Author: Kevin Brown

Deborah Dickson, Managing Partner of Smith Dickson, is pleased to welcome Richard Warner, CPA and Ryan Nguyen, CPA to our partnership!

Richard Warner provides innovative tax planning strategies, specialized advisory services, bank negotiations, and merger and acquisition structuring. He oversees tax strategy and compliance work for individuals, partnerships, and corporations.

Ryan Nguyen is a leader in the forensic CPA arena with extensive experience in financial analysis, fraud investigations, Rule 26 and other report preparation, litigation consulting, and expert witness testifying. He also leads his team in performing assurance services.

Richard and Ryan have each been with Smith Dickson for over 10 years. Congratulations from all of your colleagues!

The SECURE Act: Estate Planning for Inherited IRAs

Have you heard of the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”), passed by Congress in January of this year?  You may not know that the SECURE Act could impact your existing estate plan.  Here’s how:

If you have previously named a trust as the beneficiary of a retirement account (such as an IRA) because you wanted to control the distribution to your beneficiary, the SECURE Act may affect your planning.

Old Law vs. New Law

Under previous law, a non-spouse beneficiary (such as a child) could take distributions from an inherited individual retirement account (IRA) over his/her life expectancy, thereby minimizing the income tax payments over his/her lifetime (called the “stretch” IRA).  Historically, trusts holding an inherited IRA can provide desirable controls and protections for your chosen beneficiaries : (1) asset protection from creditors and divorce, (2) reduction of a substantial, lump-sum gift that the beneficiary could squander in a short time, and (3) income tax deferral on distributions from the IRA.  If the beneficiary was much younger than the IRA owner, the Required Minimum Distributions (“RMDs”) were calculated based on the child or other young person’s lifetime so the proceeds would be paid out over their life expectancy and only the minimum distributions would be income-taxable to the beneficiary.

Under the SECURE Act, payments to most beneficiaries have been reduced to a 10-year term. No withdrawals have to be made during the 10-year period, but at the end of 10-years from the date of the plan holder’s death, the entire balance in the plan must be withdrawn and all of the income tax paid by the beneficiary.

Exceptions to the Payout Rule

There are some exceptions to the new 10-year SECURE Act payout rule for persons who may still withdrawal the IRA proceeds over their life expectancy:

• Surviving spouses
• Chronically ill and Disabled persons
• Persons within 10 years of age of decedent

Minor children are also exempted so that the 10-year payout will not begin until they reach adulthood (age 18 in California) and be paid out by year 10 (age 28).  There is one exception to this timeline: a child may be treated as having not reached the age of majority if the child has not completed a specified course of education and is under the age of 26. This delay will help parents better plan for their minor children who intend to pursue college or university without worrying about a lump sum payment at age 28; however, more guidance from the IRS is needed to clarify how this exception will work in actual application.

What Should You Do?

If you have designated a trust as the beneficiary of your retirement accounts, you should review the drafting of that trust with your estate planning attorney to understand the implications of the SECURE Act. Some key issues to address include:

1. If you have named a trust as beneficiary and might wish to revise that trust to avoid the beneficiary receiving a large lump sum distribution after 10 years.

2. If you would prefer to gift some or all of your IRA outright to the beneficiary and abandon the shelter of the trust.

3. If you wish to keep a trust in place despite the poor income tax treatment because your beneficiary cannot manage money on his/her own or suffer from significant substance abuse problems that is not considered a “chronic illness” or “disability.”

Note that the SECURE Act only applies to retirement plans that are inherited after January 1, 2020, not to those already in place from a prior inheritance.

If you wish to review your estate plan and designated beneficiaries on your retirement accounts, please call or email to set up a free twenty (20) minute consultation with a Mortensen & Reinheimer attorney to determine how the SECURE Act potentially affects your estate planning.  You may not need to change your plan due to the new law, or you may simply need to change the beneficiary designation of your IRA and not your estate plan.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

Liability & Title Insurance and Your Living Trust

We Californians have become more nervous about wildfires over the past few years, not to mention the typical earthquake. If you transfer your home into your living trust (as you should!), be sure to call your homeowner’s insurance company and add the trust as an “additional insured” on your policy.  With most insurance companies, this will not increase your premium, and will keep your home insured inside your living trust in the event of a natural disaster.

Likewise, review your title insurance policy to make sure it defines “insured” to include your living trust. This will protect you in the event of a boundary dispute with a neighbor. You can find your title policy with the original escrow paperwork when you purchased your home. The Homeowner’s Policy of Title Insurance (after 1998) is the default policy in California and includes transfers to living trusts and will not terminate title insurance. By contrast, the CLTA Standard Coverage Policy (before 1998) does not include living trusts as an insured and will cancel your title insurance policy.  Either way, you can contact the title insurance company and obtain an “Additional Insured” endorsement to add your living trust to the policy so your home will stay covered in the event of a dispute with your neighbor.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

Estate Planning:
Recent Engagements During COVID-19

Is This Your Situation?

