The Costs to Probate an Estate in California

The cost of probate is not something that one typically takes into consideration until the time actually comes to set up a probate. One would assume that the fee would be the same as a standard estate attorney fee like setting up a standard will and so forth. However, the state of California statutory provisions determine attorney fees when it comes to the probate process.

What is probate?

Probate is the name given to the legal process of distribution of assets to the designated beneficiaries after the death of the heir. This process also will validate any existing last will and testament. If there is no will, the estate will be disbursed under the intestate succession laws of the state of California.

What factors are involved in the cost of a probate in CA?

When you are paying for the probate process in California, you are paying for more than just your attorney. Your attorney is responsible for the following (among others, depending on the specifics of the probate):

  • Consultations with the executor of the estate
  • Court representation
  • Paperwork preparation
  • Any Consultations with family members of the deceased
  • Tax return preparations for the estate
  • Property maintenance costs
  • Any fees if the property is for sale

 

Other fees involved in the probate process are as follows:

  • CPA/tax attorney
  • Real estate appraiser
  • Any advertising costs
  • Probate court costs
  • Surety bond

Every case is different and might involve additional costs. These are just the most common factors that can contribute to the overall cost of the probate process.

 

What is the cost of probate process in the state of CA?

Following is the breakdown of the state statute percentages according to the state of California for the probate process:

  • 4% of the first $100,000 of the gross value of the probate estate
  • 3% of the next $100,000
  • 2% of the next $800,000
  • 1% of the next $9 million
  • .5% of the next $15 million

The estate attorney will receive one half of the lump sum and the other half will go to the executor of the will.

The following is a reference for estimated probate costs based on the above:

 

PROBATE ESTATE VALUES TOTAL ATTORNEY AND EXECUTOR FEES*
$100,000 $8,000
$200,000 $14,000
$300,000 $18,000
$400,000 $22,000
$500,000 $26,000
$600,000 $30,000
$700,000 $34,000
$800,000 $38,000
$900,000 $42,000
$1,000,000 $46,000
$2,000,000 $66,000
$3,000,000 $86,000
$4,000,000 $106,000
$5,000,000 $126,000

 

 

Is there a way to avoid or reduce these costs?

The best way to avoid these exuberant fees is to set a plan now, so your family can avoid these fees after your death.  One alternative is to opt for a living trust instead of, or in addition to, a will. A living trust is not subject to probate. All your assets and property will be disbursed to your designated beneficiaries via your appointed trustee. There are no court fees and the entire process only takes a few weeks as opposed to the long drawn out probate process. Once the property has been disbursed according the living will, it is null and void and therefore cannot be contested.

 

At Titanium Asset Protection, we understand that you want to make the probate process as smooth and cost-effective as possible for your loved ones. Your family has enough to handle in dealing with their loss, so we will do everything in our power to help make this process less intimidating. Please contact us at (714)-827-9955 for a free consultation. A member of our experienced team will gladly answer any questions or concerns you might have regarding the probate process.

 

Transitioning or Converting Your California Business from A Sole Proprietor To S-Corp & the Tax Savings in Self-Employment Taxes

If your business is suffering as a result of recent changes in the economy and you are considering converting to an S-Corp, there are some things you need to take into consideration. There are advantages to switching off, such as tax benefits. In this article, we’ll discuss what is involved in switching over from a sole proprietor an S-Corp and the advantages involved with that.

Advantages of Converting a Sole Proprietorship to a Corporation

●     As a corporation, you will have limited liability protection. This means that in the event that you are involved in a lawsuit, the corporation’s assets are at risk rather than your personal assets.

●       It will be easier to split your profits and income with your staff through the use of dividends.

●       The tax rate is lower for a corporation that it is a sole proprietor.

As you can see, there are advantages of switching to an S-corporation. Following we will give you a brief guide as to how to make the transition.

●       Adding “LLC” or “Inc” to your company name can greatly increase your credibility as a reputable business.

●       As a corporation, you are eligible for more tax reductions than you would be as sole proprietor.

●       You will have more stock options as an S-Corp than as a sole proprietor.

