Tuesday, July 24, 2018

Critical Estate Planning for Frequent Flyer Miles

A client recently asked me, “What happens to my frequent flyer miles when I die?”  With so many credit card companies giving up to 100,000 bonus miles just for opening the credit card account and charging on the card (yes, that’s true!), and then giving away additional miles for every dollar charged, people are accumulating tens of thousands of dollars of frequent flyer miles.  As the Points Guy says, “We certainly don’t want to think about that day when we’ll go the way of the Concorde and L-1011 TriStar, but it’s even harder to think about a considerable stash of loyalty assets going to waste because you didn’t prepare.” 

Here’s what you need to do to prepare:

1.       If you’re not accumulating mileage points, you’re missing a huge opportunity.  For a great guide on the best credit cards, check out https://thepointsguy.com/
2.       Be sure to have a way to track your mileage points, making sure that the beneficiaries of your estate have access to all log in information so that upon your death, they can log into your account and access your miles.  I started using AwardWallet and my husband has access to the AwardWallet account so that upon my death, he can access all the miles.
3.       Every airline has different policies about what happens to miles upon death.  Some airlines, like Delta, do not transfer mileage programs upon a death and others have a procedure for doing so. Click https://thepointsguy.com/guide/points-and-miles-after-you-die/ to understand the policies of each airlines and the best steps to make sure your loved ones benefit from the loyalty programs after your die.

The bottom line: With proper planning, your loved ones can use your frequent flyer miles after you die.  Be sure to do your planning so that you Create Your Best Legacy

The new Tax Act changes estate planning drastically so be sure to have your estate plan updated.  For the next 2 weeks, we are offering complimentary estate planning consultations. Click here to set up a consultation appointment.

PS We will soon be releasing our 2018 edition of Create Your Best Legacy. 

Michelle C. Lerman
Certified Specialist Estate Planning, Trust & Probate Law* 
Click here to Create Your Best Legacy.
Tel: (310) 295-1951 / (415) 454-0455
Cell: (415) 308-3640

Sunday, February 28, 2016


Before January 1, 2016, terminally ill patients in California needed to move to a state like Oregon to obtain a prescription to end their suffering and die with dignity. Now, an historic new California law, the End of Life Option Act, allows physicians to provide life-ending prescriptions, referred to as “aid-in-dying drugs,” to certain patients diagnosed with a terminal illness. 
The Act has strict requirements and guidelines. The patient must be at least 18 and have an incurable and irreversible disease that has been medically confirmed and will, within reasonable medical judgment, result in death within six months. The patient also must be able to understand the nature and consequences of the health care decision -- its significant benefits, risks, and alternatives -- and must be able to make and communicate an informed decision to health care providers. 
The Act also requires specific information to be documented in the patient’s medical record, including, among other things, all oral and written requests for an aid-in-dying drug. The Act requires that the patient submit two oral requests, at least 15 days apart, along with a written request with witnesses, to the attending physician.
Those fearing that the Act would enable insurance companies to push the end-of-life option will be relieved. The Act prohibits an insurance carrier from communicating to a patient about the availability of an aid-in-dying drug unless the patient or the attending physician requests the information; the insurance carrier cannot communicate the denial of treatment or information as to the availability of aid-in-dying drug coverage.  
Treating physicians have strict reporting requirements, which include providing specified forms and information to the State Department of Public Health after writing a prescription for an aid-in-dying drug and after the death of a patient who requested such a drug. For the next 10 years, at which time the Act expires, patients who are able to make an “affirmative, conscious, and physical act of administering and ingesting the aid-in-dying drug” will have the option of obtaining a life-ending drug, and more control over the manner of their death.

So If you or a loved one is facing a terminal condition, explore California’s new law and its expanded end-of-life options. For more information about this topic, contact me. Michelle Lerman, michelle@lermanlaw.com, 415 308-3640.

