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<strong>Contra</strong> <strong>Costa</strong><br />
LAWYER<br />
Volume 26, Number 2 | March 2013<br />
Tax Law / Fiscal Cliff<br />
The California Cliff<br />
by Mark Ericsson<br />
Is Congressional Budget Gridlock<br />
Here to Stay?<br />
by Thomas Del Beccaro<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 1
Perry A. Novak<br />
Senior Vice President - Investments<br />
UBS Financial Services, Inc.<br />
2185 N. California Blvd., Suite 400<br />
Walnut Creek, CA 94596<br />
(925) 746-0245<br />
perry.novak@ubs.com<br />
ubs.com/team/thenovakgroup<br />
You know there are more questions you should be asking, but<br />
you're not sure what they are.<br />
You want to stop procrastinating and make a decision,<br />
but you don't feel well enough informed.<br />
You know where you want to be,<br />
but you don't have a plan that will get you there.<br />
That's where we come in.<br />
The Novak Group at UBS Financial Services, Inc.<br />
Providing wealth planning and asset management services to affluent<br />
families, business owners and professionals since 1983.<br />
Trusted advice, caring support, prudent financial solutions.<br />
2<br />
MARCH 2013
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CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 3
4<br />
MARCH 2013
2013 BOARD OF DIRECTORS<br />
Jay Chafetz President<br />
Stephen Steinberg President-Elect<br />
Candice Stoddard Secretary<br />
Nick Casper Treasurer<br />
Audrey Gee Ex Officio<br />
Richard Alexander<br />
Philip Andersen<br />
Dean <strong>Bar</strong>bieri<br />
Amanda Bevins<br />
Oliver Bray<br />
Denae Hildebrand Budde<br />
CCCBA EXECUTIVE DIRECTOR<br />
Lisa Reep | 925.288.2555 | lgreep@cccba.org<br />
CCCBA main office 925.686.6900 | www.cccba.org<br />
Jennifer Comages<br />
Membership Coordinator<br />
Emily Day<br />
Systems Administrator and<br />
Fee Arbitration Coordinator<br />
Dawnell Blaylock<br />
Communications<br />
Coordinator<br />
Mary Carey<br />
Alison Chandler<br />
Elva Harding<br />
Peter Hass<br />
Reneé Livingston<br />
James Wu<br />
CONTRA COSTA LAWYER<br />
CO-EDITORS EDITORIAL BOARD<br />
Harvey Sohnen<br />
925.258.9300<br />
Nicole Mills<br />
925.351.3171<br />
BOARD LIAISON<br />
Candice Stoddard<br />
925.942.5100<br />
COURT LIAISON<br />
Kiri Torre<br />
925.957.5607<br />
PRINTING<br />
Steven’s Printing<br />
925.681.1774<br />
PHOTOGRAPHER<br />
Moya Fotografx<br />
510.847.8523<br />
Theresa Hurley<br />
Associate Executive Director<br />
<strong>Bar</strong>bara Arsedo<br />
LRIS Coordinator<br />
Mark Ericsson<br />
925.930.6000<br />
Matthew Guichard<br />
925.459.8440<br />
Elva Harding<br />
925.215.4577<br />
Patricia Kelly<br />
925.258.9300<br />
Craig Nevin<br />
925.930.6016<br />
David Pearson<br />
925.287.0051<br />
Stephen Steinberg<br />
925.385.0644<br />
Marlene Weinstein<br />
925.942.5100<br />
James Wu<br />
925.658.0300<br />
The <strong>Contra</strong> <strong>Costa</strong> Lawyer (ISSN 1063-4444) is published 12 times a<br />
year - 6 times online-only - by the <strong>Contra</strong> <strong>Costa</strong> <strong>County</strong> <strong>Bar</strong> <strong>Association</strong><br />
(CCCBA), 2300 Clayton Road, Suite 520, Concord, CA 94520. Annual<br />
subscription of $25 is included in the membership dues. Periodical<br />
postage paid at Concord, CA. POSTMASTER: send address change<br />
to the <strong>Contra</strong> <strong>Costa</strong> Lawyer, 2300 Clayton Road, Suite 520, Concord,<br />
CA 94520. The Lawyer welcomes and encourages articles and letters<br />
from readers. Please send them to contracostalawyer@cccba.org.<br />
The CCCBA reserves the right to edit articles and letters sent in<br />
for publication. All editorial material, including editorial comment,<br />
appearing herein represents the views of the respective authors and<br />
does not necessarily carry the endorsement of the CCCBA or the<br />
Board of Directors. Likewise, the publication of any advertisement<br />
is not to be construed as an endorsement of the product or service<br />
offered unless it is specifically stated in the ad that there is such<br />
approval or endorsement.<br />
<strong>Contra</strong> <strong>Costa</strong><br />
LAWYER<br />
Volume 26 Number 2 | March 2013<br />
FEATURES<br />
DEPARTMENTS<br />
6 INSIDE | by Mark Ericsson<br />
7 PRESIDENT’S MESSAGE | by Jay Chafetz<br />
19 CENTER | Annual Officer Installation<br />
Introducing Judge Judy Johnson and Commissioner Anita Santos<br />
Judicial Demeanor Training | Women’s Section Powerlunch<br />
Meet Your Local Judges, Family and Juvenile<br />
30 COFFEE TALK<br />
How do you fix the congressional process?<br />
32 INNS OF COURT | by Matthew Talbot<br />
34 CLASSIFIEDS<br />
35 CALENDAR<br />
The official publication of the<br />
IS CONGRESSIONAL BUDGET GRIDLOCK<br />
HERE TO STAY?<br />
by Thomas Del Beccaro<br />
THE CALIFORNIA CLIFF<br />
by Mark Ericsson<br />
ELEMENTS OF ATRA<br />
by G. Scott Haislet<br />
B A R<br />
A S S O C I A T I O N<br />
8<br />
11<br />
12<br />
BUSINESS TAX PROVISIONS OF ATRA 2012<br />
15<br />
by George Cabot<br />
IRS RETURN PREPARER REGS DERAILED<br />
by Warren Peterson<br />
DOMESTIC PARTNER COVERAGE RIGHTS<br />
UNDER THE CALIFORNIA INSURANCE<br />
EQUALITY ACT<br />
by Ralph L. Jacobson<br />
THE POPULATION CLIFF<br />
by Perry A. Novak<br />
17<br />
26<br />
28<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 5
inside<br />
My dad always said, “Spare me exciting<br />
times.” By April first, the country will or<br />
will not have survived four near-death<br />
experiences. We have already survived<br />
the fiscal cliff with last minute legislation entitled the<br />
American Taxpayer Relief Act of 2012 (ATRA). Both parties<br />
grumble that the other side won. The Democrats got<br />
higher taxes on the rich while holding the Bush cuts on<br />
the not so rich. The Republicans did not lose their pressure<br />
points – the coming battles over the debt ceiling,<br />
sequestration and the budget. The rest of the Americas<br />
grumbled over the unmitigated gall of Congress to call<br />
the act “The American...”<br />
First, Congress will take up an increase in the debt ceiling.<br />
This week, the House passed a three-month extension.<br />
It was anticipated that the ceiling would have to<br />
be raised sometime in February. Now it looks like it may<br />
be sometime in May.<br />
The President has said he won’t negotiate over the<br />
debt ceiling. He argues that Congress passed the spending<br />
bills and it is up to them to increase the debt ceiling.<br />
In so doing, he has rejected the idea of coining a platinum<br />
one-trillion-dollar coin or raising the ceiling by fiat<br />
under the 14th Amendment, theories that would skirt<br />
the debt ceiling issue. The Republicans say they won’t<br />
raise the debt ceiling until they get spending cuts sufficient<br />
to cover the debt increase. Experts claim that a failure<br />
to raise the debt ceiling would end the world as we<br />
know it and would certainly change the way the world<br />
views us. Please spare me these exciting times.<br />
Second up is the fight over the sequester, a result of a<br />
Congress that could not come to a compromise on the<br />
debt ceiling increase last time around. To resolve the<br />
gridlock, Congress passed spending cuts in 2011 so onerous<br />
to both parties that a compromise seemed guaranteed<br />
before the January 31, 2013, effective date. A gridlocked<br />
Congress could not reach a compromise before<br />
2013 and the ATRA extended the effective date to March<br />
first, expecting that they can still reach a compromise.<br />
Einstein defined insanity as doing the same thing over<br />
and over again and expecting a different result. Enough<br />
said.<br />
Finally we face congressional confirmation of a budget.<br />
Don’t forget that Newt Gingrich shut down the government<br />
by blocking the passage of a budget. Just this<br />
week the House passed an act mandating that senators<br />
and representatives must pass a budget by April 15th to<br />
get paid. The Senate has been unwilling to pass a budget<br />
these last three years. Maybe this is the impetus needed.<br />
Mark Ericsson<br />
Guest Editor<br />
In this issue, we looked around for someone that<br />
could answer the question “How do we fix the congressional<br />
process?” and posed the question to the chair of<br />
the California Republican Party, soon to publish a book<br />
on the subject. We also asked Perry Novak to scare us<br />
with facts about the upcoming demographic changes<br />
in our society. In our feature article, Scott Haislet explains<br />
the American Taxpayer Relief Act in detail. In a<br />
companion piece, we look at the impact when you combine<br />
the effects of ATRA with California tax rates. George<br />
Cabot reviews the corporate landscape and the debate<br />
over lowering our internationally high tax rates. Ralph<br />
Jacobson brings us up to date on the rights of domestic<br />
partners under insurance policies. Warren Peterson<br />
warns us that tax preparers no longer must be registered<br />
with the IRS.<br />
I’m afraid to say that these are going to be very exciting<br />
times. My father must be turning over in his grave.<br />
One last thought: Is it a coincidence that there is no<br />
ethics credits being given in this issue? s<br />
Mark Ericsson is a partner in the tax and business<br />
firm of Youngman & Ericsson, has served as the 2006<br />
president of the <strong>Bar</strong> <strong>Association</strong> and is currently the<br />
chair of the Taxation Section. He has written over 30<br />
articles on tax and business issues.<br />
6<br />
MARCH 2013
CCCBA - It’s Your Organization<br />
president’s message<br />
By the time this reaches<br />
print, our organization will<br />
already have had its Installation<br />
Luncheon, where the<br />
new officers, directors and section<br />
leaders of the <strong>Contra</strong> <strong>Costa</strong> <strong>County</strong><br />
<strong>Bar</strong> <strong>Association</strong> are installed in<br />
their positions.<br />
I know that I will have seen only<br />
a few of you there. I regret that this<br />
year especially, because those of<br />
you who did not attend missed a<br />
fascinating interview with our most<br />
recent appointee to the California<br />
Supreme Court, Goodwin Liu. Happily,<br />
that interview was videotaped<br />
and is available for viewing on our<br />
website. It is well worth watching.<br />
The Installation Luncheon is regularly<br />
attended by judges, CCCBA<br />
presidents, officers, and past presidents,<br />
CCCBA directors, and CCCBA<br />
section leaders. I often feel that after<br />
we have given recognition to all of<br />
these luminaries, there is no one left<br />
in the audience whose name has<br />
not been mentioned. We are an organization<br />
of 1,700 members. About<br />
125 of them usually attend the Installation<br />
Luncheon.<br />
Times have changed for our <strong>Bar</strong><br />
<strong>Association</strong>. Before the early 1990s,<br />
when the State <strong>Bar</strong> first adopted<br />
mandatory continuing legal education,<br />
our <strong>Bar</strong> <strong>Association</strong> largely interacted<br />
with its members through<br />
a few well-attended bar-wide functions<br />
each year. After this change,<br />
our sections began to offer education<br />
credits at their programs and<br />
over the years most members of<br />
the <strong>Bar</strong> <strong>Association</strong> now have contact<br />
with the <strong>Association</strong> mainly<br />
through the sections.<br />
The Conservatorship, Guardianship,<br />
Probate & Trust Section has<br />
over 200 members. They had their<br />
annual luncheon a week after that<br />
of the <strong>Bar</strong> <strong>Association</strong> as a whole,<br />
and had even greater attendance<br />
than we had at the Installation<br />
Luncheon—and the people attending<br />
each function were largely different.<br />
The Family Law Section is<br />
also a large and active one with regular<br />
monthly programs, also very<br />
well attended. CCCBA is the umbrella<br />
organization that sponsors these<br />
sections, helps them advertise their<br />
programs, provides administrative<br />
and accounting support, and supplies<br />
the nonprofit corporation that<br />
lets them furnish their valuable<br />
networking and educational services<br />
to our members. So the mother organization<br />
is vitally important to all<br />
of our members even though many<br />
of them never attend anything<br />
more than events sponsored by the<br />
sections. We are the heart and lungs<br />
that let the body get where it’s going.<br />
Your board of directors has tried<br />
to be responsive to these changed<br />
times. Over the last several years,<br />
we have made changes that reflect<br />
our perception of the different<br />
things that you, our members, want<br />
and need from us. We dropped a second<br />
annual event called the State of<br />
the Court Address when attendance<br />
began to fall off. The event, in the<br />
current tough economic times for<br />
our state, ended up being just a depressing<br />
yearly recap of all the bad<br />
news about the budget cuts to the<br />
court system. We continually brainstorm<br />
about new programs that we<br />
might offer you or about possible<br />
changes to streamline and make<br />
more relevant the programs that we<br />
already offer.<br />
Unfortunately, we have little<br />
data to guide us. We do not have<br />
organization-wide elections to become<br />
officers of the CCCBA. The information<br />
we get about your likes<br />
Jay Chafetz<br />
CCCBA Board President<br />
and dislikes is fragmentary and anecdotal<br />
at best.<br />
So as I go about my duties this<br />
year, I want to make sure that each<br />
of you knows I have an open door<br />
policy. If there is a concern that you<br />
have about our organization or an<br />
idea you want to propose about<br />
how to make it better, please feel<br />
free to email or call me.<br />
Later this month, we are going to<br />
send you a survey. We will do our<br />
best to make it easy and quick to<br />
