Don’t Put Your Estate in the Hands of a Machine

Recently there has been a lot of discussion and predications about the impact of automation and artificial intelligence on the legal profession.

While technology has made administrative repetitive tasks more efficient, it is still far off from substituting the counsel of an experienced attorney.

In terms of Estate Planning, the use of document providers such as Legal Zoom has gained in popularity. The most touted benefit is the cheaper cost.

However, you get what you pay for. Translation: What is the value, quality, and assurances provided?

Value Factors


Tax Advice

Legal Advice

Court Experience


Trust Funding


Trust Administration












Document Provider




No (Represent Yourself)

No (Own Comprehension)

No (Do it Yourself)


No (Do it Yourself)


Issues Not Likely Addressed by Document Provider

  • How to transfer and effectuate ownership of specific assets (e.g. real estate) into the the Trust.
  • How to relate financial assets to the Trust only held in the name of an individual (e.g. Life Insurance and Retirement Accounts.)
  • Tax planning and management of each specific asset. (Assets have differing tax characteristics, application to beneficiaries, and the method and sequencing of distribution.)
  • Cross-border considerations and International Tax implications.
  • Advice regarding scenarios that are more likely to cause disputes, legal actions or delays.
  • Insights regarding the Trust or Estate administration. When you die what is required of those in charge to effectuate your testamentary wishes? Common tasks include tax valuations and tax returns, legal notices, legal filings, and distributions.

In conclusion, technology is a great thing, but it is still a tool that is only as good as the operator and the person providing the input. Savvy customers should ask themselves if they want to hire someone to delegate responsibility for complex and sophisticated matters, or rely on their own education, skill, and capability.


Gift Tax: Advantage of Foreign Investment in U.S. Stocks and Bonds

One of the foreign investor’s favorite investments is U.S. real estate. However, from a tax planning perspective there are other asset categories to consider.

In the U.S. the “estate tax” refers to taxation upon death. The “gift tax” means transfer tax, and applies to gifts made while alive.

From a gift tax perspective, intangible assets such as U.S. stocks and bonds are a preferred asset.

In the U.S. the gift tax only applies to real property and tangible property. It does not apply to intangible property.

The advantage for a Non-Resident Alien (“NRA”) acquiring stocks and bonds is that it can be gifted to anyone, including other NRAs, family, or U.S. residents, all without incurring any U.S. tax liability. There may however still be a tax reporting requirement.

There is also an opportunity to avoid U.S. estate (“death”) taxation for the NRA. As long as the NRA investor holding the intangible property has advance notice and awareness of his or her failing health, he or she can gift the asset to the preferred recipient.

The NRA can also take precaution for a sudden or unexpected death. The most common solutions include life insurance and an Estate Plan, such as a Trust.


San Francisco Bay Area Housing Supply to Remain Low For Foreseeable Future

If you were already discouraged by low housing inventory and supply in the San Francisco Bay Area, there is little reason to hope that it will improve for the foreseeable future.

Some factors include:

  • The two percent (2%) per annum Proposition 13 tax cap that encourages long term holding of California Real Estate;
  • New Federal Tax Law limiting mortgage deduction to $750,000, but grandfathering in pre-existing home owners $1,000,000 mortgage deduction;
  • New Federal Tax Law limiting State and Municipal real property tax deduction to $10,000 per year;
  • Rising Interest Rates making mortgage financing more expensive.

Other factors influencing selling v. holding include suitability as rental property and estate planning desire to pass on the real property “in kind” to your children who may inherit the pre-existing lower tax base.

In summation, why sell your home, if buying another home in the same area will significantly increase your financing costs and taxes.