A dialog between a fiduciary and attorney about spouses working together, co-written by Loren & Frank Acuña. Published in the Contra Costa Lawyer - Online Magazine, February 2012
“A long marriage is two people trying to dance a duet and two solos at the same time”. ~ Anne Taylor Fleming
We started working together after Loren obtained her M.B.A. from U.S.C. and left investment banking. Frank’s estate planning practice was growing and he needed help with probate cases and business systems planning. We both thought it would only be for a short time. The office was near Las Lomas High School where our kids would eventually land. Working together seemed like a good way for both of us to balance careers and parenting.
Combining the excitement of a start-up and the anxiety of what it might mean to work together, we sketched out a plan for Loren to have her own role in the law firm, using her skills and background to best use.
Loren: I started out trying to bring the “Big Business” ideas I had studied in business school to Frank’s boutique, personal-service firm. Wrong approach. Eventually, I learned to embrace the joy in helping individuals with the wide variety of issues that surround planning for the transition of wealth to the next generation. After learning the craft, I was better able to build processes that worked in that firm’s culture.
Frank: As the business changed and grew, so did Loren’s role. At first, she worked on discrete projects and probate cases; then she took on the role of senior paralegal for probate, conservatorship, and trust administration practice. Then, as growth exploded, her role expanded to include managing cash flow and system improvements needed for a growing law firm.
Loren: Frank is a wonderful strategic thinker and he loves marketing (I used to tell him that discussing marketing was like having dessert; it was always added as the last item on any firm meeting agenda). When meeting with clients, he can quickly analyze legal situations and explain concepts so his clients can easily grasp them. Because Frank spends many hours speaking to various professional groups, we developed a system that enabled him to supervise, delegate, and keep doing what he enjoys most.
Frank: Loren’s skills are more focused on digging into a subject until she understands it completely and thoroughly. I tease her about being like “a raccoon with a rock”, researching and examining a problem from all sides until she can develop a series of steps; a spreadsheet; a database; or, other tools to make the work more effective. I loved it because it gave me time to work on cases and to look for new opportunities.
Loren: Frank helped me develop an expertise in estates and trust by encouraging me to research and by allowing me to build an approach to this practice area. I helped him build his business by setting up systems that could be transferred to new staff and reduce costs. Together, we developed a set of values to build our business upon: Empathy, Expertise, and Effectiveness. Our entire team dedicated themselves to making sure that our clients would experience these values on every matter we touched. This legacy continues in his law practice and in my professional fiduciary firm.
Frank: As our children graduated from high school, Loren had a dream of starting her own business. She obtained her license as a professional fiduciary and now serves clients directly and with a team of professionals. I continue to practice as an estate planning, probate, and trust specialist with Acuña, Regli & Klein, LLP.
Loren: The children have moved on to college and careers and we are in a new season together. I am excited about the opportunity to explore my own directions; spread my wings and to use my education, financial background, and my years of experience working in my husband's law firm. When we worked together in the same office, we would occasionally feel a little too close for comfort. However, we now miss the closeness and camaraderie we shared every day for ten years.
Frank: There is nothing like the level of trust you have in working with someone whose life, love and future are so intimately tied with your own.
Final Thoughts: We respect each other’s skills and abilities in a way that would not be possible if we had not worked together. We continue to support and encourage each other, but we also respect conflict of interest rules as well as a fiduciary’s duty of independent oversight as to professionals hired. Therefore, we each have our own office and find few, if any, opportunities to work together these days.
Loren R. Acuña, is a private fiduciary with The ACE Fiduciary Group. You can obtain more information about her skills and background at www.ACEfidcuiary.com or by contacting her at (925) 906-1882, or by email at Loren@ACEfiduciary.com.
Frank R. Acuña, a partner with Acuña, Regli & Klein, LLP, is a State Bar of California certified specialist in Estate Planning, Probate and Trust Administration. He can be contacted at www.AcunaRegliKlein.com (925) 906-1880 or ohc@AcunaRegliKlein.com.
Wednesday, February 1, 2012
Saturday, January 7, 2012
Love or Comfort?
My daughter packed her bags and drove off yesterday. As she left to return to college, I flashed back on my mom, waving to me as I would drive off from her house. Then a moment later, I remembered the tears on my mom and dad's faces as we would drive home after visiting my grandparents for Christmas; fried chicken and pecans packed to eat on the long drive home.
At the time, I didn't really understand the tears. I mean, I had a good time and all, but I was kind of happy to be going back to my own home. Back to where I didn't have to be quite so quiet, or quite so polite, or follow some new set of rules; back to my comfortable routine.
