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LONICH PATTON EHRLICH POLICASTRI
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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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2011 Tax Changes: Gift Tax, Estate Tax, Portability
/in Estate Planning /by Michael LonichGeneral Overview of 2011 Tax Changes
The “Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010” (TRA) was signed into law on December 17, 2010. The TRA applies to the years 2011 and 2012. This Act was passed to address the expiration of two major tax bills[1]. These two tax-cut bills expired at the end of 2010. The TRA extends certain provisions of these bills and also provides amendments to the tax system.
2011 Gift Tax
Starting in 2011, the gift tax exemption amount will increase from $1 million to $5 million. The exemption for couples is $10 million.[2] Gift tax is again unified with the estate tax. For 2011, the “unified” applicable exemption amount is $5 million per person, and in 2012 this amount is subject to being indexed for inflation.”[3] The tax rate is set at 35%.[4] The annual exclusion for tax-free gifts remains $13,000 per donor.[5] A donor may make an unlimited number of $13,000 gifts as long as they are to different individuals.[6]
2011 Estate Tax
Under the TRA, the “applicable credit amount is the amount of tax with respect to an applicable exclusion amount of $5 million.”[7] Starting in 2012, the applicable exclusion amount will be indexed for inflation, with adjustments rounded to the nearest $10,000. The maximum rate of estate tax is 35%.[8]
2011 Portability
Under the TRA, the new tax structure will “allow a decedent’s estate or a donor to tax advantage of the applicable exclusion amount of the decedent’s or donor’s previously deceased spouse. This ‘portability’ concept is intended to prevent families from incurring gift and estate tax that could have been avoided through planning prior to the death of the predeceased spouse.”[9] Under the new tax law, “when computing the applicable exclusion amount for a donor’s or a decedent’s estate, the [deceased spousal unused election amount] is added to the donor’s or decedent’s [basic exclusion amount].”[10]
For more information about 2011 estate planning, please contact our experience attorneys. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
[1] Both the “Economic Growth and Tax Relief Reconciliation Act of 2001” (EGTRRA) and the “Jobs and Growth Tax Relief Reconciliation Act of 2003” (JGTRRA) were set to expire at the end of 2010. [2] U.S. Senate Committee on Finance, “Summary of the Reid Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010,” p. 4. The ABA materials did not state the couple exclusion as $10 million, but it makes sense if it is $5 million per person. [3] ABA Summary of Tax Relief Act 2010, p. 6. [4] Id. [5] “Tax Changes for 2011: A Checklist,” The Wall Street Journal, Laura Saunders. [6] Id. [7] ABA Summary of Tax Relief Act 2010, p.9. [8] Id. [9] ABA Summary of Tax Relief Act 2010, p. 11. [10] Id.
An Overview of California’s Supervised Visitation Law
/in Family Law /by Julia LemonSupervised visitation is judicial order for a neutral third party to be present when a child is spending time with his/her parent. When making a supervised visitation order, a judge may consider a wide variety of factors and goals. Some of the reasons a judge may order supervised visitation include giving the parent time to deal with specific issues, helping reintroduce a parent to a child after a long absence, introducing the parent to the child when there has been no prior relationship, avoiding potential domestic abuse or neglect, or if there is a threat of abduction.
If you think that supervised visitation may be in your child’s best interest, please contact the well-informed child custody lawyers at Lonich Patton Erlich Policastri for more information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
What Happens to Out-of-State Real Property Upon a Divorce in California?
/in Family Law /by Mitchell EhrlichUpon a divorce, it is often a complicated and challenging process to divide real property existing in another state. The correct treatment of an out of state home or piece of land depends on how the property is characterized under California community property law. Generally, most property acquired during marriage is considered community property. At divorce, community property is divided equally between spouses. However, property acquired during marriage while living in a non-community property state is not community property. To find out what happens to this out of state real property, it is best to look at an example.
Let’s assume you and your spouse meet, marry, and reside in non-community property state. While married, you purchase a home with the savings you both earned during your marriage. Now, let’s assume, your spouse gets a job in California and you relocated without selling your home. Years later, you file for divorce. Under California law, this property is not community property as it was not acquired in a community property state. Instead, this property is characterized as “quasi-community property.”
Quasi-community property is property (wherever located) that would have been community property if the spouses had acquired it while domiciled in California. In a California divorce proceeding, quasi-community property will be treated the same as community property. Thus, in the above example, the out of state home would be divided the same way as if it were located in California. If located in California, the home would have been considered community property as it was acquired during marriage with martial earnings. It is important to remember that California community property law is complex, and it is filled with numerous exceptions.
For more information on how your property would be characterized under California law, please contact us. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
“He Wants What?!” – The Basics of California Community Property Law
/in Family Law /by Julia LemonDid you just find out that your husband or wife wants ownership of a special piece of personal property or real estate that you acquired before you were married? If so, you should be aware of some basic rules in California family law.
First, California is a community property state. This means that all property acquired by spouses during marriage while living in California is presumed to be community property. However, property that is acquired during marriage by gift, bequest, or devise, or income from property acquired prior to marriage is presumed to be separate property of the receiving spouse. In addition, all property acquired by each spouse prior to marriage is presumptively the property of the owner spouse. Thus, if your spouse is currently twisting your arm to give you possession of a valuable asset you acquired before marriage, your spouse may not have any legal claim to this property.
However, under certain circumstances, your spouse may have a claim in your separate property. For example, if you owned a home before marriage but community funds were used during the marriage to pay down the mortgage, the community may have an interest in the home. In addition, if you purchased real estate or personal property during marriage with your separate property but agreed with your spouse in writing that you were converting this property into community property; your spouse may also have an interest in the asset.
For more information on California community property law, please contact us. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
The Importance of an Advance Health Care Directive
/in Estate Planning /by Michael LonichAn advance health care directive is a written instrument that describes your health care wishes in the event of your incapacity or injury. It serves to inform family members and healthcare professionals about your wishes and desires when you are unable to do so. The importance of having an advanced health care directive is often overlooked.
An advance health care directive can address several key issues, including whether or not you want doctors to resuscitate you if you stop breathing or if your heart stops, if and when to use breathing machines or dialysis, and whether you wish to be an organ and tissue donor. While many people prefer not to think about their own mortality, it is important that your loved ones know your desires before it is too late for you to express them. In addition, an advance health care directive allows you to choose an agent to act as your attorney-in-fact. Your attorney-in-fact is the person you designate to make health care decisions for you. Appointing such a person in advance often helps alleviate family tension during difficult times.
To find out how you can protect your family by incorporating an advance health care directive into your estate plan, please contact our estate planning attorneys at Lonich Patton Erlich Policastri for more information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.