On February 16, the Goralka Law Firm celebrated a very important milestone – its 21st birthday. The firm's success story is unlike most law firms – formed to ensure that he could focus his attention, time and energy on his children, John M. Goralka, a single dad, left behind a small law firm to open his own in order to better provide for his family.
John worked tirelessly to build a reputable client base while being an attentive father to his two children. Now, twenty-one years later, the firm has grown in number of staff, professionals and clients. John now enjoys national recognition and his articles are appearing routinely in Kiplinger Financial, Nasdaq.com, Born2invest.com, On Wall Street and other publications. Beginning this year, his articles will be translated and published in Germany. Many of his clients have been with the firm for more than 20 years, with their second and third generations turning to the firm for their tax, business and estate planning needs.
The Sacramento-based estate planning, business and tax law firm celebrated its anniversary with clients, family, friends and staff with a night full of fun! A very big thank you to everyone who attended, and who continue to make our firm a success.
To watch a video of the event click here.
To view photos from the event click here.
As published by Daily Journal, Goralka Law Firm was selected as one of the top 20 boutique law firms in California. Reminiscing his first day as a sole practitioner 20 years ago, John Goralka explains how he, as a single father had no choice but to bring his chicken-pox-afflicted children to work and how it oddly set the tone for a family-focused business. "We help successful families, business owners and real estate owners achieve their enlightened dreams by minimizing income and estate tax, resolving transitions and even cleaning up messes from time to time. We plan for our client's estates to go to the right people, at the right time and to keep the wrong people out," he said.
In one example, Goralka represented a woman who inadvertently withdrew $600,000 from her inherited individual retirement account (IRA) and accidently transferred it into an unqualified account-which would have cost her $300,000 in taxes. After his relentless work with the IRS and the Franchise Tax Board, Goralka was able to defer collection and placed the money back in her IRA as if nothing had ever happened.
With a caring team of three lawyers and five support staff, the firm is able to ensure that family values are passed on to their children and beyond. In addition to providing legal services, Goralka Law Firm amplifies the family-like atmosphere by hosting a bimonthly "Wine Wednesday" event for past, present and future clients. Goralka adds, "We have an extended client family that we are honored to assist in family estate planning and related work."
Prenuptial agreements protect much more than financial assets. They help to protect clients with children from a previous relationship, older couples, clients with significant assets prior to marriage and clients who are public figures. Prenuptial agreements also help clients who are seeking to keep such matters private, and clients seeking to protect their partner from his or her debts or liabilities.
In the article, "Celeb divorces show power of prenuptials," published in The Daily Journal, John Goralka compares the celebrity divorces of Johnny Depp and Amber Heard to Kelly Cuoco and Ryan Sweeting to illustrate the power of properly structured prenuptial agreements.
Last year Heard filed for divorce from Depp and sought spousal support; however they didn't have a prenuptial agreement. After several highly public and emotionally charged court proceedings, Heard is receiving a reported $7 million settlement, which she is donating to charity. On the other hand, Cuoco and Sweeting signed a binding prenuptial agreement, which governed how the assets and finances would be handled in the event of a divorce. The agreement gave Cuoco, whose estimated net worth is significantly larger than that of her ex-husband, full control and protection from claims for greater support or assets.
Agreements such as this help to avoid drawn out financial battles when marriages fall apart. "Clearly establishing the boundaries for divorce in a prenuptial agreement can prevent a great deal of financial and emotional pain for couples later on in the process," Goralka said.
Most couples don’t plan on divorcing when they get married, but every couple should plan for the worst and hope for the best. In his Kiplinger article “A Tale of Two Celebrity Marriages and One Prenuptial Agreement,” John Goralka uses celebrity couples to examine the benefits of having a prenup.
When actors Johnny Depp and Amber Heard divorced, Heard reportedly received a $7 million settlement. She plans to donate it all to charity, which may indicate that the litigation may be fueled by retribution rather than money. However, the court battle could have been avoided if they had a prenuptial agreement.
