Executive Summary Asset protection planning for California business owners works best when implemented proactively.  Once litigation becomes foreseeable, transfers may be challenged under California’s Uniform Voidable Transactions Act.  Strong planning often begins with insurance, exemption optimization, disciplined entity maintenance, and layered LLC structures.  Sophisticated trusts may help in certain situations, Read More

Article Summary Business owners may legitimately pay their children through the business, potentially creating payroll and income tax savings.  Under IRC §§3121 and 3306, certain wages paid by sole proprietorships or parent-owned partnerships to children under age 18 may avoid payroll taxes. However, the work must be legitimate, compensation must be reasonable, and documentation must be thorough.  Proper payroll Read More

Article Summary Life insurance death benefits are generally income-tax free under IRC §101(a), but several important exceptions exist.  Taxable situations may include policy lapses with outstanding loans, transfer-for-value transactions, employer-owned policy compliance failures, Modified Endowment Contracts, and estate tax inclusion issues.  The 2026 Sawyer v. Commissioner case illustrates how policy loan balances Read More

Article Summary California Postnuptial Agreements may help business owners separate certain assets from community property. This planning can support asset protection for business owners and high-liability professionals. A Postnuptial Agreement can also affect divorce rights, tax treatment, succession planning, and enforceability. The agreement should be coordinated with legal, tax, estate, and business planning Read More

Article Summary California close corporations are a unique statutory entity for small groups of shareholders. They allow more flexible management than conventional corporations.  The same flexibility can create shareholder disputes, liability concerns, and succession challenges.  Minority shareholders may have significant leverage through dissolution rights. Many business owners ultimately prefer LLCs or Read More

Article Summary A 529 plan can generally be used for qualified room-and-board expenses, including certain off-campus housing costs. Tax-free treatment is usually limited to the school’s published room-and-board allowance.   Parents may own a property and collect rent from a student, but the arrangement must be legitimate. Rental income is generally taxable, even when rent is paid using 529 distributions. Real estate Read More

Article Summary California estate planning fees range from a few hundred dollars to more than $10,000, depending on complexity. Low-cost plans focus primarily on document preparation. Higher pricing tiers include tax strategy, trust funding, business succession, and implementation guidance. Business owners often need more than basic trust documents. The value of a plan depends on what problems it solves. If Read More

Article Summary California law may allow multiple individuals to create a trust together, but legality does not guarantee good planning. Property tax reassessment and gift tax consequences can arise when unrelated individuals share trust ownership. Community property rules can create complications for married individuals considering these arrangements. Trusts are made for estate planning, not shared business Read More

Article Summary A 2026 federal case held that a Nevada DAPT did not protect California real estate from creditor claims. Applying California conflict-of-laws rules, the court treated California law as controlling and allowed foreclosure to proceed. The structure failed because it combined an out-of-state trust, California-situs property, and continued settlor control. The ruling shows that self-settled DAPTs are Read More

Article Summary Oil and gas investments often advertise large first-year write-offs, but that headline leaves out the California tax treatment. Federal law still offers strong tax benefits for oil and gas investment, especially through the IRC §263(c) IDC deduction. Federal treatment may also allow bonus depreciation on qualifying TDCs. California does not conform to federal bonus depreciation and now disallows the Read More