Dear Liza, My Wife and I own two pieces of real-property that we purchased long ago, in Los Angeles.  Because of Prop. 13, our property taxes are quite low. If we pass these properties to our children via a living trust, will they have to pay more property taxes? NO! I love being able to give you a simple, happy answer. But, you are in luck. By placing these properties into a living trust, you will be able to pass them to your children without a costly probate proceeding AND because you are passing properties from a parent to a child, they will inherit your property tax rate in both properties! The transfer of real property from parents to children is currently an exception to Property 13 reassessment. Your children will have to file a form requesting that this exception be applied to the properties within three years of the transfer, but unless the law changes in CA, they won’t be reassessed. For those of my readers who do not live in California, I apologize, this is a completely state-specific blog post. California passed Prop. 13 in the 1970″s, limiting the amount of property tax that’s assessed on real property until there’s a new owner, at that point, the property tax is applied to the then-current value of the property. However, parent-to-child is one of a few exceptions to this rule.