The structure depends on the property being encumbered and the other beneficiaries being equalized while the trust still holds title. If the property has already been distributed, start with the sibling-buyout scenario instead.
Proposition 19 left one reliable way for a child to keep the family home at (or near) the parents’ assessed value when the other children want cash: the equalization has to happen while the property is still in the trust, with money that did not come from the keeper. Every piece of this structure exists to protect those two facts — the third-party loan to the trust, the equalizing distributions out of loan proceeds, the encumbered non-pro-rata deed, the occupancy and the claim on their statutory clocks.
Run casually — “deed me the house and I’ll cash you out” — the same economics produce a transfer between beneficiaries, a reassessment to market, and a property-tax bill that can be an order of magnitude larger, permanently. The county does not grade on intent.
This desk’s role is narrow and complete: confirm the math and the authority, fund the bridge to the trust on the private side, and underwrite the keeper’s exit refinance before the bridge ever records — one desk, both originations, no hand-off in the middle of the sequence. Your role stays what it should be: the instrument, the distribution plan, and the final word on the structure. Nothing records until counsel has seen the sequence in writing.
If the acquiring child's own cash — or a loan they personally take — pays the other beneficiaries, the purchased interests read as transfers between beneficiaries: reassessed, no exclusion. The equalizing money must reach the beneficiaries from a third-party loan to the trust.
The family-home exclusion requires the keeper to make the home their principal residence and claim the homeowners' exemption within one year of the transfer. Filings have grace mechanics; the move-in itself does not.
The parent-child claim (BOE-19-P) is due within three years of transfer or before a transfer to a third party, whichever comes first; later filings generally get prospective relief only. Calendar it at distribution, not at tax-bill time.
Equalize below a defensible fair market value and the difference is part gift — gift-tax reporting for the beneficiaries who took less, and a distorted record if anyone later audits the math. Price the buyout off an appraisal; an MLS-based read here comes same-day as a sanity check first.
Most modern instruments grant the trustee power to borrow and encumber. Where the instrument is silent or restrictive, the fix is usually beneficiary consents or court instruction — a counsel decision. Authority is the first thing checked in the same-day read, because it drives the whole timeline.
Lenders sometimes ask. Whether any keeper involvement in the credit is compatible with the exclusion position is exactly the sequencing detail that gets reviewed with you before anything records — it is raised at the scenario stage here, never discovered at the closing table.
Often yes, partially. The excluded amount is the factored base-year value plus the BOE-published adjustment — $1,044,586 for transfers from February 16, 2025 through February 15, 2027. Above that, the excess adds to taxable value, but a partial exclusion on a low base is still routinely worth six figures of assessed value. The math gets run before the structure is priced.
That is an administration problem before it is a financing problem — the loan needs the distribution counsel actually intends, not unanimity for its own sake. Send the fact pattern; the structure memo will say what the financing side needs signed and by whom.
60–90 seconds, addressed to counsel: the fact pattern, the structure, what to send.
Published with the video.
60–120 seconds of motion graphics: the money flow, the timeline, the exit.
Published with the video.
Send the fact pattern — no client PII needed to quote. Same-day read on structure, timing, and whether it works.