complete. Please participate in it.<br />
We want to serve you, and we can<br />
only know how to serve you if you<br />
tell us what you want.<br />
This is your organization, not<br />
mine or that of the other members<br />
of the board of directors. Do not<br />
think of it as something apart from<br />
you or, as it is tempting to think<br />
about government, something you<br />
have no control over and cannot<br />
change. I and the other directors<br />
are here to serve the organization,<br />
but even more importantly, to serve<br />
you. Take control of your organization.<br />
Tell us what you want it to be.<br />
And be sure to let us know how we<br />
are doing. s<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 7
The United States national debt<br />
is higher at $16.5 trillion than the<br />
overall size of the U.S. economy.<br />
In 2012, America faced a so-called<br />
“fiscal cliff” that wasn’t resolved so<br />
much as it was put off to another<br />
day. We also know that the U.S. Senate<br />
has not passed a budget in four<br />
years.<br />
Is this the new normal for America?<br />
Or is there some solution to this political<br />
budgetary gridlock? In plain<br />
truth, while lack of leadership in<br />
congress is a problem, so much of<br />
America is either dependent on the<br />
federal government or doing business<br />
with the federal government,<br />
that the divisions in congress and<br />
America we see today are likely<br />
here to stay.<br />
As I detail in my upcoming book,<br />
The Divided Era, the partisanship<br />
Is Congressional Budget<br />
Gridlock Here to Stay?<br />
by Thomas Del Beccaro<br />
Chairman, California Republican Party<br />
The United States national<br />
debt is higher at $16.5 trillion<br />
than the overall size of<br />
the U.S. economy. In 2012,<br />
America faced a so-called “fiscal<br />
cliff” that wasn’t resolved so much<br />
as it was put off to another day. We<br />
also know that the U.S. Senate has<br />
not passed a budget in four years.<br />
Is this the new normal for America?<br />
Or is there some solution to this<br />
political budgetary gridlock? While<br />
lack of leadership in Congress is a<br />
problem, so much of America is either<br />
dependent on the federal government<br />
or doing business with the<br />
federal government, that the divisions<br />
in Congress and America we<br />
see today are likely here to stay.<br />
As I detail in my upcoming book,<br />
“The Divided Era,” the partisanship<br />
of today is different than at any time<br />
in our history. In the past, we have<br />
had very partisan eras featuring<br />
very difficult issues. The most divisive<br />
era in our history, the Civil War<br />
and Reconstruction Period, saw us<br />
decide issues with guns more than<br />
ballots. You cannot get more partisan<br />
than that.<br />
The adoption of the Constitution<br />
saw a political party do battle with<br />
its anti-party: Federalists versus Anti-Federalists.<br />
Imagine today if the<br />
two parties were called Democrats<br />
and Anti-Democrats or Republicans<br />
and Anti-Republicans.<br />
Now, however, we face a potentially<br />
more intractable problem.<br />
While the Civil War was a larger<br />
and more deadly issue, and while<br />
the adoption of the Constitution<br />
proved to be more than just a philosophical<br />
political fight for the ages,<br />
they both involved what I describe<br />
as closed-end issues.<br />
We adopted the Constitution,<br />
and while Hamilton and Jefferson<br />
fought about its meaning, just as<br />
some do today, the issue was resolved.<br />
We have a Constitution and<br />
we don’t have Articles of Confederation.<br />
That issue was capable of being<br />
decided once and for all. Similarly,<br />
we fought a Civil War and we are<br />
now one nation.<br />
Today, we face a different problem.<br />
When the Civil War ended,<br />
and even up to the year 1900, total<br />
government expenditures were less<br />
than 7 percent of the U.S. economy.<br />
Today, total government expenditures,<br />
from local government all the<br />
way to the federal government, are<br />
a staggering 33 percent.<br />
First, that means our governments<br />
are spending a lot more<br />
money. Predictably, we have the<br />
usual fights over the proper scope of<br />
government. Today, however, the<br />
number and fervor of those fights<br />
is growing right along with the size<br />
of the federal budget, which has<br />
grown over 300 percent in the last<br />
30 years. While this fight is not new,<br />
it is a growing problem.<br />
Second, our growing deficits, tax<br />
burdens and troubled economy are<br />
fostering an unprecedented competition<br />
between those seeking<br />
funding for current government op-<br />
8<br />
MARCH 2013
erations and those concerned with<br />
government pensions. Closely related<br />
to that are also: (1) the growing<br />
competition between public employee<br />
unions and taxpayers, and<br />
(2) the fights for taxes and funding<br />
between the states and the federal<br />
government over federal programs<br />
like ObamaCare.<br />
Third, and this is a critical point,<br />
the fact that our governments now<br />
represent one-third of the economy<br />
also means that our governments<br />
are doing more things than they<br />
have ever before – and by a wide<br />
factor. Those governments doing<br />
many more things lead to unprecedented<br />
partisanship that is at the<br />
crux of gridlock today.<br />
Simply put - a government that<br />
does but 100 things will find far<br />
fewer partisans than a government<br />
that does 1,000 things. Today, our<br />
governments all combined do $5<br />
trillion worth of things each year<br />
and we have many more partisans<br />
than our founders could ever imagine.<br />
As a result, we also have an unprecedented<br />
competition among<br />
those seeking government benefits,<br />
preferences and spoils doled out<br />
at all levels of our state, local and<br />
federal governments. Businesses,<br />
citizens, lobbyists, charities, government<br />
contractors and more compete<br />
for those spoils. Indeed, many businesses<br />
seemingly compete as much<br />
in the halls of our governments as<br />
they do in the marketplace. Many<br />
times, they can gain greater victories<br />
from government than they can<br />
in the marketplace.<br />
All of this adds up to the fact that<br />
the number of people doing business<br />
with our governments or dependent<br />
on them dwarfs the number<br />
of those people at any previous<br />
time in our history. The result of this<br />
new, “my piece of the pie partisanship”<br />
is people less driven by ideology<br />
and more driven by self-interest.<br />
Further, we see greater divisions<br />
among Americans and greater pressure<br />
to deliver the goods on the focal<br />
point of all of these competitions<br />
- our elected officials.<br />
Worse yet, the source of the current<br />
gridlock is not subject to any<br />
one close-end decision. To the contrary,<br />
our federal government is doing<br />
thousands of things which no<br />
single vote, war or legislative act<br />
“Simply put - a government that does but 100 things will find far fewer<br />
partisans than a government that does 1,000 things.”<br />
could resolve. As a result, we are<br />
likely to face division and gridlock<br />
for decades to come.<br />
Some choose to blame hyperpartisans<br />
in the major parties – and<br />
now the Tea Party – for our current<br />
gridlock. Partisans, however, are<br />
present in every age. For instance,<br />
Samuel Adams was considered incendiary<br />
as he sought revolutionary<br />
change in Boston. He was the<br />
leader of a mob and far more partisan<br />
than anyone in modern politics.<br />
He was essential, however, to our<br />
founding and the freedom that has<br />
spread across the world. Continuing<br />
the thought, John Adams stated<br />
outright that the Revolution would<br />
be attributed to another highly<br />
partisan writer of the age, Thomas<br />
Paine.<br />
Youngman & Ericsson, LLP<br />
1981 North Broadway • Suite 300<br />
Walnut Creek, CA 94596<br />
The point is that for anyone to<br />
blame partisans is to blame the<br />
symptom, not the cause. It is human<br />
nature for people with so<br />
much at stake to be highly partisan.<br />
As lawyers, we should be no more<br />
surprised at their fervor than at the<br />
fervor of our clients whose cases<br />
mean their fortune to them, if not<br />
more.<br />
In short, we should stop blaming<br />
the participants and start focusing<br />
on the dynamic, which brings them<br />
to the fray. They are acting in their<br />
self-interest or for their personal<br />
ambition. The rules of the game accentuate<br />
their ambition and their<br />
natures. Should one company sit<br />
at home while another seeks an<br />
advantage in Congress? Should we<br />
really expect people being taxed to<br />
the point of moving not be vocal?<br />
California has lost over 4.5 million<br />
taxpayers since 1998, mostly to low<br />
tax states. We shouldn’t any more<br />
blame them than to blame our clients<br />
for filing lawsuits for their<br />
claims.<br />
So what are we to do? First, and<br />
this will be the hardest, we need<br />
to understand that there is no example<br />
in history of a government<br />
lasting as comparatively large as<br />
ours. Part of the story of Rome and<br />
Greece at their heights is bureaucratic<br />
breakdown and class warfare<br />
over stagnant economies and divisive<br />
tax schemes. It is not a story<br />
of governments getting their fiscal<br />
house in order.<br />
As such, we need to understand<br />
Estate Litigation Lawyers.<br />
www.youngman.com (925) 930-6000<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 9
Budget Gridlock,<br />
cont. from page 9<br />
that growing government will lead<br />
to more division, not less. Each time<br />
we add to the size of government,<br />
we add to this unprecedented partisanship<br />
and potential for gridlock.<br />
We simply must stop looking<br />
to government for every happenstance<br />
or to resolve every inequity<br />
on the globe.<br />
Second, we need leaders that<br />
have the ability to focus voters on<br />
a common goal more than to divide<br />
their constituents. Reagan and Kennedy<br />
focused Americans on grand<br />
goals like restoring the economy<br />
and strengthening of our foreign<br />
policy goals. In both cases, Reagan<br />
and Kennedy relied as much on the<br />
private sector as on public sector activity.<br />
Both used tax cuts for all Americans,<br />
which bound people to their<br />
common presidential goal of reviving<br />
the economy. Kennedy challenged<br />
us to go to the moon and<br />
to join the Peace Corps. Reagan set<br />
a national goal for transcending<br />
communism. Those goals did not<br />
exclude any American from participating<br />
in their achievement. By creating<br />
goals for all Americans, goals<br />
that relied on private initiative, it<br />
made it easier for them to bring people<br />
together.<br />
Finally, as long as we have a tax<br />
system that pits one class of Americans<br />
against another, like our federal<br />
system, we can expect growing<br />
division. Taxing half of Americans<br />
and not the other half is the very<br />
nature of division. If we moved to<br />
a consumption-based tax system<br />
like many thriving states, we could<br />
minimize our divisions and grow<br />
the economy and revenues – all of<br />
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planning, wealth transfer planning, estate and gift<br />
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Telephone: 925.944.9700<br />
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www.bpbsllp.com<br />
1333 N. California Boulevard, Suite 350<br />
Walnut Creek, California 94596<br />
Telephone: 925.944.9700<br />
Facsimile: 925.944.9701<br />
www.bpbsllp.com<br />
that would lead to less gridlock.<br />
Those are long-term changes we<br />
need to make as a society. In the<br />
short term, it will take an extraordinary<br />
president or Speaker of the<br />
House to forge a consensus around<br />
a new national goal to break the<br />
current deadlock. The number of<br />
divisions present today in The Divided<br />
Era, however unfortunately,<br />
are not likely to simply go away. s<br />
10<br />
MARCH 2013
The California Cliff<br />
by Mark Ericsson<br />
California, the state that takes<br />
a backseat to no one, has<br />
certainly taken a backseat<br />
in the fiscal cliff debate.<br />
While all eyes were glued to the TV<br />
to watch the fight over how much<br />
the federal tax would bite the rich,<br />
California passed Proposition 30<br />
which raised California’s top tax<br />
rates nearly one and a half times as<br />
great as our federal counterpart, and<br />
we did it retroactively to the start of<br />
2012.<br />
Let’s look first at the rates we voted<br />
in by way of the proposition. The<br />
increases in California rates start<br />
at lower levels than the federal increases.<br />
For a single person, the top<br />
rate for those with incomes under<br />
one million dollars, formerly 9.3<br />
percent, increases to 10.3 percent at<br />
a taxable income of $250,000, 11.3<br />
percent at $300,000 and 12.3 percent<br />
at $500,000. The existing 1 percent<br />
surcharge kicks in at $1,000,000 taxing<br />
income in excess of $1,000,000<br />
at 13.3 percent. For married couples,<br />
the increases come at twice the income<br />
levels as for the single taxpayer.<br />
While the increase in the top<br />
rate nationally was an increase of<br />
13 percent over the 2012 rate, the increase<br />
in California was 32 percent<br />
over 2011, remembering the state<br />
increase was retroactive.<br />
For Californians with taxable incomes<br />
over $250,000, the news in<br />
California is not good. When you<br />
add in the effects of the alternative<br />
minimum tax, the ObamaCare investment<br />
tax and California capital<br />
gains policy, you can get some scary<br />
results. The alternative minimum<br />
