California Tax Attorney Blog

The Federal estate tax is a tax on the right to transfer property at death. The tax, reported on Form 706, United States Estate (and Generation Skipping Transfer) Tax Return, is applied to estates for which at-death gross assets, the "gross estate," exceed the filing threshold. Included in gross estate are real estate, cash, stocks, bonds, businesses, and decedent-owned life insurance policies. Deductions are allowed for administrative expenses, indebtedness, taxes, casualty loss, and charitable and marital transfers. The taxable estate is calculated as gross estate less allowable deductions.

The IRS Estate Tax page provides further information concerning the estate tax. Covered are topics including:

Frequently Asked Questions on Estate Taxes Gift Tax

Frequently Asked Questions on Gift Taxes

Filing Estate and Gift Tax Returns

Forms and Publications - Estate and Gift Tax

Publication 950, Introduction to Estate and Gift Taxes

What's New - Estate and Gift Tax

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2% of all Americans.

Most relatively simple estates (cash, publicly-traded securities, small amounts of other easily-valued assets, and no special deductions or elections, or jointly-held property) with a total value under $1,000,000 do not require the filing of an estate tax return. The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000.

To maximize your estate tax planning opportunities, call Mitchell A. Port at 310.559.5259.

The 2006 version of Form 706 asks if decedent ever transferred an interest in a closely held entity to certain trusts that are in existence at the decedent’s death. (Part 4, Question 12e). Be careful in looking for technical ways to avoid this question. One way around the question would be to terminate the trusts before the client’s death. But that is not practical in many situations. If the planner is “too clever,” the IRS may say the planner is being misleading and allege a Circular 230 violation. Even if the planner could avoid the current question, the IRS can change the form in the future in reaction to clever plans to avoid the question.

This new question applies retroactively to all transfers made by decedents filing the new Form 706. This question highlights the desirability of reporting sales of discounted interests in closely-held entities on a gift tax return. Eventually the IRS will learn about this transaction.

Recognize that the question only applies to transfers to trusts and not to transfers to individuals.

For decedents dying between 12/31/06 and 1/1/08, the new Form 706 (dated September 2007) makes several additional changes including the following: (a) The instructions on the reverse side of Schedule F lists detailed information that must be supplied to support any valuation discounts of assets listed on Schedule F; (b) any foreign account for which the decedent has an interest or signature authority must be disclosed (Part 4, new question 14); and (c) any private annuity being received by the decedent must be disclosed (Part 4, question 15).

Completing this form can be highly complex. If you need a referral to a qualified tax return preparer experienced with preparing Form 706, Mitchell A. Port can provide tax help.

This information is not intended to be a substitute for proper estate planning. Writing your own will may result in unintended consequences, misinterpretation and perhaps litigation. Probate will not be avoided. I have listed many of the steps necessary to write your own will even though I advise against it.

To write a holographic will as a California resident, the following steps should be taken:

1. Use a completely blank sheet of paper (no letterhead, no logo, nothing on it)

2. Write the entire will in your own handwriting

3. State your name and that you are of sound mind and not under any duress to write a will

4. State the county in which you reside

5. State that it is your last will and that it supersedes all prior wills

6. State who you are married to, if you are married, and if not, so state

7. State the names of your children, if any, and if none, so state. If you have children and they are minors, list those people in an order of priority who will be guardians

8. List those people in an order of priority who will be executors

9. State that bond is waived for any executor (and guardian – if you have children) who serves

10. State who is going to inherit what property, for example, “I leave my spouse all of my interest in any property whether real or personal, including but not limited to our home on _________, Drive, my nut company on __________, Drive, my real estate on ____________ Drive, all of my cash and investments, and all the rest of my property wherever located. If my spouse does not survive me, I leave all of my interest in said property in equal shares to my children.”

11. State who else gets something by mentioning their name(s) and what they get. Add that if either the person named is not living at the time of your death or if the property is no longer a part of your estate, then the gift to that person lapses.

