FAQ

Bridge Law LLP provides contract drafting, review, and negotiation services for businesses across Orange County and beyond. Every business relationship of consequence should be supported by a well-drafted agreement — one that clearly allocates rights, responsibilities, and risk, and that will hold up if a dispute arises.
Our corporate attorneys have extensive experience across a wide range of commercial contracts, including service agreements, partnership and shareholder arrangements, vendor and supplier contracts, licensing agreements, NDAs, and complex transaction documents for M&A and financing. Because our team combines transactional expertise with litigation experience, we draft agreements with an eye toward how disputes actually play out — not just how deals close.
Businesses that sign contracts without proper legal review are routinely exposed to uncapped liability, unenforceable provisions, and terms that benefit the other party at their expense. Our attorneys protect your interests at every stage of the contract lifecycle — from initial drafting through negotiation, execution, and dispute resolution.
Contact Bridge Law LLP to schedule a consultation with a corporate attorney.

Bridge Law LLP advises landlords and tenants on commercial lease transactions throughout Anaheim and Orange County. Commercial leases are not standard documents — the terms you agree to at signing can have significant legal and financial consequences for years or decades. Having experienced counsel review or negotiate your lease before you sign is one of the most cost-effective investments a business owner or property investor can make.
Our commercial lease services include:

• Review and negotiation of NNN, gross, and modified gross leases for retail, office, and industrial properties
• Lease drafting for landlords seeking enforceable, well-structured lease agreements
• Tenant representation — identifying and negotiating key provisions including rent escalation, CAM charges, exclusivity clauses, and exit rights
• Lease assignments and subleases — including consent requirements and liability allocation
• Dispute resolution related to lease terms, renewals, or defaults

Whether you are a business leasing commercial space in Anaheim or a property owner seeking to structure tenant relationships properly, Bridge Law LLP brings the legal precision and commercial awareness your transaction requires.

Bridge Law LLP provides corporate governance and compliance counsel to businesses of all sizes — from founder-led startups establishing their first governance framework to established companies managing ongoing regulatory obligations.
Effective corporate governance is not just about avoiding liability — it is about building a business that operates with the clarity and discipline that investors, partners, and buyers expect. Poor governance is one of the most common — and most costly — issues our attorneys identify during M&A due diligence. Companies that invest in proper governance structures early protect their valuation, reduce legal exposure, and position themselves for future transactions.
Our corporate governance services include:

• Entity formation and structuring — selecting and forming the right legal entity for your business objectives
• Shareholder agreements, operating agreements, and board-level governance documentation
• Ongoing general counsel services — keeping your company compliant as it grows and evolves
• Corporate Transparency Act (CTA) compliance — Beneficial Ownership Information (BOI) reporting for entities subject to the new federal requirements
• Pre-transaction governance cleanup for businesses preparing for a sale, investment round, or partnership

Contact Bridge Law LLP to speak with a corporate attorney about your governance and compliance needs.

Bridge Law LLP handles international business law for U.S. companies expanding or operating abroad. Our attorneys advise on cross-border transactions, corporate structuring, compliance, and international tax strategies — providing integrated legal solutions for global growth.

Bridge Law LLP provides trusted legal counsel for mergers and acquisitions (M&A), guiding clients through due diligence, deal structuring, and negotiation. Our attorneys combine corporate, tax, and securities expertise to ensure every transaction is strategic, compliant, and value-driven.

Bridge Law LLP offers comprehensive corporate law services for startups, guiding founders through entity formation, shareholder agreements, funding rounds, and compliance. Our attorneys combine legal precision with practical business insight to help startups grow strategically — from incorporation to international expansion.

Qualified Small Business Stock (QSBS) are originally issued shares that are issued by a US C corp that holds assets valued under $50 million at the time of stock issuance.  There are additional criteria that must be met beyond this.

To determine if your business is QSBS elligible, the following requirements must be met:

1. Business must be a domestic C corporation with gross assets that total to less than $50 million
2. At least 80% of your business’s assets must be actively used for business operations.
3. Your business must not be engaged in an exempt activity as defined under s.1202
   NOTE: In order to qualify for QSBS tax benefits, you must hold the stock for more than five years.

It depends on your situation and perspective as the buyer or the seller. As the seller, a stock sale may be appealing because of its possible reduced long term Capital Gains Tax rates and a less complex transaction process in comparison to asset sales. However, as the buyer, asset sales are more attractive because of the ability to select which assets to acquire based on each individual asset’s accompanying liabilities to be inherited.

