Articles and Letters

How is the Health of your Estate and Trust Planning?

August 11, 2016

Does the gross value of your estate exceed $150,000? If your answer is yes, then let’s talk! We understand that discussing your estate can be, well, uncomfortable. Our Estates and Trusts Team can help you see that creating a plan for what will happen after your death isn’t about passing away — it’s about the legacy you’ll pass on. With the right planning, your legacy will help others live their lives for years to come.

 Why Estate Planning?

Proper estate planning helps lay the groundwork for your family once you pass away, offering peace of mind for you and yours. It may be uncomfortable to begin the discussion, but your worries will ease once you know that your hard-earned money will be used according to your wishes. As CPAs, we’re always looking to minimize taxes and fees so your heirs receive the largest inheritance possible, and avoid probate.

Why Do I Want to Avoid Probate?

Probate is a public legal proceeding that is used to put a person’s financial affairs in order after death. In California, probate proceedings are conducted by the County Superior Court where the deceased person lived — and these proceedings can take months, even years, to move through the system. This process is a matter of public record. All of that time comes with a big price tag, too.

 Will or Trust: Which Is Better?

Anyone can write up a will. But if the gross value of your estate is $150,000 or more, it’s best to create a trust also. A trust will protect your heirs from entering probate, a series of court procedures that can be costly and emotional. A little advance planning will help your heirs retain more of your estate in the long run.

 Trust 101: The Very Basics of Setting Up a Trust

There’s a common misconception that trusts require prohibitive amounts of money to set up. The truth is, you don’t have to be rich to set up a trust. At Grimbleby Coleman, we make the process easy and will work with your attorney or help you find one to work with. We’ll take a look at your tax returns, create a plan to minimize income tax, and create a long-term strategy for asset distribution. Legally your trust, unlike a will, will remain private — a great advantage to the family you leave behind. Also, a trust is the perfect way to leave a legacy to children under the age of 18. Instead of receiving a court-appointed guardian to make financial decisions, you’ll be in charge of who will help your young beneficiary navigate his or her new inheritance.

 A Team With Compassion

We’re one of only two CPA firms in the region with a dedicated estates and trusts team. Not only do we know the ins and outs of this important practice area, we’re driven, passionate, and committed to staying current with the ever-evolving legislature. Our team members include:

What If My Estate Is … Well, Complicated?

We have experience working on difficult estate and trust planning scenarios, including Form 706 for clients with more than $5 million in assets, QTIP planning, portability, Schedule “R” generation-skipping tax planning, GST allocation, and special gift planning.

Further Reading

A member of our Estates and Trusts team looks forward to helping you with your upcoming challenges or trust maintenance.

Critical Succession Planning Tips for the Construction Industry

Do you have a succession plan for your business? Repeatedly our construction and real estate team will hear of construction owners simply closing up shop once they are ready to retire instead of developing a profitable exit plan. Typically the owner hasn’t invested time in proper planning due to the daily demands of running a construction business.

“Unlike many of our agricultural clients, often construction owners do not have the luxury of passing down the business to their family to operate,” Ian Grimbleby, Construction Team Lead mentions. “Nor is it as easy as selling land to your farming neighbor. There is more risk involved because it is an owner-operated service and there are no guarantees that the next generation has the skills required to run the business. “

 Understanding the Challenge

Succession rates are highest when the original business owner is passing it down to the 2nd generation, with a 30% success rate. Once the original owner is out of the picture, succession rates dip even further—with a 12% success rate from 2nd passed to 3rd generations and a mere 3% success rate from 3rd passed to 4th generation owners.

Even with careful selection of a future successor, inheritors are often ill-equipped to handle the transition due to a lack of understanding of what is needed to succeed, and undeveloped skills such as: a lack of management, financial, sales or leadership ability. Additionally, a lack of natural entrepreneurial grit can be to blame for the failed business.

Common succession struggles for business owners often include concerns about their employees through a transition, incentives to keep key employees motivated during uncertain times, long-lasting legacy uncertainties and of course – will I be able to maintain my quality of life?