The Transition Process

It is advised that you seek legal counsel to ensure that the transition is a smooth one, and that everything is done legally. Following are the steps you need to take to make the transition from a sole proprietor to an S-corporation for the purpose of tax reductions.

First, you need to file for corporate status. Make sure you adhere to the proper guidelines. You need to form a board of directors, file the necessary paperwork with the California Secretary of State, draft your company by-laws and establish a corporate bank account. Also, you should check to see if your chosen name of your corporation is available for use in the state of California.

Next, you need to apply for an Employer Identification Number or EIN. This will be your number for federal tax identification for tax filing purposes.  It will also be used for payroll purposes and banking such as obtaining a line of credit for your business or opening a business account. You can apply for your EIN on the IRS websit, or call the IRS 800 number (1-800-829-3993). In addition, you a mail in or fax your completed Form SS-4 to the Internal Revenue Service.

Third, you will need to file with the IRS for S-corporation status by completing Form 2253 within 2 months and 15 days prior to the beginning of the first business day as an S-Corporation.

Next, you would need to transfer your assets from your sole proprietorship to your S-Corporation. This includes both tangible and intangible assets. Tangible assets include company vehicles, office machinery, furniture and equipment and so forth. Intangible assets are those assets that are not psychical in nature such as trademarks, patents, and copyrights.  Essentially intangible assets are the estimated value of the company’s brand and reputation.

Make sure that you have filed for the necessary permits and licenses required by the state and county government such as re-sellers permit, health permit and any other required professional certifications, permits or licenses. You might have to reapply for the aforementioned when you are making the switch from a sole proprietor to an S-Corporation. Check to make sure that all of your permits, and so forth are up to date with your city, county and state government to ensure that you do not incur any fines in the future.

If you have any questions or need assistance during your transition from a sole proprietor to an S-Corporation, please contact us at (714)-827-9955. Our staff will assist you with any concerns you may have. We have years of experience and expertise in dealing with corporate law and asset protection. You can count on us for expert legal advice!

 

The Costs To Probate An Estate In CA

What are the costs to probate an estate in CA?

It’s not something most want to think about. Yet, the costs of avoiding dealing with these questions can make that inevitable moment even harder for everyone. Avoiding this conversation and taking the simple smart actions to ensure an estate is passed on to designated heirs, can mean the complete waste of a lifetime of work and discipline, and sets a precedent likely to be repeated by those you love too.

If you don’t think it’s that serious, just consider the costs and consequences of failing to prepare.

The Costs of Probate in California

There are multiple fees and costs associated with probate in CA, including:

  • ·        Court filing fees
  • ·        Estate appraisal fees
  • ·        Compensation to attorneys and representatives

The basic statutory fees for a probate case in California scale in relation to the value of the estate. This can range from $4,000 to over $163,000. The court can also allow or assess greater fees for cases they consider complex, or which have higher values.

The Pros & Cons of the Probate Process

There is an advantage of allowing an estate to fall into the probate court. That is allowing for a judge to hear arguments and solve disputes between competing heirs. However, the cons can include; elimination of privacy, risk of your desires not being fulfilled, and extended processing times. That’s all in addition to the costs.

If an estate has to go through the probate process in California it means months of legal hoops, stress, and filing papers. Some may just not make it through that. At best it can mean heirs are left without access to financial resources and assets while the cases hangs in the balance.

Ways to Lower the Risk, Costs & Time Associated with Probate

Fortunately, there are several ways to lower and avoid the risks, costs, taxation, and time frames associated with probate of an estate in CA.

This includes:

  • ·        Wills
  • ·        Durable powers of attorney
  • ·        Trusts
  • ·        Corporations

If you want to avoid the cons of probate, this is time to get proactive and talk to an expert about putting the right legal protections in place.

 

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

Can I Save On Taxes By Changing From A Sole Proprietorship To An S-Corp?

Can small business owners save on taxes by switching their entity types?