12. If applicable, state your intent to disinherit anyone who contests the will. For instance: “Except as otherwise provided in this Will, I have with full knowledge omitted to provide for my children and heirs, or any others who might feel entitled to some portion of my estate. I have carefully considered the needs and abilities of my family and after such consideration have disposed of my estate in the manner provided in this Will. Should any beneficiary named in this Will, or the parent of any beneficiary named in this Will, or any person claiming through a beneficiary named in this Will, or any person claiming to be an heir, directly, indirectly, singly or in conjunction with other persons, attack this Will, or contest any of its provisions, or contest any trust established by me, or seek to impair or invalidate any part or provision of my estate plan, or conspire or cooperate with anyone attempting to do any of the aforesaid, such person's interest (or if such person has no interest, but his or her child has an interest in my estate or any trust established by me, then such child's interest) in my estate is revoked and shall be forfeit and distributed as if such person (or the child of such person) had predeceased me and any generation-skipping transfer taxes caused by reason of such forfeiture shall be charged to and paid from such property without the benefit of the use of any of generation-skipping transfer tax exemption.”

13. Sign and date the document without any witnesses or a notary. Do not let anyone else sign as a witness and do not have the will notarized

This does not avoid probate and should not be used as a substitute for a complete estate plan. Consultation with an estate planning attorney like Mitchell A. Port at 310.559.5259 is strongly advised.

There is no secret formula that can eliminate a person’s tax obligations. People should be wary of anyone peddling any of these scams. Taxpayers in California anecdotaly seem especially vulnerable. Consult a tax attorney (perhaps in Los Angeles) if you have doubts about an "opportunity" being presented to you.

The Internal Revenue Service issued its 2008 list of the 12 most egregious tax schemes and scams.

Tax schemes can lead to problems for both scam artists and taxpayers. Tax return preparers and promoters also risk significant penalties, interest and possible criminal prosecution.

Avoid these common schemes:

1. Return Preparer Fraud

Dishonest tax return preparers can cause many problems for taxpayers who fall victim to their schemes. These scam artists make their money by skimming a portion of their clients’ refunds and charging inflated fees for return preparation services. They attract new clients by promising large refunds. Some preparers promote the filing of fraudulent claims for refunds on items such as fuel tax credits to recover taxes paid in prior years. Taxpayers should choose carefully when hiring a tax preparer, especially one who promises something that seems too good to be true.

2. Hiding Income Offshore

Individuals continue to try to avoid paying U.S. taxes by illegally hiding income in offshore bank and brokerage accounts or using offshore debit cards, credit cards, wire transfers, foreign trusts, employee leasing schemes, private annuities or life insurance plans. The IRS and the tax agencies of U.S. states and possessions continue to aggressively pursue taxpayers and promoters involved in such abusive transactions.

3. False Claims for Refund and Requests for Abatement

This scam involves a request for abatement of previously assessed tax using Form 843, “Claim for Refund and Request for Abatement.” Many individuals who try this have not previously filed tax returns. The tax they are trying to have abated has been assessed by the IRS through the Substitute for Return Program. The filer uses Form 843 to list reasons for the request. Often, one of the reasons given is "Failed to properly compute and/or calculate Section 83-Property Transferred in Connection with Performance of Service."

4. Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. They promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. However, some trusts do not deliver the promised tax benefits. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering into a trust.

5. Zero Wages

Filing a phony wage- or income-related information return to replace a legitimate information return has been used as an illegal method to lower the amount of taxes owed. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer also may submit a statement rebutting wages and taxes reported by a payer to the IRS. Sometimes fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any of the variations of this scheme.

6. Frivolous Arguments

Promoters of frivolous schemes encourage people to make unreasonable and unfounded claims to avoid paying the taxes they owe. Most recently, the IRS expanded its list of frivolous legal positions that taxpayers should stay away from. Taxpayers who file a tax return or make a submission based on one of these positions on the list are subject to a $5,000 penalty. The most recent update of the list of frivolous positions includes: misinterpretation of the 9th Amendment to the U.S. Constitution regarding objections to military spending, erroneous claims that taxes are owed only by persons with a fiduciary relationship to the United States, a nonexistent “Mariner’s Tax Deduction” related to invalid deductions for meals and the misuse of the fuel tax credit (see below). The complete list of frivolous arguments is on the IRS Web site at IRS.gov.

7. Disguised Corporate Ownership

Some people are going as far as forming domestic shell corporations in certain states for the purpose of disguising the ownership of a business or financial activity. Once formed, these anonymous entities can be used to facilitate underreporting of income, non-filing of tax returns, engaging in listed transactions, money laundering, financial crimes and even terrorist financing. The IRS is working with state authorities to identify these entities and to bring the owners of these entities into compliance.