The Big Bang Theory’s Kelly Cuoco and professional tennis player Ryan Sweeting signed a prenuptial agreement. “Agreements such as this one help to avoid drawn out financial battles, such as over spousal support, when marriages fall apart,” said Goralka. Since Cuoco’s net worth was $44 million and Sweeting’s is $2 million, “The agreement gave Cuoco much greater control and protection from claims for greater support or assets.”
Goralka said couples should consider pairing a prenuptial agreement with a confidentiality agreement or an Asset Protection Trust, determine if earnings and debts will be community or separate property, and designate assets in the case of a divorce.
John Goralka has been selected for inclusion on the 2016 Northern California Super Lawyers list for his work in estate planning and probate, tax, and business. This marks John’s first year on the list.
Super Lawyers is a rating service of the top five percent of outstanding lawyers who have attained a high-degree of peer recognition and professional achievement. The selection process is multi-phased and includes independent research, peer nominations and peer evaluations.
Sacramento Magazine recognized John Goralka as a top attorney for his work in business and corporate law. John and his team have assisted individuals and families in matters of estate planning and asset protection for over two decades. He is a dual Certified Specialist, passed the CPA exam and has the highest possible rating of 10.0 on Avvo. John is also rated AV preeminent by Martindale which is the highest possible rating for ethics and legal ability.
The Goralka Law Firm helps successful families, business owners and real estate owners achieve their enlightened dreams by better protecting their assets, reducing income and estate tax and providing for the distribution of their estate to the right people, at the right time.
In his Kiplinger article "Six Estate Planning Tips for Those Approaching Death," John Goralka outlines six actions an individual should take to ensure peace of mind for themselves and their family after death.
In Penton's Wealth Management’s July e-newsletter, John Goralka discusses the obstacles that come with a long lifespan in his article "Estate Planning for an Aging Population." As Americans are living longer, it’s essential to financially prepare for retirement. Individuals who fail to plan accordingly may risk experiencing financial strain toward the end of their lives.
Reports show that individuals are more concerned about running out of money than dying. In order to be better equipped for the future, Goralka recommends that individuals consider a retirement trust. Retirement trusts "allow children to disclaim all or a portion of the inherited retirement account benefits for their own children," he said. Goralka also addresses the fear of running out of money, using gift provisions to reduce estate tax, and establishing or changing residency to ensure adequate savings.
There are a litany of questions that have arisen since the death of legendary musician, Prince. As the days proceed, it has come to light that Prince may not have had a will, and with an estate valued at more than $300 million, that leaves quite a bit at stake. And with no obvious heirs, the future of his estate is especially unclear. In the article “Estate Planning Advice Inspired by Prince,” published in the Kiplinger Magazine, John Goralka expounds on the importance of last minute planning if severe medical issues arise.
The number one rule in estate planning is to plan for death. If one dies without a will, the state will dictate how the estate will be distributed, which often includes estranged family members. “If he did not have a will, then he chose to let the state of Minnesota determine who his heir will be,” Mr. Goralka said. “Apparently, he experienced medical issues in the weeks leading up to his death. Even if only a short time may have been available to do the work, specialized planning could have helped minimize the estate tax and establish his intended legacy.”
Capital gains taxes can be a huge drain on proceeds from asset sales. However, if time permits, two-year installment sales can be a great strategy for reducing tax bills. In an article published by Kiplinger, John Goralka discusses the advantages using a two-year installment sale when selling a substantially appreciated asset, property or business.
This strategy creates a taxation timing gap between when the asset sale proceeds and when it's taxed. Mr. Goralka addresses several advantages to this strategy, including gains being taxed at a reduced rate as a long-term capital gain; beneficiaries still receiving all cash proceeds in the year of the second sale; avoiding the net investment income tax; and achieving a far greater overall return.
"Without careful planning, capital gains can be substantial. This is just one alternative to minimizing capital gains on assets that are sold," explains Mr. Goralka.
Estate plans don't have to be limited to money and assets – they can also include core values and beliefs that individuals wish to pass on to their heirs. In order to leave a "value legacy" that promotes a family's values, the first step is to identify exactly what these values are.
