of hard work to build along with the dream of passing on a legacy to children and grandchildren.”

To learn more about FBA’s course of action, please visit Repealing Death Tax will help family businesses stay afloat – Family Business Association (myfba.org)