Forming an LLC can provide several advantages with minimal disadvantages. LLC members can qualify for certain tax deductions, including reduced legal fees and self-employment taxes. Limited liability and asset protection play a key role in LLC structures as well, ensuring the protection of personal assets from business liabilities, which ensures that members will not face any of the debt or obligations pertaining to the business. LLCs offer management flexibility, allowing members to incorporate a dynamic structure that suits their individual and business needs.  However, every situation and business is different, so an LLC may not always be the best choice of entity.

This payment method is becoming more common and often preferred by the buyer, as it allows the buyer to pay a certain amount of the purchase price upfront and the remainder based upon future financial performance. This ensures that the buyer pays a fair price and the seller is compensated for the continued prosperity of the company.

With the rise in AI presence, it is important to include language in purchase and sale agreements that protect IP rights and demonstrate that all parties engaged acknowledge the validation of AI generated works. Furthermore, in due diligence it is extremely important to understadn who owns any of the algorithms and the product produced by any third party AI.

Including an indemnification clause legally obligates the indemnifying party to compensate the indemnified party on the losses suffered from the transaction, including any legal fees, costs, liabilities and damages incurred.  As such this is extremely important and an often heavily negotiated clause

A C-corporation can be elligible for taxation at the corporate and shareholder levels, whereas an S-corporation allows for taxation at the individual level. C-corporations can have an unlimited number of shareholders with numerous classes of stock; however, S-corporations are limited to 100 shareholders and can only issue one class of stock.

To ensure an orderly due dilligence process in a deal, it is advised that you provide your attorney with any financial statements, tax returns, IP documents and employee records.

The newly introduced CTA requires that all reporting companies file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN) that states any member or shareholder with at least 25% equity in the entity. This is a timely matter and has designated deadlines based on the filing date of your entity:

1. If your entity was formed before January 1, 2024, you have until the end of 2024 to file the BOIR.
2. If your entity was formed between January 1, 2024 and January 1, 2025, you have 90 days to file the BOIR.
3. If your entity was formed after January 1, 2025, you have 30 days to file the BOIR.

Bridge Law LLP represents buyers, sellers, and investors in commercial property transactions throughout Anaheim and Orange County. Commercial real estate deals are among the most complex and high-stakes transactions that individuals and businesses undertake — and they demand legal counsel with both transactional expertise and a deep understanding of the tax and ownership structure implications involved.

We advise on:

• Purchase and sale agreements for commercial properties — ensuring your interests are protected at every stage from letter of intent through closing
• Entity structuring for property ownership — LLC, LP, and trust structures that provide liability protection and tax efficiency
• 1031 exchanges — identifying qualifying replacement property timelines and structuring the exchange to defer capital gains tax
• Real estate syndications — structuring pooled investment vehicles for multi-investor commercial acquisitions
• Due diligence review — title, environmental, zoning, and contract review for buyers entering complex transactions

If you are acquiring, selling, or structuring a commercial property deal in Anaheim or Southern California, Bridge Law LLP is prepared to serve as your legal counsel. Contact us to discuss your transaction.

Bridge Law LLP provides an integrated combination of corporate law and tax advisory specifically designed for entrepreneurs and business owners in Anaheim and across Southern California. Most law firms offer one or the other. We offer both — and that integration is what produces the best outcomes for founders and growing businesses.

For entrepreneurs, the corporate and tax decisions you make early — entity type, ownership structure, compensation design, equity arrangement — have lasting consequences. Done well, they reduce tax liability, protect personal assets, and position the business for future investment or sale. Done poorly, they can cost hundreds of thousands of dollars to unwind.

Services we provide for entrepreneurs include:

• Entity formation and tax election — C-corp, S-corp, LLC, and partnership structures evaluated against your specific business and personal goals
• Founder equity and QSBS planning — structuring stock issuances to preserve the federal capital gains exclusion under Section 1202
• Operating and shareholder agreements — protecting your interests as the company grows and new stakeholders enter
• Capital raise structuring — preparing for investment rounds with properly documented securities compliance
• Exit planning — structuring a future sale to maximize after-tax proceeds from day one

Bridge Law LLP is the legal partner entrepreneurs in Anaheim choose when they want counsel that thinks like a business advisor, not just a document processor. Contact us to schedule a consultation.

