Archives for December 2021

5 Tips for Winning a Divorce Mediation in California

The American Bar Association published an article with tips for a successful mediation, with content inspired by the best-selling book, “Getting to Yes.”  This article will summarize these mediation best practices, and the full story can be found here: 

  • Separate the person from the problem.

Both parties almost always have anger, resentment, and distrust of their ex, but for the purpose of negotiation those negative emotions – while often very justified—are not productive to getting what you want out of the negotiation.  Your ex’s personality is not going to change in the divorce.  However, if you can identify specific problems to be solved, then those may be negotiable.  

  • Develop options for mutual gain. 

The more options that are presented, the more likely it is that both parties can find an option that is palatable to everyone.  Look for options that are win-win for both people so that instead of a combat position, you are taking a problem-solving tact.  

  • Focus on interests, not positions. 

With a position approach, you have a winner and a loser.  With an interest-centered approach, you try to understand the interests of the other party and the goal is to achieve solutions not winners and losers.  When you take time to really listen to what makes the other side tick, then you will understand how to properly incentivize the behavior you want to achieve. 

  • Find objective material to lead to common understanding

Both parties can respond to objective material.  For example, if two parties value property or assets differently and neither will budge, then an assessor could be hired to provide data or internet research could be done to get objective information.  

  •   Focus on the best alternative to a focused agreement “BATNA.”

If you are trying to get everything you want in a negotiation, you are likely to fail.  If you identify what you really need and prioritize, then you are more likely to achieve those realistic goals through settlement. 

Consult with the Law Office of David Knecht

At the Law Office of David Knecht we have extensive experience with family law in California and can help you successfully negotiate a California divorce.  Contact us at 707-451-4502 for more information.  

 

Filed Under: General

New Higher Estate and Gift Tax Limits for 2022

A new year brings with it new federal tax exemption numbers.  For 2022 deaths, the estate and gift tax  jumps from  $11.7 million in 2021 for an individual to $12.06 million per individual.  The gift tax annual exclusion climbs from $15,000 from previous years to $16,000 for 2022.  This article will summarize changes in federal gift and estate tax law with content from an article from Forbes.com, which can be found here:  

What do these new numbers mean?

These numbers mean that wealthy tax payers can transfer more to heirs during their lifetime and upon death. 

 

  • How are gifts used as a strategy for transferring wealth?

 

One strategy that is commonly used is to transfer gifts to heirs every year to the max allowable, which will be $16,000 per individual in 2022.  Spouses can each make a $16,000 gift, which doubles the impact. 

 

  • Is there a limit on how many can receive gifts from you? 

 

You can transfer $16,000 to as many individuals as you like, so children, grandchildren, etc. can each receive that amount without a federal tax consequence to the giver. 

 

  •  What about appreciation with the gifts?

 

Another advantage of transferring wealth through gifts during your lifetime is that the appreciation that would result from any investments that those gifts were used to purchase would go to the new generation and therefore not be in your taxable estate. 

 How are tuition payments and medical expenses a wealth transfer strategy ?

You can make unlimited direct payments for medical expenses or tuition for an many individuals as you like.   These can add up and be very powerful to help the next generation create a better situation.  

Where can I find an attorney who can help me with estate planning in California?

An experienced attorney can help you make advantageous estate planning decisions for the benefit of you and your loved ones.  At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning in California and can help you create the right plan for you. 

 

Filed Under: Taxes

5 Divorce “Don’ts” for a California Divorce

If you are considering divorce, you may have reached out to friends or family to get their advice.  Many people may have shared with you the do’s and don’ts to help you navigate the divorce process effectively.  This article will add to the advice, with a cautionary list of things not to do. 

 

  • Don’t necessarily keep the house.

 

A home can have a lot of sentimental value, but when evaluating it in the divorce, you need to look at it as simply an asset or a liability.  Determine whether you have sufficient resources not just for the mortgage and utilities but for any maintenance. Consider whether it meets your needs now. Evaluate with logic not emotion.

 

  • Don’t ignore potential tax consequences or retirement accounts. 

 

Make sure you understand how your taxes will be impacted going forward and how any deductions or stimulus for the children will factor in.  Talk to an accountant or lawyer to plan taxes ahead of time so that you aren’t caught by surprise. Additionally, make a plan for splitting the retirement so that you aren’t left without those resources later on.

 

  • Don’t forget about health insurance. 

 

If you or your children have been covered by your ex’s policy, you need to determine how health insurance will work going forward. 

 

  • Don’t spend lavishly out of spite. 

 

You may be receiving support pending the divorce, but generally you should spend money the same way that you did during the marriage.  Spending lavishly out of spite could interfere with the asset division.

  •  Don’t roll over all of an ex’s retirement account into an IRA if you need some of the money for divorce expenses.

 

If your divorce settlement allocates assets under a qualified domestic relations order (QDRO), then any withdrawal a QDRO alternate payee takes from a 401(k) or 403(b) is exempt from the 10% early withdrawal penalty—even if you’re under age 59½. The bottom line is if you think you’ll need money now, you might want to make a withdrawl before the rollover. But, do this with caution, because you will owe income tax on the amounts withdrawn.

Consult with Experienced Divorce Attorneys at the Law Office of David Knecht

At the Law Office of David Knecht we have extensive experience with family law in California and can help you successfully negotiate a California divorce.  Contact us at 707-451-4502 for more information.  

 

Filed Under: General

Where You Should Keep Your Estate Planning Documents

A recent business story in the LA Times online posed an interesting question:  Where should you keep your estate planning documents?  This article will answer this and other basic estate planning questions.  

1. What is the downside of putting your estate planning documents in a safe deposit box at the bank? 

People sometimes think they should keep their original estate planning documents in a safe deposit box.  However, when the bank is notified that you have died they will often seal the box until your executor can prove they have the legal right to access the contents.  If the documentation needed is in the box, then that can create a sticky situation. 

2. What is a better place to store your estate planning documents?

One option is to keep the documents in your own safe, but that is not the best solution.  If you fear someone with bad motives could access your safe, then that is not a great option.  For most people, the best option is to leave the original with your attorney and provide copies to your executor and other trusted people.  You can give them your attorney’s contact information and have peace of mind knowing that the documents are in a safe place. 

3. What estate planning documents should I store with my attorney?

 

The following is a list of estate planning documents that you will want to have stored safely: 

  • A Living Trust
  • Powers of Attorney for Property and Healthcare
  • HIPAA Authorization
  • A Living Will/Advance Healthcare Directive
  • A Pour-Over Will
  • Deeds to Your Properties
  • Beneficiary Designations
  • Guardian Nominations for Minor Children

Where can I find an attorney who can help me with estate planning in California?

An experienced attorney can help you make advantageous estate planning decisions for the benefit of you and your loved ones.  At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning in California and can help you create the right plan for you. 

 

Filed Under: California Estate Plan