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You’ve put blood, sweat, and tears into your family and your business. Now it’s time to protect it. Dare to Leap The Thrill and Rewards of Taking Chances 916-545-2790 tqdlaw.com APRIL 2024
We’ve often heard that, in the end, we only regret the chances we didn’t take. When I think about my own life, I feel fortunate for the leaps of faith I have taken that have led me to where I am today. April 23 is National Take a Chance Day, a celebration of the bravery required to step into the unknown and the incredible outcomes that can result from taking risks. Without the willingness to venture into uncertainty, many of us would never realize our full potential or achieve our most ambitious goals. Taking chances is inherently linked to progress and innovation, especially in the dynamic realm of Business Law, where the adage “big risk, big reward” often holds true. In business, taking calculated risks is essential for growth and development. However, it’s equally important to avoid leaping without a safety net — that’s where legal counsel comes into play, providing the necessary protection and peace of mind to pursue bold moves. By securing our legal assistance, entrepreneurs can safeguard their personal assets, optimize their tax positions, and set the
love, joy, and companionship into my life, especially during the challenging transition to California. I recall being so nervous about committing to this adorable animal whom I knew nothing about, but as it turned out, choosing her was the best decision. These experiences have taught me that while taking chances can be intimidating, the potential for change and achievement makes the risk worthwhile. Whether making personal life decisions or embarking on new business ventures, taking a chance can be the best recipe for positive change. However, it’s crucial to approach these opportunities with a well- thought-out plan and the right support systems in place. As a legal professional, my role is to provide the assurance and protection necessary to turn those leaps of faith into calculated risks that lead to substantial rewards. So, as we celebrate National Take a Chance Day, let us remember the power of taking chances with the proper support and safeguards in place. Take the leap of faith, but make sure you’re
stage for sustained success. Investing in legal advice is not just a precaution — it enhances the potential rewards of taking significant risks. Looking back, I realize I’ve taken a few significant risks in my life. Deciding to attend law school was a monumental leap of faith. I remember when I first decided to pursue law, the challenges and competitiveness of the field were intimidating. However, as daunting as it was, this decision paved the way for my future achievements. Similarly, relocating from Michigan to California to sit for the bar exam and start anew was full of uncertainty. But it ultimately led to a fulfilling life and career I’m proud of. On a more personal note, adopting my dog — a German shepherd and golden retriever mix appropriately named Faith — was a venture into the unknown that brought
protected. The rewards just might exceed your wildest dreams.
“Take the leap of faith, but make sure you’re protected.”
–Danielle Lawrence
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Securing Your Legacy
In 1902, the Barcolo Manufacturing Company in Buffalo, New York, implemented a 10-minute break for its employees in the morning and afternoon. The goal was to provide workers with an opportunity to enjoy tea or coffee with a snack. After the break, workers were ready for more time on the job, filled and caffeinated. Not coincidentally, the first vacuum-sealed coffee grounds were released around 1900, making coffee accessible during short breaks, and more companies started offering breaks. A 1955 court case, The United States v. Phil Greinetz of Los Wigwam Weavers , cemented the break into law. Greinetz was the owner of the Los Wigwam Weavers tie factory and struggled to find staff after World War II. He introduced mandatory coffee breaks so workers could get a boost to make it through the day. The problem? He wouldn’t pay the workers for their mandatory coffee break. So, the U.S. Department of Labor stepped in and won the workers paid breaks as they had a positive effect on the business. As time has passed, coffee breaks have evolved from a pragmatic solution in the industrial era to a worldwide phenomenon about more than just a moment to consume caffeine. It has become a social ritual, fostering camaraderie among colleagues and providing a space for informal conversations. These breaks have become a catalyst for creativity and collaboration, so enjoy this cherished cultural staple, especially if you work alongside coworkers in an office space. Coffee Lovers, Look No Further The History of Your Favorite Break-Time Treat
The Financial Wisdom of ‘Freeze Partnerships’