tax was passed some 30 years ago<br />
to prevent high-income taxpayers<br />
from sheltering their incomes from<br />
tax. To calculate the tax, you first<br />
calculate your normal tax. You then<br />
calculate the tax without the shelter<br />
items to create a broader base<br />
and apply a lower rate. You pay the<br />
higher of the tax calculated by the<br />
two methods.<br />
One of the shelter items is state income<br />
tax. You do not get to deduct<br />
state income tax when calculating<br />
your alternative minimum tax. Taxpayers<br />
in states with high income<br />
tax rates like New York and California<br />
often get no tax benefit federally<br />
from paying state tax. Therefore, the<br />
two taxes are often additive. The<br />
combined tax rate for a single person<br />
with taxable income above $250,000<br />
is 45.2 percent; above $300,000 it is<br />
46.2 percent; above $400,000, it is<br />
50.8 percent, above $500,000, it is<br />
51.8 percent; and above $1,000,000,<br />
it is 52.8 percent.<br />
We then have the ObamaCare<br />
investment tax of 3.8 percent on investment<br />
income. All investment<br />
income over $200,000 for individuals<br />
and $250,000 for families is taxed<br />
at 3.8 percent. If you sell your house<br />
for a profit, you will certainly be<br />
subject to this tax. A lot of income is<br />
going to be taxed at 56.6 percent.<br />
Most disruptive is that in California,<br />
we don’t give any break for<br />
capital gains. The theory is that the<br />
California rates aren’t high enough<br />
to drive taxpayers out of the state.<br />
Thus someone with a capital gain<br />
from the sale of property or a business<br />
can incur a 12.3 percent rate on<br />
gains above $500,000 in addition to<br />
the 23.8 percent federal rate.<br />
I have a client who is going to<br />
sell his company for $150,000,000.<br />
He has asked me for instruction<br />
on how to cut his ties to this state.<br />
With 13 percent of his capital gain<br />
being taken by California, he sees<br />
no advantage in living in this state<br />
in a time where mobility is the big<br />
new thing. He will pay no tax if he<br />
moves to Nevada or Texas. The governor’s<br />
balanced budget assumes<br />
that no one is going to leave the<br />
state. Multiply the $18,500,000 in<br />
taxes the state is going to lose from<br />
this one taxpayer by the hundreds<br />
of others leaving and the budget<br />
loses its glamour.<br />
It is often noted that tax rates<br />
were much higher during the prosperous<br />
years of the Eisenhower administration.<br />
However, society is<br />
much more mobile now and work<br />
forces are much more competitive.<br />
Relocation is no longer a burden.<br />
Not only does California have<br />
America’s highest income tax rates,<br />
California has the nation’s highest<br />
sales tax rate, with counties that are<br />
looking to the more profitable real<br />
estate sectors to extract property tax<br />
and cities that are increasingly enforcing<br />
once lax gross receipts tax<br />
ordinances.<br />
One has to wonder why California<br />
needs the most pervasive tax<br />
regime by far of any state in the nation.<br />
s<br />
Mark Ericsson is a partner in the<br />
tax and business firm of Youngman<br />
& Ericsson, has served as the<br />
2006 president of the <strong>Bar</strong> <strong>Association</strong><br />
and is currently the chair of<br />
the Taxation Section. He has written<br />
over 30 articles on tax and business<br />
issues.<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 11
Elements of ATRA<br />
The American Taxpayer Relief<br />
Act (ATRA) became law<br />
on January 2, 2013.<br />
ATRA: (1) repealed the<br />
sunset of the Economic Growth<br />
and Tax Relief Reconciliation Act<br />
of 2001 (EGTRRA); (2) increased tax<br />
rate; (3) increased the capital gains<br />
rate; (4) re-introduced the “stealth”<br />
taxes by reduction of itemized deductions<br />
and personal exemptions;<br />
(5) created “permanent” alternative<br />
minimum tax relief; and (6) extended<br />
estate and gift tax exemptions<br />
established in 2010.<br />
ATRA relief retained some of the<br />
Bush-era tax policies and avoided<br />
government spending cuts, although<br />
resolution of the debt ceiling<br />
question has only been deferred.<br />
ATRA was a compromise. The<br />
administration wanted higher tax<br />
rates on incomes of at least $250,000<br />
(citing those successful families and<br />
individuals as “rich”), while Republicans<br />
resisted higher rates. The definition<br />
of rich settled at singles making<br />
over $400,000, and $450,000 for<br />
married joint filers.<br />
Repeal of EGTRRA<br />
Sunset<br />
EGTRRA provided significant tax<br />
breaks from 2001 through 2012, particularly<br />
in the area of capital gain<br />
rates, estate taxes and gift taxes.<br />
EGTRRA was scheduled to sunset<br />
after 2010, meaning that we would<br />
return to higher tax rates in effect<br />
before 2001. Both sides agreed to defer<br />
the EGTRRA sunset at the end of<br />
2010 to December 31, 2012, at which<br />
time the government would face its<br />
self-imposed fiscal cliff.<br />
When the dust settled, both sides<br />
claimed victory when they made<br />
by G. Scott Haislet<br />
EGTRRA permanent under ATRA,<br />
with no possibility of sunset in the<br />
future.<br />
Income Tax Rates<br />
ATRA retained existing 10 percent,<br />
15 percent, 25 percent, 28 percent,<br />
33 percent and 35 percent rates<br />
that prevailed pre-ATRA. Absent<br />
ATRA, these rates would have been<br />
materially higher.<br />
ATRA added a 39.6 percent rate for<br />
income above the applicable threshold<br />
of $400,000 for single taxpayers,<br />
$450,000 for married joint filers and<br />
$425,000 for heads of household.<br />
The applicable threshold will be<br />
adjusted annually for inflation.<br />
The tax brackets on which income<br />
is taxed at 10 percent, 15 percent, 25<br />
percent, 28 percent, 33 percent and<br />
35 percent will be adjusted annually<br />
for inflation. These favorable<br />
policies retain the “bracket creep”<br />
avoidance policy dating from the<br />
1980s.<br />
Capital Gain Rates<br />
ATRA retained the zero percent<br />
and 15 percent long-term capital<br />
gain rates. That means zero percent<br />
capital gain rate will apply to gains<br />
that would otherwise be subject to<br />
10 percent or 15 percent ordinary<br />
rate; 15 percent will apply to gains<br />
that would otherwise be subject to<br />
25 percent, 28 percent, 33 percent or<br />
35 percent ordinary rate.<br />
ATRA imposes a 20 percent longterm<br />
capital gain rate on income<br />
above the applicable threshold (e.g.,<br />
above $450,000 for married joint filers<br />
and $400,000 for singles). That<br />
means that 20 percent capital gain<br />
rate will apply to gains that would<br />
otherwise by subject to the 39.6 percent<br />
ordinary rate.<br />
For example, it will be possible<br />
for a gain to be taxed partially at 15<br />
percent and partially at 20 percent.<br />
Long-term capital gain rates will apply<br />
to gains on sales of capital assets<br />
and on “qualified” dividends. A dividend<br />
is qualified if taxpayer holds<br />
the stock at least 61 days during the<br />
121-day period that begins 60 days<br />
before the stock goes ex-dividend.<br />
Note: a new 3.8 percent tax will<br />
apply to net investment income<br />
(interest, dividends, gains, etc.) for<br />
those with “modified” adjusted gross<br />
income of $200,000, and $250,000 for<br />
married joint filers; that tax began<br />
January 1, 2013, under federal tax<br />
code section 1411, which was adopted<br />
by Congress in 2010. Thus, top<br />
federal long-term capital gain rates<br />
are effectively 23.8 percent.<br />
12<br />
MARCH 2013
ATRA also retained the 25 percent<br />
rate on “unrecaptured section 1250<br />
gain,” which is taxpayer’s accumulated<br />
depreciation on real estate. Example:<br />
taxpayer buys commercial<br />
property for $1 million in 2005; taxpayer<br />
sells the property for $1.2 million<br />
on February 1, 2013, at which<br />
date accumulated depreciation<br />
was $100,000. Taxpayer will pay tax<br />
at applicable capital gain rate on<br />
$200,000 ($1.2 million minus $1 million<br />
purchase price) and pay 25 percent<br />
on $100,000 unrecaptured section<br />
1250 gain. Taxpayer will avoid<br />
both the capital gain tax and 1250<br />
gain tax in the event of a successful<br />
1031 exchange. The new 3.8 percent<br />
tax will apply to the unrecaptured<br />
section 1250 gain.<br />
Stealth Increases<br />
Without increasing tax rates,<br />
taxes increased during the Clinton<br />
administration by reducing deductions<br />
for personal exemptions and<br />
certain itemized deductions. EG-<br />
TRRA reduced those stealth tax increases<br />
in 2005-2008 and eliminated<br />
them from 2009-2012. Thus, for 2012,<br />
each individual was entitled to a<br />
personal exemption of $3,800 irrespective<br />
of income. A married couple<br />
without children would save<br />
$7,600 in taxable income. A married<br />
couple with two dependents would<br />
save $15,800 in taxable income.<br />
Under ATRA beginning in 2013,<br />
personal exemptions are phased<br />
out for adjusted gross income (AGI)<br />
over $250,000, and $300,000 for married<br />
joint filers. Beginning in 2013,<br />
itemized deductions for mortgage<br />
interest, taxes, charity, and miscellaneous<br />
deductions will be reduced<br />
for single taxpayers with AGI over<br />
$250,000, and $300,000 for married<br />
joint filers. The reduction of itemized<br />
deductions is 3 percent times<br />
that sum above applicable AGI.<br />
Alternative Minimum<br />
Tax (AMT)<br />
AMT is an alternative taxation<br />
system. Each individual taxpayer<br />
computes his income tax under the<br />
“regular” and “alternative” systems,<br />
paying the higher of the two. The<br />
regular system is AGI minus itemized<br />
deductions, minus personal exemptions,<br />
the result being taxable<br />
income subject to the tax rates discussed<br />
above.<br />
The AMT system is AGI, modified<br />
for certain items, minus itemized<br />
deductions (except that deductions<br />
for taxes and miscellaneous deductions<br />
are not permissible under<br />
AMT), the result being alternative<br />
taxable income subject to 26 percent<br />
or 28 percent rates. Note: many Californians<br />
fall into AMT because of<br />
high state income taxes.<br />
A relatively large personal exemption<br />
frees most taxpayers from<br />
AMT concern. The higher the personal<br />
AMT exemption, the more<br />
likely a person would not be subject<br />
to AMT. The previous permanent<br />
AMT exemptions were $45,000 for<br />
married joint filers and $33,750 for<br />
singles.<br />
Beginning with EGTRRA, the<br />
exemptions were temporarily increased<br />
with an AMT “patch”; laws<br />
Morrill Law Firm<br />
1333 N. California Blvd., Ste 620 • Walnut Creek, CA 94596<br />
Phone 925.322.8615 • Fax 925.357.3151<br />
Will & Trust Litigation<br />
Financial Elder Abuse<br />
Conservatorships<br />
General Civil Litigation<br />
Probate & Civil Appeals<br />
Mediation<br />
Joseph Morrill<br />
Andrew R. Verriere<br />
Nicole Morrill<br />
Paralegal<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 13
Elements,<br />
cont. from page 13<br />
enacted every one to two years after<br />
2001 to provide for relatively higher<br />
levels of AMT exemptions.<br />
ATRA has eliminated the need<br />
for future patches by adopting permanently<br />
higher AMT exemptions:<br />
$78,750 for married joint filers and<br />
$50,600 for singles.<br />
Estate and Gift Taxes<br />
Estate taxes are levied on a decedent’s<br />
assets valued at date of death.<br />
Tax law permits a person to transfer a<br />
sum of property and money to heirs<br />
or other individuals. The limit has<br />
varied over the years. The limit was<br />
$675,000 before EGTRRA, increased<br />
to $1 million under EGTRRA with<br />
additional increases until reaching<br />
$3.5 million in 2009. There was no<br />
limit for persons dying in 2010 (i.e.,<br />
taxpayers died tax-free).<br />
Example: an unmarried person<br />
died in 2009 with net estate of $7.5<br />
million with no prior gifts. The sum<br />
of $4 million would have been<br />
taxed ($7.5 million net estate minus<br />
$3.5 million exemption). The $4 million<br />
is the decedent’s taxable estate.<br />
EGTRRA was supposed to sunset<br />
at December 31, 2010. Congress<br />
extended EGTRRA, implementing<br />
a $5 million tax-free transfer limit<br />
applied for 2011 and 2012, again<br />
subject to expire after 2012. ATRA<br />
extended the $5 million limit permanently,<br />
with inflation adjustment<br />
after 2011.<br />
Thus, the limit for persons dying<br />
in 2012 was $5.12 million, and is<br />
$5.25 million for persons dying in<br />
2013. The top estate tax rate in 2011<br />
and 2012 was 35 percent. ATRA increased<br />
that rate to 40 percent.<br />
That means, for example, that a<br />
single person dying in 2013 with<br />
$7.25 million net estate will incur<br />
$800,000 estate taxes, which is $7.25<br />
million minus $5.25 million, or $2<br />
million, times the 40 percent top estate<br />
tax rate. This example assumes<br />
that the decedent had made no gifts<br />
prior to death that would have reduced<br />
the lifetime exemption limit.<br />
Gift and estate taxes were “unified”<br />
in 2011 and 2012 and remain<br />
so under ATRA, meaning that a donor’s<br />
gifts during life or after death<br />
count against the lifetime exempt<br />
limit. Therefore, some donors give<br />
money and property to their heirs<br />
during their life up to a lifetime limit<br />
($5.25 million in 2013), because:<br />
(1) of concern that the government<br />
may reduce the limit in future, and<br />
(2) any appreciation on today’s gifts<br />
escape tax at the donor’s death.<br />
effectiveness<br />
While ATRA makes the $5 million<br />
limit permanent, nothing involving<br />
tax legislation is ever really permanent<br />
inside of the beltway, and<br />
that applies to all the permanent<br />
changes noted above. Thus, clients<br />