Bridge Law LLP provides both proactive tax planning and tax dispute resolution for individuals and businesses in Anaheim and throughout Orange County. These are related but distinct services — and having the same team handle both can make a significant difference in outcomes.

Tax Planning

We advise clients on income tax, capital gains tax, estate and gift tax, and entity-level tax strategy. Our goal is to structure transactions and holdings in a way that minimizes your tax burden legally — using strategies such as QSBS elections, installment sales, charitable vehicles, tax-efficient M&A structures, and trust-based planning. For business owners, this work often intersects directly with exit planning and wealth transfer.

Tax Dispute Resolution

When a tax authority — whether the IRS or the California Franchise Tax Board — initiates an audit, assessment, or enforcement action, you need experienced legal counsel, not just an accountant. Our attorneys advise on domestic and international tax compliance disputes, represent clients in audit proceedings, and work to resolve tax controversies in the most favorable manner possible.

If you have received a notice of tax non-compliance — domestic or international — or are looking for strategic tax planning counsel in Anaheim, contact Bridge Law LLP today.

Bridge Law LLP provides legal counsel for businesses and entrepreneurs navigating cross-border transactions and international regulatory requirements. As a boutique firm headquartered in Anaheim Hills with decades of experience advising clients across more than 35 countries, we bring genuine international legal fluency — not just a general practice with an international tab on the website.

International business law matters that require qualified legal counsel include:

• Cross-border corporate structuring — establishing the right entity structure for operations in the U.S. and abroad
• International M&A — navigating deal structure, due diligence, and regulatory compliance for cross-border acquisitions
• Tax treaty planning and cross-border tax compliance for businesses and high-net-worth individuals operating in multiple jurisdictions
• Foreign investment in U.S. businesses — CFIUS considerations, regulatory filings, and compliance obligations
• International contracts — drafting and negotiating cross-border agreements, including governing law, dispute resolution, and enforceability considerations

If you are a business or investor based in Orange County with international operations or cross-border transactions, Bridge Law LLP is equipped to serve as your local counsel with global reach. Contact us to schedule a consultation.

Even under Prop 19, there are still legal strategies available to avoid the reassessment when the parent dies or there is a change in ownership. Our law firm specializes in these strategies. Note that they are not for everyone and can sometimes take a long time to implement. Each case is different and unique and this is why it’s important to book a consultation to discuss the facts of your case.

Any one of the children needs to move into the parent’s primary residence and make it their own. The title of the property can include other children however.

Under Prop. 19, which took effect February 2021, these rules are no longer valid. Instead, property taxes will go up when the parents die or when property is transferred during the parent’s lifetime. The only limited exception is for the primary residence of the parent. Under that exception, if a child moves into the parent’s primary residence within one year of the date of death and fills out all the necessary forms within the time period, then the property tax will only go up if the fair market value of the property on the date of death exceeds the assessed value by over $1 million (subject to minor inflation).

Yes, trusts are disregarded for purposes of Prop 19. The Assessor will ask for the trust and determine who is the present income beneficiary. This is the person who counts for purposes of property taxes.

Under Prop 13, the assessed value (the amount the home is valued for purposes of property taxes (which is different from fair market value)) can only go up 2% per year. Once there is a change in ownership (e.g., a parent’s death, a transfer of title between people), then the assessed value is reassessed to fair market value. A 1% fee is levied at that time.

For example, if I purchased a property for $1 million. The assessed value is $1 million. The property tax is 1% of $1 million or $10,000. The following year, if there is no change in ownership, the assessed value is now increased by 2% (from $1 million to $1,020,000). Again, the property tax is 1% of this new assessed value. This will continue year to year under Prop 13. In reality though, the fair market value of the property might increase more than 2%. Under Prop 19, when the parent dies or there is a change to the title of the property, the assessed value will jump up (or down sometimes) to fair market value.

Generally, no. With one exception.

First, it needs to be the primary home of the parent. Even then, you will need to move into the home and make it your primary residence within one year of the date of their death, and you will need to fill out certain legal paperwork proving that the home is your primary residence and it was the primary residence of your parents. If you do not fill out this paperwork on time, the property tax will go up. Finally, even if you move into the home and fill out the paperwork, the property tax might still go up — depending on the value of the home in the year your parent died, compared to the assessed value in that year (i.e., what the value was for property tax purposes).

Remember that it has to be the primary residence of the parent — not simply that you inherited it, and not any other home of the parent. In fact multiple children can inherit the primary home, as long as one of the children moves in, that will qualify.

