Supplemental Taxes are generally levied when there is a change in ownership – including when property is inherited upon the owner's death, or when it is sold.

• Many erroneously assume that ALL property taxes are paid at close of escrow (when property is sold) or that ALL taxes are impounded – when the an impound account holds back mortgage and property taxes. This is incorrect. Accordingly to a Los Angele County Assessor Newsletter issued on June 27, 2024, Supplemental Property Taxes are calculated and billed to the homeowner Separately from escrow or impound accounts.

• This is especially important in the context of Probate and Trust Administration, when an Estate Representative or a Successor Trustee is dealing with the sale or transfer of a deceased owner's real property to heirs of the Estate or Trust Beneficiaries. Trustees, Executors and Administrators must be acutely aware of this important liability which can be in the thousands of dollars, AND which comes sometimes MANY MONTHS after an Estate is closed or a Trust – fully distributed.

• A supplemental property tax liability needs to be adequately estimated and factored into holding a RESERVE for the payment of this bill, which arrives six to nine months (or sometimes later) after escrow has closed and distributions have been made to heirs/beneficiaries.  If the Trustee/Executor does not hold adequate funds in reserve, they will be shocked to learn that they have to pay another, sometimes very high bill, with a penalty attached.

• Quoting the Los Angeles County Assessor as noted in their June 27, 2023 newsletter:

“It's important to also remember that supplemental property tax bills are not paid at the close of escrow when you purchase of a property. Additionally, if you set-up an impound account to pay your mortgage, taxes and insurance, it does not pay supplemental property taxes. They are billed separately. This is important as many homeowners are confused about what is paid through an impound account. For those who mistakenly think that these taxes are paid through the impound account, a hefty 10% penalty may await you!”

Recognizing  this “trap for the unwary,” the Los Angeles County Assessor

has launched a very useful tool – a

 Supplemental Tax Estimator.

• Homeowners, Trustees, Executors and Administrators would be wise to keep Supplemental Property Taxes top of mind and use the Assessor's Supplemental Tax Estimator Tool, to be adequately prepared to pay this liability that becomes “known” usually many months after a “change in ownership.” 

• At the Law Offices of Maria N. Jonsson, PC we represent Trustees, Trust Beneficiaries, and Probate Estate Representatives. Among the tasks we provide guidance on is the sale or transfer of real property owned in Trust or by a Probate Estate. We counsel our clients on a wide range of duties and liabilities the law imposes on them in their fiduciary capacity as Trustees or Estate Representatives.

• Maria N. Jonsson, Esq. is a Certified Specialist in Estate Planning, Trust and Probate Law by the State Bar of California Board of Legal Specialization.

• Contact The Law Offices of Maria N. Jonsson, PC via our website's CONTACT page.

• You can send us a Text or chat via the Website, or even SCHEDULE A CONSULTATION. We are here to assist.