Trusts

Why should you hire an attorney to prepare a Trust? With so many legal self-help organizations available, it seems that one could save a good deal of money by purchasing a trust form from a legal document service, and simply fill in the blanks. However, the buyer of such documents should beware – if an important legal decision is made without the advice of counsel, what will be the cost of the mistake? As an ounce of prevention is always worth the pound of cure, please take the time to seek competent legal representation in these matters.

Wills

Simple Wills can be prepared in the ‘Testator’s’ own handwriting. Or, should the situation merit, an attorney can prepare a more formal Will for a client. However, if a person dies with a Will, and their Estate is valued at more than $100,000, and not otherwise exempt, the Estate will have to go through Probate. Probate is the court-supervised administration of an Estate. While it is a functional process, it is generally much slower, and much more costly to administer an Estate through the Probate process as opposed to a Trust Administration

Estate Planning

Estate Planning is the practice of analyzing a person’s over-all financial picture, strategizing to minimize estate tax, considering testamentary and other family needs, and implementing the plan of action. The concept of the ‘Family Trust’ or ‘Revocable Living Trust’ is basic to creating an estate plan. Other types of trusts such as Qualified Personal Residence Trusts, Life Insurance Trusts, and transactions such as planned gifting to family members and charities, both during life, and upon death are evaluated in determining the most suitable Estate Plan for any particular client’s needs. Lastly, as part of our approach to meet all of our clients Estate Planning needs, we prepare Durable Powers of Attorney for Financial Affairs and Advance Health Care Directives.

Durable Power of Attorney for Financial Affairs

A Durable Power of Attorney for Financial Affairs (DPOA) appoints someone you trust to handle financial and legal transactions on your behalf. You can choose to have it take effect immediately or only go into effect upon incapacitation. When used properly, the DPOA can avoid the need to establish a Conservatorship, and hence, is a very important document to have.

Advance Health Care Directive

The Advance Health Care Directive communicates your health care wishes and appoints an agent to carry out such wishes upon the inability to communicate with a treating physician. This document sets forth your decisions about artificial life support, types of treatment you may or may not allow, and other personal health care matters, well in advance of those questions ever arising. Not only does it ensure that your wishes will be heard, but prevents your loved ones from having to guess about what you would have wanted. In doing so, it prevents potential conflict within the family in a time of crisis. Any well planned estate will include an Advance Health Care Directive.

Trust Administration

Trust administration is the administration of a Trust Estate after a ‘settlor,’ or, person who created the trust, passes away. A common misconception with married couples is that, on the first spouse’s death, nothing needs to be done. However, in order to implement the estate-tax savings mechanism established in many Revocable Living Trusts, and to meet the fiduciary obligations created by the Trust, an attorney should always be consulted upon the passing of a person who took the time to create a Trust document. On the passing of the second spouse, or a single settlor, a successor trustee will administer the trust. In a nutshell, the successor trustee must ‘marshall’ the trust assets, ascertain the decedent’s debts and creditors, pay any income tax, fiduciary tax, or estate tax, as well as pay administration expenses, account for the trust assets, and make appropriate distributions to the beneficiaries. This process will seem overwhelming at first, however with proper guidance, the path will become clear.

Probate

Probate is the court-supervised administration of a decedent’s Estate. While it is a functional process, it is generally much slower, and much more costly to administer an Estate through the Probate process as opposed to a Trust Administration. Our firm is well-experienced in handling all aspects of the Probate Process.

Guardianships and Conservatorships

Generally speaking, guardianships are for minors whose parents, for whatever reason, are no longer caring for their children. Conservatorships are created for adults who have become incapacitated. Both Guardianships and Conservatorships are established by court order, create a fiduciary relationship between the Guardian or Conservator and the minor or Conservatee, and have strict accounting requirements. Further, both require periodic reporting to the Court system. The reporting and accounting requirements have been subject to recent changes, which have been implemented to establish a better mechanism of protection for the person subject to the Guardianship or Conservatorship. While these processes can be at first daunting, with proper guidance and representation, a Guardianship or Conservatorship can be the best way to assist a family member through a time of need.

Business Entity Formation

Again, this is an area where a business owner can find many self-help legal document services that will claim that you can save money without an attorney. But what will be the cost of making important legal decisions with respect to your business without proper legal advice? A business entity can take many forms, including: Sole Proprietorships, Partnerships, Joint Ventures, Corporations, or Limited Liability Companies. Each form of business entity offers unique advantages, and also involves its own administrative formalities. Selection of the correct business entity when starting a new business is one of the most important decisions for a small business owner. Whether the business is a professional practice, a licensed trade, retail store, or real estate investment, all owners need to be educated as to their options, as well as the benefits and risks that any particular form of business entity can present. Experienced counsel is strongly recommended.

Corporations

There are two reasons that a business owner will incorporate: The first is to save money on income taxes; and the second is to limit the liability of the owners/ shareholders. In evaluating the decision to incorporate, we strongly advise that our clients properly evaluate their income and expenses, and work with a skilled income tax advisor. While a good errors and omissions, liability, and/or malpractice insurance policy is always prudent, the corporate form will provide the extra degree of comfort that many business owners need.

Limited Liability Companies

Similar to a corporation, a Limited Liability Company generally shields the owner/ membership interest holder from liabilities in excess of the LLC assets. However, also similar to a corporation, limited liability is not the only factor one should evaluate in selecting this form of business entity. For example, as single-member LLC’s are generally disregarded as separate entities for tax-paying purposes, many solely-owned businesses would be better organized as a corporation. On the other hand, LLC’s are particularly well suited to hold title to real estate held for investment purposes. As each client’s goals and needs are unique, we can help you with the distinct challenge of selecting and forming the most appropriate entity for your business endeavor.

Real Estate Transactions

Inter-family transactions, Option Agreements, Tenancy-In-Common Agreements, 1031 Exchanges, and advising clients on more intricate aspects of real estate sales/ purchase agreements are all areas that require experienced legal assistance.

Civil Litigation

What happens when a Successor Trustee fails to account or make proper distributions to a beneficiary? How does a Successor Trustee properly defend claims threatened or filed by a beneficiary? What happens when a caregiver convinces a family member to leave their estate to the caregiver? How does an owner of jointly-titled real estate get out of their investment of the other owner(s) don’t want to buy them out? While nobody wants to be faced with these types of situations, they unfortunately do arise. These are all cases where you will need strong and attentive representation from an attorney with a good reputation in the local legal community. Civil Litigation has been a regular aspect of this firm’s practice throughout its more than 30 year history in Santa Barbara.

Income Tax

Mr. Scott H. Walther, E.A. has been with the firm since 1999, and handles over 225 personal income tax returns (IRS Form 1040), 75 corporate or other business tax returns (IRS Forms 1120/ 1120s); and a significant amount of 1041 Fiduciary/ Trust tax returns on an annual basis. As many of our business entity clients also need tax advice/ analysis it becomes very efficient and cost effective to handle business entity formation and tax return preparation all under the same roof. By the same token, our Trust Administration and Real Estate Transactional clients frequently benefit from the skilled and experienced tax advice and return preparation that we offer.