should consider inter vivos gifts to<br />
exhaust the lifetime gift exclusion<br />
in case it disappears. s<br />
G. Scott Haislet is a CPA and tax attorney<br />
in Lafayette. He is a certified<br />
specialist in taxation law, Board of<br />
Legal Specialization of California<br />
<strong>Bar</strong>. His practice includes tax planning,<br />
preparation, controversies,<br />
real estate matters, estate planning,<br />
and 1031 exchanges. He may be<br />
reached at (925) 283-1031 or scott@<br />
goscott.com.<br />
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14<br />
MARCH 2013
Business Tax Provisions of ATRA 2012<br />
An extension of targeted incentives, but needed<br />
corporate tax reform must wait…<br />
When have budgetary<br />
and tax machinations<br />
in Washington<br />
generated so fertile a<br />
phrase, one so conducive to corny<br />
metaphor and other colorful figures<br />
of speech? I pledge in writing this<br />
article to avoid the use of the phrase<br />
“fiscal cliff.” Oops, I just did. Well,<br />
never again…<br />
The purpose of this article is to discuss<br />
those provisions of the American<br />
Taxpayer Relief Act of 2012 1 (the<br />
Act) of particular interest to business.<br />
The Act extends a variety of<br />
tax incentives for business, including<br />
15-year depreciation and bonus<br />
depreciation on certain property<br />
and Section 179 expensing (essentially<br />
100 percent depreciation on<br />
certain assets up to $500,000, subject<br />
to certain limitations). In addition,<br />
two very interesting corporate incentives<br />
were made retroactively<br />
applicable to 2012 and extended<br />
through the end of 2013. These are<br />
described and discussed in the first<br />
two sections below. The final section<br />
explores proposals for the corporate<br />
tax reform which are being<br />
seriously discussed in Washington,<br />
but which were not addressed in<br />
the Act.<br />
Qualified Small Business<br />
Stock<br />
In the June 2011 edition of CC<br />
Lawyer, this author reported on an<br />
economic stimulus provision relating<br />
to small business stock. See<br />
“Gains from Investments in Small<br />
Business Stock Acquired During<br />
2011 May Be Tax Free” [CC Lawyer<br />
June 2011]. Section 1202 of the<br />
tax code generally provides a 50<br />
percent exclusion of gain from the<br />
sale of “qualified small business<br />
stock.” Measures enacted in 2009<br />
and 2010 increased the exclusion to<br />
100 percent temporarily and thus<br />
allowed an investor to effectively<br />
pay zero percent tax on gains from<br />
QSBS purchased prior to the end of<br />
2011 and held for at least five years<br />
before sale. QSBS is defined in Section<br />
1202 as stock in a C corporation<br />
that: (1) has no more than $50 million<br />
in gross assets, and (2) engages<br />
in the active conduct of a qualified<br />
trade or business. 2 For a detailed description<br />
of the other qualifications<br />
and limitations of Section 1202, see<br />
“Gains.” California adopted the analogue<br />
of Section 1202 in 1993, allowing<br />
a 50 percent exclusion of gain<br />
for QSBS, but restricted eligibility to<br />
California businesses. California did<br />
not follow the federal lead in offering<br />
a temporary 100 percent exclusion.<br />
The Act extends the effective zero<br />
percent tax rate on capital gains<br />
from the sale of QSBS through the<br />
end of 2013. It provides a 100 percent<br />
exclusion of eligible gain received<br />
by an individual taxpayer<br />
from the sale of QSBS acquired after<br />
September 7, 2010, and before January<br />
1, 2014, and held for more than<br />
five years. In addition, gain from<br />
QSBS is excluded for alternative<br />
minimum tax purposes. Note that<br />
the Act has retroactive application<br />
to 2012. The exclusion had expired<br />
at the end of 2011. The Act both extends<br />
the exclusion through the end<br />
of the 2013 but also retroactively applies<br />
it to QSBS acquired in 2012. Absent<br />
another extension, beginning<br />
by George Cabot<br />
January 1, 2014, QSBS will again be<br />
eligible for only a 50 percent exclusion<br />
and the excluded gain will be<br />
a tax preference item for alternative<br />
minimum tax purposes.<br />
That is the good news. The bad<br />
news is that California’s 50 percent<br />
exclusion has recently been found<br />
to be unconstitutional by the Court<br />
of Appeals in Cutler v. Franchise<br />
Tax Board, (2012) 208 Cal. App. 4th<br />
1247, which held that the provision<br />
violates the U.S. Constitution by<br />
discriminating in favor of California<br />
businesses. That means that QSBS<br />
qualifying for partial or full exclusion<br />
for federal income tax purposes<br />
will still be subject to California income<br />
tax at rates up to 13.3 percent<br />
(capital gains are not eligible for<br />
preferential tax rates in California).<br />
Taxpayers who relied upon this exclusion<br />
in prior tax periods that are<br />
not closed by the statute of limitations<br />
are required to amend their<br />
returns and recompute their taxable<br />
income without the exclusion.<br />
From a planning perspective, the<br />
temporary 100 percent exclusion<br />
for QSBS makes the C corporation<br />
an interesting alternative to passthrough<br />
entities (LLCs and S corporations)<br />
for start-ups. In addition,<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 15
Provisions,<br />
cont. from page 15<br />
existing LLCs and S corporations<br />
may want to explore conversion to<br />
C corporation status prior to the end<br />
of 2013. Will the exclusion be extended<br />
beyond 2013 or made applicable<br />
for California income tax purposes?<br />
There is certainly reason to<br />
hope so, given that the economy is<br />
likely to remain very sluggish well<br />
beyond 2013 or even return to recession<br />
as a result of the anti-growth<br />
policies currently being pursued in<br />
Sacramento and Washington.<br />
S Corporation: Built-in<br />
Gains Relief Provision<br />
C corporations can gain the benefit<br />
of a single level of taxation by converting<br />
to S corporations. However,<br />
converted S corporations remain<br />
subject to tax on built-in gains on<br />
assets that existed at the time of<br />
conversion. If the S corporation disposes<br />
of any BIG assets during the<br />
10-year period following conversion,<br />
the realized built-in gains are<br />
taxed at the highest C corporation<br />
tax rate, currently 35 percent. As a<br />
result of economic stimulus legislation<br />
in 2009 and 2010, the holding<br />
period for BIG assets was reduced.<br />
For tax years beginning in 2009 and<br />
2010, the holding period was seven<br />
years. For tax years beginning in<br />
2011, the holding period was five<br />
years, meaning that in 2011 an S<br />
corporation could sell BIG assets<br />
held as little as five years without<br />
being subject to BIG tax.<br />
Like the relief provision for QSBS<br />
discussed above, this S corporation<br />
relief provision expired at the end<br />
of 2011. However, ARTA 2012 extended<br />
the five-year holding period<br />
through the end of 2013 and made it<br />
retroactively applicable to 2012.<br />
What Wasn’t in ATRA<br />
2012 (but may be on<br />
the horizon):<br />
The U.S. corporate tax system has<br />
grown increasingly out of sync with<br />
the corporate tax structures in other<br />
developed countries. The U.S. currently<br />
taxes corporate income at a<br />
top rate of 35 percent - the highest<br />
among advanced world economies.<br />
The average is closer to 25 percent<br />
in most of the developed world.<br />
Moreover, most of the other developed<br />
countries have a territorial tax<br />
system, under which a company<br />
is taxed only on income generated<br />
domestically. The U.S., on the<br />
other hand, taxes a corporation on<br />
its worldwide income. Tax credits<br />
are available for taxes paid in a foreign<br />
jurisdiction, but if those taxes<br />
are imposed at a lower rate (which<br />
will usually be the case) the U.S.<br />
corporation effectively pays the<br />
higher U.S. tax rate. U.S. taxation of<br />
foreign earnings can be delayed by<br />
keeping the earnings inside foreign<br />
subsidiaries, but the earnings will<br />
be subject to U.S. taxation when<br />
repatriated to the U.S. According to<br />
J.P. Morgan, U.S. companies control<br />
$1.7 trillion in foreign earnings held<br />
outside the U.S., a portion of which<br />
would doubtless be repatriated and<br />
used for investment in the U.S. but<br />
for the disincentives in the current<br />
corporate tax system.<br />
There is an emerging consensus<br />
on both sides of the political aisle<br />
that the U.S. corporate tax system<br />
needs to be reformed to make it<br />
more competitive. President Obama<br />
has at least paid lip service to the<br />
notion in the presidential debates<br />
last fall. Proposals for legislative<br />
reforms are being actively debated,<br />
and the impetus for taking action is<br />
strong given the serious imbalance<br />
between the U.S. corporate tax system<br />
and that of our major trading<br />
partners.<br />
The outcome of reform proposals<br />
is far from certain, but what would<br />
be the implications of a reduction in<br />
top U.S. corporate tax rates to something<br />
in the 25 percent ballpark? A<br />
top corporate rate significantly below<br />
the individual rate, currently<br />
39.6 percent, will reduce the tax<br />
incentive for forming pass-through<br />
entities (LLCs and S corporations).<br />
There was a time in the past when<br />
a similar dynamic prevailed. For example,<br />
in the 1960s and 70s the top<br />
individual rate was 70 percent, but<br />
the top corporate rate was 35 percent.<br />
In those times it was not uncommon<br />
for closely held businesses<br />
to operate as C corporations. It was<br />
even common to hold real estate in<br />
C corporations – something that is<br />
considered the height of lunacy today.<br />
Nonetheless, if we again see a<br />
significant rate differential, it may<br />
be “back to the future.”<br />
Even without legislative reform,<br />
the temporary extension of the<br />
100 percent exclusion for QSBS discussed<br />
above gives the C corporation<br />
a comparative advantage in<br />
some situations through the end<br />
of 2013, and maybe later if it is extended.<br />
s<br />
1<br />
P.L. 112-240, signed by the President on<br />
January 3, 2013.<br />
2<br />
The definition of “qualified trade or business”<br />
excludes investment companies,<br />
professional services and consulting,<br />
banking, insurance and other financial<br />
services, farming, oil & gas or mineral extraction,<br />
and the hotel, motel or restaurant<br />
business.<br />
George S. Cabot is a Partner at<br />
PremierCounsel LLP, with offices<br />
in San Francisco and Lafayette.<br />
George is a Certified Tax Specialist<br />
with a business transactional practice<br />
focusing on structuring business<br />
entities, M&A and entity level<br />
tax planning.<br />
Win A $100 GIFT CARD!<br />
We will be sending out a<br />
member survey via email this<br />
month and would greatly appreciate<br />
your feedback. When<br />
you receive it, please complete<br />
the survey for a chance to win<br />
a $100 gift card to the store<br />
or restaurant of your choice!<br />
16<br />
MARCH 2013
IRS Return Preparer Regs Derailed<br />
by Warren Peterson<br />
On January 18, 2013, the<br />
United States District<br />
Court for the District of Columbia<br />
decided Loving v.<br />
Internal Revenue Service, 1 derailed<br />
the IRS’ efforts to regulate hundreds<br />
of thousands of tax return preparers<br />
who are not attorneys, CPAs or<br />
enrolled agents with the IRS (hereinafter<br />
“unenrolled preparer”). The<br />
IRS had promulgated regulations<br />
that required unenrolled preparers<br />
to register with the IRS, pass a<br />
qualifying exam, pay an annual<br />
application fee and take 15 hours of<br />
continuing education each year.<br />
Three unenrolled preparers<br />
brought suit to enjoin the regulations.<br />
In an opinion issued just in<br />
time to throw things into a turmoil<br />
for this tax season, the District Court<br />
granted summary judgment to the<br />
plaintiffs finding that the IRS did<br />
not have the statutory authority to<br />
regulate unenrolled preparers.<br />
The IRS’ effort to regulate unenrolled<br />
preparers was prompted by<br />
Youngman & Ericsson, LLP<br />
1981 North Broadway • Suite 300<br />
Walnut Creek, CA 94596<br />
Tax Lawyers.<br />
www.youngman.com (925) 930-6000<br />
the increasing importance of third<br />
parties and tax preparation software<br />
in the preparation of tax returns.<br />
In 2007 and 2008, over 80 percent<br />
of federal individual income tax<br />
returns were prepared by paid tax<br />
preparers or by taxpayers using tax<br />
preparation software. The IRS has<br />
estimated that there may be 1.2 million<br />
paid preparers. 2<br />
Organizations such as the IRS National<br />
Taxpayer Advocate 3 and the<br />
Treasury Inspector General for Tax<br />
Administration (TIGTA) 4 have each<br />
identified errors and omissions in<br />
the preparation of tax returns by<br />
both unenrolled preparers and national<br />
tax preparation chains. Many<br />
critics argued that the wide-open<br />
nature of the industry makes it difficult<br />
to ensure minimum competence<br />
and ethical standards for unenrolled<br />
preparers. 5<br />
The IRS has been focusing on<br />
this issue since June 2009, when the<br />
Commissioner of the IRS, Douglas<br />
Shulman, initiated the Return Preparer<br />
Review. The IRS solicited input<br />
from the public which led to the<br />
following recommendations:<br />
1. Mandatory tax return preparer<br />
registration.<br />
2. Mandatory competency examinations<br />
for unenrolled preparers.<br />
3. Required continuing professional<br />
education for unenrolled<br />
preparers.<br />
4. Extension to unenrolled preparers<br />
of the ethical standards established<br />
by Treasury Department<br />