8. Abusive Retirement Plans

The IRS continues to uncover abuses in retirement plan arrangements, including Roth Individual Retirement Arrangements (IRAs). The IRS is looking for transactions that taxpayers are using to avoid the limitations on contributions to Roth IRAs. Taxpayers should be wary of advisers who encourage them to shift appreciated assets into Roth IRAs or companies owned by their Roth IRAs at less than fair market value. In one variation of the scheme, a promoter has the taxpayer move a highly appreciated asset into a Roth IRA at cost value, which is below annual contribution limits even though the fair market value far exceeds the amount allowed.

9. Scams Related to the Economic Stimulus Payment

Some scam artists are trying to trick individuals into revealing personal financial information that can be used to access their financial accounts by making promises relating to the economic stimulus payment, often called a “rebate.” To obtain the payment, eligible individuals in most cases will not have to do anything more than file a 2007 federal tax return. But some criminals posing as IRS representatives are trying to trick taxpayers into revealing their personal financial information by falsely telling them they must provide information to get a payment. For instance, a potential victim is told by phone or e-mail that he or she is eligible for a rebate but must provide a bank account number (or similar information) to get the payment. If the target is unwilling, the victim is then told that he cannot receive the rebate unless the information is provided. Individuals should remember that the only way to get a stimulus payment is to file a 2007 tax return. The IRS urges taxpayers to be extra-vigilant. The IRS will not contact taxpayers by phone or e-mail about their stimulus payment.

10. Abuse of Charitable Organizations and Deductions

The IRS continues to observe the misuse of tax-exempt organizations. Misuse includes arrangements to improperly shield income or assets from taxation, attempts by donors to maintain control over donated assets or income from donated property and overvaluation of contributed property. In addition, IRS examiners are seeing an upturn in instances where taxpayers try to disguise private tuition payments as contributions to charitable or religious organizations.

11. Phishing

Phishing is a tactic used by Internet-based thieves to trick unsuspecting victims into revealing personal information they can then use to access the victims’ financial accounts. These criminals use the information obtained to empty the victims’ bank accounts, run up credit card charges and apply for loans or credit in the victims’ names. Phishing scams often take the form of an e-mail that appears to come from a legitimate source. Some scam e-mails falsely claim to come from the IRS. To date, taxpayers have forwarded more than 33,000 of these scam e-mails, reflecting more than 1,500 different schemes, to the IRS. The IRS never uses e-mail to contact taxpayers about their tax issues. Taxpayers who receive unsolicited e-mail that claims to be from the IRS can forward the message to a special electronic mailbox, phishing@irs.gov, using instructions contained in an article titled “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes.” Remember: the only official IRS Web site is located at www.irs.gov.

12. Fuel Tax Credit Scams

The IRS is receiving claims for the fuel tax credit that are unreasonable. Some taxpayers, such as farmers who use fuel for off-highway business purposes, may be eligible for the fuel tax credit. But some individuals are claiming the tax credit for nontaxable uses of fuel when their occupation or income level makes the claim unreasonable. Fraud involving the fuel tax credit was recently added to the list of frivolous tax claims, potentially subjecting those who improperly claim the credit to a $5,000 penalty.

For tax and legal advice from a former IRS attorney now working throughout Southern California, particularly in Los Angeles County, Orange County, Santa Barbara County and Ventura County, call Mitchell A. Port at 310.559.5259.

IRS tax issues can be the bane of our existence. The tax office of your local income tax preparer is often the best place to find relief. If you wish to learn as much as you can from authoritative tax collection sources, look at the IRS’ own publications. One such tax collection source is the Internal Revenue Manual (IRM) published by the federal government. How the government may go about resolving your tax problems is explained in the Manual. The IRM contain the policies, procedures, instructions, guidelines, and delegations of authority which direct the operation and administration of the Internal Revenue Service’s tax collection arm. Topics include tax administration, personnel and office management, and others. Below is a list of the topics covered in “Part Five Collecting Process”:

5.1 General Collecting Procedures

5.2 Reports

5.3 Entity Case Management System (ENTITY)

5.4 Case Processing

5.5 Insolvencies, Decedents Estates and Estate Taxes

5.6 Collateral Agreements

5.7 Trust Fund Compliance

5.8 Offer in Compromise

5.9 Bankruptcy

5.10 Seizure and Sale

5.11 Notice of Levy

5.12 Federal Tax Liens

5.13 Collection Quality Measurement

5.14 Installment Agreements

5.15 Financial Analysis

5.16 Currently Not Collectible

5.17 Legal Reference Guide for Revenue Officers

5.18 Liability Determination

5.19 Liability Collection

5.20 Abusive Tax Avoidance Transactions

Tax help is available from a qualified tax attorney in Los Angeles, California. Call Mitchell A. Port, Esq. at 310.559.5259 to discuss your tax problems.