As my daughters and all the family & friends left yesterday, I experienced the oddest contrast in emotions. On the one hand, there is the misty eyed, missing them already kind of love. On the other hand, there is a sense of relief. Now, I can go back to my routine and clean house. Did I just say that?
After the family left, the routines started up again. Oh, those comforting routines. But wait, it's so quiet here today. I'm kind of restless, looking for my mom to walk with or my daughter to talk with or my friends to play with. Hey, where did everybody go?? Did my grandparents or mom experience that dual sense of gratitude for family and for the comfort in the daily routine?
There is comfort in knowing that you have offered your best and highest love to others. Families offer many opportunities to experience and give love, joy, loyalty, and a sense of belonging as well as so many other positives. But, you have to admit, families also bring in their stuff, their wishes and their drama or chaos. Just being with family can push us out of our comfort zones. Sometimes love feels more like fighting a wave to swim to the other side.
Remember those “Love Is ….” cartoons? Love involves small gifts of self: pushing back the irritations; finding something the other person likes to eat; spending time listening; offering advice only when asked; playing a game the other person wants to play; turning up the heat, even when you don't want to; and, every so often in a glittering moment we get to share from our hearts and connect with someone else. There are numerous ways to offer love and most of us try our best to do so during the season of remembering Christ's birth.
Now Christmas is over. Routines set in. Most of what we remember about others often boils down to “How did we start?” or the little habits we notice or leave-takings. What goes on the middle is sometimes a mixture of love and discomfort. And you always wonder . . . . did they hear your love or your discomfort more?
Some of us are taking leave of our families heading off into our own lives and homes – like my daughters, others are returning home after a visit and settling into known comforts; and, some are preparing to leave this world due to an illness: they are wondering what is really beyond - not wanting to leave behind the comfort of the known. How we finish our lives and take our leave is often most remembered. Today, I prefer the chaos and discomfort of love. I hope, in the end, that Love wins out. Imagine, Christmas everyday and no diets!
Click here to read an excerpt of a book coming soon, Afterword, by Loren R. Acuna. The book is inspired by C.S. Lewis and George Macdonald's allegorical, imaginative fiction.
Friday, December 30, 2011
Reimbursable Expenses for Estate Representatives in 2012
2012 Reimbursable Mileage & New Postage Rates below!
Did you know that not only do attorneys and fiduciaries need to stay on top of changes in the State of California Probate Code; but they also must monitor the California Rules of Court; the Business & Professions Code; and, the state, federal and local tax rules? In addition, each court publishes local rules to clarify how they interpret codes or rules. These codes and rules can change each year.
To help the attorneys and fiduciaries we serve, we have put together a “cheat sheet” for selected counties in Northern California. Take a look at our website page Tidbits & Morsels to get a quick look at how each court views fees, costs, and reimbursable expenses, such as mileage, copies, postage, telephone, internet, etc. Each local court views fees and costs differently.
Most expenses incurred by an Executor, Estate Administrator, Conservator, or Guardian must be approved by the court before reimbursement to the personal representative. Some courts allow reimbursement for some of these miscellaneous expenses and others do not. It pays to keep track of your expenses, but remember that your attorney may choose not to submit all expenses you incur in handling a loved one’s estate. Check with your attorney.
Actually, fiduciaries must be aware of a wide variety of areas that touch on the different types of cases they handle. This means they need to know how to evaluate and hire the additional professional expertise required for each situation they encounter. Enter your email address to the left to receive regular emails from The ACE Fiduciary Group Blog - The 5th Chapter. This way, you’ll receive our posts on topics and resources that can help personal representatives and professional fiduciaries.
Remember to note business related mileage in a small pocket calendar or other manner that can be to used as back-up for your tax return or for your attorney, if requested.
2012 IRS business mileage reimbursement rate is 55.5 cents per mile, 23 cents medical mileage, and 14 cents for charitable mileage.
US Postage rates will increase to 45 cents for a first-class single letter on January 22, 2012.
Stay warm, healthy, and have a Happy New Year!
Did you know that not only do attorneys and fiduciaries need to stay on top of changes in the State of California Probate Code; but they also must monitor the California Rules of Court; the Business & Professions Code; and, the state, federal and local tax rules? In addition, each court publishes local rules to clarify how they interpret codes or rules. These codes and rules can change each year.