Your estate plan needs to transfer wealth from one generation to the next in a tax-efficient manner. Attempting to force all assets through a simple will without consideration of more tax- wise actions fails your heirs. A freeze partnership stands out because of its unique approach to transferring wealth while minimizing estate taxes. THE FREEZE PARTNERSHIP STRUCTURE Freeze partnerships have distinct classes of interests: preferred and common classes. Senior partners — typically family members or the original owners of an asset (often parents) — contribute assets to the partnership. Owning real estate and having ownership stakes in partnerships or LLCs, stocks in operating companies, and securities portfolios are prime examples. The preferred owners receive fixed annualized returns and have priority over common interest holders in the event of liquidation, allowing them to maintain control over the assets. Conversely, junior partners, often the next generation or designated beneficiaries, contribute cash or other assets in exchange for common interests that provide the common partners with any excess beyond the annual fixed interest allocated to the preferred owners. This setup safeguards the financial stability and control of preferred partners and promotes the transfer of wealth through asset appreciation. COMPLIANCE AND STRATEGIC ADVANTAGES For a freeze partnership to be effective, it must comply with Section 2701 of the Internal Revenue Code. This ensures preferred interests are valued appropriately, preventing undue shifts in value to other interests. Effectively, it minimizes any gift tax implications of transfers to common partners. Compliance requirements stipulate that preferred returns must be cumulative and paid annually at a market rate determined by a qualified appraiser. The value of the common interests must represent at least 10% of the total value of the partnership, including any debts owed to preferred partners. This strategic framework enables preferred partners to leverage their lifetime estate and gift tax exemptions effectively. It facilitates the transfer of asset appreciation to common partners (children), making it a suitable strategy for families with appreciable assets. A STRATEGIC OPTION The freeze partnership structure offers flexibility, control, and tax efficiency. However, given its complexity and the stringent requirements of Section 2701, it’s essential to approach this strategy with careful planning and professional guidance. PARTNER WITH DAHL LAW GROUP We encourage you to schedule a consultation to explore the benefits of a freeze partnership. Our team provides custom advice and will help you achieve your wealth transfer goals effectively.
Do you have a friend who needs our help? When you’re done reading, give them this newsletter and recommend they scan our QR code. We can help them solve their tax, business, or estate planning problems before things get worse.
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How Divorce Transforms Estate Distribution
The end of marriage signals a major shift in your financial future, especially regarding how your assets will be distributed through wills in your estate plan. It’s common practice to designate your spouse as the recipient of all or a significant portion of assets through a will, but how does a divorce impact those designations? UNDERSTANDING PROBATE CODE 5040 Under Probate Code 5040, if you pass away after a divorce, the law typically views your ex-spouse as having predeceased you. This is extremely important regarding how your assets get distributed according to your estate plan — which was likely made (or modified) when you married. Any benefits your ex-spouse would have received are automatically voided, ensuring the assets are distributed according to other instructions in the document or, if no instructions are provided, according to state intestacy laws. This automatic adjustment is based on the presumption that you wouldn’t want your ex-spouse to inherit your assets post-divorce. However, you are welcome to include your ex-spouse in future distribution
designations if desired in cases where you maintain an amicable relationship.
created, reviewing and possibly revising your estate planning documents after a divorce is imperative. Updating your estate plan is also an opportune moment to reassess your entire estate planning strategy. This includes considering the need for new fiduciaries, such as executors or trustees, who align with your current situation. For those with minor children, divorce necessitates a careful review of guardianship and distribution arrangements for those children. This review should include financial provisions and guardians’ appointments in the unfortunate event of your incapacity or death. DAHL LAW GROUP IS HERE TO HELP If you need to adjust your estate plan post-divorce, the team at Dahl Law Group will assist you. We invite you to schedule a consultation to evaluate your estate planning needs and make necessary updates to ensure your assets are distributed according to your wishes. Our team is dedicated to guiding you through this process, safeguarding the legacy you wish to leave behind.