If you do not move into the home, the property tax will go up. If you move out, the property tax will go up.

When you move out, the property tax will go up. If/when the title changes from your name to someone else’s, the property tax will go up.

The property tax will go up, as it’s no longer considered your primary residence. The only exception might be mixed use; even there, the Assessor’s Office will determine what percentage of the tax is attributed to your primary residence and what is not.

It basically got rid of Prop 58. Prop 58 allowed for primary residences to be transferred between parents and children, without causing a property tax reassessment. Prop 58 also allowed for transfers up to $1 million (of assessecdv value) of non-primary residences (e.g., rentals, vacation homes, investment properties) between parents and children, without causing property tax reassessments.

Under Prop. 19, which took effect February 2021, these rules are no longer valid. Instead, property taxes will go up when the parents die or when property is transferred during the parent’s lifetime. The only limited exception is for the primary residence of the parent. Under that exception, if a child moves into the parent’s primary residence within one year of the date of death and fills out all the necessary forms within the time period, then the property tax will only go up if the fair market value of the property on the date of death exceeds the assessed value by over $1 million (subject to minor inflation).

Bridge Law LLP provides legal counsel for commercial real estate transactions in Anaheim and throughout Southern California. Complex closings demand more than paperwork — they require attorneys who understand deal structure, title issues, entity considerations, tax implications, and the commercial realities on both sides of the transaction.

Our real estate attorneys advise on acquisitions, sales, financing arrangements, entity structuring for property ownership, 1031 exchanges, real estate syndications, and commercial transactions involving multi-party or cross-border considerations. We work with individual investors, business owners, and institutional clients who need precise legal guidance to protect their interests and close transactions with confidence.

If your real estate transaction involves complex ownership structures, significant asset values, or tax planning considerations, our integrated team — combining real estate law, tax advisory, and corporate counsel — is well-positioned to serve you. Contact Bridge Law LLP to discuss your transaction.

Bridge Law LLP is an award-winning estate planning firm headquartered in Anaheim Hills, serving clients throughout Orange County and beyond. Our attorneys design comprehensive estate plans that protect your assets, provide for your family, and reflect your specific wishes — whether your estate is straightforward or highly complex.

A well-designed estate plan typically includes a revocable living trust, pour-over will, durable power of attorney, and advance healthcare directive. For clients with larger or more complex estates, it often also includes irrevocable trust structures, tax planning, and asset protection strategies tailored to their family’s specific situation.

When choosing an estate planning attorney near Anaheim, look for experience with California-specific laws, a track record with clients similar to your situation, and an attorney who will take the time to understand your goals — not just produce a generic set of documents. Our team has been recognized by publications including Newsweek and Super Lawyers and holds an American Institute of Family Law Attorneys designation among the 10 Best Estate Planning Firms in California for client satisfaction.

Contact Bridge Law LLP to schedule a consultation and take the first step in protecting what you have built.

Bridge Law LLP provides comprehensive estate planning and probate services for individuals, families, and business owners throughout Anaheim and the greater Orange County area. Our team guides clients through every stage — from designing a complete estate plan to administering a loved one’s estate through the California probate process.

California probate is a court-supervised process for transferring assets that are not covered by a trust, beneficiary designation, or joint tenancy. It can be time-consuming and costly, which is why proper estate planning — including a well-funded revocable living trust — is often the best way to keep your estate out of probate entirely.

Our estate planning and probate services include:

• Revocable and irrevocable living trusts, wills, powers of attorney, and healthcare directives
• Trust funding and administration — ensuring assets are properly titled and managed during the trust term
• Probate court filings and administration for estates that pass outside of a trust
• Strategies to avoid California probate and the costs, delays, and public exposure that come with it
• Coordination with tax advisory to minimize estate and gift taxes across the full planning picture

If you are in Anaheim or the surrounding area and need a trusted legal team for estate planning or probate, contact Bridge Law LLP to schedule a consultation.

Bridge Law LLP offers a full suite of advanced estate planning strategies for clients in Anaheim and throughout Orange County. Our practice goes well beyond standard wills and trusts — we design integrated plans that address wealth transfer, asset protection, tax minimization, and generational planning.

