Q&A: Brett Bjornson

By JACQUELINE PRIMO | Reporter

Brett Bjornson has deep roots in Pacific Palisades, the community he’s called home for 18 years. When the attorney and California Certified Legal Specialist in Estate Planning, Trust and Probate Law with Gorman & Miller isn’t helping a client with estate planning, trust administration or income and estate tax matters, he can be seen browsing the Palisades Farmer’s Market on Sundays, attending community events or surfing.

Bjornson spoke to the Palisadian-Post about the importance of estate planning—even for young people—and its specific importance for those living in the Palisades where property values have soared in recent years.

Jacqueline Primo: What are the most important reasons for people to think about estate planning?

Brett Bjornson: If you have children, elderly parents, if you own a home or just have a savings account, you need an estate plan; otherwise, you’ll default to the State of California’s estate plan. Most people think that estate planning only applies to wealthy individuals, but this is not at all true.

Estate planning can help protect your family in the event you are unable to take care of yourself or at death. Estate planning alleviates costly court fees and legal battles that happen so often in our country.

Estate planning involves a lot of moving parts. It is a process and involves people: your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take.

Primo: Where’s a good place to start in terms of estate planning?

Brett Bjornson: I always have my clients start with an Advanced Health Care Directive. This is crucial, so you can provide for others to make medical decisions if you cannot. Asset protection is another important tool. The right structure should minimize estate, income and property taxes while providing some protection from lawsuits. Estate planning is a forever-moving target that requires revisiting with your attorney from time to time. It is not something you put in place and never look at again.

Primo: Is there a certain age when people should start thinking about estate planning?

Bjornson: The age of majority in California: 18. It’s never too early for an individual to have an Advanced Health Care Directive.

Primo: Why is estate planning especially important for people who live in areas like Pacific Palisades where real property values have skyrocketed?

Bjornson: For 2015, a single person is subject to a 40 percent estate tax on the value of assets in excess of $5,430,000. A husband and wife can shelter their assets from estate taxes two times that amount, or $10,860,000. Given the high real property values in Pacific Palisades, many people here have estates exceeding these thresholds.

Since 2012 with the introduction of “portability,” many thousands of income tax dollars may be in jeopardy if estate plans were prepared during the 1990s and before where the “ABC Trust” was used. Back in the ’90s a single individual could die with only $600,000, without imposition of an estate tax, so a lot has changed since then.

Primo: Can estate planning minimize California property taxes?

Bjornson: California property tax is always a concern in estate planning. Proposition 58 provides for a parent/child transfer exclusion whereby the low Prop 13 tax base can be maintained by children. The exclusion is unlimited on a personal residence and up to $1,000,000 (of the assessed value) per person for other real property.

There’s also a parent/grandchildren transfer exclusion in certain instances. Using Family Limited Partnerships can jeopardize the parent/child transfer exclusion in certain situations so property taxes are always a consideration when dealing with advance estate planning techniques and real property.

Primo: Are there tax-efficient ways that people can structure commercial real estate investments to pass ownership to their heirs?

Bjornson: Yes. Tax-efficient tools such as GRATs (Grantor Retained Annuity Trusts), CLATs (Charitable Lean Annuity Trusts) and IDGTs (Intentionally Defective Grantor Trusts) are all tools that can be utilized to transfer real property to one’s heirs or beneficiaries that can save millions of dollars in estate taxes if one has an estate in excess of $5,430,000 or for a married couple, $10,860,000.

Every situation is different. The question is always, “How much is the savings and am I willing to jump through hoops to save the kids some money?” A major component of any advanced gifting technique is to arrange affairs so that valuation “discounts” come into play.

Primo: What do you enjoy most about living in Pacific Palisades?

Bjornson: I have deep roots in this town. My aunt Peggy lived in one of the Eames houses on Chautauqua and my uncle Carlyle Manaugh was Santa Claus on the Station 69 fire engine for 20 years, back in the ’80s and ’90s.

Pacific Palisades is a wonderful community to live in. It’s been our home for 18 years. I enjoy walking to the Farmer’s Market on Sundays with my family and of course, the Fourth of July parade.

I have made special friends in the Chamber of Commerce and The Rotary Club, but I would say the greatest thing for me is that I get to throw my surfboard on top of my car when the surf is up and I can be in the water in five minutes.

In fact, if you call my office during lunch, they may tell you I’m in a “board meeting,” (wink-wink).