 Where to Start

  • Have discussions about long-term goals with trusted advisors such as your legal and financial team, key family members, and key employees.
  • Conduct a business valuation (this is recommended for all types of businesses).  Recognizing the difference in fair market value and your emotional value is key, as they will not be the same. Understanding the value of your business assets, financial performance and opportunities is critical. To learn more about Business Valuations please click here
  • Consider all succession alternatives, including, but not limited to:
    1. Internal sale
    2. External sale
    3. Recapitalization
    4. ESOP (full or partial)
    5. Status Quo
  • Discuss buy-in tactics such as sweat equity.
  • Assess the management capability of the next generation and identify the “gaps” in required talent.
  • Evaluate the tax implications of any transaction.
  • Make your recommendations to provide the basis for a formalized succession plan.

 Our Construction team is here to help you navigate these discussions and uncertain times. Rule of thumb is…it’s never too early to start succession planning and being flexible will certainly help in the long run! Please give a member of our construction team a call today.

Ag Software Case Study

GC NICHE: Ag and Cloud Accounting Services Team

GC TEAMMEMBERS INVOLVED: Tami Davis (CAS); Jeff Coleman and Jeff Bowman (Ag Team)

TYPE OF INDUSTRY: Almond and walnut family farming operation




Two brothers and one sister, members of a third-generation farm, were unable to keep up with the business management and bookkeeping processes for their expanding operation. The sister took on bookkeeping tasks to help fill the need, but had no training or accounting background. Farm equipment, cultural and labor costs were often in question and cash flow was a constant struggle, as was accurate bookkeeping.


  • Track expenses across three entities and four orchards.
  • Access accurate information easily.
  • Raise awareness about the skills each member of the business needs to demonstrate.
  • Manage cash flow carefully due to recent plantings.
  • Transition the sister (at her request) away from day-to-day business responsibilities.
  • Identify and track profitability by entity.


Each sibling has a unique skillset and interest in the business; however, each sibling does not invest an equal amount of time in the business, which requires careful valuation. Early on, it became clear that each sibling is adept at technology and open to using it across a variety of devices to manage the business. The siblings are also open-minded and welcoming of regular outside counsel.


After much discussion, the final recommendation was four-fold:

       I.          Adopt and integrate and cloud accounting software technologies.

     II.          Utilize Grimbleby Coleman’s Managed Service department with an outsourced Accounting Manager to assist with ongoing, high-level bookkeeping controller needs.

   III.          Set up a dashboard with auto-generated reports for each sibling’s review.

   IV.          Conduct a monthly meeting to review income and expenses for the entire operation, orchard development costs per acre, financial results compared to budget by acre and crop by year, and impacts on cash flow.


After much discussion, the four recommendations were adopted and have been very helpful from an operational and financial perspective. The siblings now have the ability to:

  • Continuously manage the business anytime, anywhere.
  • Review financial results across all entities in a single report.
  • Remotely approve payments, sign checks, and manage cash flow.
  • Analyze planting, cultural and harvest costs by year, acre, or other criteria.
  • Use tools to compare financial results against budgets and industry standards, as well as analyze the effectiveness of irrigation, spraying, and harvest equipment.
  • Allocate expenses between orchards and entities.
  • Use an outsourced controller to implement protocol and increase accuracy. The ongoing presence of an “extended” accounting and bookkeeping expert has helped facilitate and develop accurate data.

 The siblings are now making business decisions with confidence and the family business is thriving.

To learn more about this case study or other ag related managed services capabilities please contact Jeff Bowman ( or Tami Davis ( 

Grimbleby Coleman Puts the Heart in Community – and I Love That.


We Won the STATEWIDE CalCPA Public Service Award!

I often get asked why I am no longer working in the nonprofit profession here in Modesto; that is subsequently followed by a probing question inquiring when I plan to return. The answer is easy! My role as Marketing Manager here at Grimbleby Coleman CPAs bridges this gap in the most fulfilling of ways — so I won’t be heading back soon!

After working in the non-profit world for more than 10 years, I’ve now managed to find a position where two of my passions — marketing and community activity — are encouraged to blossom simultaneously. I feel so strongly about this that I personally wrote the Grimbleby Coleman CPAs’ nomination for the Cal CPA Public Service Award. Each day I count my blessings that I found a place of work filled with inspirational, honest, and hardworking people.

CalCPA Public Service Award Recognition

This month, our firm was awarded the statewide honor of the CalCPA Public Service Award, exemplifying our commitment to firm-wide community support. The honor rewards visionary professionals, and the firms they lead, for extraordinary efforts in serving their communities. According to the award committee, we have demonstrated “firm-wide ethos exemplifying the community consciousness that all firms should adopt.” They went on to say, “We want to not only congratulate you for this achievement, but also hold you up as an example to others for adopting community service as a best practice.”