To help the attorneys and fiduciaries we serve, we have put together a “cheat sheet” for selected counties in Northern California. Take a look at our website page Tidbits & Morsels to get a quick look at how each court views fees, costs, and reimbursable expenses, such as mileage, copies, postage, telephone, internet, etc. Each local court views fees and costs differently.
Most expenses incurred by an Executor, Estate Administrator, Conservator, or Guardian must be approved by the court before reimbursement to the personal representative. Some courts allow reimbursement for some of these miscellaneous expenses and others do not. It pays to keep track of your expenses, but remember that your attorney may choose not to submit all expenses you incur in handling a loved one’s estate. Check with your attorney.
Actually, fiduciaries must be aware of a wide variety of areas that touch on the different types of cases they handle. This means they need to know how to evaluate and hire the additional professional expertise required for each situation they encounter. Enter your email address to the left to receive regular emails from The ACE Fiduciary Group Blog - The 5th Chapter. This way, you’ll receive our posts on topics and resources that can help personal representatives and professional fiduciaries.
Remember to note business related mileage in a small pocket calendar or other manner that can be to used as back-up for your tax return or for your attorney, if requested.
2012 IRS business mileage reimbursement rate is 55.5 cents per mile, 23 cents medical mileage, and 14 cents for charitable mileage.
US Postage rates will increase to 45 cents for a first-class single letter on January 22, 2012.
Stay warm, healthy, and have a Happy New Year!
Saturday, December 24, 2011
The Big Gift - Do You Have The Financial Management “X-FCTR”?
Let’s start this one with a puzzle. Here is a new brain teaser. Below is a proverb with all of the vowels removed. Put the vowels back to find the proverb. (Note: the letters have not been grouped by word, rather by four letters in a line.)
Congratulations if you got it. You’ll find the answer on our website. Congratulations also to Melanie Amaro, with the angel voice, winner of the X-Factor. Read on to find out how to solve some puzzles about windfall earnings, like those Melanie Amaro will receive.
A $5 million dollar contract and the opportunity to launch a recording career. What a gift! She earned her top spot and it is a very large amount of overnight wealth for anyone to receive. A recent article by Robert Frank, “The Truth About Wealth” in the Wall Street Journal, December 17, 2011 refers to a Federal Reserve study on the top 1% of income earners (those earning over $343,000 in 2009). The study revealed that 60% of the super wealthy did not remain in the top 1% of income after a couple of years. Wealth is hard to hold onto.
You may not have just won the X-Factor, but you might receive a large settlement, inheritance, lottery, bonus or stock option. Just in case, pay attention before you take any action to maximize the wealth available to you over your lifetime.
Scenario #1 - No Plan
If the winner of a $5,000,000 lottery or game show or bonus or stock option lived in California (Melanie is lucky since Florida has no income tax), without planning, the winnings would be taxed at the highest combined rate. California tacks on 10.5% plus the 35% federal rate, makes a top 45.5% income tax rate. This would reduce the amount available to the winner to $2,725,000. If the winner wanted to be conservative and only use the income from this remaining amount to live on, they might be able to invest to earn $136,250 annually, which is then taxed a bit over 30%.
Many people do not have competent legal or investment advice, but instead use the winnings to fund the family gifts, toys and fun that we all love to imagine. In that case, most of it the windfall is gone within approximately 5 years. Remember, income from inheritance or legal settlements is income taxable, but the principal is not. Windfall earnings or lottery winnings are taxed at the highest possible income tax rate in the year they are paid.
Scenario #2 - Structured Payments
If Melanie is lucky, her winning contract will pay her a set monthly amount at a level that will keep her tax rate below 30%. Given a 5% annual investment rate, she could see approximately $144,0000 per year for 20 years, which is approximately a $5,000,000 present value contract. With no tax deductions, this would leave her with $103,680 in annual income over twenty years. While not the millions it seems at first, this type of settlement effectively guarantees income for life at a lower tax rate than taking the entire amount immediately. Also, this type of structure offers a base “safety net” of income should Melanie’s singing career not provide her with a steady income. Structured settlements are often used in personal injury settlements. Often a neutral 3rd party trustee is named to handle a litigation special needs trust for the benefit of the injured party. In the case of windfall earnings or winnings, if the payment can be taken over time, the temptation to spend it all is reduced and the tax rate can be reduced.
Scenario #3 - Give It Away
While the winner of $5,000,000 does not save in income taxes by creating a charitable trust with the winnings, if a large lump sum is received from inheritance, winnings, or un-exercised stock options, charitable trusts can be used to save the estate from paying estate taxes. This is especially useful when low basis assets are re-valued upon the death of a parent. This scenario can also save the estate from losing value by avoiding capital gains taxes if properly handled.