Advanced strategies we regularly employ include:

• Qualified Personal Residence Trusts (QPRTs) — transferring your primary residence or vacation property out of your taxable estate while retaining the right to live in it
• Spousal Lifetime Access Trusts (SLATs and SLANTs) — irrevocable trusts that remove assets from your estate while preserving indirect access through a beneficiary spouse
• Beneficiary Defective Irrevocable Trusts (BDITs) — structures that allow beneficiaries to pay income taxes, reducing the taxable estate further
• Generation-Skipping Trusts — transferring wealth directly to grandchildren and beyond while minimizing transfer taxes
• Cross-border estate planning for non-U.S. citizens and clients with international assets

Every advanced plan we build is grounded in a thorough understanding of your assets, your family structure, and your long-term goals. We serve clients across Anaheim, Anaheim Hills, Yorba Linda, Irvine, and greater Orange County. Contact Bridge Law LLP to discuss your planning objectives.

Bridge Law LLP, headquartered in Anaheim Hills, provides sophisticated estate planning strategies including the Qualified Personal Residence Trust (QPRT) for high-net-worth individuals and families throughout the Anaheim area.

A QPRT is an irrevocable trust that allows you to transfer your primary residence or vacation home out of your taxable estate while retaining the right to live in it for a fixed term of years. At the end of that term, ownership passes to your beneficiaries. Because you retain a right to use the property, the IRS values the gift at a discount — meaning you transfer a high-value asset at a significantly reduced gift tax cost. Any appreciation in the property’s value during the trust term also occurs outside of your estate, compounding the tax savings.

Our estate planning attorneys evaluate whether a QPRT fits your specific circumstances, including your age, the trust term, the property’s value, and your broader estate plan. A QPRT carries real planning trade-offs — including the risk that you predecease the term — and requires careful design to deliver the intended result.

If you are exploring advanced estate planning strategies in Anaheim or the greater Orange County area, contact Bridge Law LLP to schedule a consultation.

Even under Prop 19, there are still legal strategies available to avoid the reassessment when the parent dies or there is a change in ownership. Our law firm specializes in these strategies. Note that they are not for everyone and can sometimes take a long time to implement. Each case is different and unique and this is why it’s important to book a consultation to discuss the facts of your case.

Any one of the children needs to move into the parent’s primary residence and make it their own. The title of the property can include other children however.

Under Prop. 19, which took effect February 2021, these rules are no longer valid. Instead, property taxes will go up when the parents die or when property is transferred during the parent’s lifetime. The only limited exception is for the primary residence of the parent. Under that exception, if a child moves into the parent’s primary residence within one year of the date of death and fills out all the necessary forms within the time period, then the property tax will only go up if the fair market value of the property on the date of death exceeds the assessed value by over $1 million (subject to minor inflation).

Yes, trusts are disregarded for purposes of Prop 19. The Assessor will ask for the trust and determine who is the present income beneficiary. This is the person who counts for purposes of property taxes.

Under Prop 13, the assessed value (the amount the home is valued for purposes of property taxes (which is different from fair market value)) can only go up 2% per year. Once there is a change in ownership (e.g., a parent’s death, a transfer of title between people), then the assessed value is reassessed to fair market value. A 1% fee is levied at that time.

For example, if I purchased a property for $1 million. The assessed value is $1 million. The property tax is 1% of $1 million or $10,000. The following year, if there is no change in ownership, the assessed value is now increased by 2% (from $1 million to $1,020,000). Again, the property tax is 1% of this new assessed value. This will continue year to year under Prop 13. In reality though, the fair market value of the property might increase more than 2%. Under Prop 19, when the parent dies or there is a change to the title of the property, the assessed value will jump up (or down sometimes) to fair market value.

Generally, no. With one exception.

First, it needs to be the primary home of the parent. Even then, you will need to move into the home and make it your primary residence within one year of the date of their death, and you will need to fill out certain legal paperwork proving that the home is your primary residence and it was the primary residence of your parents. If you do not fill out this paperwork on time, the property tax will go up. Finally, even if you move into the home and fill out the paperwork, the property tax might still go up — depending on the value of the home in the year your parent died, compared to the assessed value in that year (i.e., what the value was for property tax purposes).

Remember that it has to be the primary residence of the parent — not simply that you inherited it, and not any other home of the parent. In fact multiple children can inherit the primary home, as long as one of the children moves in, that will qualify.

If you do not move into the home, the property tax will go up. If you move out, the property tax will go up.

When you move out, the property tax will go up. If/when the title changes from your name to someone else’s, the property tax will go up.

