Facts: A family trust was terminated upon the death of the parent. The trust provided the right of first refusal to one son as the preferred trustee, but the son opted for the property to be held equally by all four siblings as tenants-in-common with each holding a 25% interest in the property. The siblings were granted an exclusion from property tax reassessment as the property was transferred from a parent to children. Later, three siblings transferred their 75% interest in the property to the preferred trustee. The transfer triggered a property tax reassessment, increasing the property taxes.
Claim: The preferred trustee sought a refund of increased taxes and an exclusion from reassessment, claiming the transfer was between parent and child since the initial transfer to the other three siblings were “step-transactions” with the ultimate goal of conveying the property to the preferred trustee.
Counter claim: The county sought to uphold the reassessment, claiming the second transfer was between siblings, not between parent and child, and thus did not qualify for the exemption.
Holding: A California Court of Appeals held reassessment was valid and the preferred trustee may not obtain a refund of the increased taxes since the second transfer was not between parent and child. [Graber v. County of San Bernardino (2013) __ CA 4th__]