The California probate court, in particular the Los Angeles Superiour Court sitting in probate, publishes online its Probate Court Rules . The probate court rules begin in Chapter 10. These court rules provide the court and those who use the probate court with guidance on how the system works. What follows is a table of contents for those California probate court rules which you can use to decide whether to pursue obtaining more information from the court website itself.

GENERAL PROVISIONS

10.0 APPLICABILITY OF RULES
(a) Applicability of Rules
(b) Rules of Construction
(c) Jurisdiction

10.1 EXCUSE FROM COMPLIANCE

10.2 PROBATE COURT INFORMATION
(a) District Courts Hearing Probate Matters
(b) Addresses and Telephone Numbers and Calendaring Information

10.3 PROBATE ATTORNEY'S NOTES
(a) Probate Notes Available on the Web
(b) Clearing Probate Notes
(c) Updated Probate Notes
(d) Failure to Clear Probate Notes

10.4 PROBATE NOTE ABBREVIATIONS

HEARINGS, EX PARTE PROCEDURES AND TRIALS

10.5 SETTING OF PROBATE MATTERS

10.6 RESETTING PETITIONS

10.7 CENTRAL DISTRICT - PROBATE LAW AND MOTION MATTERS
(a) Setting for Probate Law and Motion Matters
(b) Filing Oppositions, Joinders and Replies to Opposition in Law and Motion Matters

10.8 EX PARTE PROCEDURES
(a) Time for Ex Parte Matters in Central District
(b) Time for Ex Parte Matters in District Courts
(c) Preliminary Considerations
(d) Ex Parte Procedures

10.9 PROBATE HEARINGS CANNOT BE ADVANCED

10.10 CONTINUANCES OF NON-TRIAL MATTERS
(a) Continuances of Matters Not Ready for Hearing
(b) Continuances Pursuant to Stipulation
(c) Continuance To Permit Filing of Objections/Responses
(d) Notice of Continued Matters

10.11 CONTINUING PROBATE LAW AND MOTION MATTERS

10.12 TRIALS ON CONTESTED MATTERS IN CENTRAL DISTRICT
(a) Trial Setting
(b) Joint Trial Statements for All Contested Matters
(c) Continuances
(d) Motions in Limine

TRANSFERRING, CONSOLIDATING, AND RELATING CASES

10.13 TRANSFERS FROM ONE DISTRICT TO ANOTHER

10.14 CONSOLIDATION AND/OR TRANSFER OF CASES

10.15 RELATED CASES
(a) Related Probate Cases
(b) Relating Probate Cases To Non-Probate Cases

PLEADINGS

10.16 DOCUMENT FILINGS REQUIRE DEPARTMENT NUMBER AND HEARING DATE

10.17 DOCUMENT FILING REQUIREMENTS
(a) Reproducing Judicial Council Forms
(b) Filing Requirements to Facilitate Document Scanning

10.18 SUPPLEMENTAL AND AMENDED PLEADINGS
(a) Supplemental Pleadings
(b) Amended Pleading

10.19 OPPOSITION AND REPLY PLEADINGS

10.20 ORDERS
(a) Orders in Contested Proceedings
(b) Use of Judicial Council Form Orders
(c) Probate Volunteer Panel (PVP) Attorney's Approval of Orders
(d) Material To Be Included In Probate Orders
(e) Riders and Exhibits
(f) Nunc Pro Tunc Orders

10.21 ISSUANCE OF LETTERS TO PERSONAL REPRESENTATIVES OF DECEDENTS'ESTATES
(a) Issuance of Letters
(b) Multiple Representatives
(c) Confidential Supplement To Duties and Liabilities of Personal Representative

PROVISIONS COMMON TO VARIOUS CASE TYPESAND MISCELLANEOUS PROCEEDINGS

10.22 MOTIONS TO WITHDRAW AS ATTORNEY OF RECORD - CITATION REQUIRED FOR FIDUCIARY

10.23 PARTY TO GIVE NOTICE
(a) Party To Give Notice
(b) Undelivered Notice

10.24 PETITION TO DETERMINE TITLE TO REAL OR PERSONAL PROPERTY
(a)10.0 Caption and Setting
(b)10.0 Notice of Hearing

10.25 APPRAISAL OF PERSONAL PROPERTY BEFORE SALE

10.26 SALES OF REAL PROPERTY
(a) Published Notice for Private Sales of Real Estate
(b) Sale of Specifically Devised Real Property
(c) Increased Bid Forms
(d) Real Estate Commissions