The property tax will go up, as it’s no longer considered your primary residence. The only exception might be mixed use; even there, the Assessor’s Office will determine what percentage of the tax is attributed to your primary residence and what is not.

It basically got rid of Prop 58. Prop 58 allowed for primary residences to be transferred between parents and children, without causing a property tax reassessment. Prop 58 also allowed for transfers up to $1 million (of assessecdv value) of non-primary residences (e.g., rentals, vacation homes, investment properties) between parents and children, without causing property tax reassessments.

Under Prop. 19, which took effect February 2021, these rules are no longer valid. Instead, property taxes will go up when the parents die or when property is transferred during the parent’s lifetime. The only limited exception is for the primary residence of the parent. Under that exception, if a child moves into the parent’s primary residence within one year of the date of death and fills out all the necessary forms within the time period, then the property tax will only go up if the fair market value of the property on the date of death exceeds the assessed value by over $1 million (subject to minor inflation).

Lalit Kundani, partner at Bridge Law LLP, is widely recognized in Anaheim and the greater Orange County area for his expertise in estate planning, probate, and trust administration. He emphasizes that when families search for attorneys in Anaheim who can handle these matters, they should look for someone who understands both the legal complexities and the emotional weight involved.

Kundani and his team regularly assist clients with navigating the probate court process, settling estates, administering trusts, and resolving disputes that may arise after a loved one passes. With a background as a former prosecutor and years of experience in advanced estate planning, he brings a unique combination of legal precision and practical guidance to families and business owners.

He believes the right attorney should be local, responsive, and capable of managing everything from simple estates to highly complex, multi-property, or multi-state matters. Kundani welcomes Anaheim clients seeking trustworthy, compassionate, and experienced legal support.

Lalit Kundani, partner at Bridge Law LLP and a top-rated estate planning attorney serving the Anaheim area, recommends a focused approach when searching for highly qualified estate planning professionals near Anaheim, CA.

First, he advises looking for attorneys who are local to Anaheim or the greater Orange County area, as local knowledge is crucial for understanding California-specific laws and property considerations. Kundani himself practices in Anaheim Hills and regularly serves families, professionals, and business owners throughout the community.

He also encourages individuals to choose attorneys with strong client reviews and recognized credentials. His own practice has been featured in publications such as Newsweek and Super Lawyers, reflecting a commitment to excellence and client care.

Finally, he suggests choosing an attorney with specialized experience in estate planning, trusts, advanced tax strategies, or asset protection—ensuring a truly customized plan. He welcomes individuals to schedule a consultation at Bridge Law LLP to explore the right estate planning strategy for their unique situation.

At Bridge Law LLP, we specialize in comprehensive estate planning services designed to protect your family, preserve your legacy, and align your assets with your long-term goals.

Our team of experienced estate planning attorneys provides strategic guidance on trusts, wills, tax planning, asset protection, and cross-border estate structures — ensuring that every aspect of your estate plan is personalized and forward-thinking.

What sets Bridge Law apart is our integrated approach. We work seamlessly across practice areas — including tax advisory, corporate law, and international planning — to build complete solutions that anticipate both local and global considerations. Whether you’re planning for your family’s future, managing multi-jurisdictional assets, or preparing for business succession, our counsel is precise, compassionate, and results-driven.

If you’re searching for estate planning law firms near you, Bridge Law LLP offers both local experience and international insight — helping families and businesses achieve peace of mind and long-term stability.

• You must survive the trust term for the tax benefits to apply.
• Because the trust is irrevocable, you lose flexibility and cannot undo the transfer once it’s made.
• Beneficiaries do not receive a “step-up” in basis, which may lead to higher capital gains taxes if the property is sold.
• Legal and administrative costs can be significant, and the strategy is not suitable for everyone.

Yes. You retain the right to live in your home rent-free during the trust term. After the term ends, you can continue living in the residence, but you will need to pay fair market rent to your beneficiaries or to the trust. This arrangement can provide an additional estate planning benefit, since those rent payments further reduce your taxable estate without incurring gift tax.

If you pass away during the trust term, the full value of the residence is brought back into your taxable estate, as though the QPRT was never created. This risk makes it important to carefully choose the trust term, balancing tax savings with life expectancy.

When you create a QPRT, the IRS discounts the value of the gift to your beneficiaries because you are keeping the right to live in the property for a set term. This discounted value is what’s applied toward your lifetime gift tax exemption, allowing you to transfer a high-value property at a much lower tax cost. Additionally, any appreciation in the home’s value during the trust term occurs outside of your estate, further reducing potential estate taxes.

