Beacon FAQ

We compiled this FAQ page based on questions we have been receiving from clients as a result of the recent Los Angeles wildfires. We will update this page from time to time as additional questions come up.

Please note, we have put this FAQ page together to assist our clients with immediate questions and concerns, however, every situation is different and we suggest speaking with us or another trusted advisor about your specific situation. As such, do not rely on the below without speaking to an appropriate attorney or tax preparer. 

Q1. What tax relief are California and the IRS providing for wildfire-affected taxpayers?

A1. Taxpayers who either reside or have a principal place of business in Los Angeles County have been granted an automatic postponement to file Federal and California tax returns and make any Federal and California tax payments that would otherwise be due January 7, 2025, through October 15, 2025. This includes income tax (including quarterly estimates and fiduciary income taxes and returns), various business related taxes (including payroll and excise tax, passthrough entity elective tax (PTET) payments, partnership, limited liability company, S corporation, C corporation, and tax-exempt organization taxes and returns), gift tax, and estate tax.

For federal tax purposes, taxpayers who are not in the covered disaster area, but whose tax and related records are in Los Angeles County are also entitled to federal tax relief, but affirmative action by the taxpayer or tax preparer may be needed to qualify. California’s tax relief is only available to taxpayers who are in the covered disaster area (at least as of the time of this posting).

There are also possible Federal and California deductions for disaster losses that affected taxpayers may be eligible to claim on their income tax returns. Taxpayers may elect to claim the deduction on either their 2024 or 2025 federal return. The election must be made no later than 6 months after the return due date for the year of the disaster.

To learn more about the Federal tax relief, including any updates to date, go to https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.

To learn more about the California tax relief, including any updates to date, go to https://www.ftb.ca.gov/file/when-to-file/los-angeles-county-fires.html.

Q2. What property tax relief is available for owners of wildfire-affected properties?

A2. The California Board of Equalization announced that damaged or destroyed properties with a loss estimate of at least $10,000 may be eligible for a temporary reduction in property taxes, including refunds for property taxes already paid by the taxpayer for the current property tax year. To qualify, a claim must be filed within a specified time period (which will be at least 12 months from the date of the damage or destruction).

The Board of Equalization’s Informational Packet for Disaster Relief may be obtained online at https://res.cloudinary.com/los-angeles-county-assessor/image/upload/v1736540235/Factsheet/Relief_for_Properties_Impacted_By_A_Disaster.pdf and its Information Guide for Disaster Relief for Damaged or Destroyed Property may be obtained online at https://www.boe.ca.gov/pdf/pub802.pdf.

To lean more about the California property tax relief, including any updates to date, go to https://www.boe.ca.gov/proptaxes/disaster-relief.htm.

Q3. What should we do if our original estate planning documents were destroyed in the wildfire?

A3. It would be best to re-execute your estate planning documents as soon as practical. Presenting original estate planning documents is becoming less and less necessary, but there are some instances where being able to present the original estate planning document will make things run more smoothly for all involved (e.g., probating a Will or recording a deed as agent under a durable power of attorney). To that end, we suggest reaching out to us or your estate attorney and re-executing your estate planning documents if your existing documents were destroyed.

In the interim, if you do not have copies of your estate planning documents, we suggest reaching out to us or your estate attorney to request copies of your existing estate planning documents that you can refer to or provide if requested by third parties or government agencies.

Q4. We have updated our estate plan multiple times over the years, which original estate planning documents should we be trying to maintain?

A4. We suggest that you keep all original trust instruments (including the initial declaration or agreement of trust, any restatements, amendments, or modifications of trust, and any written exercises of powers over the trust) and Wills (including Codicils to Wills) along with your most recent original general assignment, certification of trust, statement of wishes or other trust side letters, durable power of attorney for property management or other financial powers of attorney documents, advanced health care directive or other medical powers of attorney documents, and HIPAA release.

If you would like our assistance going through all of your existing original documents and letting you know what may be safe to destroy, do not hesitate to reach out to us.

Q5. Where is the safest place to store original copies of our estate planning documents and should we sign estate planning documents in duplicate or triplicate just in case?

A5. Beacon does not have the physical storage capacity or ability to hold our clients’ original estate planning documents at our office.

We suggest that you store your original estate planning documents in a secure but accessible location at home, like a safe or filing cabinet for important paperwork. While some suggest storing estate planning documents in a safe deposit box, we generally advise against it. To gain access to a safe deposit box you generally need to both be an authorized person with the bank and present the appropriate key for entry. If those two conditions are not met, court action may become necessary to gain access to a safe deposit box.

Signing originals in duplicate and triplicate and thus having multiple sets of original estate planning documents may lead to confusion if they do not exactly match or if you later make handwritten edits to some and not others. As such, we generally do not recommend having multiple sets of original estate planning documents.

Q6. What should we be considering if we want to transfer title to our real estate for estate planning purposes?

A6. Before transferring title to any real property, we suggest reviewing the property’s current ownership (including whether it is separate or community property, whether it is subject to a right of survivorship clause, and if there is a clean chain of title to date), whether it is subject to any liens or encumbrances, and whether it is subject to any co-ownership or lease agreements.

If there is an existing lien or encumbrance (e.g., a mortgage) on the property, lender approval may be required before you transfer title. Failing to obtain prior approval could inadvertently trigger an acceleration clause, resulting in the entire remaining loan balance becoming due immediately. Most mortgages allow transferring title to your revocable trust without requiring any sort of prior approval. But to be safe, if there is an encumbrance on the property, you should check that the anticipated transfer does not require prior lender approval before proceeding.

If there is an existing co-ownership or lease agreement related to the property, review that agreement and take any actions required by it before proceeding with the transfer of your interest in the property. For instance, some co-ownership agreements will require prior approval by the other co-owners for transfers to non-family members. If there is a lease agreement related to the property and you are transferring the property, the lease agreement may need to be updated after the transfer or notice to the tenants may be necessary after the transfer (e.g., to request future rental payments to be made out to the new property owner).

After transferring the property, it is best practice to update the property’s insurance policy by changing the policy owner to the new title holder or by adding them as an additional insured. This is not always a requirement, but each policy is different and some may require an update to the policy even if the transfer of the property is simply to your revocable trust for estate planning purposes. If you lost your home in the wildfires or experience any other significant loss that may lead to a claim on your property insurance policy, we suggest consulting an insurance attorney to confirm coverage (especially if you are unsure if you updated your policy after transferring your residence into your revocable trust for estate planning purposes) or to explore other options.

Similar considerations arise with your title insurance policy. Review your existing title insurance policy for the property ahead of any transfer to see if the new owner will automatically be included as an insured under the existing title policy or if an updated title insurance policy would be need should the new owner wish to maintain coverage.

Whether you expect the transfer of the property to cause the property to be reassessed for property tax purposes or not, be sure to share any correspondence from the County Assessor’s Office with the advisors who helped with the transfer, as the correspondence may warrant a timely response to avoid inadvertent property tax reassessment.