Westwood Village Rotary Club - The Windmill for December 10, 2020

December 10, 2020

Westwood Village Rotary Club

Coming up next on December 17th . . .

Our Virtual Holiday Celebration

The Westwood Village Rotary Club will hold our first virtual holiday celebration on Thursday, December 17th at 12:30 p.m. Come join us for fellowship and fun as we observe the holiday season and (thankfully) bid farewell to 2020.

Westwood Virtual Rotary Club Meeting - December 10, 2020

There once was a fellow named Paul

Who thought it would be FAIR to all

If the TRUTH could help build

The GOODWILL that helps yield

FRIENDSHIPS . . . BENEFICIAL to all!

George Lathrop, Winner of 2018 Limerick Contet for Rotary Club of Spokane 21

Once again, it was time for the warm and friendly Westwood Village Rotary Club to convene under the daunting leadership skill of our President, Ms. Nancy McCready.

At precisely noon, President Nancy opened up the Zoom room for the members who wanted to socialize for the ½ hour before the Club meeting began. It was the usual gathering of thugs who are bored with nothing to do; Heikkila, Lyster, Rogo, Moore and others.

As the clock moved to 12:30, more members strolled into the room. At precisely 12:31, President Nancy symbolically rang the bell and Westwood Rotary Club Meeting came to order. She welcomed us all, making special mention of AG Michael Lushing and his new glasses. And why not? Those members of the Beverly Hills RC are a classy group, well known for their philanthropy and dedication to the spirit of Rotary. (Editor’s note – tonight I learned of the passing of Lee Gelfond, long-time friend and wife of Herb Gelfond, Beverly Hills RC member).

President Nancy next moved on to our regular format, asking Nevin Senkan to lead us in the Pledge of Allegiance, all the way from her home in Turkey! (There are benefits to this Zoom technology!)

John O’Keefe gave us the thought for the day, reflecting on our blessed positions in life despite the pandemic.

Ed Gauld wound it all up with his solo, and for the life of me, I don’t remember what it was! [Note: The song was, "Bye Bye Blackbird."]

Now came my favorite part of each meeting (yawn) Club Announcements:

(1) President Nancy reminded all of us that Club members who volunteered to be a part of our annual signature project, the Holiday Shopping Spree, will be having virtual dinner via Zoom with the children. This project was the brainstorm of Michael Yousem over thirty years ago and remains one of the Club’s favorite activities. Dinner started at 6:00 p.m. in 20-minute increments, as the children are parceled in to maintain social separation and keep them healthy.

(2) December 17^thwill be our next meeting with the theme of a Holiday party. Members are urged to dress up for the Holiday season and even join online with festive back drops. Our esteemed Treasurer, Terry M. White, explained that the Foundation would be matching all Club member donations made before December 31^steither by adding to their next Club statement or donations received in December or January by check. Either way, our treasury is “swelling” due to the strange circumstance of meeting via zoom rather than the UCLA Faculty Club. So be sure to contact Terry and make your pledge soon!

(3) Club birthdays were announced for the month of December!

a. Chris Bradford - December 2^nd

b. Estherleon Schwartz - December 5^th

c. Jim Collins - December 20^th

d. Mark Rogo - December 22^nd(Hanukah Claus is bringing me new golf clubs!)

e. Scott Whittle - December 28^th

(4) President Nancy reminded us of the District Strategic Planning Session scheduled for Saturday, December 12^that 10:00 a.m. (it may be too late by the time this Windmill is published, but worthy of downloading the recording and watching it if you are a prospective Club officer). You will hear from RI Director Brad Howard among other Rotarians.

(5) Gail Smith announced that the 2021 District 5280 Humanitarian Trip to Costa Rica has been delayed due to the pandemic. Only delayed. Planning is continuing for the projects, with the hope that the trip can be rescheduled for later in the year.

(6) President Nancy announced that DG Bette Hall’s sister unexpectedly passed away yesterday. Our hearts and prayers are with our Governor.

(7) PP Steve Day made four Rotary Foundation presentations to recognize exemplary giving and generosity:

a. President Nancy McCready - Honored with Paul Harris + 1 pin

b. Sally Brant - Honored with Paul Harris + 3 pin

c. PP Diane Good - Honored with Paul Harris + 3 pin

d. PP Marsha Hunt - Very Honored with Paul Harris + 8 pin (Wow!)

(8) Carol Rosenstein announced new and exciting news about her organization, Music Mends Minds. Her wonderful journey exploring how the power of music softens the effects of dementia is now branching out to Asia, with offshoots in India, starting with a Zoom meeting tonight. Our own Carol is going Global!

Special Event: First Annual WVRC Estate Planning Panel

Now we moved to the event we were all waiting for: the WVRC panel of experts for Estate Planning. This panel of esteemed professionals includes PP Stephen Scherer, his daughter Rachel Scherer Jellen (soon to be a new mom!), PP Michael F. Newman and PP Christopher Bradford. All told, especially with Steve and Michael’s tenured status counted in, there was over 450 years of professional practice represented on the panel.

STEPHEN SCHERER

PP Scherer started the presentation by reminding us about the “Four Ps” in their presentation, “Pandemic Politics Propositions & Planning”. He then moved on to give us an introduction of the panel’s backgrounds. The only one that caught my attention was Rachel, who had an interesting start as an attorney in civil rights litigation, before joining her father’s and Chris’s law firm in Century City. Which reminds me of a good lawyer joke; Question – What do you call twenty lawyers falling out of an airplane? Answer – Skeet.