Circular 230. 6<br />
The IRS implemented these recommendations<br />
by adopting regulations.<br />
The system was to go into full<br />
effect as of the beginning of 2013.<br />
The IRS reported that 88 percent<br />
of those expressing an opinion favored<br />
registration of unenrolled<br />
preparers. Those who addressed<br />
the issues of minimum education<br />
and testing requirements were 90<br />
percent in favor of such requirements.<br />
7 At the same time, others did<br />
not favor the direction the IRS was<br />
taking on regulation of unenrolled<br />
preparers. There were objections to<br />
the costs and burden the regulatory<br />
regime would place on return preparers,<br />
with the costs likely being<br />
passed onto taxpayers. 8<br />
This opposition to the new regulatory<br />
requirements prompted the<br />
filing of Loving. The District Court<br />
determined that the key question<br />
was whether tax return preparers<br />
are ‘representatives’ who ‘practice’<br />
before the IRS” (Loving, p. 9). The<br />
court considered the meaning of<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 17
IRS Return,<br />
cont. from page 17<br />
statutory language about “presenting<br />
their cases” and concluded that<br />
normal usage of the term would not<br />
include the tax return preparation<br />
activities of unenrolled preparers,<br />
striking down the regulations.<br />
The IRS will file an appeal by early<br />
March 2013. 9 s<br />
1<br />
https://ecf.dcd.uscourts.gov/cgi-bin/<br />
show_public_doc?2012cv0385-22<br />
2<br />
AICPA Tax Advisor, Regulation of Tax Return<br />
Preparers, May 1, 2011.<br />
3<br />
National Taxpayer Advocate, 2009 Annual<br />
Report to Congress, Vol. 1 (December<br />
31, 2009).<br />
4<br />
TIGTA, Inadequate Data on Paid Preparers<br />
Impedes Effective Oversight (2009-40-<br />
098), (July 14, 2009).<br />
5<br />
IRS Return Preparers Review, December<br />
2009, pp. 24-30.<br />
6<br />
Supra, pp. 3-4.<br />
Roger F. Allen<br />
510.832-7770<br />
Ericksen, Arbuthnot<br />
155 Grand Avenue, Suite 1050<br />
Oakland, CA 94612<br />
rallen@ericksenarbuthnot.com<br />
Northern California<br />
Mediator / Arbitrator<br />
16 years as Mediator<br />
25 years as Arbitrator<br />
33 years in Civil Practice<br />
• Training includes Mediation Course at<br />
Pepperdine University 1995<br />
• Serving on Kaiser Medical Malpractice<br />
Neutral Arbitrators Panel<br />
• Settlement Commissioner, Alameda and<br />
<strong>Contra</strong> <strong>Costa</strong> Counties<br />
• Experienced in all areas of Tort Litigation,<br />
including injury, property damage, fire loss,<br />
malpractice, construction defect<br />
7<br />
Supra, p. 2.<br />
8<br />
Supra, p. 32.<br />
9<br />
www.irs.gov/uac/IRS-Statement-on-<br />
Court-Ruling-Related-to-Return-Preparers<br />
Warren R. Peterson, a Danville<br />
sole practitioner, has been practicing<br />
law in one form or another<br />
for several years. He is a graduate<br />
of New York University School of<br />
Law and holds an M.S. in Taxation<br />
from California State University<br />
East Bay. Warren has extensive experience<br />
in various areas of corporate<br />
law and was employed as<br />
a Revenue Agent by the Internal<br />
Revenue Service. He is presently<br />
concentrating his practice in the<br />
area of tax conflicts, defending taxpayers<br />
in disputes with federal and<br />
California state tax authorities.<br />
— WANTED —<br />
Conservatorships<br />
think<br />
Matt Toth<br />
as in<br />
Pedder, Hesseltine,<br />
Walker & Toth, LLP<br />
oldest partnership in <strong>Contra</strong> <strong>Costa</strong> <strong>County</strong><br />
(since 1955)<br />
p 925.283-6816 • f 925.283-3683<br />
3445 Golden Gate Way, P.O. Box 479<br />
Lafayette, CA 94549-0479<br />
AV Martindale-Hubbell<br />
David B. Pastor<br />
GET INVOLVED<br />
Learn more about the CCCBA,<br />
its sections,<br />
committees,<br />
and upcoming<br />
events at<br />
www.cccba.org<br />
ConServAtorShiPS<br />
ProBAteS<br />
CriMinAl DefenSe<br />
• Free Consultation •<br />
Law Offices of<br />
DAviD B. PAStor<br />
CCCBA MeMBer<br />
SinCe 1977<br />
www.davidbpastor.com<br />
1280 Boulevard Way, Suite 212 • Walnut Creek, CA 94595<br />
925-932-3346 • david@davidbpastor.com<br />
18<br />
MARCH 2013
Annual Officer<br />
Installation<br />
January 25, 2013<br />
The Honorable <strong>Bar</strong>ry P. Goode administering the oath<br />
Fireside Chat with the Honorable<br />
Goodwin Liu<br />
Board of Directors and Section<br />
Leaders taking the oath<br />
CCCBA 2012 President<br />
Audrey Gee<br />
CCCBA 2013 Board President Jay<br />
Chafetz presenting Richard Frankel<br />
with a plaque honoring his many<br />
years of volunteer service to the CCCBA<br />
Photos courtesy of Michael Moya,<br />
MOYA fotografx | ArType Studio<br />
www.moyafotografx.com<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 19
Meet Your New Judge:<br />
Judy Johnson<br />
Administration of the oath by the Honorable<br />
Thelton E. Henderson<br />
Presentation of the judicial robe by<br />
Delores Fontenberry and Maxine Johnson<br />
CCCBA Board President Jay Chafetz presenting the gavel<br />
JUDY JOHNSON was inducted on February 1, 2013. She<br />
has been named as one of 20 “Women Leaders in Law” by The<br />
Recorder in 2011. Last year she came out of retirement and accepted<br />
an appointment by Governor Brown to the <strong>Contra</strong> <strong>Costa</strong><br />
<strong>County</strong> Superior Court.<br />
The Honorable Diana Becton, Starr Babcock, Esq.<br />
and the Honorable Teri L. Jackson<br />
After graduating from King Hall School of Law at UC Davis,<br />
Judy became a legal aid attorney in Oakland, and soon after<br />
was appointed as Assistant District Attorney for the city and<br />
county of San Francisco. In 2000, Judy took the position as the<br />
State <strong>Bar</strong>’s executive director and served for 11 years, the longest<br />
that the position has been held in California history.<br />
Judy is also extensively involved in community affairs as the<br />
elected board president for the California Consumer Protection<br />
Foundation.<br />
The Honorable Willie Lewis Brown Jr.<br />
20<br />
MARCH 2013
Meet Your New<br />
Commissioner:<br />
ANITA SANTOS is excited to<br />
be the new child support commissioner.<br />
Prior to her appointment,<br />
Anita had a private practice in Solano<br />
<strong>County</strong> as a sole practitioner in<br />
family law since 2008.<br />
After graduating from UC Berkeley,<br />
Anita attended Hastings College<br />
of the Law in San Francisco. In<br />
1994, she began her career as a police<br />
officer in Concord. She moved<br />
on to become a deputy district attorney<br />
in <strong>Contra</strong> <strong>Costa</strong> <strong>County</strong> from<br />
1997 through 2008.<br />
Anita has been married to her<br />
husband, Mitch Celaya, for 17 years.<br />
Mitch is chief of police in Calistoga.<br />
They have four children: JC, 23 years<br />
old, Nile, 16 years old, Mateo, 12<br />
years old and four-year-old Lanissa.<br />
Anita Santos<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 21
Judicial Demeanor<br />
Training<br />
In January, CCCBA members responded to the call from the CCC<br />
Superior Court for Pro Tem Judges. Participants in the Judicial<br />
Demeanor training classes learned about appropriate bench<br />
conduct, demeanor and decorum. Discussing potential scenarios<br />
led to much laughter among participants!<br />
The Honorable Jill Fannin and the<br />
Honorable Theresa Canepa<br />
Joscelyn Jones Torru and Helen Peters<br />
Katherine Wenger<br />
Women’s Section<br />
January 16, 2013<br />
Powerlunch<br />
Nicole Mills and Robin Krutzsch<br />
Margaret Grover, Michelle Thimesch,<br />
Ericka Ackeret and Michelle McGrath<br />
Lubna Jahangiri, Victoria Robinson Smith<br />
and Marta Vanegas<br />
22<br />
MARCH 2013
Meet Your Local Judges,<br />
Family and Juvenile<br />
February 7, 2013<br />
Andy Ross introducing the judges<br />
The Honorable <strong>Bar</strong>ry Goode, Luis Montes<br />
and the Honorable <strong>Bar</strong>ry Baskin<br />
Commissioner Anita Santos, Paula Grohs<br />
and Constance Figuers<br />
<strong>Bar</strong>bara Suskind, the Honorable Rebecca<br />
Hardie, the Honorable <strong>Bar</strong>bara Hinton and<br />
the Honorable Lewis Davis<br />
Peter Loewenstein, the Honorable Bruce<br />
Mills and Gary LaMusga<br />
Joe Wolch, the Honorable Trevor White<br />
and Lisa Reep<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 23
The Women’s Section<br />
Annual Wine Tasting &<br />
Silent Auction<br />
Thursday, April 11, 2013<br />
5:30 pm - 7:30 pm<br />
<strong>Contra</strong> <strong>Costa</strong> Country Club<br />
801 Golf Club Road<br />
Pleasant Hill<br />
Dedicated to the Hon. Joyce Cram<br />
on the Occasion of Her Retirement and<br />
for Her Service to the Women’s Section<br />
Proceeds Benefit the Hon. Patricia Herron<br />
& Hon. Ellen James Scholarship Fund<br />
Pricing<br />
$15 for Students<br />
$30 for Section Members and Judges<br />
$35 for CCCBA Members<br />
$40 for Non-Members<br />
Delicious Wines &<br />
Tasty Hors D’oeuvres!<br />
Clothing Drive for Wardrobe<br />
for Opportunity!<br />
RSVP<br />
Online at www.cccba.org/attorney/calendar or<br />
contact Theresa Hurley at (925) 370-2548<br />
Info on Donations or Sponsorship<br />
Contact Megan Cohen at (925) 945-1880 or email<br />
megan@familyformation.com<br />
24<br />
MARCH 2013
RES IPSA JOKUITOR<br />
XVIII<br />
THE JOKE SPEAKS FOR ITSELF<br />
KICKOFF FOR FOOD FROM THE BAR 2013<br />
Benefitting the Food Bank of <strong>Contra</strong> <strong>Costa</strong> and Solano<br />
When: Wednesday, April 24<br />
Doors open 6:00pm<br />
Show starts at 8:00pm<br />
Where: Back Forty BBQ<br />
100 Coggins Drive<br />
Pleasant Hill<br />
Tickets: $60<br />
BBQ Buffet*: 6:30 - 7:30pm<br />
*Vegetarian option available<br />
upon request - contact Renee by<br />
April 15 at (925) 771-1310<br />
Bring a can of Beef Stew to enter<br />
a drawing for valuable prizes!<br />
GET YOUR TICKETS TODAY!<br />
For tickets, scan the<br />
QR code or contact<br />
Theresa Hurley at<br />
(925) 370-2548 or<br />
thurley@cccba.org<br />
Featuring:<br />
Will Durst<br />
Irish Newsboys<br />
with <strong>Bar</strong>ry Melton<br />
presented by<br />
benefitting<br />
*For sponsorship opportunities,<br />
contact Lisa Reep at<br />
(925) 288-2555 or lgreep@cccba.org<br />
Thanks to our Generous Sponsors!*<br />
BENEFACTORS<br />
Wells Fargo<br />
PATRONS<br />
Archer Norris<br />
Newmeyer & Dillon LLP<br />
The Recorder<br />
Steele, George, Schofield<br />
& Ramos LLP<br />
Timken Johnson LLP<br />
U.S. Legal Support, Inc.<br />
CONTRIBUTORS<br />
Certified Reporting Services<br />
Esquire<br />
Gagen, McCoy, McMahon, Koss,<br />
Markowitz & Raines<br />
Gil Berkeley<br />
Law Offices of Suzanne Boucher<br />
MassMutual Financial Group<br />
Miller Starr Regalia<br />
Scott Valley Bank<br />
Bring your checkbook to enter a raffle and bid on valuable silent auction items!<br />
As of February 12, 2013<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 25
Domestic Partner Coverage Rights Under<br />
the California Insurance Equality Act<br />
by Ralph L. Jacobson<br />
GJEL Accident Attorneys<br />
Under California law, registered<br />
domestic partners<br />
are “two adults who<br />
have chosen to share one<br />
another’s lives in an intimate and<br />
committed relationship.” 1 The California<br />
Domestic Partner Rights and<br />
Responsibilities Act of 2003 required<br />
that registered domestic partners be<br />
provided the same rights, protections<br />
and benefits as spouses; and<br />
that they also be subject to the same<br />
responsibilities, obligations and duties<br />
under law. 2<br />
One year later, the California Insurance<br />
Equality Act 3 (hereafter referred<br />
to as The Equality Act) was<br />
enacted to mandate that insurance<br />
policies governed by the law provided<br />
coverage for the domestic<br />
partner equal to that provided for<br />
the spouse of an insured. It states:<br />
(a) Every policy issued, amended,<br />
delivered, or renewed in this state<br />
shall provide coverage for the<br />
registered domestic partner of an<br />
insured or policyholder that is<br />
equal to, and subject to the same<br />
terms and conditions as, the coverage<br />
provided to a spouse of an<br />
insured or policyholder. A policy<br />
may not offer or provide coverage<br />
for a registered domestic partner if<br />
it is not equal to the coverage provided<br />
for the spouse of an insured<br />
or policyholder. This subdivision<br />
applies to all forms of insurance<br />
regulated by this code.<br />
(b) A policy subject to this section<br />
that is issued…shall be deemed<br />
to provide coverage for registered<br />
domestic partners that is equal to<br />
the coverage provided to a spouse<br />
of an insured or policyholder.<br />
(c) It is the intent of the Legislature<br />
that, for purposes of this section,<br />
“terms,” “conditions” and<br />
“coverage” do not include instances<br />
of differential treatment<br />
of domestic partners and spouses<br />
under federal law.<br />
The Equality Act also amended<br />
Insurance Code Section 10121.7, regarding<br />
group health insurance, to<br />
read:<br />
“A policy of group health insurance<br />
that provides hospital, medical,<br />
or surgical expense benefits<br />
shall provide equal coverage to employers<br />
or guaranteed associations,<br />
as defined in Section 10700, for the<br />
registered domestic partner of an<br />
employee, insured, or policyholder<br />
to the same extent, and subject to<br />
the same terms and conditions, as<br />
provided to a spouse of the employee,<br />
insured, or policyholder, and<br />
shall inform employers and guaranteed<br />
associations of this coverage. A<br />
policy may not offer or provide coverage<br />
for a registered domestic partner<br />
that is not equal to the coverage<br />
provided to the spouse of an employee,<br />
insured, or policyholder.”<br />
Prior law had required group<br />
health care insurance plans and<br />
policies of group disability insurance<br />
