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Wednesday, August 17, 2016

Investment Policy Statements


An Investment Policy Statement is basically a summary Financial Plan and roadmap for the investments of a Trust / Estate / Conservatorship.  It is a critical tool that provides a great deal of protection for the Fiduciary.  If all of the assets you are managing are in a brokerage account with an experienced Financial Planner you probably have something like this already in place.

But in many situations the assets are not so conventional or held in one place and as a result diversification and suitability can be difficult to prove - particularly if the Fiduciary is the subject of litigation in the future.  The attorney, CPA and Financial Advisor (if they are capable) should get together every year or two and create a joint Investment Policy Statement to protect the interests of the Fiduciary.
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Thursday, August 11, 2016

1031's Are A Hot Area


 The most common question I am getting these days is about 1031 Exchanges.  Apparently many people became real estate investors during the downturn and now face the reality of paying some substantial taxes.  In many of these situations they have come into the property in a not purely investment or business manner (which is necessary for a 1031 exchange - see below from IRS) and are looking for a way to convert to an investment property prior to the exchange. 

In general this is a fact based determination.  The best course of action is to meet with your legal and tax advisors well in advance and develop a plan.
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Wednesday, March 30, 2016

Property Tax More Important Than Estate Tax For Most Of Us

 

    Today the threshold for advanced Estate Planning is really $12-15 million.  For most people the most important tax consideration is being able to transfer property and keep our beneficial Prop. 13 values.  Many of the oversold and unnecessary strategies such as the use of LLC's and Irrevocable Trusts for "Asset Protection" will put your Prop. 13 Tax Basis at risk.  The County Assessor is ready to pounce on any questionable transfer and the need for tax revenue to support our local governments and soaring pension obligations will only increase. 

    The bottom line is this In today's environment - NEVER RECORD A DEED WITHOUT BEING ABSOLUTELY SURE OF THE PROPERTY TAX IMPLICATIONS.


Saturday, March 26, 2016

The New Revocable Transfer On Death (TOD) Deed - Must Be Good Because Estate Planning Attorneys Hate It

 

    California has long provided free Estate Planning tools such as the Statutory Will, Durable Power of Attorney and Advanced Healthcare Directive.  When it came to real property however, the only Do-It-Yourself option to avoid Probate was to make a lifetime gift and put your beneficiary on title with you as a Joint Tenant.  As it is not always ideal to have a beneficiary on title with you during your lifetime, California has now given us a great new tool.

    The new Revocable Transfer On Death Deed allows for you to designate a beneficiary for your real property and when you die it will pass to them and avoid Probate.  The Estate Planning community hates this as it will eliminate the need for any formal Estate Planning for many, many Californians, and so they have already come up with they typical laundry list of problems with these new Deeds - and they will inevitably try to convince people not to use them.

    However, I have probably talked to hundreds of Californians where this would have been all the Estate Planning they needed, in addition to the simple free forms mentioned above.  Sure, if you have problems with creditors or a more complex situation this is not for you.  But if you just have 1 or 2 beneficiaries and you want them to get your property this is certainly a viable option.




The Tonkovich Law Firm assists clients with Estate Planning, Wills, Trusts, Durable Powers of Attorney, Conservatorship and Contested Probate Procedures and Business and Real Estate Litigation in Irvine, CA as well as El Toro, Aliso Viejo, Lake Forest, Laguna Hills, Tustin, Newport Beach, Santa Ana, Newport Coast, Ladera Ranch, Foothill Ranch, Mission Viejo, Laguna Woods, Corona Del Mar, Silverado, Orange, Laguna Beach, Rancho Santa Margarita amd Fountain Valley in Orange County.



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