Maximizing Wealth and Legacy: Negotiating a $50M Settlement, Securing Capital Gains Treatment, and Structuring Trusts for Tax Savings and Multigenerational Benefits

By, John M. Goralka
Sacramento, CA

Client was going to receive over $50 million from a lawsuit. We were able to help negotiate the Settlement Agreement to ensure that the entire amount would be treated as a capital gain. We provided an opinion letter reaffirming the capital gain treatment for tax purposes. This provided a significant savings in and of itself. Client then contributed $7 million into an Intergenerational Split-interest trust providing an income tax deduction of $2,171,200 and projected annual income of $420,000 a year for client’s life and the lives of his partner and 2 children. Client maintained dictatorial control over the investments (where and how investments are made) and could even invest in realty if he chose to do so. This provided a tax savings of over $1 million and income for life for the client, his partner, and children.

That Client then contributed $3,000,000 which included a fully paid insurance policy on his life to a Deferred Inheritance Trust (a form of Charitable Lead Annuity Trust). Client received a $3,000,000 income tax deduction. During his lifetime, the charity of his choice will receive annual income of $6,000 per year. The income tax deduction in the year of the Settlement provides a cash savings of about $1,500,000. At the client's death, the family received benefits totaling $16,923,727 and the charity will receive $8,359,017. This combination provides a substantial overall economic benefit to the family.

Sacramento Estate Planning, Tax Planning and Business Attorney.

I’m John Goralka, a Sacramento Estate Planning, Tax Planning and Business Attorney at the Goralka Law Firm, P.C. If you have an estate, tax or business situation needing legal help, contact our team for experienced and friendly advice. You can contact us at 916-440-8036. Alternatively, you can use our convenient online contact form here on our website. We listen, and you can have your questions answered, your case evaluated, and explore your options for getting the legal help you need.

There are almost 200,000 attorneys in the state of California, and fewer than 100 of those attorneys are State Bar Specialists in Estate Planning, Trusts and Probate and State Bar Specialists in Taxation. I am one of the few attorneys with both critical specializations. I passed the California CPA examination and am a former income tax auditor and hearing officer. I am also recognized as a top attorney in the United States by US News and World Reports and by Best Lawyers and hold an AV rating from Martindale which is the premiere rating organization for attorneys. The AV rating is the highest possible rating for legal experience and for legal ethics.

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