In the On Wall Street article "The Best Ways to Help Clients' Values Live On," John Goralka outlines ways to identify the core values that an individual or family would like to include in an estate plan. It can be helpful to envision which core principles or qualities are most important to the family, as well as which milestones heirs and descendants should aspire to reach. Mr. Goralka suggests thinking about how an estate plan properly encompasses the four C's – character, competence, confidence, and core values.
Mr. Goralka also suggests that families consider creative strategies for ensuring that values stay alive in future generations, such as recording the family history, offering educational and inspirational resources, and creating incentive trusts to encourage descendants to surpass educational goals.
Well-crafted estate plans have the potential to shape and guide future generations. Passing on a values legacy can leave a lasting imprint on a family's descendants, and ensure the continuing success and productivity of generations to come.
Bypass trusts, also known as B trusts, are often used as a strategy to avoid estate tax. But because of recent changes in income tax and estate tax rates, families with B trusts should review their situation to ensure they’re not jeopardizing the financial stability of the surviving spouse and beneficiaries. While there are conditions when a B trust is appropriate, care must be taken to ensure that the B trust is tax efficient and will not trigger unwanted capital gains tax.
"If the surviving spouse attempts to use the deceased spouse's one-half of the community property, it may trigger a variety of undesirable outcomes," explains John Goralka, in an article published in Private Wealth Magazine. "An existing B trust can be a ticking time bomb, detonating after the death of the surviving spouse."
B trusts can create significant issues, including higher taxes during the surviving spouse's life and higher capital gains taxes when assets are sold, without saving any estate tax. These types of trusts are typically irrevocable, but they can be modified during the surviving spouse's life. Mr. Goralka advises that families with B trusts have two options. The best alternative is to obtain a court order to modify the trust. Another possibility to consider is to "decant" the trust by moving assets to create new, more desirable provisions. With either option, it's essential that families move quickly to avoid substantially higher taxes.
Planning for retirement is one of the most common and daunting personal finance concerns for families. Parents want to ensure that their children are taken care of, but inherited IRAs can represent a significant tax burden. IRA minimum distributions can be "stretched out" over the lifetime of the beneficiary, creating a huge potential increase in wealth; however, the amount of each distribution is taxable and there is no grace period.
In an article published by On Wall Street, John Goralka explains how retirement inheritance trusts can be a more tax-efficient way to pass on retirement funds. Trusts can be particularly beneficial for parents concerned about leaving a large amount of money to minors or children whose money management skills are lacking. Compared to an IRA, trusts can provide better protection against losing money through a divorce, lawsuit, estate tax or family dispute. "Protecting your clients' assets with a retirement inheritance trust may be the most secure option for them and their family," says Mr. Goralka.
To preserve and convey one's value legacy, estate planning goes beyond money and even asset protection. For an estate to be truly effective and do more than just simply move money and assets from one generation to the next, it must accomplish three basic goals. In order to leave heirs a complete estate plan, an individual must ensure that they are actually leaving their assets to those designated, make certain those assets are received at the right time to maximize their lifetime benefits, and protect their legacy from being lost to third parties.
In the Kiplinger article "Is Your Estate Plan Truly Complete?" John Goralka discusses the benefits of developing a "values legacy" to leave behind for the next generation, which identifies key elements of the core values and beliefs an individual should develop and pass on in their estate plan. The "values legacy" should reflect their character, competence, confidence and core values. Mr. Goralka also advises creative strategies for educating, motivating and inspiring heirs, such as implementing incentive provisions or trusts, documenting of the family story, organizing family retreats and providing a personal directions letter.
An effective estate plan does not only serve as an insurance policy to protect the assets from costly bumps in life. As Mr. Goralka explains, it also provides an opportunity to preserve a family's core values for future generations.
The article, "California's End of Life Option Act: A Look at a Law in Limbo," published by Hospital Impact, John Goralka analyzes the End of Life Option Act, which was signed by California Governor Jerry Brown on October 5, 2015 and enables adults who meet certain qualifications and who are suffering from terminal diseases to request drugs for the purpose of ending their lives. However, the Act does not go into effect until 91 days after the legislature adjourns its special session on healthcare financing. This date has not yet been set.