to offer coverage for the domestic<br />
partner of an employee or<br />
insured to the same extent as coverage<br />
provided to a dependent. 4 That<br />
statute was amended by the Equality<br />
Act as well. This prior definition<br />
seemed to be at odds with the statutory<br />
definition of dependent, which<br />
was:<br />
“’Dependent’ means the spouse<br />
or child of an eligible employee,<br />
subject to applicable terms of the<br />
health benefit plan covering the<br />
employee...” 5<br />
On its face, this definition did not<br />
seem to include the domestic partner,<br />
leaving ambiguity.<br />
Prior to adoption of the Equality<br />
Act, there were also gray areas<br />
as to the contractual standard of<br />
what constituted a dependent in a<br />
health insurance contract. Most revealing<br />
in that regard is Prudential<br />
Ins. Co. of America, Inc. v. Superior<br />
Court, 6 which concerned whether<br />
or not a college student daughter of<br />
an insured was, or was not, a qualified<br />
dependent under her parents’<br />
health insurance policy at the time<br />
she suffered catastrophic injuries.<br />
Under the policy, qualified dependent<br />
status was defined to include<br />
children of the insured over the age<br />
of 18 who were full-time students.<br />
In this case, the insured’s daughter<br />
had chosen not to enroll in school<br />
for the quarter following her freshman<br />
year due to personal problems,<br />
but she had retained the right to<br />
seek re-admission. Evidence from<br />
the school indicated that this was<br />
not an unusual circumstance; and<br />
the parents and student asserted<br />
she should be deemed a qualified<br />
26<br />
MARCH 2013
Elder Abuse Litigation<br />
Will & Trust Litigation<br />
• Conservatorships<br />
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318-C Diablo Road • Danville, CA 94526-3443 • (925) 314-9999<br />
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Christopher M. Moore<br />
Konstantine A. Demiris<br />
Tracey McDonald, Paralegal<br />
*Certified Specialist, Estate Planning, Trust and Probate Law, The State <strong>Bar</strong> of California Board of Legal Specialization<br />
dependent in light of her continuing relationship with<br />
her school at the time of the accident. But the appellate<br />
court, citing out-of-state cases on the same subject, held<br />
that the plain meaning of “full-time student” is “attending<br />
classes on a substantial basis.” Since the daughter<br />
had not met this requirement for the quarter in question,<br />
the court granted summary judgment in favor of<br />
the insurance company, and denied the daughter’s<br />
claim, finding that she was not a qualified dependent.<br />
Fortunately, prior to adoption of the Equality Act,<br />
there were no appellate cases which had to construe<br />
similar factual permutations of a partner’s status that<br />
might arise during a domestic partnership (part-time<br />
residency, lack of financial dependency on the other<br />
partner, etc.), in conjunction with this sort of murky notion<br />
of dependent status. The outcome would have been<br />
less than predictable, had such cases arisen.<br />
According to one commentator, these ambiguities<br />
caused real world problems for domestic partners:<br />
“Without a uniform definition [of dependency], confusion<br />
often resulted in the area of health insurance and<br />
domestic partners were routinely denied benefits and<br />
coverage, or were forced to pay higher premiums.” 7<br />
Under the Equality Act, there is now a “bright line”<br />
test: the domestic partner is indeed entitled to equal<br />
coverage as the named insured, without condition, and<br />
without the need for interpretation of dependency status.<br />
For this reason, if nothing else, the Equality Act has<br />
served its purpose: premiums can be calculated based<br />
upon the known status of a domestic partner; and domestic<br />
partners can be assured of the right to the same<br />
insurance contract health benefits purchased by their<br />
partner, or by their employer on their behalf. A longer<br />
term question will be to what extent, over time, these<br />
health insurance rights of registered domestic partners<br />
might become subject to preemption by either law or<br />
regulation under ObamaCare. s<br />
1<br />
Family Code § 207(a).<br />
2<br />
Family Code § 207.5.<br />
3<br />
Ins. Code, § 381.5, et seq.<br />
4<br />
Cal. Health & Safety Code § 1374.58(a).<br />
5<br />
Ins. Code, § 10700(e).<br />
6<br />
Prudential Ins. Co. of America, Inc. v. Superior Court (2002) 98<br />
Cal.App.4th 585, 600<br />
7<br />
Meredith A. Felde, California Insurance Equality Act: Providing<br />
Equal Insurance Coverage to Domestic Partners (2005) 36 Mc-<br />
George L. Rev. 917, 920.<br />
Ralph L. Jacobson is a founding partner of, and now<br />
of counsel to, the law firm of Gillin, Jacobson, Ellis,<br />
Larsen & Lucey in Orinda.<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 27
The Population Cliff<br />
by Perry A. Novak<br />
Demography, the statistical<br />
study of living human<br />
populations, is one<br />
of those detail laden subjects<br />
that just doesn’t lend itself to<br />
much excitement, but demographic<br />
change is about to have a profound<br />
impact on the U.S. economy.<br />
Here Comes the Baby<br />
Boom<br />
Population change normally occurs<br />
at a glacial pace, unless there<br />
is an extreme outside influence.<br />
World War II was just such an influence,<br />
increasing the U.S. birthrate<br />
by more than four million annually<br />
in the years following the war.<br />
From 1946 through 1964 there were<br />
75 million births which gave rise to<br />
the term “baby boom.”<br />
When it comes to us boomers, no<br />
single group has had quite as profound<br />
an impact on the U.S. economy<br />
as we have. Boomers, who now<br />
range in age from 49 to 67, control<br />
over 80 percent of all personal financial<br />
assets, and account for more<br />
than half of all consumer spending.<br />
We are responsible for 80 percent of<br />
leisure travel, 77 percent of prescription<br />
drugs and 61 percent of overthe-counter<br />
drugs.<br />
The rise of the baby boom has<br />
caused tremendous growth in the<br />
U.S. economy, from the housing<br />
boom that started in the 1950s, to<br />
the creation of suburban living that<br />
changed the face of a previously<br />
agrarian nation. Unfortunately, the<br />
rapid retirement of the baby boom<br />
will accelerate some of the country’s<br />
most serious financial problems.<br />
Most of our large-scale consumptive<br />
spending occurs between the<br />
ages of 40 and 55, as we build our<br />
families and acquire the items we<br />
seek to make our lives more comfortable.<br />
After that, and especially<br />
as we approach retirement, our consumptive<br />
spending declines sharply.<br />
Consumer spending accounts for<br />
roughly 71 percent of U.S. gross domestic<br />
product (GDP). That is why<br />
the government usually deals with<br />
economic crises by trying to encourage<br />
consumers to spend. The changing<br />
demographics of the U.S. economy<br />
mean there will be fewer people<br />
in a position to spend us back to a<br />
robust economy.<br />
The second, more dramatic problem,<br />
is really two sides of the same<br />
coin. When we retire, we stop paying<br />
into programs like Social Security<br />
and Medicare and start taking out<br />
benefits. The money starts flowing<br />
the other way, so the costs of these<br />
programs rise dramatically just as<br />
their income is falling off sharply.<br />
More than 10,000 boomers a day<br />
began retiring in 2011 and that<br />
cycle will continue for most of the<br />
next two decades. More than 36<br />
percent claim they have nothing in<br />
retirement savings and 35 percent<br />
of those over age 65 are relying entirely<br />
on Social Security for their retirement<br />
income. An AARP survey<br />
found that 40 percent plan to work<br />
until they die because they did not<br />
plan or save for retirement.<br />
Social Security: Past and<br />
Present<br />
The Social Security program was<br />
created in 1937 and began paying<br />
regular benefits to retirees, age<br />
65 and older, in 1940. At that time,<br />
however, average life expectancy in<br />
the United States was just 58 years.<br />
If someone actually did live to age<br />
65, their remaining life expectancy<br />
was 12.7 years for men and 14.7<br />
years for women.<br />
When the program began, it covered<br />
workers but not spouses or<br />
dependents. It covered roughly 60<br />
percent of the active workforce and<br />
provided a benefit equal to 26 percent<br />
of pre-retirement income. According<br />
to the 1940 census, there<br />
were only nine million Americans<br />
age 65 or older, and only a small<br />
fraction of them received benefits.<br />
The program was originally adopted<br />
to aid retirement only. It did<br />
not include disability payments or<br />
Medicare, both of which were added<br />
much later.<br />
Fast forward to 1990, and the<br />
numbers had changed dramatically.<br />
The number of Americans age<br />
65 and older had climbed from nine<br />
million in 1940 to 34 million, comprising<br />
13 percent of the U.S. population.<br />
Life expectancy had climbed<br />
as well. An expansion of the original<br />
law now covered 96 percent of<br />
the workforce versus the original 60<br />
percent and benefits as a percentage<br />
of pre-retirement wages had<br />
climbed from 26 percent in 1940 to<br />
45 percent in the 1990s.<br />
The increased number of retirees,<br />
living longer and receiving larger<br />
benefits as a percentage of their preretirement<br />
wages, has resulted in<br />
the payroll tax rate being increased<br />
over 500 percent since the program<br />
first began. Fully 80 percent of<br />
American workers pay more in payroll<br />
taxes than they pay in income<br />
taxes. That is why the federal government<br />
temporarily reduced the<br />
employee rate two years ago in an<br />
effort to influence consumer spending<br />
and jump-start the economy.<br />
28<br />
MARCH 2013
Unfortunately, the rate reduction<br />
expired at the end of 2012 and was<br />
not extended as part of the Fiscal<br />
Cliff Tax Bill. The result is an annual<br />
increase in employee payroll tax<br />
withholding of roughly $120 billion,<br />
which will impact consumer<br />
spending and potentially lower<br />
U.S. economic growth by roughly<br />
one-half of 1 percent in 2013.<br />
The View from 2030<br />
Fast forward again, to the year<br />
2030. The number of Americans<br />
age 65 and older has more than<br />
doubled since 1990, rising from 34<br />
million and 13 percent of the population,<br />
to 69 million and 20 percent<br />
of the population. Life expectancy,<br />
which had been 12.7 years for men<br />
and 14.7 years for women in 1940,<br />
has risen to 18 years and 21 years<br />
respectively.<br />
Estimates from the Social Security<br />
Trust Fund say that payroll taxes<br />
will have to double from their 2013<br />
levels to cover the cost of providing<br />
benefits in 2030. Keep in mind,<br />
too, that these figures are for Social<br />
Security retirement benefits alone.<br />
They do not include the explosion<br />
in Social Security Disability costs or<br />
Medicare. Medicare alone cost $555<br />
billion in 2011, and is expected to<br />
see costs rise 75 percent by 2021, according<br />
to the Congressional Budget<br />
Office (CBO).<br />
A Wall Street Journal editorial<br />
published in November 2012 found<br />
that while the national debt is<br />
about $16.4 trillion now, it rises to<br />
$87 trillion if we take into account<br />
the unfunded Social Security liability<br />
– the amount owed over the<br />
lifetime of those people who are<br />
currently retired and drawing benefits.<br />
Turn the clock ahead 20 years,<br />
when all of us boomers are retired,<br />
and the unfunded Social Security liability<br />
rises to $202 trillion, according<br />
to a Boston University study.<br />
What Does a Trillion<br />
Look Like?<br />
A trillion is one of those numbers,<br />
like light-years, that is often<br />
cited, but hard to get a handle on.<br />
What does a trillion look like? One<br />
trillion pounds is roughly the combined<br />
weight of every single person<br />
on the planet. If you had a trillion<br />
bricks, you could build the 5,500<br />
mile-long Great Wall of China...and<br />
257 more just like it. A pile of 202<br />
trillion bricks, one for every dollar<br />
of unfunded future liability in the<br />
Social Security system, would build<br />
a Great Wall that would circle the<br />
earth almost 12,000 times.<br />
As our elected leaders wrestle<br />
with the debt ceiling, sequestration,<br />
the federal budget, national debt<br />
and deficit, and tax code changes,<br />
entitlement reform will be a constant<br />
topic of discussion and disagreement.<br />
Entitlement programs<br />
now consume every single dollar<br />
the federal government receives in<br />
tax revenue and the cost is rising<br />
rapidly. That is the real cliff. Let’s<br />
hope they find an answer soon. s<br />
AND MEDIATION CENTER<br />
“A unique and effective style -<br />
a great mediator”<br />
Candice Stoddard<br />
The Novak Group would like to thank the<br />
following sources of data used in this article:<br />
U.S. Social Security Administration<br />
(SSA); U.S. Census Bureau, U.S. Treasury<br />
Department, Congressional Budget Office<br />
(CBO), Office of Management & Budget<br />
(OMB); American <strong>Association</strong> of Retired<br />
Persons (AARP); Boston University; The<br />
Independent Institute; The Wall Street<br />
Journal; James Brown’s Option Investor;<br />
David Wessell, Red Ink: Inside the High-<br />
Stakes Politics of the Federal Budget;<br />
UBS Wealth Management Research – Art<br />
Cashin, Director of Floor Operations, New<br />
York Stock Exchange.<br />
Perry A. Novak, J.D., is a financial<br />
advisor and Senior Vice President<br />
at UBS Wealth Management<br />
in Walnut Creek, CA. Perry is an<br />
active member of the Taxation, and<br />