10.27 BORROWING AND REFINANCING
(a) Petition
(b) Inventory and Appraisal

10.28 REDUCTION AND WAIVER OF BOND
(a) Court Order Required to Increase or Decrease Bond or Substitute Surety
(b) Description of Bonds in Accounts
(c) Request for Bond Waiver In Decedents' Estates Proceedings
(d) Appearance Required In Decedents' Estate Proceedings

10.29 BANK STATEMENTS AND BLOCKED ACCOUNTS
(a) Decedents' Estates and Trusts
(b) Reconciliation
(c) Confidential Financial Statements
(d) Blocked Accounts

10.30 ACCOUNTS AND REPORTS SUFFICIENCY OF BOND TO BE STATED

10.31 PAYMENT AND REIMBURSEMENT OF COSTS
(a) Non-reimbursable Costs
(b) Discretionary Reimbursement

10.32 FINDINGS AS TO CHARACTER OF PROPERTY
(a) Facts Establishing Community or Quasi-community Property Character of Assets
(b) Documents Supporting Community or Quasi-community Property Character of Assets
(c) Copies of Deeds To Be Attached
(d) Will as Basis for Passing Decedent's Property
(e) Petitioner Is Not the Spouse or Domestic Partner
(f) Spousal or Domestic Property Petitions, Findings Regarding Character of Property

10.33 AFFIDAVITS FOR REAL PROPERTY OF SMALL VALUE PROBATE CODE SECTION 13200 ET SEQ12
(a) Decedent Died Testate
(b) Decedent Died Intestate

DECEDENTS' ESTATES PROCEEDINGS

10.34 APPOINTMENT OF SPECIAL ADMINISTRATORS
(a) Notice
(b) Preference
(c) Bond

10.35 DECLINATIONS AND CONSENTS TO ACT
(a) Declination of Named Executor
(b) Consent to Act

10.36 APPOINTMENT OF PUBLIC ADMINISTRATOR
(a) Appointment
(b) Notice

10.37 PROOF OF WILLS AND CODICILS
(a) Self Proving Wills and Codicils
(b) Non-Self Proving Wills

10.38 FOREIGN LANGUAGE WILL

10.39 SUBSEQUENT PETITIONS FOR PROBATE

10.40 INCORPORATED CITIES IN LOS ANGELES COUNTY

10.41 NOTICE TO CREDITORS
(a) Notice To Known and Reasonably Ascertainable Creditors
(b) Claims by Public Entities

10.42 CREDITOR'S CLAIMS
(a) Creditor's Claims of Personal Representatives or Their Attorneys
(b) Funeral and Interment Claims

10.43 NOTICE OF PROPOSED ACTION
(a) A Notice of Proposed Action
(b) Notice Filed with the Court
(c) Petitions for Distribution

10.44 PETITION FOR FAMILY ALLOWANCE
(a) Ex Parte Petitions
(b) Limitation on Period of Family Allowance
(c) Reasonableness and Eligibility

10.45 HEIRSHIP DETERMINATIONS
(a) Notice of Hearing
(b) Notice to Attorney General
(c) Contents of Petition
(d) Genealogical Chart
(e) Escheat

10.46 PETITIONS FOR INSTRUCTIONS
(a) Limitations
(b) Specifying Instruction

10.47 COLLECTION OF DAMAGES FOR WRONGFUL DEATH/PHYSICAL INJURY OR PROPERTY DAMAGE
(a) Wrongful Death Damages
(b) Physical Injury or Property Damages
(c) Court Approval Required

10.48 PETITIONS FOR PRELIMINARY AND FINAL DISTRIBUTION
(a) Schedule of Creditors' Claims
(b) Medi-Cal Recipient
(c) Heir Confined In a Correctional Facility

10.49 PAYMENT OF COSTS OF ADMINISTRATION

10.50 ALLEGATIONS REGARDING CREDITORS

10.51 MEDI-CAL NOTIFICATION

10.52 INHERITANCE TAXES FOR DECEDENTS DYING BEFORE JUNE 8, 1982

10.53 GUIDELINES FOR ATTORNEY COMPENSATION

10.54 ALLEGATION RE CHARACTER OF PROPERTY

10.55 PROVISIONS RE SURVIVORSHIP

10.56 DESCRIPTION OF DISTRIBUTEES
(a) Names and Addresses
(b) Age of Minors and Others

10.57 ORDERS ESTABLISHING TESTAMENTARY TRUSTS
(a) Appointment of Testamentary Trustee Prior To Distribution
(b) Orders Establishing Testamentary Trusts

