Real estate is the biggest area of confusion for my clients. Deeds are hard to understand; the underlying laws are even worse! A home represents security, stability, and legacy – but most people are not taking steps to protect their biggest and most important asset. When estate planning is not done the right way, property can quickly turn into a source of conflict, delay, and unexpected expense.
If you’ve ever felt confused about your deed, worried about probate costs, or unsure how Proposition 19 might affect your children, you’re not alone. Most Californians don’t learn these rules until it’s too late — and that’s why planning ahead matters so much.
This guide will walk you through:
- Why probate in California is so costly.
- How Proposition 19 affects inherited real estate.
- Common deed mistakes that create unintended outcomes.
- Five must-do tips for all real estate owners.
- What you should do if you co-own property with others.
Lesson 1: Condos and TICs — The Hidden Risks
Small condos and tenancy-in-common (TIC) arrangements are common in California’s major cities. But what happens if one co-owner passes away without a trust?
The answer: everyone else is impacted. Without a trust, that share of the property goes through probate. This process can take years, during which:
- HOA dues may go unpaid.
- Repairs and capital contributions may be delayed.
- Refinancing can become impossible.
- Vacant units can deteriorate and even affect the rest of the property.
It can feel frustrating to realize that even if you’ve done your own planning, a neighbor’s lack of planning could still harm you. That’s not your fault — it’s simply how probate law works.
Lesson 2: Statutory Probate Fees in California
Many people assume probate fees are based on the equity in their home. Unfortunately, California law calculates fees on the gross value.
Example:
- Home value: $2,000,000
- Mortgage: $1,500,000
- Equity: $500,000
For probate purposes, the estate is valued at $2 million. Both the attorney and the executor are each paid statutory fees based on the full $2 million, even though the heirs only receive $500,000 in equity.
Understandably, families are shocked when they learn this. It feels unfair to pay fees on money that isn’t really theirs. But it’s the law.
Use the Probate Fee Calculator on my website to see what probate could cost for your home.
Lesson 3: Proposition 19 and Inherited Property
Proposition 19 significantly changed how property is taxed when passed down to children.
Before Prop 19:
Children could inherit a parent’s home (and in many cases, rental property) and keep the parent’s low property tax base.
After Prop 19:
- Children may only keep the low tax base if they move into the inherited property as their primary residence, and even then, only for up to $1,000,000 of the fair market value.
- If they don’t, the property is reassessed at full market value.
- Rental properties always trigger reassessment.
The impact: Families that expected to keep a home may now face tax bills that are five to ten times higher. I’ve seen property taxes jump from $1,500 to $18,000 a year after reassessment.
It’s natural to feel blindsided by this — the rules changed suddenly, and many families never saw it coming. But planning ahead can soften the impact.
Lesson 4: DIY Deed Mistakes
Property deeds look straightforward, but small wording choices can have big consequences. Common issues include:
- Unclear ownership percentages. Clients tell me they own 20% of a property, while others own 80% — but the deed says 50/50. Without percentages written, California law assumes equal ownership.
- Joint tenancy vs tenancy in common. Deeds that combine names without clarity can create inheritance outcomes the owners never intended.
- “Only one spouse owns the property.” In California, unless there’s a prenuptial agreement, community property laws often override this assumption.
If you feel uneasy because you’re not sure exactly what your deed says, you’re not alone. Most people never look closely until there’s a problem.
Lesson 5: Five Must-Do Tips for Every California Homeowner
Here’s a simple framework for protecting your home and your heirs:
- Create a revocable trust → Keeps your home out of probate.
- Update your address → With all of your advisors, the IRS, and the post office.
- Check your title → Community property, joint tenancy, or TIC ownership all carry different tax and inheritance results.
- Review your life insurance → Ensure it’s enough to pay off the mortgage..
- Update your homeowners and umbrella policies → Property values have risen, and many Californians are underinsured. Your home/auto/umbrella should all work together to provide you with terrific asset protection.
If this list feels like a lot, start with just one step. Each action reduces risk and brings you closer to peace of mind.
Lesson 6: Co-Ownership Done Right
If you own real estate with others, you’re essentially in business together. Without agreements, even close families can find themselves in conflict.
The big three every co-owner needs:
- A revocable trust for each owner.
- Strong insurance coverage (homeowners, umbrella, and possibly life).
- A co-ownership agreement that sets expectations and rules.
Additional protections include:
- Title clarity (TIC, joint tenancy, community property).
- Reserve funds for repairs.
- Rules for decision-making (majority vs unanimous consent).
- Right of first refusal if someone wants to sell.
- Exit strategies and buy-sell provisions.
- LLCs or partnerships for investment properties.
- Durable powers of attorney in case someone becomes incapacitated.
It’s normal to feel nervous about co-ownership — especially if your property is tied up with siblings, friends, or investors. But having the right structure turns co-ownership into a strength, not a stress.
Bringing It All Together
Real estate can either be the foundation of your family’s financial future or a source of costly problems. The difference comes down to planning.
- Probate is expensive — and avoidable.
- Proposition 19 reshaped inheritance and tax rules.
- DIY deeds create confusion and conflict.
- A handful of simple steps can protect every homeowner.
- Co-ownership works best with clear agreements.
If you’ve been feeling guilty about not having a plan, please know this: you are further along than you think. Just by learning about these risks, you’ve already taken the hardest step — awareness.
Next Steps
- Use our Probate Fee Calculator to see what probate might cost for your estate.
- Learn more by attending a workshop.
- Contact us to schedule a discovery call.
- Watch this video to learn how probate, deeds, and trusts impact California real estate. Discover the steps you can take now to protect your home and your loved ones.
At De Fonte Law PC, we call this Estate Planning with Heart®. We help Californians protect their property, preserve family harmony, and ensure their legacy carries on the way they intend.