Business Law & Corporate Counsel<br />
sections. He has served as an advisor<br />
to the Joint Economic Committee<br />
of the U.S. House of Representatives,<br />
the California Society of<br />
CPAs and the California Medical<br />
<strong>Association</strong>. He can be reached at<br />
(925) 746-0245 or by email at perry.<br />
novak@ubs.com.<br />
Ron Mullin<br />
Willows Office Park p 1355 Willow Way, Suite 110<br />
Concord, California 94520<br />
Telephone (925) 798-3413 p Facsimile (925) 798-3118<br />
Email ronald@mullinlaw.com<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 29
COFFEETALK!<br />
How do you fix<br />
the congressional<br />
process?<br />
You need a bunch of independents or a<br />
third political party of centrists.<br />
Jay Chafetz<br />
2013 Board President<br />
Fix the voters.<br />
Mark W. Frisbie<br />
Attorney at Law<br />
Make our elected representatives be subject<br />
to all of the laws they pass, including<br />
social security and health care.<br />
Joshua Genser<br />
Genser & Watkins LLP<br />
Elect Democrats!<br />
Joel Zebrack<br />
Attorney - Mediator<br />
I believe that our Congress members now<br />
focus almost all their efforts to re-election<br />
rather than taking care of the nation’s<br />
business. Free TV and newspaper ads<br />
and finding a way to interest the bulk of<br />
the citizens the political process would<br />
help. A fix must really wait to make the<br />
citizens angry enough to get out and vote<br />
in large numbers.<br />
Gerald T. Richards<br />
Attorney at Law<br />
I was a strong supporter of term limits<br />
until I worked in the State Assembly.<br />
Then I soon realized that with term<br />
limits, the only people in the Legislature<br />
with any “institutional memory” were<br />
the lobbyists and others who were only<br />
too willing to take the freshman lobbyists<br />
“under their wing” and show them the<br />
ropes. With (3) two year terms, they were constantly worrying<br />
about raising re-election campaign funds instead of<br />
learning their way around. The end result was that many<br />
were wholly ineffective – voting for the wrong reasons –<br />
either uninformed, or to get re-elected. I suspect Congress<br />
is like that on steroids. SO…my plan would be that everyone<br />
gets to serve in Congress for one six year term…period,<br />
and then they go home. That way, they would not be distracted<br />
by raising campaign reelection money 80 percent<br />
of the time, they would have more time to get educated<br />
and, most importantly, they would vote their conscience –<br />
do the right thing without regard to how that vote would<br />
affect them in the next election. Six years is enough time<br />
to learn and do some good but not so long that if you occasionally<br />
got a real loser in there we couldn’t weather the<br />
storm until they were out.<br />
Stephen Gizzi, Esq.<br />
Gizzi & Reep, LLP<br />
30<br />
MARCH 2013
Win A $100<br />
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When you receive it, please<br />
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Elder Law is<br />
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Planning<br />
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You can take<br />
SELF-STUDY MCLE<br />
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CCCBA offers MCLE self-study<br />
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get credit for a variety of courses<br />
including Detection/Prevention of<br />
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Bias and Legal Ethics. Go online to:<br />
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The average survival rate is eight years after<br />
being diagnosed with Alzheimer’s — some live as<br />
few as three years after diagnosis, while others<br />
live as long as 20. Most people with Alzheimer’s<br />
don’t die from the disease itself, but from<br />
pneumonia, a urinary tract infection or<br />
complications from a fall.<br />
Until there’s a cure, people with the disease will<br />
need caregiving and legal advice. According to<br />
the Alzheimer’s <strong>Association</strong>, approximately one<br />
in ten families has a relative with this disease.<br />
Of the four million people living in the U.S.<br />
with Alzheimer’s disease, the majority live at<br />
home — often receiving care from family<br />
members.<br />
If the diagnosis is Alzheimer’s,<br />
call elder law attorney<br />
Michael J. Young<br />
Estate Planning, Disability, Medi-Cal,<br />
Long-term Care & VA Planning<br />
Protect your loved ones, home and independence.<br />
n<br />
925.256.0298<br />
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Will/Estate Contests<br />
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You handle the estate, we do the contest.<br />
Cases, except conservatorships, often<br />
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be hourly. Referral fee where appropriate.<br />
Pedder, Hesseltine,<br />
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CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 31
inns of court<br />
by Matthew Talbot<br />
On January 11, 2013, Judge<br />
Craddick’s group (consisting<br />
of Jeremy Seymour,<br />
Nataly DiCortossa, Alison<br />
Chandler, David Marchiano, Heidi<br />
Coad-Hermelin, Harry Styron, Joseph<br />
Ryan, Matthew Guichard and<br />
Ralph Zappala) provided the educational<br />
presentation at the Robert<br />
G. McGrath Inns Of Court Meeting.<br />
Their presentation was about electronic<br />
discovery. It is often said<br />
(mostly by me) that discovery fights<br />
are the bane of every attorney’s existence.<br />
Nothing in this presentation<br />
helped dissuade me from that<br />
outlook. Even UFC fighters think<br />
discovery fights are too primitive<br />
and brutal. Technology has only<br />
complicated discovery in ways that<br />
few could have anticipated. The<br />
bottom line of the presentation was<br />
“never use technology ever.”<br />
First, Alison Chandler and Jeremy<br />
Seymour used a photo of Judge<br />
Craddick uploaded to Flickr to discuss<br />
meta-data. Meta-data is all<br />
the background information about<br />
electronic items (such as digital<br />
photos) that few ever pay attention<br />
to. They discussed how the iPhone<br />
tracks everything it does and everywhere<br />
it goes. This information can<br />
be discoverable and you might not<br />
have even known that it existed.<br />
The discussion next flowed to providing<br />
the electronically stored information<br />
(ESI). Federal Rule Of Civil<br />
Procedure 26(b)(2)(B) notes that<br />
you don’t have to provide the ESI<br />
if it is not easily accessible because<br />
of burden or cost. Nataly DiCortossa<br />
and Ralph Zappala discussed the<br />
enforcement of this rule. You can<br />
bring motions for a protective order<br />
or to compel discovery. These<br />
motions are generally a delightful<br />
experience not filled with minutiae<br />
regarding what constitutes an undue<br />
burden. Or the exact opposite of<br />
that sentence.<br />
The discussion flowed to setting<br />
up a Discovery Plan for the court<br />
if you end up in the middle of an<br />
ESI discovery fight. Additionally,<br />
the group discussed the duty to preserve<br />
ESI. You do not have a duty to<br />
preserve every piece of electronic<br />
information. If you have a standard<br />
policy (such as deleting ESI every<br />
90 days), it is appropriate. However,<br />
deleting ESI specifically to avoid<br />
discovery is about as big a no-no as<br />
you can get. Unless you slap your<br />
opposing counsel about the face<br />
and neck with a stack of document<br />
requests. And negligent destruction<br />
can even lead to sanctions. So, don’t<br />
leave all of your hard drives on the<br />
furnace during the winter.<br />
Matt Guichard and David Marchiano<br />
then focused on the protective<br />
orders. They discussed drafting<br />
them, including Liquidated Damages<br />
Clauses in the Protective Orders<br />
themselves. The conversation<br />
flowed to methods of production.<br />
Electronic discovery can include<br />
thousands or even millions of documents.<br />
It could easily overwhelm a<br />
smaller law firm. One way to assist<br />
with electronic discovery is to hire<br />
a vendor to organize the discovery.<br />
You can use in-house attorneys<br />
if you are a big enough firm, but<br />
32<br />
MARCH 2013
that can be expensive for the client.<br />
Some attorneys even outsource the<br />
organization and review process to<br />
foreign corporations.<br />
The key is to ensure that only appropriate<br />
documents are sent and<br />
nothing privileged is sent to opposing<br />
counsel. Casey McTigue introduced<br />
us to the concept of the<br />
discovery clawback. In that always<br />
awkward situation when you inadvertently<br />
provide a privileged document,<br />
you can basically demand<br />
that opposing counsel destroy the<br />
document without reviewing it.<br />
They have to destroy it and the privilege<br />
is protected! It is significantly<br />
more complicated than that, but I<br />
only have so many words.<br />
Joseph Ryan finished off the night<br />
with a further discussion of various<br />
privileges that can restrict document<br />
production. He noted that<br />
pursuant to California Evidence<br />
Code 917, if you claim privilege for<br />
a document, the opposing counsel<br />
has the burden of proof to disprove<br />
privilege. Disproving privilege can<br />
be incredibly difficult without reviewing<br />
the document giving the<br />
discovery respondent the advantage.<br />
All this discussion helped remind<br />
me to avoid discovery fights for my<br />
own mental sanity. The next meeting<br />
is March 14, 2013, at the Lafayette<br />
Park Hotel. To learn more about<br />
the Inns Of Court and get involved,<br />
contact President Scott Reep at (707)<br />
784-0900 or Scott@Solanolawgroup.<br />
com. s<br />
For more information on recent case developments<br />
regarding inadvertently produced<br />
documents, please see “The Ethics<br />
Corner” in the February 2013 issue of the<br />
<strong>Contra</strong> <strong>Costa</strong> Lawyer, which is available<br />
online at cclawyer.cccba.org.<br />
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CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 33
CLASSIFIEDS<br />
ACUNA CONSULTING EXPERTISE<br />
Attorney & Fiduciary Support Services<br />
Conservator, Probate, Estate Accounting.<br />
Practice management, system implementation<br />
and strategic business planning. Expert witness,<br />
professional; timely excellence.<br />
Loren R. Acuña, MBA, CPFL #534<br />
loren@ACEfiduciary.com | (925) 906-1882<br />
PROFESSIONAL OFFICE SPACE<br />
Currently subleasing up to four professional<br />
furnished offices within our spacious (11) office<br />
suite. Great views from the 10th floor of the<br />
California Plaza building in Walnut Creek, with<br />
great location near Walnut Creek BART station.<br />
Rent is $800-$900 per office (depending on<br />
the office size) on month-to-month basis.<br />
Alternatively, will consider reconfiguration of<br />
existing office layout and occupancy to provide<br />
for a longer term of a suite of up to four significantly<br />
larger offices, including a large secretarial<br />
station and signage – price and term<br />
to be negotiated depending on configuration.<br />
All subleases include telephone service with<br />
receptionist, high speed internet access, large<br />
kitchen and use on first come basis of two large<br />
conference rooms. A smaller secretarial station<br />
is also available in conjunction with leasing one<br />
or more of the smaller offices – price to be<br />
negotiated depending on how many offices are<br />
leased in the package. Contact, Jan Raymond<br />
via e-mail: mail@avmllp.com or by phone:<br />
925-939-9880.<br />
LAW OFFICE SPACE -<br />
WALNUT CREEK SHADELANDS AREA<br />
Three nice-sized offices in law office suite<br />
available. Two offices are interior and one is a<br />
window office. Each office is approximately<br />
140 square feet. Very comfortable surroundings<br />
with six other attorneys who all get along<br />
well. Secretarial/ paralegal spaces also available.<br />
Amenities include two conferences<br />
rooms, reception area, full kitchen, library, full<br />
bathroom with a shower, individual climate<br />
control, security, copiers and more. Fast internet,<br />
secretarial help, and copiers are available.<br />
Close to trails. Ample free parking. For more<br />
information, please call Kari at (925) 256-9855.<br />
***ATTORNEYS ONLY***<br />
WALNUT CREEK OFFICE SPACE<br />
Three beautiful window offices with secretarial<br />
stations available to share in well-appointed<br />
nine-office attorney suite. Can rent<br />
the offices individually. Located on the seventh<br />
floor in Two Ygnacio Center in downtown<br />
Walnut Creek, one block from BART. Includes<br />
receptionist services, and use of conference<br />
rooms, law library and kitchen. Underground<br />
parking available. Call Elliot (925) 947-1333<br />
PROBATE PARALEGAL<br />
TO ATTORNEYS<br />
Joanne C. McCarthy. 2204 Concord Blvd.<br />
Concord, CA 94520. Call (925) 689-9244.<br />
CONCORD LAW OFFICE NEAR BART<br />
On Clayton Road. 1 or 2 Offices with Library,<br />
Kitchen, Reception Area. Free Parking. Overflow<br />
Cases Possible. Call Joe at (925) 687-9121<br />
advertisers’ index<br />
ADR Services ........................4<br />
Roger F. Allen ..................... 18<br />
David Arietta ...................... 39<br />
Armanino McKenna .............. 32<br />
<strong>Bar</strong>r & <strong>Bar</strong>r Attorneys .............. 27<br />
Bray & Bray .........................33<br />
Buchman Provine<br />
Brothers Smith LLP .................10<br />
Jay Chafetz .........................33<br />
Diablo Valley Reporting Services ..40<br />
Margaret M. Hand..................10<br />
Lenczowski Law Offices ............33<br />
Morrill Law Firm ...................13<br />
Mullin Law Firm . . . . . . . . . . . . . . . . . . 29<br />
Palmer Madden ................... 14<br />
Perry A. Novak ,<br />
UBS Financial Services, Inc. ............ 2<br />