Monday, December 21, 2015

How To Save Money Before December 31, 2015

You could save thousands of dollars by either forming your new entity or dissolving unused entities between now and December 31, 2015.  
1. 1031 FLEXIBILITY. If you currently hold property in an LLC with one or more "partners", but want the flexibility, when you sell the property, to be able to go your separate ways [for example, you may want to do a 1031 exchange while your partner(s) want to cash out], then you need to convert your LLC into a tenancy in common ASAP (generally, at least one year before the sale and preferably in a PRIOR TAX YEAR; that means, if you think there's any possibility you will sell one of your LLC-owned real estate investments in 2016, then you MUST take care of this conversion before 12/31/15). If you do that conversion and still want the asset protection benefits of an LLC, you need to form a new LLC to hold your TIC interest.

2. IMMEDIATE TAX SAVINGS. Sec. 195 of the IRC gives you a tax deduction of UP TO $5,000 of start up expenses that you spend before December 31, 2015.  So, if you're thinking about forming a new entity to own your real estate, you could save money if you form it this year.   

3. AVOID DELAYS. Generally, Secretary of State offices are FLOODED with new filings at the beginning of January. Time frames could be longer and that means your deal may get delayed.  The best way to avoid that delay, and the hundreds of dollars of additional cost involved in having to pay for an expedited filing, is to form your entity NOW.

4.  HOW TO SAVE $800 PER ENTITY ON YOUR UNUSED CORPORATIONS AND LLCs:  Do you no longer use any of your LLCs? If you don't dissolve those unused entities before December 31 of this year, they'll cost you $800 next year in the annual minimum franchise tax, even if you no longer operate those companies. This is your final opportunity to dissolve unnecessary or unused entities this calendar year. Delay the dissolution by even a week and it will probably be too late to complete this process this year, meaning the Franchise Tax Board will assess another $800 against the entity.

Now is a great time to stop procrastinating and clean up your business entities. Contact us today for assistance with this or any other legal matter. But hurry! Year-end crunches make delays risky.  For more information about this topic, contact Jeff Lerman at 415-454-0455 x234 or jeff@lermanlaw.com.

Monday, November 2, 2015

Breaking News-SEC FINALLY Adopts Final Rules to Permit Crowdfunding: What It Means To Commercial Real Estate Investors

Last Friday, the SEC finally, after 3 years, adopted final rules to permit companies to offer and sell securities through crowdfunding.  But, to me, the more interesting SEC news is what’s on the horizon (keep reading to the end of this article for more details).  What does this mean to commercial real estate investors—both those who are considering using crowdfunding to raise money for their next deal and those who would like to use crowdfunding to invest in more real estate deals?

At the outset, as most of my readers know, I am a syndicator (although I prefer joint ventures) and commercial real estate investor as well as a syndication lawyer.  With that “dual capacity”, I look at every investing strategy wearing those two hats.  I first ask myself, as an investor, is this a strategy I would use myself.  If it makes sense from that business analysis, I then analyze the legal pros and cons.  I would never recommend an investment strategy to any of my clients that I, myself, have not used or would not use.

With that preliminary explanation of my mindset, it is my personal opinion that crowdfunding is not, in its current form and under current laws (which can and will change in the future), any better, less expensive, easier, faster or safer of a strategy to raise money for your deals than taking advantage of any one of multiple exemptions to the securities laws which have been in place for decades.

This latest development (the SEC’s approval of crowdfunding rules) doesn’t change my opinion, despite all the media brouhaha (which unfortunately generally contains a lot of misinformation and more often results in confusion than clarity).  Basically, the new rules would:

  • Permit a company to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period;
  • Permit individual investors, over a 12-month period, to invest in the aggregate across all crowdfunding offerings up to:
    • If either their annual income or net worth is less than $100,000, than the greater of:
      • $2,000 or
      • 5 percent of the lesser of their annual income or net worth.
    • If both their annual income and net worth are equal to or more than $100,000, 10 percent of the lesser of their annual income or net worth; and
  • During the 12-month period, the aggregate amount of securities sold to an investor through all crowdfunding offerings may not exceed $100,000

In addition, all transactions relying on the new rules would be required to take place through an SEC-registered intermediary, either a broker-dealer or a funding portal.

The rules also prescribe disclosure requirements, which are far more extensive and burdensome than what would be required under several already-available securities laws exemptions.