A QPRT is an irrevocable trust that allows you to transfer your primary residence or vacation home out of your taxable estate while retaining the right to live in it for a set number of years. At the end of that term, ownership passes to your beneficiaries. By doing this, the property is valued at a reduced rate for gift tax purposes, which helps lower overall estate and gift tax exposure.

Following appropriate due diligence by the buyer, the Reps and Warranties in any purchase agreement are heavily negotiated. If ever there is a problem down the line, the buyer will point to the affirmative statements made by the seller in this section of the agreement, especially around undisclosed liabilities, such as employment issues, threatened lawsuits and IP infringement.

Possibly, if the business stock qualifies for Federal Capital Gains Tax treatment under Section 1202 as Qualified Small Business Stock (QSBS).

Forming an LLC can provide several advantages with minimal disadvantages. LLC members can qualify for certain tax deductions, including reduced legal fees and self-employment taxes. Limited liability and asset protection play a key role in LLC structures as well, ensuring the protection of personal assets from business liabilities, which ensures that members will not face any of the debt or obligations pertaining to the business. LLCs offer management flexibility, allowing members to incorporate a dynamic structure that suits their individual and business needs.  However, every situation and business is different, so an LLC may not always be the best choice of entity.

It depends what your objectives are. For example, how many shareholders the company will have, will there be foreign or corporate owners, do you intend to raise money, will it receive an active or passive income?  These factors will dictate whether the entity should be taxed as an S-Corp, C-Corp, Partnership or other election.

An 83(b) Election gives those who hold restricted stock the option to pay taxed based on the current value of the stock rather than at time of vesting, which can potentially reduce the overall tax liability if the stock appreciates over time. However, if the stock depreciates or forfeits before vesting, the tax paid on the stock cannot be recovered.

A Deferred Sales Trust allows for an investor’s assets to be transferred to a trust managed by a third party while deferring capital gains tax, similar to the result of a 1031 exhange.

Section 25012(f), also referred to as the Limited Offering Exemption, of the California Corporations Code states that equity issuances to the entity’s founders are exempt from registering as security offerings.

Choosing whether to elect to be taxed as a C-corporation or S-corporation depends on your individual situation regarding your business. An S-corporation only requires a single layer of taxation. Therefore, an S-corporation does not tax at the corporate level, rather it only taxes the indiviudal shareholders based on their personal tax returns. C-corporations, however, are subject to double taxation, which means the company’s profits are taxed as a whole and again when the profits are, then, distributed to the shareholders.

Both stock purchase agreements and asset purchase agreements offer pros and cons that must be considered throughout the process of a corporate transaction. The formation of a stock purchase agreement is a straightforward process and allows the buyer to purchase the entire entity, including all of its assets and liabilities. However, this means the buyer may incur any unwanted liabilities. On the other hand, an asset purchase agreement is a more complex process that allows the buyer to select the assets and liabilities they would like to incur. The buyer may be subject to greater tax benefits through an asset purchase agreement than through a stock purchase agreement.

Alter ego liabilities occur when a court determines that a business is not truly separate from its owner, often due to poor financial practices or failure to follow legal formalities. To shield your entity from ‘alter ego’ liabilities, it’s crucial to maintain clear separation between personal and business finances. Here are a few ways to protect your entities and reduce the risk of personal liability:

1. Ensure that your business operates with its own bank accounts, financial records, and legal documents.
2. Avoid commingling personal and business assets, and adhere to corporate formalities, such as holding regular meetings and maintaining proper documentation.
3. Clearly define the roles and responsibilities within your entity to prevent confusion.

A sole proprietorship is the easiest form of business ownership though is rarely the best choice as it is not a separte legal entity form its owner, and therefore there is personal liability. Although it allows a single owner to operate and control a business and its operations, acquiring all profits and liabilities, and is an appealing structure for a new business owner, it comes with a lot of inherent liability issues.

Although both forming a Joint Venture (JV) and forming a Partnership are collaborative projects, they both differ in scope and structure. A JV can often be  a short-term project where two or more parties agree to either form a separate legal entity with shared liability or simply conduct the JV under a JV Agreement. A Partnership is typically an ongoing business relationship where parties combine their resources to run a business, sharing profits, losses, assets and liabilities based on the type of partnership and agreed terms.