Grimbleby Commun — I Mean, Coleman

At Grimbleby Coleman CPAs, community service is more than just an opportunity to build relationships with the areas we serve, it’s part of our firm’s identity and mission statement: “Building success for and connections with our colleagues, clients and community … it’s the people behind the numbers.” Our commitment to social responsibility and serving people in our community is at the heart of everything we do. The “people behind the numbers,” is a constant theme that runs throughout our company; we care about one another and aim to support our associates with community involvement experiences.

Our partners understand that being locally connected is more than just sponsoring a baseball team or having an annual employee food drive. They lead by example by serving as board members and lending their time, talent, and financial resources to many important local organizations. Our employees are encouraged to get involved in community organizations that speak to their individual passions; in fact, our employees are encouraged to take the time and flexibility they need to pursue volunteer opportunities through our policy of unlimited volunteer time off.

  • 1,680 hours of team-wide civic and community service participation!
  • 60+ events sponsored annually!

Proudly Supporting…

Modesto Chamber of Commerce, Stanislaus Business Alliance, Central Valley Business Center and Opportunity Stanislaus, Modesto Rotary, Community Hospice, Love Modesto, Modesto Chamber of Commerce, McHenry Mansion, Women’s Education & Leadership League, Downtown Modesto Partnership, Historic State Theatre, Modesto Sunrise Rotary, Toastmasters, Modesto Sunset Lions Club, Murals in Motown, Del Rio Country Club, Hope Haven International, United Samaritans, United Way of Stanislaus County, CPA Firm Management Association, Valley Medical Group Managers Association, Hope Haven West, Cambodia Impact, Stanislaus County Estate Planning Council, Stanislaus Community Foundation, CalCPA San Joaquin Chapter, Modesto Neighborhoods, Community Hospice, Salvation Army, Beyond Borders and numerous others!

 Let’s All Do Our Part!

There are always ways to be part of making our community better, and my hope is that everyone is doing their part! Whether it’s at church, at school, or giving an ear to a friend or a smile to a stranger.

Back of the Napkin Valuations

“Just give me your “back of the napkin” opinion about the value of this business.”

This is how some conversations begin. Perhaps someone wants to buy your business. Or maybe you’re interested in selling an interest to one of your key employees. A business in town is up for sale and you want to know how to strike a deal with the owner.

While you shouldn’t expect a valuation professional to figure out the value of a business on the back of a napkin, do you really need to pay for a valuation report? Maybe not. You may be better served by investing your time and funds in more important issues.

I’ve received a good number of calls from business people who tell me they need to have their business valued. Many times, though, I find that the reason for their call relates to one of the situations described above. While we can certainly provide them with a valuation report, the fact is that it will usually be overkill for what they really need.

And what is it that they really need? More often than not, it boils down to education and information. Business owners are much better off spending time on discussing how a business is valued.

  • What drives the value of a business?
  • What factors are considered?
  • What about the assets owned by the business? Which ones are included in the value of goodwill or “blue sky” and which ones should be added to that value?
  • What are rules of thumb? How do they relate to the business’ particular industry?
  • What adjustments should be made to earnings?


 We also talk about deal structures and how they relate to the ultimate sales price.

  • Is it an asset sale or a stock sale?
  • What are the terms of payment (cash, debt, both)?
  • If debt, what are the terms of the loan?
  • What are the buyer’s expectations of the seller’s continuing involvement in the business?
  • Will the seller be paid for these efforts?
  • What are the tax effects of various deal structures?

I find that, once these discussions have taken place, the mechanics of coming up with a fair price between the buyer and seller are usually much simpler. The parties are often able to come up with a negotiated price on their own. When it comes down to it, a valuation analyst is required to gain an understanding of the business and industry, the current economic trends, and the business management structure. Usually, these are things that the buyer and seller already know.

As valuation professionals, we can also provide a lot of information from the resources we have available to us, such as industry benchmarks, transaction details from sales of similar businesses, salary information, etc. Business owners find this information to be very valuable in making decisions.