For investors who are hoping these new crowdfunding rules will give them “better” opportunities to invest, all I can say is that they will give them more opportunities to invest.  Whether or not those opportunities are any “better” than are already available is a matter of opinion and must be evaluated on a deal by deal basis.  I have just two words for those thinking of jumping in to a crowdfunded opportunity: “Investor Beware”, and make sure you get good advice before making your final decision.

I am much more intrigued by the news that also came out of the SEC last Friday, but for whatever reason nobody seems to be talking about.  According to the SEC press release, it is considering whether to propose amendments to Regulation D, Rule 504.  Those proposed amendments would increase the aggregate amount of securities that may be offered and sold under Rule 504 in any 12-month period from $1 million to $5 million.  If that amendment is passed, that would be probably the most impactful securities development in decades for commercial real estate investors.  Why?  Because Rule 504 has two big advantages over every other SEC exemption: (1) it allows you to advertise, and; (2) it allows you to sell to non-accredited investors without the heavier disclosure requirement of other exemptions. 

We help investors around the country raise money for the deals, whether through syndication or joint ventures (which allow you to raise money without worrying about the securities laws).  Whichever strategy you use, YOU MUST work with an experienced lawyer.  Since I am an investor as well as a lawyer, I can help and understand you in ways other lawyers cannot. Just read some of the many testimonials from satisfied clients.

If you would like to discuss this or any other real estate matter in greater detail, call our office to schedule your private strategy session with me. You’ll get the special attention of me and our dedicated staff and we’ll make you feel right at home.  Every one of our clients is like family.  We firmly believe that you can’t do any better than having our firm represent you.  Let us prove it to you.

Jeff Lerman
The Real Estate Investor's Lawyer

Tuesday, August 25, 2015


Estate of Duke, filed July 27, 2015

If you don’t properly document your wishes, your assets may be part of a long and expensive court battle after you die over unjustified claims of “mistake.” 

In an historic ruling, the California Supreme Court reversed the rule on what evidence can be used to determine the meaning of an unambiguous Will. Rather than only looking at the document itself, in some circumstances the Court will consider all evidence that proves the decedent’s true intention. Which could translate into litigation over your true intention, unless you plan your estate properly.

Irving Duke wanted his assets to go to his wife, but if he and his wife died at the same time, he wanted his assets going to various charitable organizations. He handwrote a will, stating his intention. He never specified what he wanted if he died AFTER his wife died, which is exactly what happened.

After Mr. Duke died, his nephews filed a claim saying that they were the rightful heirs despite the Will. The lower court agreed with the nephews. The charities were out of luck because the Will, leaving the assets to charity, only applied if Mr. Duke and his wife died simultaneously. Since that didn’t happen, the nephews were entitled to his assets as his heirs. The court did not consider any evidence about Mr. Duke’s estranged family relationships.

However, changing 50 years of established law, the California Supreme Court ruled that such evidence may be considered in determining the effect of Mr. Duke’s Will. The High Court held that extrinsic evidence, meaning facts not found within the estate planning document, may be introduced to change the effect of a Will if clear and convincing evidence establishes a mistake and shows the decedent’s true intent.

“Will” your named beneficiaries get your assets, or will a judge determine the fate of your assets? A carefully drafted written estate plan is the key. If you omit something, like Mr. Duke’s omission about whether the charities should get his assets if his wife died before he died, the court may decide whether to override your stated desires. Properly document your wishes to avoid a long and expensive court battle about your true intentions. 

If you want to properly plan your estate, you’ll find what you need to know in my new bookCreate Your Best Legacy, available in hard copy and kindle version: Click here to purchase now.

A published author and guest on radio and TV, attorney Michelle C. Lerman is certified by the California Board of Legal Specialization of the State Bar of California as a Legal Specialist in Estate Planning, Trust and Probate Law. She has been included in the Northern California list of “Super Lawyers” for 2009 and 2010.  She specializes in custom legacy plans for the unique needs of families with children. Practicing law for over 30 years, she has published numerous articles on estate planning for families.

Tel: (310) 295-1951 / (415) 454-0455