If someone receives a large inheritance, many estate planning attorneys will recommend placing some or all assets into a charitable trust. If an employee receives stock options and the value of the stock dramatically increases, a great strategy can include a charitable trust to obtain income and lock in values. The charitable trust can be set-up to give assets to a church or other charity near to your heart. The trust manages the money and passes on the income to you until death, when the charity receives the assets.
Word to the wise: if you anticipate or receive a windfall payment or have stock options you want to exercise, it pays to see a qualified, competent estate planning attorney who can help you coordinate with other professionals to lower taxes and help you maximize your windfall. Otherwise, you might be the subject of the above proverb.
Merry Christmas to all and to all a good night!!
FLND HSMN YRSN PRTD
Congratulations if you got it. You’ll find the answer on our website. Congratulations also to Melanie Amaro, with the angel voice, winner of the X-Factor. Read on to find out how to solve some puzzles about windfall earnings, like those Melanie Amaro will receive.
A $5 million dollar contract and the opportunity to launch a recording career. What a gift! She earned her top spot and it is a very large amount of overnight wealth for anyone to receive. A recent article by Robert Frank, “The Truth About Wealth” in the Wall Street Journal, December 17, 2011 refers to a Federal Reserve study on the top 1% of income earners (those earning over $343,000 in 2009). The study revealed that 60% of the super wealthy did not remain in the top 1% of income after a couple of years. Wealth is hard to hold onto.
You may not have just won the X-Factor, but you might receive a large settlement, inheritance, lottery, bonus or stock option. Just in case, pay attention before you take any action to maximize the wealth available to you over your lifetime.
Scenario #1 - No Plan
If the winner of a $5,000,000 lottery or game show or bonus or stock option lived in California (Melanie is lucky since Florida has no income tax), without planning, the winnings would be taxed at the highest combined rate. California tacks on 10.5% plus the 35% federal rate, makes a top 45.5% income tax rate. This would reduce the amount available to the winner to $2,725,000. If the winner wanted to be conservative and only use the income from this remaining amount to live on, they might be able to invest to earn $136,250 annually, which is then taxed a bit over 30%.
Many people do not have competent legal or investment advice, but instead use the winnings to fund the family gifts, toys and fun that we all love to imagine. In that case, most of it the windfall is gone within approximately 5 years. Remember, income from inheritance or legal settlements is income taxable, but the principal is not. Windfall earnings or lottery winnings are taxed at the highest possible income tax rate in the year they are paid.
Scenario #2 - Structured Payments
If Melanie is lucky, her winning contract will pay her a set monthly amount at a level that will keep her tax rate below 30%. Given a 5% annual investment rate, she could see approximately $144,0000 per year for 20 years, which is approximately a $5,000,000 present value contract. With no tax deductions, this would leave her with $103,680 in annual income over twenty years. While not the millions it seems at first, this type of settlement effectively guarantees income for life at a lower tax rate than taking the entire amount immediately. Also, this type of structure offers a base “safety net” of income should Melanie’s singing career not provide her with a steady income. Structured settlements are often used in personal injury settlements. Often a neutral 3rd party trustee is named to handle a litigation special needs trust for the benefit of the injured party. In the case of windfall earnings or winnings, if the payment can be taken over time, the temptation to spend it all is reduced and the tax rate can be reduced.
Scenario #3 - Give It Away
While the winner of $5,000,000 does not save in income taxes by creating a charitable trust with the winnings, if a large lump sum is received from inheritance, winnings, or un-exercised stock options, charitable trusts can be used to save the estate from paying estate taxes. This is especially useful when low basis assets are re-valued upon the death of a parent. This scenario can also save the estate from losing value by avoiding capital gains taxes if properly handled.
If someone receives a large inheritance, many estate planning attorneys will recommend placing some or all assets into a charitable trust. If an employee receives stock options and the value of the stock dramatically increases, a great strategy can include a charitable trust to obtain income and lock in values. The charitable trust can be set-up to give assets to a church or other charity near to your heart. The trust manages the money and passes on the income to you until death, when the charity receives the assets.
Word to the wise: if you anticipate or receive a windfall payment or have stock options you want to exercise, it pays to see a qualified, competent estate planning attorney who can help you coordinate with other professionals to lower taxes and help you maximize your windfall. Otherwise, you might be the subject of the above proverb.
Merry Christmas to all and to all a good night!!
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