 Does this process always result in a smooth process where everyone is happy with the settled price? Of course not. Very often one or both parties decide not to move forward with the deal. Perhaps the seller needs more time to put his house in order so he can command a higher price. We can then spend our time on improving the structure and systems that can optimize the value of the business. The cultural basis of the business may not be a good fit between the buyer and seller. The price may be fair, but the wheels may fall off the business if too many changes are put into effect. Avoiding a bad deal is just as valuable as entering into a good one. Maybe more so.

 So, do we ever prepare valuation reports for these types of engagements? Yes, but in most cases they are structured as limited-scope “calculations of value” as opposed to a full-scope “opinion of value”.

 When engaging a valuation professional, it’s important that you get what will ultimately help you accomplish what you want. And sometimes, that starts on the back of a napkin.


Featured Article

Tax Options Benefitting Young Farmers and Parents
Our ag clients are typically multi-generational, and most of them came into the business as youngsters, often helping grandparents and parents with odd jobs. Farm life offers children many benefits: a strong work ethic, the opportunity for teamwork, important skills — even another language!  “We encourage our clients to take their children’s involvement a step further by properly compensating them and planning ahead for their futures, which can be extraordinarily helpful from both the taxation and college financing perspectives,” mentions Chad Van Houten, Senior Manager and CPA. “The work you do now could help set up generations of success.” PAY YOUR CHILDREN Be sure you pay your children an actual wage so that you can shift some of your business income to a lower tax bracket. Depending on your business structure, you may be exempt from payroll taxes when paying your children under the age of 18. We often recommend that our clients pay their children just below the filing requirement, or be really creative and pay their children higher than a nominal amount – but with a catch! This money should be used to contribute to a savings plan, such as an IRA (including Roth IRA), or to contribute to a 529 college savings plan. Keep in mind Roth IRA and 529 contributions are not pre-tax, which can be tricky. You still want to claim your child as a dependent, so it’s critical to work with your financial advisor to strategically explore other types of education or retirement plans. HEALTH SAVINGS ACCOUNT (HSA) PLAN Enrolling in an HSA plan, with a higher deductible, makes good financial sense for young farmers. The HSA acts as a pre-tax savings account for people who are enrolled in a high-deductible health plan. Funds contributed to an HSA account are excluded from wages or deducted from income and can even be made after year-end for additional planning opportunities. Often times, younger people opt for higher-deducible health plans, but can still find themselves paying a significant amount of money out of pocket due to the higher co-pays and deductibles. This is where HSA accounts come in handy and are especially helpful for a large one-time medical expense in the year, such as the birth of a baby. AVOID THE “KIDDIE” TAX Be sure to work with a member of our accounting team when planning your children’s fair wages to avoid unknowingly creating a filing requirement. You want to be sure and avoid the “kiddie tax,” which according to the IRS occurs “If the child's interest, dividends, and other unearned income total more than $2,100, part of that income may be subject to tax at the parent’s tax rate instead of the child’s tax rate.” PLAN AHEAD! You may want to consider term life or disability insurance policies to cover the period of time when the kids may be too young to farm and earn an income if something were to happen to the parents.  Also, it is almost never too early to start thinking about your trust and estate plan. Creating a living trust to own the farm real estate may help avoid the public governmental probate process in the unfortunate case of the parents passing. BE RESOURCEFUL! Remember, there are many grants and educational resources available through the USDA. Be sure to take advantage of all your options! Specifically, be sure to check out Special financing for new farmers through to the extended Farm Bill. The renewed farm bill allows down payment assistance up to $300,000 at a 1.5% interest rate if you qualify as a new farmer.  Please be sure to give Chad Van Houten or another member of our Ag team a call to discuss any of these suggestions!  

Featured Staff

Karen helps the partners at Grimbleby Coleman with scheduling, coordinating client luncheons, and organizing special events. She's the one you'll want to butter up several weeks before your birthday.

When asked what she enjoys most about working with clients, Karen says, "Before I started working with Grimbleby Coleman, I was afraid of even the initials IRS. Now, I feel comfortable when clients are worried and scared. I can reassure them with confidence that we will assist them in whatever the issue might be."

She's active in several community programs and charities, including the Relay for Life Fundraiser and the children's ministry at First Baptist Church. She also loves swimming and working in her yard.

Karen's favorite number is 7. "For its significance of God's promise to us."

Karen Green Administrative Assistant read more

Thanks! Would you like to provide some more information?