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Choosing the Trusts in Your Estate Plan

There are a number of important issues which every couple must consider when deciding how to structure their estate plan. These include: (i) who will be the trustees; (ii) when should the children have access to the estate when both parents are gone; and (iii) how should the spouses allocate the trust assets and what trusts should be established after the death of the first spouse. There are a number of responses to these questions, and the proper response for each set of clients will be dependent on the unique facts and circumstances of each family. The purpose of this memo is to give clients some general information about their choices in allocating trust assets.

Summary of Relevant Provisions of Proposition 19

California recently approved Proposition 19, which, effective February 16, 2021, (1) eliminates the $1 million parent-child and grandparent-grandchild exclusion for transfers of real property other than a primary residence; and (2) modifies the manner in which the taxable value of a primary residence is calculated following transfer.

2020 Tax Updates Affecting Estate and Gift Taxation

In light of the recent election, the nature of the tax code may be changing significantly in the near future. As 2021 approaches, it is crucial to understand potential changes to estate, gift, generation-skipping and related income taxes, and consider planning options immediately. In some cases, it may be advantageous to complete certain planning techniques prior to the end of calendar year 2020. However, it is important to keep in mind that, with the exception of Proposition 19 (which is now law), the matters discussed in this memorandum are potential changes. Future tax law and its effect on estate planning matters remains uncertain.

Bonus Depreciation for Commercial Real Estate Improvements

With the passage of the CARES Act, interior improvements to non-residential property are now eligible for bonus depreciation. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, 2020, included an important revision to depreciation rules enacted as part of the Tax Cuts and Jobs Act of 2017 (TCJA) that will correct a prior error that many have referred to as the “retail glitch.”

GOP Tax Bill Approved By Congress. What Does This Mean For Taxpayers?

On December 20, 2017, the final version of the GOP tax reform bill (the “Act”) was approved by both houses of Congress and sent to the President for signature. The provisions of the new legislation will generally become effective for tax years beginning after December 31, 2017. Many of the provisions of the Act applicable to individuals will sunset after 2025 unless extended by Congress.

The Impact of President Trump’s Proposed Tax Reforms on Your Bottom Line

President Trump has proposed a number of tax reforms that would significantly change the taxation of both personal and business income. In particular, the proposals would broaden the income base and create significant nominal rate reductions on the income of businesses and high-income individuals. 

The Benefits of California Benefit Corporations

Some individuals may want to utilize a corporation to earn a profit. Others may want to utilize a corporation to benefit society. And still others may want to utilize a corporation to do a little bit of both. For individuals seeking financial gain, there is the for-profit corporation.