Although we have a new president who has sworn to cut taxes and boost American business, many independent professionals and small business owners are still feeling the burden of taxation. Many have gone into business for themselves to earn more and profit more, but can find they are almost worse off, and are pocketing less after tax time comes around. What can be done?

One commonly posed solution is switching entity types, or opting to be taxed differently. Every tax professional and attorney may have their own opinion of the best structure. Some of the options may include switching from sole proprietor to S-Corp. S-Corp to C Corp. Offshore trust to domestic LLC and so on.

Each entity has its own pros and cons. Different legal entities may have more or less advantages at different stages of business, and for different business strategies. However, let’s take a look at just one of these potential shifts and the benefits to be gained. Sole proprietors bear a big tax burden. This is especially true when it comes to self-employment taxes. Not all want to switch to a C Corp and all that comes with. Yet, there can be some potential perks of switching to a S-Corp. Most notably this is due to the difference in how income is taxed. As an S Corp owner only a portion of net proceeds needs to be taken as a salary. The rest can be taken as dividends, or reinvested in the business. You may even be able to back date these changes and enjoy more tax savings, or losses which can be carried forward to offset income in future years.

How do you change from sole proprietor to S Corporation? It’s smart to work with both your tax professional and attorney to make the right choice. Then have a corporate attorney file the necessary documents for you with the department of state. Note that the change isn’t 100% official until the change has been accepted and approved by the state.

You’ll also want to make sure all parts of your business are correctly rolled over to the new entity. This may include employment contracts, leases, business vehicles, bank accounts, business licenses, etc.

What’s most important for each self-employed person and small business owner to consult relevant professionals who can give expert and personalized advice for their individual situation.

 

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

Got Children? The Importance of a Durable Power of Attorney & Health Care Directives

If you have children of any age a durable power of attorney and health care directive is a critical part of your family, estate, and wealth planning.

America has been increasing in popularity as a tax haven and safe place to build and store wealth. However, its litigious environment and legal quirks, especially in the area of health care can also make it risky. The best benefits can be lost without having important documents in place.

A Rising Risk Environment

While life expectancy may be rising, and health care breakthroughs continue to promise new solutions to aging, in many ways we are also in a rising risk environment.

1 in 5 adults in the U.S. experience mental illness according to Forbes. This alone costs almost $200 billion in lost earnings every year. Hurricanes and wild fires appear to be increasing. And we are seeing more and more stories of political and civil unrest, and terrorism.

Injury or incapacitation for any period of time can impact our finances and assets. Every day accidents and illnesses can impact important family members and their ability to make decisions. Not to mention incurring very hefty healthcare costs.

The unexpected happen often. Fortunately, we can be prepared with the right legal structures and documents.

Living Wills & Advance Healthcare Directives

Again, one of the biggest threats we face isn’t the end of our lives, but that purgatory of being in between in an incapacitated state. This is not only an issue for real estate investors and heads of the estate now, but for their heirs as well.

Of particular concern today is when our children head off to college. By law a physician cannot share any medical information on your child, if your child is 18 or older, and is injured or becomes sick, even if you are paying the bill. Furthermore, you are not able to access bank accounts or financial records if a child is ill or incapacitated.

In these cases powers of attorney, Living Wills, and Advanced Health Care Directives can be a priceless asset. The necessary legal power to make decisions on medical care, treatments, and preserve the family’s financial management powers. They ensure more control of these decisions by family members you trust and designated professionals. They aid in avoiding steep costs that are incurred without this legal protection, and provide privacy protection.

No family with children should be without these documents. You never know what tomorrow will bring. If you don’t have them yet, today is the day to have these conversations and put them in place.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

 

Frivolous ADA Lawsuits Being Filed Against CA Business Owners

California business owners continue to fall victim to frivolous and malicious lawsuits. How can they protect themselves?

At a recent hearing California State Representative Ken Calvert declared “California has become ground zero for ADA lawsuits,” and is “home to more federal disability lawsuits than the next four states combined.” In fact, KCRA 3 quotes executive director of California Citizens Against Lawsuit Abuse, Tom Scott as revealing that “California has about 12 percent of the nation’s disabled but attracts 40 percent of ADA lawsuits.”