10.58 DOCUMENTS TO BE ON FILE BEFORE ORDER FOR DISTRIBUTION OF DEVISE TO MINOR OR FIDUCIARY
(a) Distributions To Minors
(b) Distribution To Court Appointed Fiduciary

10.59 POST DECEASED DISTRIBUTEES, DISTRIBUTION PURSUANT TO PROBATE CODE SECTION 13100 ET SEQ18
(a) Post Deceased Distributee Died Testate
(b) Post Deceased Distributee Died Intestate

10.60 ASSIGNMENT OR TRANSFER OF INTEREST IN ESTATE
(a) Notification To Court
(b) Written Assignment or Transfer of Interest
(c) Distribution Care-of Attorney

10.61 RECEIPTS OF DISTRIBUTION
(a) Distributee Receipts
(b) Recorded Deed or Order In Lieu of Distributee's Receipt

GUARDIANSHIP PROCEEDINGS

10.62 APPOINTMENT OF GUARDIANS
(a) Single Petition for Multiple Minors
(b) PRO 003 Must Be Filed with Petition
(c) Appointment of Non-Relative Guardians

10.63 GUARDIANSHIP ACCOUNTS OR WAIVERS OF ACCOUNTS
(a) Separate Accounting for Each Minor
(b) Waiver of Accounting When a Ward Reaches Majority

CONSERVATORSHIP PROCEEDINGS

10.64 APPOINTMENT OF CONSERVATORS
(a) PRO 003 Must Be Filed with Petition
(b) Appointment of Private Professional Conservators

10.65 LANTERMAN-PETRIS-SHORT (LPS) CONSERVATORSHIP
(a) LPS Conservatorship Proceedings
(b) Notice to LPS Conservator

10.66 NOTICE OF ESTABLISHMENT OF CONSERVATORSHIP

10.67 CONSERVATORSHIP CARE PLAN
(a) LASC Form Care Plan
(b) Mailing Copy of Conservatorship Care Plan to Court Investigator

10.68 COURT INVESTIGATOR'S ASSESSMENTS

10.69 RESIGNATION OF CONSERVATOR
(a) Effective Date of Resignation
(b) Final Account of Resigning Conservator

10.70 NOTICES RE FINAL ACCOUNT UPON DEATH OF CONSERVATEE

RULES COMMON TO CONSERVATORSHIP PROCEEDINGS,GUARDIANSHIPS PROCEEDINGS AND/ORTRUSTS CREATED OR FUNDED BY COURT ORDER

10.71 CONSERVATOR'S OR GUARDIAN'S INDEPENDENT POWERS

10.72 INVENTORY AND APPRAISAL OF BENEFITS

10.73 ACCOUNTS, REPORTS AND CONSERVATOR/GUARDIAN COMPENSATION
(a) Reconciliation of Financial Statements
(b) Allegation Regarding Sufficiency of Bond
(c) Allegation Regarding Blocked Accounts
(d) Insured Accounts
(e) Vesting of Accounts
(f) Court Investigator's Assessments
(g) Conservator Compensation
(h) Hearings for Approval of Conservatorship/Guardianship Accounts To Be Coordinated With Hearings For Approval of Trust Accounts

10.74 ACCOUNTS AND INVENTORIES AND APPRAISALS - CONSERVATORS AND TRUSTEES OF TRUSTS SUBJECT TO THE COURT'S CONTINUING JURISDICTION
(a) Mailing Copies to the Court Investigator's Office
(b) Lodging Original Financial Statements with the Court

TRUST PROCEEDINGS

10.75 MULTIPLE PROBATE CODE SECTION 17200 ET SEQ. PETITIONS CONCERNING ONE TRUST

10.76 PETITIONS TO CONFIRM SALE OF TRUST REAL PROPERTY

10.77 SETTLEMENTS INVOLVING CHARITABLE TRUSTS

10.78 TESTAMENTARY TRUSTEES' ACCOUNTS

SETTLEMENTS OR JUDGMENTS INVOLVING MINORS ORPERSONS WITH DISABILITIES, TRUSTS FUNDED OR ESTABLISHED PURSUANT TO COURT ORDER