RACHEL SCHERER JELLEN

Rachel started the presentation, focusing on some of the basics. The main document in any estate planning is the Will, which must be signed in the presence of two witnesses in California to be enforceable. This presents some unique challenges today, of course, which is requiring her firm to explore creative options with technology. Trusts are not required to be witnessed in order to be valid. Historically they have been notarized out of an abundance of caution. Deeds are another document, and do not need to be notarized to transfer property, but do need the notarized signature in order to be recorded. Electronic recordings by the County in lieu of physical recordings are leading to more efficient methods for all parties. Probate Court is the final topic for Rachel. Most cases have been postponed as the County court system has moved to online video conferencing. She has found it very efficient to use technology in her practice.

“Movement to a digital world has impacted our practice” – PP Steve Scherer

MICHAEL F. NEWMAN

Michael’s firm goes back to 1929, being one of the oldest firms in Los Angeles. Michael started his law career as the DA for a northern California municipality for ten years before joining his father’s firm. He explained that everyone really does need a trust with estates over $160,000 in order to stay out of Probate Court and avoid conservatorship, costing $5,000 - $10,000 just to get the process started. Trusts avoid conservatorships. Real estate needs to be deeded into Trusts in all cases. Micheael recommends a Power of Attorney (POA) because Social Security Administration and Medicare will not talk to representatives who do not have a POA, and in many elderly cases, the children need to care for the needs of their parents, including dealing with these two important government institutions. He called a lot of estate law, “Russian Roulette System”, meaning that so much of the planning assumes making certain assumptions that may or may not work out. The first is how we are mistreated in California because of our high property values, compared to other parts of the country. This has an impact on how much of your estate you can pass to your children without generating a taxable event. That threshold disappeared entirely for one year in 2010 when any amount of a person’s estate could be passed on to heirs without inheritance or gift tax concerns. In the 1980s it remained around $600,000, then moved from $1.0M to $3.5M between 2000 and 2010. Now it is $14.8M/person, and President-elect Biden has indicated he leans towards lowering it once again. (an example of how California residents are penalized merely for owning their home in a desirable state).

Michael has developed a plan to allow a split in values to be determined at time of death of the first spouse, permitting more flexibility to meet current needs which may be realized long after Wills and Trusts are written.

Proposition 19 (supported by Realtors) has eliminated the stepped-up basis for heirs unless the heir moves into the subject property. As an example, seven children inherited a home in Westwood that their parents purchased in 1929 for $5,000. Now the parents need to be moved to an assisted living facility for their health, and in order to pay for it the children need to sell the property to generate the funds. This generates a taxable event, incurring the 35% to 40% rate in taxes, a combination of long term preferred capital gains rate (federal) and the highest bracket for state tax purposes. President-Elect Biden wants to remove the stepped-up basis. Michael referred to this as “distasteful” and “disruptive”.

CHRISTOPHER BRADFORD

Chris wanted to review recent and proposed state and federal changes in tax codes.

(A) Proposition 19 – this will have a major impact on estate and gift planning. It changes the parent / child / grandparents transfers of property. As of February 16, 2021, transfers will be limited to principal residences and transferees must become full time residents. But the transfer of property taxes can be assumed three times in a lifetime. The tax reassessment freeze will be limited to assessed values of $1.0M.

(B) Estate and gift tax lifetime exclusions have been increased from $11.580M to $11.700M, which ends in 2025.

a. Estate tax lifetime exclusions will be reduced to $3.5M.

b. Elimination of the stepped-up basis.

c. The realization of capital gains taxes upon death.

d. “Radical changes” coming in a new presidential administration, particularly in the stepped-up basis calculations.

(D) Transfer real estate holdings to children or heirs in order to avoid increases in property taxes.

PP President Scherer now opened the floor to questions, which were fielded from Curt Smith, Phil Gabriel, PP Mark Rogo, John O’Keefe and PP Ed Gauld.

When asked specifically about transferring real estate assets immediately in order to avoid the February 16^thimplementation of Proposition 19, PP Chris made the observation that it still depended on the particular circumstances of each gift and the parties involved.

On the question of transferring primary domiciles while the owners are still alive, PP Chris reminded everyone that transferors must relinquish all controls and pay the fair market value equivalent of rent. But there will be no increases in property taxes or reassessment by the County Assessor’s Office.

In summary, PP Scherer reminded everyone that “Free advice is worth what you pay for it”. The topic and content was so fascinating to all of us, that this meeting did not adjourn until almost 30 minutes past the scheduled time. Once again, PP Scherer hit one out of the park, and kudos to PP Chris Gaynor for coming up with the idea to begin with. A recording of this meeting can be found on our website www.wvrc.net for those that missed it.

Most of all, applause all around to our President who has once again reminded us what it means to be a Rotarian in the middle of the pandemic of our lives.

Yours in Service,

PP Mark Rogo

Commentary and Photography by PP Mark Rogo

WVRC 2020/2021 Leadership Team

President: Nancy McCready

President-Elect: Adel Shalaby

Treasurer: Terry M. White

Youth Service: Phil Gabriel

Peace: PP Minarsha Hunt

Foundation: PP Steve Day

Webmaster: PP Ron Lyster

Merchant Minutes: PP Mark Rogo

District Governor: Bette Hall

Immediate Past President: Diane Good

Secretary: PP Diane Good

Community Service: Aaron Donahue

International Service: Nevin Senkan

Program Chair: PP Tom Barron

Membership: PP Mike Newman

Social Media: PP Aly Shoji

Windmill Editor: P Nancy McCready

Asst. District Governor: Michael Lushing