Having laws to defend our rights is important. The problem is when unscrupulous individuals and firms begin to use loopholes to victimize innocent business owners. There are insurance scams, renter scams, and now the Americans with Disabilities Act has become responsible for massive and widespread victimization of California investors and businesses.

These lawsuits are hitting restaurants, gyms, sales and rental establishments, senior centers, and all types of accommodations including homeless shelters. The impact or freeloaders looking to make easy money at someone else’ expense can be devastating. Yes, the disabled should have reasonable access. They shouldn’t be discriminated against, and nor should anyone else. Yet, one character alone filed 250 of these suits over the last few years. He doesn’t even in live in California. Other disabled members of the community have reported being recruited to file suits, even against places they haven’t visited. This can mean thousands of dollars per complaint, and hefty legal fees. If the defending business owner wins, they’ve still lost an incredible amount of time, money on legal fees, business, and their reputation and good will in the community.

Some have posed that the answer is to require all businesses to obtain a certification of meeting ADA standards to avoid these suits. Whatever the solution is, one is needed. Otherwise we are facing a sizable risk to the state as it becomes unaffordable for businesses to operate. In turn the disabled will be among the many suffering from a lack of services and talented local professionals.

Utilizing voting rights is one of the most obvious tools as the disposal of California business owners, investors, and entrepreneurs. Of course, changing the law takes time, and the outcome isn’t always perfect. So, what can you do?

Having a great and ethical California attorney on retainer in case of any issues is just good sense. Having your place of business evaluated for accessibility and compliance in advance also seems to be a sound and thoughtful practice. Sadly, these two actions alone may not save you. Small business owners are especially vulnerable to lawsuits. All too often they don’t have the right estate and business structures and documents in place to preserve their finances, and to minimize their appeal as victims.

Be conscious about your privacy. That means watching what you post on social media, using LLCs and other entities to guard your data, and solid accounting which separates your business, investment, and personal finances. Talk to a qualified California lawyer and define a legal plan to keep you safe, serve your customers well, and be sure to be proactive about using your voting rights for what you believe in.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

 

Asset Protection: Are Landlords Liable for Dog Bites?

Are landlords liable for dog bites? If so how can real estate investors protect their assets?

The short answer is – yes, they can be.

According to some data sets:

  • Someone seeks medical attention in the US for a dog bite every 40 seconds
  • Almost 5M people are bitten by dogs each year
  • 60% of dog bites happen at residences

Theoretically property owners can be held liable if a tenant’s dog attacks someone on the property, gets loose and attacks someone off of the property, and can even be fined if the type of dog is illegal in that jurisdiction, or is being neglected. Harsh, but true.

Now the exact law varies from jurisdiction to jurisdiction all around the United States. There are normally tests to determine the extent of the landlord’s liability. This commonly includes their knowledge of the animal on the premises, breed of dog, and the level of control the owner has over the animal. However, just because you appear to be in the clear doesn’t mean you can’t have problems when there are pets in a rental property.

The Biggest Threats

Whether it is a dog, an exotic animal, or the tenants themselves, landlords can find themselves on the wrong end of lawsuits, and often do.

When this happens there are two big threats to deal with:

  1. Limiting liability to avoid being personally bankrupted
  2. Minimizing the disruption caused by the lawsuit itself

Without the right investment structure many landlords are just leaving themselves wide open to potentially have their personal and family assets, and incomes levied as the result of a malicious lawsuit. Without a steel asset protection umbrella your home, cars, kids’ college funds, retirement accounts, and future earnings can all be up for grabs.

Yet, while winning these cases is important, the damage done simply by being party to a lawsuit like this can be devastating. The legal representation costs are often the least of this. There is lost time off of work, expenses dealing with the case, potential for loss of rental income and even the property itself, and the ensuing loss of other income and your reputation.

True or not, all it takes is one news story or Facebook post and all of a sudden you are only known to the whole world as “that notorious property owner whose dog mauled that poor child.”