Since the COVID-19 pandemic hit Orange County, Mortensen & Reinheimer, PC has received numerous requests for assistance. A typical inquiry … “We communicated about a year ago and I failed to follow up, as I got distracted and made planning a low priority.  COVID-19 serves as a good reason for me to get my act together regarding wills and trusts. I would like to get this process moving and want to know how to best proceed. Are there updated documents you need? Can we do the entire process virtually?”

These inquiries point out the need to do comprehensive estate planning — and to avoid being unprepared to deal with the impact of any lengthy illness or death.  Our attorneys help clients prepare for these difficult decisions, providing expert guidance throughout each step of the process.

It might be helpful to demonstrate how we can help through a couple of our recent engagements during the pandemic:

Case #1 – Family business and simplified marital estate planning: Many of our clients have small family-owned businesses and desire succession planning as a key aspect of their estate plan.  In this case, our clients were a couple looking ahead toward retirement in a few years, expecting their adult child to move up in the family business and assume full control and ownership.

The couple had an existing estate plan but it was nearly 100 pages long and overly complicated.  The former attorney provided too many options, making it difficult to understand and even harder to implement.  Since the couple had never been remarried and other complications did not exist, it was unnecessary to make the estate plan complex.

Mortensen & Reinheimer, PC crafted a plan that met this couple’s specific needs, including a straightforward living trust (and will), durable power of attorney, beneficiary designations, letter of intent, healthcare power of attorney, and guardianship designations.  The plan was simple to implement and steps are currently underway to file deeds of trust and other related documents. The clients were very content in knowing that their business will be passed along as planned and all other estate details are in order.

Case #2 – Conservatorship turned to Inheritance and Business Succession Planning: In this recent matter, a client had previously asked Mortensen & Reinheimer, PC to prepare a conservatorship for the elderly father and his son as conservator.  When the father recently passed, the son inherited the business and needed to update his own estate plan.  A few complications existed due to family structure and specific desires for asset disposition.

Key goals of the plan included: establishing community property rights for the spouse, including substantial real estate wealth; planning for one of the children to eventually take over the business; and working with the family’s business transactions attorney to structure buyout options for other children not involved in the business.  This estate plan is currently underway and we are communicating regularly with the client as each step is completed.

Video of the Month: Conservatorships

A conservatorship is established for an adult person who is unable to handle his or her own financial or personal affairs. The conservator (person who is authorized to make decisions on behalf of the incapacitated person) can be a parent, spouse, child, other relative, friend, or professional conservator. We want our clients to be as informed as possible about the important decisions they’re making, so learn more about conservatorships in our video.

Ready to Assist You

The attorneys at Mortensen & Reinheimer, PC are available to help you.  All of our staff are working remotely, keeping our law corporation operational.  Since in-person meetings are not an option for most at this time, we can assist clients through “virtual” telephone or video conferences.  In addition, most of the follow-up legal and administrative work can be done remotely and by email/mail.  Our goal is to help you move forward with your estate planning issues, even in the midst of these very trying times that we are all facing.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

Estate Planning:
Key Client Concerns During COVID-19

Helping Clients at this Crucial Time

Our role as estate planning attorneys is to help clients prepare for some of the most difficult decisions in their lives, then to guide them through it each step of the way with thoughtful and expert guidance.  We care about the welfare of each of our clients and desire to help them as much as possible.

The coronavirus COVID-19 pandemic has caused many to worry about estate planning, such as concerns about their will, trust and related issues.  The reality of mortality is very concerning when the Center for Disease Control is warning that older adults, and people of any age who have serious underlying medical conditions, may be at higher risk for more serious complications from COVID-19.  Mortensen & Reinheimer, PC is here for you if you are struggling with these issues.

If the current circumstances have caused you to be concerned about your estate plan, you’re not alone.  Mortensen & Reinheimer, PC has received many inquiries from clients who are addressing questions, including the following:

• I’ve been avoiding making decisions on my estate.  Can I get an estate plan done now?
• Do I need a power of attorney for medical decisions?
• I need help settling a trust now.  What can be done?
• Who will be in charge of settling my estate?
• What are some options for bequeathing my assets?
• Who will take care of my minor children?
• Are there specific trust options that are best for my estate?
• What can I do now?  Are your attorneys working and available?

A Great Time to Access Our Video Library!

As you contemplate your needs (and while you are at home maintaining “social distancing”), you may want to look at our online “video library” to learn from our experienced attorneys about estate planning, wills and trusts, the probate process, and more.  We want our clients to be as informed as possible about the important decisions they’re making.  Check them out to learn more about these important – and often complex – legal processes. For example, see our Wills video to learn more about preparing an individualized and tailored will for you.

Ready to Assist You

Please rest assured that the attorneys at Mortensen & Reinheimer, PC are available to help you.  All of our staff are working remotely, keeping our law corporation operational.  Since in-person meetings are not an option for most at this time, we can assist clients through “virtual meetings” on Zoom, Skype or teleconferences.  In addition, most of the follow-up legal and administrative work can be done remotely and by email/mail.  Our goal is to help you move forward with your estate planning issues, even in the midst of these very trying times that we are all facing.

