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LONICH PATTON EHRLICH POLICASTRI
1871 The Alameda, Suite 400, San Jose, CA 95126
Phone: (408) 553-0801 | Fax: (408) 553-0807 | Email: contact@lpeplaw.com
LONICH PATTON EHRLICH POLICASTRI
Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com
1871 The Alameda, Suite 400
San Jose, CA 95126
Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.
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Is the Price Right?
/in Estate Planning /by Michael LonichBuy/Sell Agreements and Estate Planning
Generally, for a buy/sell agreement to establish the value of a business interest for estate planning purposes it must:
1. Be a bona fide business arrangement;
2. Not be a device for transferring the business to family members at a discounted value;
3. Have terms comparable to similar, arms length agreements;
4. Fix a purchase price that is reasonable when the agreement is executed; and outline a pricing formula to consider evaluation changes in the intervening years;
5. Require an owner’s estate or beneficiaries to sell the shares at a specified price; and
6. Restrict owners’ disposition of their interests during life and at death.
If at least 50% of a company’s value is owned by non-family members subject to the same terms as family members, a buy/sell agreement is presumed to meet these requirements.
2010: The Year of No Estate Tax
/in Estate Planning /by Michael LonichThe Economic Growth and Tax Reconciliation Act of 2001 eliminated estate taxes for 2010, though they will return with a vengeance in 2011. (The maximum rate, previously 45% with an exemption of 3.5 million, rises to 55% next year with an exemption of just 1 million.) Although many expect Congress to retroactively apply estate taxes for this year, others are calling 2010 the “throw mama from the train” year. Adding an element of suspense is a push in Congress to make permanent the previous $3.5 million exemption. California’s estate lawyers are awaiting the outcome of HR4154. Even if Congress extends the 2009 exemption going forward there were many plans written with the current code in mind and once a permanent decision is made many plans will need rewriting.
Many observers doubt the HR4154 will pass unless it includes a provision to “reunify” gift and estate taxes which were split into different rates in 2001. That, in turn, could mean a two or three year boom in tax and estate law as gift givers scramble to take advantage of the shift.
With all of the changes happening recently as well as potential changes yet to be decided, many estate plans could have holes and will probably have some issues once the law is changed. If it ends up being no estate tax in 2010, it will make for an interesting year.
Study Shows Value of Living Will
/in Estate Planning /by Gina PolicastriA new study suggests that more than one in four of the elderly population will need someone to make their end-of-life decisions for them. This finding places a significant emphasis on the importance of creating a living will and stating after-life wishes explicitly. A living will is a statement that is written by the patient that explains their choices for treatment if he/she becomes incapacitated. Researchers also stated that someone must be designated to make the treatment decisions for the patients. The results of a recent study concluded that those who explicitly stated their end-of-life wishes in a living will were more likely to get the treatment that they wanted. In 2009, the end-of-life care topic became a part of the health care reform debate. During the debate, the legislation proposed that if they were given a provision, Medicare would be allowed to pay doctors in order to counsel patients about end-of-life decisions. This idea got denied because critics thought end-of-life counseling was similar to a death panel.
The study also showed that due to dementia, a stroke, or a debilitating illness, the elderly are unable to make their own decisions near the end of life.
(This study included 3,746 people who were 60 and over. They passed away between the years of 2000 to 2006. )
Dodger Divorce
/1 Comment/in Family Law /by Julia LemonAs Opening Day approaches, much of the buzz about the LA Dodgers focuses on the owners’ high profile divorce case. There are numerous legal issues in the case, as well as millions of dollars at stake.
While Frank and Jamie McCourt are currently litigating the issue of temporary spousal support (with Jamie requesting nearly $1,000,000 per month), the bigger issue in the case is whether the Dodgers are community property. The team was purchased during marriage, raising the presumption that it is a community property asset. However, Frank McCourt asserts that a post-marital agreement signed in 2004 transferred title of the parties’ residential properties to Jamie and made him the sole owner of the team. Jamie is seeking to invalidate the post-marital agreement. It will be interesting to see how it unfolds.
http://sports.espn.go.com/los-angeles/mlb/news/story?id=5037133&campaign=rss&source=MLBHeadlines
The Dangers of a Power of Attorney Following Separation
/in Family Law /by Gina PolicastriMany people give their spouse a Durable Power of Attorney to handle their financial affairs. In the divorce context, Durable Powers of Attorney are loaded guns. An estranged spouse can use a Durable Power of Attorney to transfer their spouse’s assets to them, take out loans in the name of their spouse, and engage in other financial transactions without that spouse’s knowledge. If you have given your spouse a Durable Power of Attorney, you should consider revoking it immediately so that it cannot be used in an unintended fashion. Check with a qualified estate planning attorney to make sure you know the rules for revoking a power of attorney. Generally, banks and other third parties can rely upon a power of attorney unless they have notice that it has been revoked. If you are concerned that your spouse may attempt to use the power of attorney without your permission, you should consider notifying all your financial institutions that the power of attorney has been revoked.