Palm Desert Tax Lawyers

By greatly increasing the Applicable Exclusion Amount to $11,400,000, the 2017 tax reform act made estate planning much less complicated estate tax-wise. Why? Because for most people, the $11,400,000 Applicable Exclusion Amount ($22,800,000 for a couple with community property) eliminated estate tax concerns.

Nevertheless, because of children that are spendthrifts, of remarriages by reason of divorce or death, grabbing an A-B-C trust form off the internet, could be an expensive blunder. Estate planning for blended families, and for family-owned businesses, and for spendthrift children, requires thought, and careful estate planning. Fortunately today, careful estate planning can be accomplished without concern about death taxes. You can do what is right” for your family. “

Additionally, if your estate plan does not involve a blended family or a family business, if your current estate plan predates the 2017 tax act, and funds the Bypass Trust with the applicable exclusion amount, you should consult Sanger & Molever to learn why your old estate plan probably should be updated for income tax basis purposes.

The Sanger & Molever’s experienced Palm Desert lawyers can help you address troublesome common estate planning situations pregnant with problems that can fester and lead to family turmoil and litigation. Common situations that produce family turmoil and litigation: (a) blended family situations, where there are children from prior marriages; (b) family held business situations, where some children are in the business, and other children are not involved with the family business.

When a person dies, the law mandates a “final” accounting for the decedent. That final accounting takes place in the Probate Court, or in a postdeath trust administration process. The probate process and the postdeath trust administration process have as their primary purpose, the decedent’s assets pass to the decedent’s beneficiaries — that all the decedent’s taxes (both income and estate taxes) be paid, and all the decedent’s creditors be paid.

In the context of probates and PDTA’s, Sanger & Molever can represent the fiduciary or the beneficiaries. Representing the fiduciary, our proficient Sanger & Molever tax attorneys will guide the fiduciary in discharging his duties imposed by law (i.e. pay taxes; pay creditors, prepare a subtrust asset accounting; prepare a final accounting, and lastly pay the beneficiaries). Representing the decedent’s beneficiaries, our Sanger & Molever Palm Desert tax lawyers will carefully review the fiduciary’s accountings, to make certain the fiduciary properly inventoried all the decedent’s assets, that no assets “went missing”; that the proper dollar amount of assets gets distributed to the subtrusts and to the beneficiaries.

The Probate Code describes the required contents and the format of fiduciary accountings. The Probate Code rules (which include the Principal and Income Act) are detailed. Many believe that if a Probate Court issues an order for final distribution, the order confirms the accuracy of the final accounting. Thus, they believe the fiduciary did everything correctly, that the fiduciary accounting was done correctly, and that the fiduciary will correctly distribute to the decedent’s beneficiaries what they are entitled to. That’s untrue. Sanger & Molever’s Palm Desert tax lawyers have decades of experience in handling fiduciary accountings

For want of time and for want of staff, a Probate Court order that approves a fiduciary accounting simply reflects that the Probate Court staff did what amounts to a cash-in, cash-out accounting, and that the fiduciary did not walk off with any of the decedent’s assets. The order does not mean the fiduciary properly did a subtrust asset accounting (i.e. that the subtrusts for different beneficiaries were properly funded), or that the fiduciary properly characterized “income” and “principal”, which ultimately go to different beneficiaries (i.e. the widow-income-beneficiary vs. the children from the decedent’s first marriage, who are the principal beneficiaries).

If you are a fiduciary, skittery about being sued because your subtrust asset accounting or your principal and income accounting, might be faulty, have Sanger & Molever’s Palm Desert tax attorneys prepare (or review) your fiduciary accounting. If you are a beneficiary, and you are concerned that the fiduciary has a conflict of interest (i.e. blended family situation), and the accounting might shortchange you, you should engage Sanger & Molever to review the fiduciary accounting.

Starting or running a business can be fraught with problems. Add in the personalities and the psychological issues within a family business, and you have a recipe for anything between a well-run operation and … a disaster. Pre-death estate planning for a family business is essential where some children are “in the business”, and others have nothing to do with the business. Family business planning can involve parsing a business into different division, or drafting a buy-sell agreement where the children “in the business” must purchase their siblings interest in the business, or planning for an independent board of directors to oversee the business. Using Sanger & Molever’s very capable tax attorneys can help you consider possible solutions that might preserve both the family business and cordial relationships among the children of the next generation.

If you owe substantial unpaid taxes, bankruptcy can eliminate the unpaid taxes … assuming you can meet the statutory tests. Our firm can tell you whether you meet the tests, and thus if bankruptcy is something you should consider. Stating the bankruptcy tests is simple. Applying the tests is not simple. Why? Because of the likely presence of many “tolling events”. If you are considering a tax-motivated bankruptcy, before filing, consult with the Sanger & Molever Palm Desert tax lawyers to carefully review the facts of your situation, and the extent to which bankruptcy will discharge some or all of your tax arrearages.

Selling a business requires thoughtful planning. If it’s a small closely held business, that planning should include engaging an appraiser to value the business entity, or to value the “inside assets” of the entity, if you intend to sell the assets, and not the business entity itself.

Utilizing Sanger & Molever can help you with engaging an appraiser, with the after-tax analysis, and the PTS Rule.

Where a family has a special needs child, there are both Federal and California government assistance programs that benefit individuals who have a disability that has been “certified.” Various tests exist to determine if or when a person’s disability has been “certified.” If such a child exists, you should discuss with Jeff Molever, possibly creating a Special Needs Trust (“SNT”). Setting up a SNT with Jeff’s assistance can mean a substantially improved life for a special needs child.

Both Sanger & Molever have LLM degrees in tax, and Mr. Sanger is a Certified Tax Law Specialist. In California there are probably more than a 100,000 licensed lawyers, but only roughly 300 (less than one-half of 1%) have passed the examination to be a Certified Tax Law Specialist. If you need tax savvy attorneys, with years of real-world experience in the areas outlined above, you should contact the law firm of Sanger & Molever: Phone at 760-320-7421 or by Email: jmolever@sangerlaw.com ; or hsanger@sangerlaw.com.