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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.

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.

New Case Study: An Ag Family Succession Story

February 4, 2016

"The facts vary such that no two situations are ever the same."  - Jeff Bowman, CPA, Partner and Ag Team Lead

A first-generation farmer in Stanislaus County wanted to pass on his individually owned business to his adult children. The second generation planned to maintain and enlarge the operation, which included farming and ag processing. Important to note, not all of the farmer's children were employed on the ranch.
  • The farmer wanted to ensure the children inherited equitably.
  • All parties wanted to limit the liability exposure posed to the farmer as an individual owner and operator.
  • The father and his children wanted to limit taxable income and estate taxexposure for the older generation.
  • The operation needed to be positioned for future growth.
  • Limiting tax impact on contributing operations to new S Corp and Limited Partnerships
  • Considering the benefits and burdens of an IC-DISC entity
  • Determining how and through which entity owners should be compensated
  • Cash-basis methods available for farm activities 
  • Important factors for tax planning:
    • Farm income averaging and qualifying types of income
    • Net investment income tax
    • Active versus passive investor treatment
    • Maximizing the domestic production activity deduction
    • Optimizing income for IC-DISC commission purpose
Along with the farmer's attorney, we recommended forming a new operating entity and a separate entity for holding the real estate, reducing risk and providing flexibility. The new operating entity is used to maintain the business services, equipment ownership, and labor for the farming operation. By forming the realty entity, the father was able to conveniently introduce ownership to the second generation. In the end, our Ag team developed a fair, strong succession plan for our client by working with his attorney and taking into account the current and future needs of the operation.
Forming entities and limiting liability exposure require a high level of legal counsel. We worked closely with the client's attorney while analyzing succession options. The attorney's estate tax expertise ensured the plans were consistent with future gifting and estate transfer intentions, while mitigating risk. 
*FYI: The attorney filed state articles of formation, obtained a federal ID number for each entity, drafted the crop share lease and farm management services agreement, formed the IC-DISC, and drafted the commission agreement. The attorney also created a deed for transferring the land.

Top 5 Keys to Succession Planning

As Harvest Comes to a Close, Now is the Time to Focus on the Big Picture: Succession Planning
Jeff Bowman, Ag Team Leader
At some point, all family farming operations face the same challenge: "What do we do if something happens to Dad? Who gets what?"
Succession planning is never a favorite topic. It can be rife with emotion and conflict, but it also is a challenge and a reality that all family businesses need to prepare for. 
Is this the year that your family is going to tackle succession? For ag families, the alternative to proper succession planning oftentimes is grim and involves losing most or all of the family farm. Sadly, this is a fact. As families grow, so does the potential for conflict.
Let us help.
Jeff Bowman, Ag Team Leader, says the first step he takes when working with a family on its succession planning is to learn what the long-term goals are for the farm and the next generation. "It's an open conversation where I can learn their thoughts and big-picture goals," he says.
Here are five starter tips to help get the ball rolling*
  1. Don't avoid "The Talk" because it is a touchy or fight-triggering subject.  
  2. Obstacles like greed, family disharmony, control freaks, self-interest, and lack of contribution are tricky topics to air. Speak candidly and nip them in the bud with new solutions. 
  3. Write down both small and major goals that every person can agree on.  
  4. Schedule regular meetings with the entire family during the year and be sure that notes or recordings are taken at every meeting.  
  5. Commit and execute the plan!
Back in October of last year, we invited agriculture succession planning expert Kevin Spafford to join us for a luncheon presentation. He shared the helpful tips he has gleaned after working with hundreds of ag families. Click here to learn more.
Grimbleby Coleman is a trusted ally when it comes to assisting ag families with succession planning. We want each family member to accomplish his or her individual long-term financial goals. There's no time quite like the present when it comes to the matter of succession planning - make plans with your family today. We can help you navigate the conversation.
*These reminders are thanks to Kevin Spafford, Legacy-By-Design.