 

Please let us know of any questions or concerns that you have.  We want to be there to help you.

About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.

Response to COVID-19 Outbreak

Hello Clients:

As businesses around Southern California close down in response to the COVID-19 virus outbreak, please know that we are and will continue to work on client matters remotely via email and phone. We also can meet with clients in our large conference room by appointment only for signing and notary services, which allows us to be 4-6 feet apart. We have always taken measures to clean “high-touch” areas like waiting areas and desks, and are now more diligently disinfecting such surfaces before and after all in-person meetings and throughout the day.  We will make all necessary accommodations for you if there is anything urgent to address.

Importantly, please note that most California courts are closing for the next several days and will not be having hearings or processing legal filings. Orange County Superior Court is closed until March 27th; Los Angeles Superior Court is closed until March 20th; San Bernardino Court is closed until April 2nd. That means if you are awaiting the return of important Orders or Letters, you will experience additional delay in attending to your trust or estate matter. We will continue to closely monitor these closures and advise you of any updates as we receive notice from the courts.

W. Robert Price, Esq., President, Mortensen & Reinheimer, PC.  Contact Robert at wrobertpriceesq@yahoo.com.

CONSERVATORSHIPS FOR ADULT-AGE SPECIAL NEEDS CHILDREN

Weily Yang, associate, published an article in the February 2020 issue of “Orange County Lawyer,” the official publication of the Orange County Bar Association.

Excerpt from the article:

Ever since I discovered my child was on the autism spectrum, I have done everything I could to provide him with a proper upbringing. In the beginning, after conducting some research and speaking with numerous advocates from the special needs community, I realized that many aspects of my child’s life would have to be modified in order to fit his needs. It was not easy, but now he receives the appropriate behavioral services with the regional center, attends special needs classes that tailor to his individual education plan (IEP), and gets all the love and support from his family. 

This year, my child turns seventeen. It dawned on me: in one year, my child will be eighteen; the threshold into adulthood. I thought that I still had a full year to plan this out. However, now I cannot stop thinking about what will happen once my child reaches the age of majority. I panic uncontrollably while my mind, like a record player, plays the same questions over and over in my head.

CLICK HERE TO READ THE ARTICLE

About the author:
Weily Yang is an attorney at Mortensen & Reinheimer, PC, an estate planning and probate firm in Irvine. Weily is a zealous advocate for individuals with special needs. His primary focus is special needs trusts and probate conservatorships together with estate planning, trust administration, and probate. He can be reached at weily@ocestateplanning.net.

MYANMAR: TRADEMARK REGISTRATIONS NOW POSSIBLE

Up until now, trademark protection in Myanmar was limited to common law protection resulting from recording a Declaration of Ownership at the Office of Registration of Deeds, and publications of Cautionary Notices in local newspapers. However, beginning at the end of December, the Trademark Office of Myanmar will begin accepting trademark applications.

Initially, the Trademark Office will only accept applications from those with currently recorded Declarations of Ownership. This will allow existing owners to ensure their rights are given priority of protection over newcomers to the system. Existing registrants will need to re-file by submitting a Power of Attorney as well as the relevant application forms. The Power of Attorney will need to be legalized by the Consulate of Myanmar. Registrations will be valid for terms of ten years, with renewals available for additional ten-year terms.

Whether you are a current trademark owner or new to doing business in Myanmar, we strongly suggest filing a trademark application for your mark as soon as possible after the December launch.

BRAZIL AND MALAYSIA JOIN THE MADRID PROTOCOL

It is now possible to extend an International Trademark Registration to Brazil as of October 2, 2019.

Additionally, Malaysia will join the Madrid System as of December 27, 2019, which now covers 122 countries.

Protection of your trademark registration through the Madrid System is a cost-effective way to ensure your valuable IP rights are protected across the globe.

QUESTIONS?

If you are interested in international trademark protection in Brazil, Malaysia, Myanmar, or any other jurisdiction, please contact us at dstewart@gtilaw.com, and we can provide you with any information and fixed fee quotations you need to move forward in protecting your valuable intellectual property rights.

FIRM PROFILE

Founded in 2002, Global Trademarks, Inc. provides legal expertise in trademark and copyright protection around the world. We serve numerous Fortune 500 companies and other businesses of all sizes.

Global Reach: We have extensive experience in numerous countries and jurisdictions throughout the world. Global Trademarks, Inc. has long-term relationships with a network of agents and associates all around the world, ensuring responsive, reliable and superior work quality. We help clients protect and defend numerous famous brands all over the world, particularly in regions where it is difficult to find reliable legal representation.

Services:

• Trademark registration (domestic and international)
• Trademark portfolio management
• Trademark watch services
• Trademark renewal
• Assignments of trademark rights
• Copyright registrations
• International infringement actions and investigations
• Customs recordals

PROTECTING INTELLECTUAL PROPERTY AROUND THE WORLD