Per the terms of the Act, an attending physician must determine whether the individual has the legal ability to make their own medical decisions; and it is critical that patients who choose to end their lives do so of their own free will. Mr. Goralka details the rules and regulations surrounding the End of Life Act, as well as specific procedures that protect patients and safeguard against elder abuse. Although the Act has not come into effect, it will be available to Californians until at least January 1, 2026, when it is either repealed or extended.
On October 5, 2015, California Governor Jerry Brown signed the bill for the End of Life Option Act, which authorizes an adult who meets certain qualifications, and who has been determined by his or her attending physician to be suffering from a terminal disease, to make a request for a drug prescribed pursuant to these provisions for the purpose of ending his or her life. Although it is unclear when the law will take effect, published reports say it could take effect as early as April 2016 or as late as March 2017.
In an article published by The American Journal of Managed Care, Attorney John Goralka explains that under California law, the End of Life Option Act does not go into effect until 91 days after the legislature adjourns its special session on healthcare financing. In the interview, Mr. Goralka addresses several issues concerning the new law such as the clarification of the law, the requirements to prevent abuse, safeguards to keep the patients in control and how the law will be restricted to California residents. Although many people remain opposed to California’s law based on religious or moral grounds, these efforts are to educate people to have a better understanding of the Act.
When planning for retirement, an individual may face the dilemma of deciding what to do if they have leftover retirement assets when they die. Many designate a beneficiary, like a child or a grandchild, to inherit the retirement account. During the beneficiary’s lifetime, the assets are able to grow significantly; but sometimes, young beneficiaries withdraw funds at an early age, which can be a crippling decision.
In the article 'How to Protect Inherited Retirement Assets' published by ThinkAdvisor, John Goralka, founder of the Goralka Law Firm, explains the consequences of withdrawing funds too early. "Once it comes out, instead of a stretch-out, it's kind of like a blowout; it's like a flat tire that you can't fix because once the funds are pulled out of that qualified account, you really can’t put it back,' he says. By naming a retirement trust as a designated beneficiary, assets are protected from beneficiaries until they are old enough to properly decide when to withdraw from the fund.
However, early withdrawal is not the only concern regarding retirement accounts. In fact, there are many other factors that jeopardize these assets, such as bankruptcy and divorce. One section of the Bankruptcy Code stipulates that inherited assets are not considered retirement funds. Moreover, retirement assets are highly desired in divorce settlements because a spouse can take them tax-free. In order to protect retirement assets, Mr. Goralka encourages communication between estate planning attorneys and clients, and making sure that beneficiary designations are properly made. He adds, "It sounds silly, but often these beneficiary designations, because they’re so simple, they’re overlooked."
I highly recommend your service. This has been an informative, reassuring, and pleasant experience. I have benefited greatly and I am pleased to have had the opportunity to avail myself of your services.
- Dr. Isadore Morrison, Jr
Mr. Goralka is an outstanding attorney who is very competent in various areas. We have received professional services from Mr. Goralka for many years. He is local to the Sacramento area where his roots lie, however, he doesn't stop there. Just recently, he prepared Living Trust Fund where he doesn't leave any rock unturned, and gives us real peace of mind. We are privileged to endorse Mr. Goralka in every way possible.
- Mr. & Mrs. Robert Ruffino
Goralka Law Firm serves clients throughout Sacramento, Roseville, Folsom and Elk Grove, California and the Surrounding Areas. Services provided include legal consultation and the preparation of: Revocable Living Trusts, Wills, Powers of Attorney, Living Wills, Healthcare Power of Attorney, Life Insurance Trusts, Family Limited Partnerships, Limited Liability Companies, Corporations, Charitable Trusts, Medi-Cal Planning, and Other Estate Planning and Tax Planning Strategies
Copyright © IMS. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement. Some artwork provided under license agreement.