Featured Article

Technical Q&A with our Ag Team
Our farming and processing clients don’t run typical businesses — after all, the ag business isn’t typical! That’s why Grimbleby Coleman CPAs developed a specialized, six-person Ag Team to handle the unique needs of these clients. Our team is trained to handle the particular challenges our ag clients face, including taxes, audits, cloud accounting, and financial and succession planning. Over the years, our Ag Team has helped California ag clients through countless tricky situations. Recently, we asked our Ag Team members: What was your most challenging ag project? Jeff Bowman, CPA and Principal ( Answer: Recently I’ve had several tax planning discussions with farmers who are preparing for harvest and considering deferring their crop income. These discussions can get really intriguing as we talk about balancing cash flow needs with the timing for taxable income. In some cases, the use of an IC-DISC entity adds another variable as we consider which commodities should be deferred in which year for maximum tax benefits. What starts as a “tax question” usually turns to a conversation about cash flow, budgets, expected changes in the commodity market, and other longer-range goals of our clients. Donae Caravalho, CPA and Manager ( Answer: Recently we executed a complicated 1031 Exchange that involved a fully developed orchard that was exchanged for a newly planted orchard. Jeff Coleman, CPA and Principal  ( Answer: One of my challenges was the sale of a significant agribusiness company that was a longtime client. We consulted on the tax differences between a sale of stock and a sale of assets, worked with the attorney and the broker to maximize the after-tax yield to the stockholders, and assisted the shareholders of the closely held company and their family members. Doug DeBoer, CPA and Experienced Senior Associate ( Answer: A large, complex ag client merged numerous entities into a parent company, formed an ESOP, and needed to review financial statements consolidating two large subsidiary companies into the parent company’s financial statements. Even without the merger or ESOP activity, this would have been a complicated review. Accounting for the mergers (many of which had different fiscal year ends) and the ESOP formation made this an even more challenging and interesting project! Nate Miller, CPA and Principal ( Answer: One of the more unique projects I worked on recently was the setup of an IC-DISC entity for one of the firm’s larger ag clients, which has multiple entities that could benefit from such an arrangement. We worked with a local law firm to help the client set up a single shared IC-DISC, owned by a trust, whose beneficiaries are the grower entities who will be paying the IC-DISC commissions and receiving the IC-DISC benefits. It’s been a great tax benefit for our client and will continue to save a significant amount for years to come. Chad Van Houten, CPA and Senior Manager ( Answer: One of my most rewarding projects was working with a younger client who was farming an orchard on leased ground and wanted to be to able use the income from the leased ground to buy their own orchard before the lease expired. We were able to utilize unique farm tax provisions in order to save them considerable amount of tax fee. With the tax savings assisting with the down payment, the client was able to purchase their own orchard and begin production before the lease ran out. Is your business in a pickle or facing similar challenges? Give us a call!  Continuing to Invest In a Well-Rounded Team and Ag Education   We are committed to continued education and encourage active participation in conferences, trade events and the community.  Being an active participant has paid off with the wonderful relationships we’ve developed. Our team attends conferences across the country, including the 2016 AgriBusiness Tax Advisors Summit, which was recently held in North Carolina, as well as the annual AICPA National AgriBusiness Conference. And, as most of you know from bumping elbows with us, we love to attend our local and regional regular trade shows, including the Farm Credit dinner, Hilltop luncheon, Tree and Vines Expo, the World Ag Expo, and the Almond Conference, just to name a few. Please do not hesitate to reach out to a member of our Ag Team. We’re here to serve you!

Featured Staff

As a Manager, it only makes sense that Linda likes “listening, meeting with clients and being in a position to help with whatever their accounting needs may be.” She’s been working in accounting since 1980 and with us since 1994. 

When she’s not helping clients, Linda serves on the Board of Directors for the Townsend Opera and as Vice President of the local chapter of CSEA. She also actively participates in fundraising year-round for various local charities. 

Linda admires Alton Brown, celebrity chef, because he’s “entertaining and explains cooking from the scientific point of view;” Maya Angelou, because “she’s a terrific writer, wise, honest and thought-provoking;” and Martha Beck (life coach and writer), because “her writing inspires me to get the most of life and to be a better person.” 

Regardless of the season, Linda spends her Saturdays either “in my kitchen trying new recipes, or sewing something in my sewing room.”

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