This rule kicks in only once the divorce is officially finalized. If you are legally separated but remain married, your spouse could still inherit as if you were married, underscoring the legal importance between separation and divorce. DESIGNATIONS OUTSIDE OF YOUR ESTATE PLAN Divorce in California alters the distribution of assets outlined within your estate plan, but you must take specific actions to update other financial instruments. For instance, beneficiary designations on life insurance policies and retirement accounts remain unaffected by divorce unless manually changed (but can be voided in some limited cases). This distinction is vital for ensuring your estate plan aligns with your intentions
after your marriage ends, as these designations supersede your estate.
THE IMPORTANCE OF UPDATING YOUR ESTATE PLAN Since divorce nullifies provisions for an ex-spouse in any will and trust you have
Grilled Steak With Chimichurri Sauce
GET A HEAD START ON YOUR LEGACY INTERVIEW! Scan this QR code to request a FREE copy of our Legacy Interview questions. With them in hand, you
Savor the flavor with our mouthwatering grilled steak, paired perfectly with vibrant chimichurri sauce.
Ingredients • 2 lbs steak (flank, sirloin, or skirt steak) • 2 tbsp olive oil • Salt and pepper, to taste
For the chimichurri sauce: • 1 cup fresh parsley, chopped • 2 cloves garlic, minced
can create a precious gift for your children, grandchildren, and other loved ones that will preserve your memory for decades to come.
• Juice of 1 lemon • 2 tbsp olive oil
• 1 tsp red pepper flakes • Salt and pepper, to taste
“A people that values its privileges above its principles soon loses both.” –Dwight D. Eisenhower
Directions 1. In a large pot, heat oil over medium heat. Add onions and garlic and sauté for 5 minutes. Add the mushrooms, wine (if desired), and thyme and cook for 5 minutes. 2. Add the broth and bring to a boil. Once boiling, cover, reduce heat, and simmer for 10 minutes. Stir in the coconut milk and continue cooking for another 5 minutes. 3. Mix cornstarch with water and add to soup. Stir frequently for 1–2 minutes until soup thickens to desired consistency. 4. Remove from heat and stir in the parsley. Season with salt and pepper and enjoy!
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INSIDE What’s
2. 1. The Life-Changing Magic of Taking Chances
The Birth of the Coffee Break What Is a ‘Freeze Partnership’? Will Divorced Spouses Still Receive Assets in a Will? Grilled Steak With Chimichurri Sauce Unlocking the Power of Consistency
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5 Tips for Sustaining Your Exercise Routine
4. ENLIST A WORKOUT BUDDY
Beginning a journey toward a healthier, more active lifestyle is commendable; one key to success is a consistent commitment to exercise. Here are five tips to ensure you’re consistent in your journey. Establishing realistic goals is the foundation of a consistent exercise routine. Instead of aiming for dramatic changes overnight, focus on incremental milestones. Celebrate 1. SET REALISTIC GOALS
specific days and times for exercise, treating them with the same importance as any other commitment. This structured schedule helps integrate exercise into your routine seamlessly. Exercise shouldn’t be a monotonous chore. Exploring various activities to find those you genuinely enjoy will help you remain consistent. Whether it’s rock climbing, hiking, cycling, Zumba, or aerobics, you need to find engaging activities that you love. This will increase the likelihood of long-term commitment as the exercise is something you want to do.
Journeys are more enjoyable when shared. Find a workout buddy who shares similar fitness goals and schedules. Exercising with a friend will establish accountability and bring a fun social element that encourages staying on track. Understand that setbacks are natural. If you miss a workout or face setbacks in your fitness journey, that’s okay! Be kind to yourself and avoid self- criticism to just focus on recommitting to your routine. Consistency is built over time, and resilience is crucial in maintaining it. You can’t be resilient without assuring yourself that you can do it despite the challenges.
3. FIND EXERCISES YOU ENJOY
5. BE KIND TO YOURSELF
these little wins to foster a sense of achievement that will fuel your motivation to continue.
2. CREATE A SCHEDULE
Just as you schedule appointments and meetings, prioritize scheduling your workout sessions. Designate
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