Shields Up

Picture any battle scene you like. Knights, soldiers, or Spartans; they all carry around their shields, and enter the battlefield with their shields firmly raised between themselves and the threat. Can you imagine if they all lined up facing each other, and then only after being pelted with barrages of arrows, then went to look for their shields or to ask the ironsmith to make one? It would be way too late right?

Sadly, that’s just how many real estate investors enter the property market.

Smart steps to being protected include:

  • Acquiring title to properties under the right entity structure
  • Having sufficient insurances
  • A smart asset protection plan which separates business and personal assets and income
  • Having a great attorney on staff

Perhaps even more important is not putting yourself out there as a juicy prospective victim. If you walk around with wads of hundreds falling out of your pocket, rocking expensive jewelry, and carelessly waving your new iPhone around when traveling as a tourist, you would expect to be robbed right?

If you kept those things out of sight in your pocket, your chances of being a victim may go down by 90% or more.

The same goes for being an investor and property owner. Smart asset protection moves can preserve your privacy and dramatically limit the chances your tenant’s neighbors are going to be running around wrapped in bacon begging the dog to bite them.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

 

The Tax Advantages of Being a Landlord

The promise of ‘tax breaks’ for investing in real estate is one of the biggest draws, but what are they?

Minimizing taxes is often promoted as one of the top reasons to invest in real estate. Yet, few investors are aware of what those tax advantages are and how they can be maximized. That often leads to thousands of extra dollars being shelled out to the tax man each year. So what are the real breaks available?

Here are five ways to lower your taxes as a landlord, plus a couple of extra power strategies to investigate…

Depreciation

Depreciation is one of the biggest tax breaks for landlords. Properties and improvements degrade and become worn over time. You can get a tax credit for that. Under the new PATH Act some types of properties can enjoy accelerated depreciation, and their landlords get bigger breaks sooner. Note that this is one of the few deductions out there that mortgage lenders will allow you to add back to your qualifying income when applying for loans.

Financing Costs

Mortgage interest, lender points, and other financing fees may all potentially become tax deductions. That can be a big motivator and perk for using financial leverage to grow a portfolio faster and earlier.

Taxes, Taxes, Taxes

Yes, you can actually write off other types of taxes you pay in conjunction with investing in real estate when it comes time to file your taxes. You can also deduct what you pay in accounting and tax preparation fees. That’s a big reason to get the best tax prep help you can get.

Losses

Some real estate investors and business owners may experience net paper losses in the first couple of years. Those losses may be used to offset other earned household income. These essentially become credits against other income tax liability, and maybe rolled over to cover future year’s liability. Don’t overlook this one.

Property Management

It’s sad to see so many real estate investors running themselves ragged, taking on extra liability, and hurting their net profits all because they think they are saving by not using professional property management. Ironically those ‘costs’ can be a tax break too.

More Miscellaneous Expenses and Tax Breaks for Landlords

According to Landlordology and House Logic some of the other commonly neglected breaks for landlords include advertising expenses, payroll and commissions paid, property maintenance, insurance premiums, and legal fees.

Advanced Tax Strategies for Serious Real Estate Investors

While LLCs, SDIRAs, 1031 exchanges, and other asset protection tools can add another layer of tax write-offs and defense, and are frequently referred to as ‘advanced’, they should be utilized by far more investors. Don’t wait till you’ve got a big tax bill to try and fix the situation. These tools can open the doors to breaks for offices, vehicles, communications, education, and more, as well as shielding investors from taxes on gains so they can snowball and enjoy compounding results for decades.

Disclaimer: It is always crucial talk to your own individual licensed professionals for custom advice and to create a real tax strategy before making any financial moves.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

 

Benefits of California LLC

The benefits of a California LLC corporation include:

  • Personal liability protection
  • Stockholders names are not public
  • Availability of corporate retirement plans
  • Corporate fringe benefits
  • Unending corporation existence
  • Tax benefits
  • Possible S corporation status
  • A single person can hold all offices
  • Available to professionals: Doctors, Dentists, Nurses, Attorneys, Chiropractors, Pharmacists, Accountants, etc.