I am often asked how or why I got into the areas of planning to reduce unnecessary income tax and estate planning. I thought I'd share with you my story, particularly in light of National Estate Planning Awareness Week, which is the third week of this month.
I originally went to law school at night while I worked as an income tax auditor and hearing officer for the California Franchise Tax Board. As a hearing officer, I traveled throughout California. I handled a wide range of protests and appeals from complex multi-state corporations to more simplistic but emotionally charged head of household claims. This experience provided a solid foundation for the knowledge and skills used today to save taxes, estate planning, and business matters.
As a hearing officer, I would have the Field Auditor’s report and the taxpayer protest or appeal often prepared by large law or CPA firms. This enabled me to learn much faster from the experienced professionals on both sides of every issue. The best possible learning opportunity. As a hearing officer, I found many taxpayers were poorly represented and positioned. I was confident that I could do far better than that. This experience was directly transferable to provide the foundation for the tax planning, estate planning, and business law practice that I conduct. Many people incorrectly view estate planning as being simplistic. But to be done well, estate planning draws upon business and property laws, federal and state income tax law and real property law, probate and trust law, estate gift tax law. Most importantly, the focus must be identifying the client’s true goals and fears. Often, we help identify goals that were not thought to be possible.
Opening of The Goralka Law Firm
I began my firm in 1996 because I needed more flexibility to spend time with my kids. As a single parent with children under the ages of 2 and 5, I was coaching my daughter’s soccer team, doing lunch yard school duty, and simply enjoying just spending time together. Establishing my own firm permitted that, but often required that I work late at night after putting them to bed. While this was challenging, this was one of the happiest times in my life.
An estate planning, business, and tax practice provided the flexible schedule that I needed. Even with that, there were times when I brought my kids to the office where I had a separate, private area for my kids. At times I took my kids to court with me when no other option was available. Children under the age of 18 are not permitted in court without supervision. My kids would be unsupervised during my appearance before the judge. I gave my kids some books and crayons and asked them to sit quietly, I never ever made direct eye contact with the bailiff or police officer on duty for fear of my kids being sent to the court’s day care. At times as my daughter got older, I was very concerned that she might object at any time to my position. She was and is very outspoken.
As a tax, estate planning, and business attorney, my goal is to help my clients to make a transformative change in their lives and the lives of the families for the better. By transformative, we mean making a substantial improvement that will benefit the family for generations into the future. As a firm, we seek to identify and apply uncommon knowledge and unique solutions to the challenges, risks, and opportunities faced by our clients.
Over the Years...
The years go by so very fast. We now have many clients that we represented for over 20 years. We represent multiple generations including grandparents, children, and then grandchildren from the same family. We have also helped administer their estate and business and continue to assist their future generations for years to come. One example is establishing a Family Limited Partnership 25 years ago for a mom, dad, and son, and then helping pass down those interests and businesses to third and fourth generations over the past 25 years.
I believe that estate planning is one of the most gratifying areas of law because you really get to know your clients often on a deep, personal level. We help with some of the most important life decisions they will make (both good and bad) with their family and hard-earned assets. Unlike many other areas of law, we routinely establish long-term relationships with our client family members for many years to come in the future. I feel truly blessed to have found a career in an area that brings me such joy and is truly satisfying. Every day presents a new chess game - we identify where the pieces are on the board and plan for the next move and beyond.
Some of our planning success stories over the years include:
- Obtaining a $2,750,000 estate tax refund upon filing a single amended or supplemental estate tax return (IRS Form 706) that was sustained after an IRS audit. The original estate tax return was prepared by an experienced estate planning firm that represented the family for many years. The Goralka Law Firm was able to identify other reporting methods and additional deductions that provided the family a $2,750,000 estate tax savings, a transformational result.
- Reinstated an inherited IRA as a tax-deferred retirement account after the client inadvertently transferred the securities from a qualified account to a non-qualified taxable account. The reinstatement was completed more than two (2) years after the withdrawal. As a result, we successfully appealed the assessment of additional Federal and California Income Tax of over $450,000.
- Established an asset protection plan for the owner of a number of high-end restaurants in the Los Angeles area with the goal of protecting personal assets and investment. From a claim for additional sales tax of over $1,000,000 related to one (1) restaurant while the sale tax liability never materialized. This plan was tested when he lost all of the restaurants and closed due to the pandemic. The family’s personal assets were completely protected from the losses related to the closed restaurants.
- Successfully negotiated an “as is” stock sale of a combined group of construction companies for approximately $12,000,000. Not only did we successfully negotiate the “as is” provisions, we also incorporated general release language which were critically important with the economic crash in 2008. When the buyer sought to make a claim later, we reminded the buyer of the general release.
- In a multi-state tax appeal with the California Franchise Tax Board, we successfully resolved the appeal and received a judgment against the Franchise Tax Board (“FTB”) that required the FTB to pay our fees.
- Created a Premarital Agreement, Financial Confidentiality Agreement, and Separate Property Asset Protection Trust for the son of third-generation family business owners. Many Years later, while the son was a resident of Texas, the marriage failed, and the Premarital Agreement was challenged in court. After a full trial, the Premarital Agreement was fully respected protecting all of the family business assets. The judge, in his order and even opposing counsel complimented our client on the thoroughness, specificity and creativity of the Premarital Agreement and the related legal instruments.
- Implemented a tax savings plan for a lottery winner with a $2,500,000 investment, providing income tax deductions of over $1,700,000, a tax savings of nearly $900,000, income for life (with complete investment control on $1,500,000), and a remainder of over $1,100,000 income tax-free in 10 years (with investment control during the 10-year period).
- For a client whose son was injured at work causing him to be completely mentally and physically disabled, we funded and created a trust to hold the multimillion-dollar personal injury settlement. We put a plan in place to avoid all estate tax and probate fees. One provision of the settlement agreement provided for full coverage of all medical costs for his life. When a stated amount was spent, an additional large sum payment was to be paid to the family. When the insurance would not provide the records to determine the amount spent, we sued, forced the release of the medical records and compelled an additional multimillion-dollar payment from the insurance company. We represented this family over 20 years and through three (3) generations.