David B. Pastor .................... 18<br />
Pedder, Hesseltine, Walker<br />
& Toth, LLP......................18, 31<br />
Scott Valley Bank .................. 39<br />
Candice Stoddard .................. 39<br />
WestlawNext,<br />
Thomson Reuters ....................3<br />
Michael J. Young ...................31<br />
Youngman & Ericsson, LLP ......9, 17<br />
Zandonella Reporting Service ......4<br />
34<br />
MARCH 2013
CALENDAR<br />
UPCOMING EVENTS | OVERVIEW<br />
March 12 | Alternative Dispute Resolution Section<br />
ADR Roundtable: Using ADR to<br />
Resolve Discovery Disputes<br />
more details on page 36<br />
March 15 | Real Estate Section<br />
Recent Developments for the Intersection Between Deeds<br />
of Trust and Article 3 of the Commercial Code<br />
more details on page 36<br />
March 15 | Family Law Section<br />
How Children’s Development and Sexual Behavior<br />
Impacts Custody<br />
more details on page 36<br />
March 21 | Employment Section<br />
ERISA - Employment Retirement Income Securities<br />
Act Basics for Employment Law Practitioners<br />
more details on page 36<br />
April 10 | Family Law Section<br />
Social Security & Retirement - Effect on Spousal Support<br />
more details on page 36<br />
April 11 | Women’s Section<br />
Annual Wine Tasting & Silent Auction<br />
more details on page 24<br />
April 23 | Conservatorship, Guardianship, Probate & Trust Section<br />
20th Annual Probate & Trust Symposium<br />
more details on page 36<br />
April 24 | Res Ipsa Jokuitor XVIII<br />
Comedy Night & Kickoff for Food from the <strong>Bar</strong> 2013<br />
more details on page 25<br />
April 25 | Employment Section<br />
The Employment Tax Consequences of Settlements<br />
and Judgements<br />
more details on page 37<br />
April 29 - May 10 | CCCBA<br />
22nd Annual Food From the <strong>Bar</strong><br />
more details on page 37<br />
May 2 | CCCBA<br />
Interprofessional Mixer - Springfest!<br />
more details on page 37<br />
May 9 | Appellate Section<br />
A Discussion with Justice Henry Needham<br />
more details on page 37<br />
May 10 | Employment Section<br />
Violence in the Workplace: Employer Obligations,<br />
Legal Issues and Threat Assessments<br />
more details on page 37<br />
May 15 | Business Law & Corporate Counsel Section | Litigation Section<br />
The Ever-Evolving Enigma of ESI (Electronically Stored<br />
Information) and Its Ethical Obligations<br />
more details on page 37<br />
For up-to-date information on programs, please visit www.cccba.org/attorney/calendar<br />
and/or subscribe to our weekly “Events & News” email.<br />
To subscribe, text CCCBA to 22828.<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 35
March 12 | Alternative Dispute Resolution<br />
Section<br />
ADR Roundtable: Using ADR to<br />
Resolve Discovery Disputes<br />
This roundtable will be a wide ranging<br />
discussion of ways to use ADR to resolve<br />
Discovery and other pre-trial disputes short<br />
of a complete global settlement.<br />
Drinks and snacks will be provided.<br />
Speaker: Kenneth Strongman<br />
Time: 6 pm – 7:30 pm<br />
Location: San Ramon Center<br />
2010 Crow Canyon Place - 1st Fl. Conference<br />
Room, San Ramon<br />
MCLE: 1.5 hours general credit<br />
Cost: $10 for section members and law<br />
student members; $15 for CCCBA members;<br />
$20 for non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
March 15 | Real Estate Section<br />
Recent Developments for the Intersection<br />
Between Deeds of Trust and<br />
Article 3 of the Commercial Code<br />
Speakers: Marcus Brown<br />
Brian Gunn<br />
Time: 7:30 am – 9 am<br />
Location: Scott’s Seafood<br />
1333 N California Blvd., Walnut Creek<br />
MCLE: 1 hour general credit<br />
Cost: Free for section members; $5 for law<br />
student members; $15 for CCCBA members;<br />
$35 for non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
March 15 | Family Law Section<br />
How Children’s Development and<br />
Sexual Behavior Impacts Custody<br />
Speakers: Rhonda <strong>Bar</strong>ovsky, LCSW, BCD<br />
Hon. Jill Fannin<br />
Carol George, PhD, Prof. of<br />
Psychology, Mills College<br />
Time: 1:15 pm – 4:45 pm<br />
Location: <strong>Contra</strong> <strong>Costa</strong> Country Club<br />
801 Golf Club Rd., Pleasant Hill<br />
MCLE: 3 hours general credit<br />
Cost: $75 for section, CIC and law student<br />
members; $100 for CCCBA members; $150<br />
for non-members<br />
Registration: Go to the Family Law website<br />
at www.familylawsectioncontracosta.org<br />
More Info: Contact Therese Bruce at<br />
(925) 930-6789<br />
36<br />
March 21 | Employment Section<br />
ERISA - Employment Retirement<br />
Income Securities Act Basics for<br />
Employment Law Practitioners<br />
Speaker: Ruth Silver Taube, Esq., Law Office<br />
of Silver & Taube<br />
Time: 12 pm – 1:15 pm<br />
Location: Massimo Ristorante<br />
1604 Locust St., Walnut Creek<br />
MCLE: 1 hour general credit<br />
Cost: $35 for section members and law<br />
student members; $45 for CCCBA members;<br />
$50 for non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
MARCH 2013<br />
April 10 | Family Law Section<br />
Social Security & Retirement -<br />
Effect on Spousal Support<br />
Time: 12 pm – 1:15 pm<br />
Location: <strong>Contra</strong> <strong>Costa</strong> Country Club<br />
801 Golf Club Rd., Pleasant Hill<br />
MCLE: 1 hour general credit<br />
Cost: $50 for section members and law<br />
student members; $75 for CCCBA members;<br />
$100 for non-members<br />
Registration: Go to the Family Law website<br />
at www.familylawsectioncontracosta.org<br />
More Info: Contact Therese Bruce at<br />
(925) 930-6789<br />
April 23 | Conservatorship, Guardianship,<br />
Probate & Trust Section<br />
20th Annual Probate & Trust Symposium,<br />
sponsored by Mechanics Bank<br />
Making the most of and avoiding the pitfalls<br />
of the new tax legislation.<br />
Registration: 11:45 am | Buffet Lunch: 12 pm<br />
Program: 1 pm - 2:45 pm<br />
Dessert Reception to follow<br />
Speaker: Samuel A. Donaldson, Prof. of Law,<br />
Georgia State University College<br />
of Law<br />
Time: 11:45 am – 2:45 pm<br />
Location: Lesher Center for the Arts<br />
1601 Civic Drive, Walnut Creek<br />
MCLE: 1.5 hours tax specialization credit<br />
(pending)<br />
Cost: $50 for section members; $25 for law<br />
student members; $60 for CCCBA members<br />
and non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548
April 25 | Employment Section<br />
The Employment Tax Consequences<br />
of Settlements and Judgements<br />
Speaker: William Hays Weissman, Esq.,<br />
Littler Mendelson, P.C.<br />
Time: 8 am – 9:15 am<br />
Location: Scott’s Seafood<br />
1333 N California Blvd., Walnut Creek<br />
MCLE: 1 hour general credit<br />
Cost: $30 for section members; $25 for law<br />
student members; $35 for CCCBA members;<br />
$45 for non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
April 29 - May 10 | CCCBA<br />
22nd Annual Food From the <strong>Bar</strong><br />
Make a difference to the hungry people in<br />
<strong>Contra</strong> <strong>Costa</strong> <strong>County</strong> (and show those other<br />
law firms how generous your firm really is!)<br />
This year marks the 22nd Annual Food From<br />
the <strong>Bar</strong> drive benefitting the Food Bank<br />
of <strong>Contra</strong> <strong>Costa</strong> and Solano. This amazing<br />
organization provides food to over 132,000<br />
people EVERY MONTH in <strong>Contra</strong> <strong>Costa</strong> and<br />
Solano counties.<br />
The firm with the highest per capita figures<br />
in each category will receive an individual<br />
award for permanent display in their office.<br />
This year’s goal is $100,000 and 10,000<br />
pounds of food. We hope to break the<br />
$1,000,000 mark in cumulative FFTB donations<br />
this year. Do your part to feed the<br />
hungry in your area. Participate in Food From<br />
the <strong>Bar</strong>!<br />
Donate food from your computer with the<br />
Virtual Food Drive! Sign up online at<br />
www.foodbankccs.org/foodfromthebarcc.<br />
May 2 | CCCBA<br />
Interprofessional Mixer - Springfest!<br />
Come join attorneys, bankers, CPAs and real<br />
estate and financial professionals for an informal<br />
happy hour mixer. Get to know other<br />
trusted advisors. No host bar.<br />
Time: 5 pm – 7:30 pm<br />
Location: Pyramid Alehouse<br />
1410 Locust St., Walnut Creek<br />
Registration: Please RSVP online at<br />
http://ebhh.eventbrite.com<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
May 9 | Appellate Section<br />
A Discussion with Justice Henry<br />
Needham<br />
Join First District Court of Appeal Justice<br />
Henry Needham and Appellate Practice Section<br />
Chair Gary A. Watt for a discussion on<br />
appellate practice, pitfalls and pet peeves.<br />
Speakers: Justice Henry E. Needham<br />
Gary A. Watt, Esq.<br />
Time: 12 pm – 1:15 pm<br />
Location: Archer Norris<br />
2033 N Main St. #800, Walnut Creek<br />
MCLE: 1 hour appellate law specialization<br />
credit (pending)<br />
Cost: $15 for section members; $25 for<br />
CCCBA members and non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
May 10 | Employment Section<br />
Violence in the Workplace: Employer<br />
Obligations, Legal Issues and Threat<br />
Assessments<br />
Speakers: James Cawood, Threat Assessment<br />
Expert, Factor One<br />
Thomas Klein, Esq., TKlein<br />
Associates, Inc.<br />
Moderators: Andrea Kelly Smethurst<br />
Shannon Walpole<br />
Time: 8 am – 9:15 am<br />
Location: Scott’s Seafood<br />
1333 N California Blvd., Walnut Creek<br />
MCLE: 1 hour general credit<br />
Cost: $30 for section members; $25 for law<br />
student members; $35 for CCCBA members;<br />
$45 for non-members<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
More Info: Contact Theresa Hurley at<br />
(925) 370-2548<br />
May 15 | Business Law & Corporate<br />
Counsel Section and Litigation Section<br />
The Ever-Evolving Enigma of ESI<br />
(Electronically Stored Information)<br />
and Its Ethical Obligations<br />
Program from 3:30 pm - 5:30 pm, Wine and<br />
Cheese reception to follow. Free parking<br />
validation offered.<br />
Speakers: Hon. Steve Austin<br />
Jonathan Redgrave, Esq.<br />
Kirk Pasich, Esq.<br />
Jeffrey Rabkin, Esq.<br />
Roger Brothers, Esq.<br />
Moderator: Linda DeBene, Esq.<br />
Location: JAMS Office Conference Room<br />
1255 Treat Blvd. #700, Walnut Creek<br />
MCLE: 1 hour general credit<br />
1 hour legal ethics credit<br />
Cost: $30 CCCBA members; $35 for nonmembers<br />
Registration: Online at<br />
www.cccba.org/attorney/calendar<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 37
WE WANT YOUR ARTICLES!<br />
We invite you to take the opportunity to get your articles published.<br />
Please take a look at our 2013 editorial calendar below<br />
for upcoming themes and deadlines.<br />
If you think of a timely, interesting article - write it and send it to us!<br />
We have editorial guidelines available on our website,<br />
at www.cccba.org/attorney/cclawyer<br />
CONTRA COSTA LAWYER<br />
2013 EDITORIAL CALENDAR<br />
Print issues are listed in bold, online-only issues in regular font.<br />
Themes are subject to change. Check our website for the most up-to-date information.<br />
ISSUE ARTICLE DEADLINE THEME<br />
April 2013 Mar 12, 2013 Employment Law<br />
May 2013 Apr 5, 2013 The Future of Law Practice<br />
June 2013 May 7, 2013 The Vacation Issue<br />
July 2013 June 3, 2013 Criminal Law<br />
August 2013 July 9, 2013 Women in Law<br />
September 2013 Aug 2, 2013 Real Estate<br />
October 2013 Sept 10, 2013 Our Cities<br />
November 2013 Oct 4, 2013 Bench/ <strong>Bar</strong> Issue<br />
December 2013 Nov 12, 2013 Pro Bono<br />
QUESTIONS? ARTICLE IDEAS? FEEDBACK?<br />
email contracostalawyer@cccba.org<br />
38<br />
MARCH 2013
Why YOU<br />
should make<br />
referrals to<br />
CCCBA’s<br />
LRIS<br />
• Our LRIS is the only State<br />
<strong>Bar</strong> certified & ABA approved<br />
lawyer referral<br />
service in our county • Our<br />
LRIS has been providing<br />
quality referrals as a public<br />
service since 1978 •<br />
LRIS panel attorneys are<br />
required to meet specific<br />
experience requirements<br />
as a prerequisite to joining<br />
the service • Every LRIS attorney<br />
is required to carry<br />
malpractice insurance •<br />
Our LRIS has an experienced,<br />
friendly and<br />
knowledgeable staff to<br />
assist you!<br />
Law Offices of<br />
Candice E. Stoddard<br />
1350 Treat Blvd., Suite 420<br />
Walnut Creek, CA 94597<br />
Ingenuity<br />
Colleen is renown for understanding her<br />
clients' financial needs. Using ingenuity,<br />
and that understanding, she works hard<br />
to find the best solutions for you and your<br />
business. Her commitment exemplifies<br />
the personalized service for which<br />
Scott Valley Bank is known.<br />
Her 30 years of banking experience and<br />
Scott Valley Bank - now that is a powerful<br />
marriage of knowledge, experience, and<br />
the style of banking service you deserve.<br />
Candice E. Stoddard<br />
Personal Injury<br />
Real Estate Litigation<br />
Trust and Estate Disputes<br />
Mediation<br />
n<br />
925.942.5100 • fax 925.933.3801<br />
cstoddard@stoddardlaw.com<br />
Practicing law in the East Bay for over 25 years<br />
For more information,<br />
call LRIS Coordinator<br />
<strong>Bar</strong>bara Arsedo<br />
at 925.370.2544<br />
Walnut Creek Office<br />
1500 N. California Blvd. • 925.944.0180<br />
Oakland • 1111 Broadway • 510.625.7850<br />
San Jose • 2001 Gateway Place • 408-573-7710<br />
scottvalleybank.com<br />
Colleen Benatar<br />
VP / Relationship Banker<br />
cpbenatar@scottvalleybank.com<br />
925.944.0180 ext. 215<br />
CONTRA COSTA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER 39
DIABLO<br />
VALLEY<br />
REPORTING<br />
SERVICES<br />
Certified Shorthand Reporters<br />
Serving the entire Bay Area<br />
• Deposition Reporting<br />
• Experienced Professional Reporters<br />
• Computerized Transcription<br />
• Deposition Suites Available<br />
• Expeditious Delivery<br />
• BART Accessible<br />
2121 N. California Blvd.<br />
Suite 310<br />
Walnut Creek, CA 94596<br />
925.930.7388<br />
fax 925.935.6957<br />
dvrs2121@yahoo.com<br />
40<br />
MARCH 2013