Riverside, California – As we reflect on the year 2023, it is clear that it was a year of significant legislative changes. From the implementation of Proposition 19 to the introduction of the Uniform Partition of Real Property Act and the enactment of the Corporate Transparency Act, there was no shortage of legal developments to keep individuals and businesses on their toes.
Proposition 19, also known as “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act,” took effect in part in February and fully in April 2021. While voters believed they were supporting a proposition that helped seniors, individuals with disabilities, and disaster victims, many were unaware of the potential financial ramifications. To make up for lost revenue, Prop. 19 limited the reassessment exemption when parents transfer real property to their children, unless specific conditions are met. This change has led to a backlog of property transfers and prompted families to reevaluate their estate plans to avoid increased property taxes.
In addition to Prop. 19, 2022 saw the passage of the Uniform Partition of Heirs Property Act (UPHPA) in California. However, this law was quickly replaced by the Uniform Partition of Real Property Act (UPRPA) in 2023. While UPHPA protected tenants-in-common property owners from aggressive partition actions, UPRPA broadened the scope to include all tenants-in-common property interests. With three sets of rules for partition actions depending on the filing date, individuals may need legal assistance to navigate these complex regulations.
Furthermore, the Corporate Transparency Act (CTA), which had bipartisan support in 2021, finally received detailed regulations in 2023. This federal law requires businesses, including LLCs, S corporations, and C corporations, to file reports revealing beneficial owners, officers, managers, and other relevant information. While the intention of the CTA is to combat illicit activities and money laundering, it also places a burden on legitimate small businesses and individuals to comply with the reporting requirements.
As laws continue to change, it is crucial for individuals and businesses to stay informed and seek advice from knowledgeable professionals. With 2024 being an election year and the expiration of numerous tax and legal provisions after 2025, staying ahead of the curve is more important than ever.
In summary, 2023 brought about several significant legal changes in California. Proposition 19 affected property transfers between parents and children, the Uniform Partition of Real Property Act replaced the earlier UPHPA, and the Corporate Transparency Act imposed new reporting requirements on businesses. To navigate these changes, individuals and businesses should seek counsel and stay informed about evolving laws.