10.79 SETTLEMENTS OR JUDGMENTS RELATING TO CLAIMS OF MINORS OR PERSONS WITH DISABILITIES (INCLUDING ESTABLISHMENT AND FUNDING OF TRUSTS)
(a) Proper Court To Approve Settlement
(b) Disposition of Proceeds
(c) Petition to Compromise Claim
(d) Orders
(e) Post Judgment Procedures

10.80 TRUSTS CREATED OR FUNDED PURSUANT TO COURT ORDER INCLUDING CIVIL JUDGMENT
(a) Trusts Created or Funded By Court Order
(b) Additional Trust Requirements
(c) Rule Does Not Apply to Trusts Under $20,000

10.81 SPECIAL NEEDS TRUST CREATED BY COURT ORDER/JUDGMENT

10.82 NEW COURT PROCEEDINGS REQUIRED FOR TRUSTS ESTABLISHED UNDER PROBATE CODE SECTION 2580 OR 3100

PROBATE VOLUNTEER PANEL ATTORNEYS

10.83 PROBATE VOLUNTEER PANEL GENERAL ELIGIBILITY REQUIREMENTS AND PROCEDURES FOR APPOINTMENT TO THE PANEL
(a) Active Status with the State Bar
(b) Submit Application and Compliance Statement
(c) Educational and MCLE Requirements
(d) Professional Liability Insurance

10.84 PROBATE VOLUNTEER PANEL - REQUIREMENTS FOR SPECIFIC AREAS OF INTEREST
(a) General Requirements for Specific Areas of Interest
(b) MCLE Requirements for Specific Areas of Interest

10.85 ETHICAL GUIDELINES

10.86 PVP ATTORNEY APPOINTMENTS ARE PERSONAL

10.87 WRITTEN REPORTS AND COMPENSATION FOR COURT-APPOINTED ATTORNEYS
(a) Written Reports
(b) Compensation for PVP Attorneys

APPENDIX A COMMONLY USED ABBREVIATIONS
APPENDIX B TABLE OF INCORPORATED CITIES
APPENDIX C LOS ANGELES SUPERIOR COURT GUIDELINES ONATTORNEY COMPENSATION AND COSTS IN DECEDENTS' ESTATES
APPENDIX D REQUESTING COMPENSATION FOR THE PROFESSIONAL CONSERVATOR

Continue reading "California Probate Court - Court Rules" »

California probate law says that if the person who died left property worth $100,000 or less, then the proper person may claim the property without using the probate court in Los Angeles County, Ventura County, Santa Barbara County, Orange County or any other county throughout California. No probate lawyer is necessary.

Here is what California Probate Code says to avoid probate:

If the gross value of the decedent's real and personal property in this state does not exceed one hundred thousand dollars ($100,000) and if 40 days have elapsed since the death of the decedent, the successor of the decedent may, without procuring letters of administration or awaiting probate of the will, do any of the following with respect to one or more particular items of property:

(a) Collect any particular item of property that is money due the decedent.

(b) Receive any particular item of property that is tangible personal property of the decedent.

(c) Have any particular item of property that is evidence of a debt, obligation, interest, right, security, or chose in action belonging to the decedent transferred, whether or not secured by a
lien on real property.

Continue reading "Avoid Probate In California" »

Has your ex-spouse or former employee turned you in? Are you the victim of a false claim?

The Internal Revenue Service has a Whistleblower Office – it even has a director for it: he is Stephen Whitlock. Recently, the IRS outlined ways informants can report violations of the tax law and possibly claim a reward based on the amount of additional tax, penalties and interest that is owed.

If you earn a reward, you have to pay your own income tax on it. All awards will be subject to normal tax reporting and withholding requirements.

To be eligible for an award under the new procedures, the tax, penalties, interest, additions to tax, and additional amounts in dispute must exceed $2 million for any taxable year and, if the taxpayer is an individual, the individual’s gross income must exceed $200,000 for any taxable year in question.

The Whistleblower Office was created about a year ago, December. To make a claim, an informant must file new Form 211, Application for Award for Original Information, which asks informants for an explanation of how the informant obtained the information, to provide an estimate of the tax owed and the facts in the case.

The IRS’ Whistleblower Office will make the final determination about whether an award will be paid and the amount of the award for claims that it processes. Awards will be paid in proportion to the value of information furnished voluntarily with respect to proceeds collected.

Under the new procedures, the amount of award will be at least 15%, but no more than 30%, of the collected proceeds in cases in which the IRS determines that the information submitted by the informant substantially contributed to the collection of tax. The award percentage may be reduced in some circumstances, which are described in IRS guidance.

Has your ex-spouse or former employee turned you in? Are you the victim of a false claim? Call Mitchell A. Port at 310.559.5259 for tax help.

The Internal Revenue Service has many forms and free publications on a wide variety of topics to help you understand and meet tax obligations, reporting and filing requirements. If you need IRS materials try one of these ways:

Walk-in: During the tax-filing season, many libraries and post offices offer free tax forms. Some libraries also have copies of commonly-requested publications. Braille materials may also be available. Many large grocery stores, copy centers, and office supply stores have forms you can photocopy or print from a CD.

Internet: You can access forms and publications on the IRS website 24 hours a day, 7 days a week, at IRS.gov.

Mail: Send your order for tax forms and publications to National Distribution Center, P.O. Box 8903, Bloomington, IL 61702-8903. You should receive your products within 10 days after we receive your order.

Phone: Call 800-TAX-FORM (800-829-3676) to order current year forms, instructions and publications and prior year forms and instructions. You should receive your order within 10 days.

Try these links:

Publication 2053A, Quick and Easy Access to IRS Tax Help and Forms (PDF 40K)

Publication 910, Guide to Free Tax Services (PDF 636K)

Need other tax help? Have other tax problems you wish to discuss with a California tax attorney? Call Mitchell A. Port at 310.559.5259.

It is a common belief that the recipient of a taxable gift has to pay the tax.

Federal tax law is different than that: the person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value. Instead, if you recently gave any one person gifts that are valued at more than $12,000, you - the maker of the gift - must report the total gifts to the Internal Revenue Service and you may have to pay tax on the gifts.

If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift. Gifts also include money and property, including the use of property without expecting to receive something of equal value in return.

There are some exceptions to the tax rules on gifts. The following gifts generally are not taxable and do not count against the $12,000 annual limit:

Tuition or Medical Expenses that you pay directly to an educational or medical institution for someone's benefit

Gifts to your Spouse

Gifts to a Political Organization for its use

Gifts to Charities

If you are married, both you and your spouse can give separate gifts of up to the annual limit of $12,000 to the same person without making a taxable gift. In other words, you and your spouse can give one of your children (or anyone else for that matter) a $24,000 gift of cash or other property during any one year without paying any gift tax. This is commonly known as splitting gifts between spouses. Essentially, it means a gift by you or your spouse to a third person can be considered as made one-half by each of you provided there is consent by both spouses.

For more information, get the IRS Publication 950, Introduction to Estate and Gift Taxes, IRS Form 709, United States Gift Tax Return, and Instructions for Form 709. They are available at the IRS Web site at IRS.gov in the Forms and Publications section or by calling 800-TAX-FORM (800-829-3676).

Gift tax planning often requires the help of a qualified tax lawyer. Please call attorney Mitchell A. Port at 310.559.5259.

LLCs are subject to an $800 annual tax if they are doing business in California or have articles of organization accepted, or a certificate of registration issued by the California Secretary of State. The annual tax is prepaid for the privilege of doing business in California, and is due and payable on or before the 15th day of the 4th month after the beginning of the taxable year. The annual tax must be paid for each taxable year until the appropriate papers are filed.

In addition to the annual $800 tax, every California LLC must pay a fee based on total annual income. The LLC fee is due on or before the 15th day of the 4th month after the close of the LLC’s taxable year. The California Franchise Tax Board has a booklet containing much of what one needs to know about LLCs. For taxable years beginning on or after January 1, 2002, use the following chart to compute the fee:

If total annual income is equal to or over – but not over –

$250,000 to $499,999 the fee is $900
$500,000 to $999,999 the fee is $2,500
$1,000,000 to $4,999,999 the fee is $6,000
$5,000,000 and over the fee is $11,790

If the California Franchise Tax Board (FTB) determines multiple LLCs were formed for the primary purpose of reducing fees, the LLC’s total income from all sources that are reportable to California could include the aggregate total income of all commonly controlled LLC members. “Commonly controlled” means control of more than 50% of the capital interests or profit interests of the taxpayer and any other LLC or partnership by the same persons.

Strategic planning is necessary when working with LLCs. Expert tax advice is essential to accomplish business goals. Call Mitchell A. Port at 310.559.5259 to discuss your ideas.