Transcripts For SFGTV BOS Budget And Appropriations Committee 20240712

Casting this meeting. To protect the employees and the public due to covid 19 the meeting in the chambers is closed. Due to state and federal orders and directives. You can participate in the meeting through video conference. Comments are available through each item on this agenda. Comments or opportunities to speak during Public Comment period will be available during. Best practices are to call from a quiet location, speak clearly and slowly. Turn down your television and radio. You can make Public Comment in the following ways. Provide Public Comments via email, it will be forded to the supervisors and be included in part of the decision file. Thank you very much. Can you please call items one, two, and three together. Sus spendin suspending the ct policy and recurring expenditures. Item number two all estimated receipts and expenditures of the city by july 31. Item no. 3 annual salary ordinance and annual budget ordinance for the fiscal years ending 2021 and june 302022. If you wish to give Public Comment on these items police dial 415 6550001 the meeting i. D. 1465718890pound pound and press star three to be added to the speaker queue. Madam secretary will you please open up Public Comment on these items. We have two caller ns in the queue. I will unmute the first caller. Good morning supervisors. I hope im on the right item. I dont see the agenda. Im an African American native since the 40s. Im standing in solid yairity witsolidarity toform a more perr domestic tranquility and asking you to pass the entire 120 which is a modest amount for the next two years for the black community. Im asking that explicitly it would go to the black community for Health Emergency and when you direct fund frs from our poe department. We have to ensure Police Resources respond immediately thank you for your comments. Next speaker, please. Hi. Im the executive director of thank you for your comments. Next speaker, please. Madam chair, that completes the queue. Thank you. Public comment for items one, two, and three are now closed. Welcome to the final day of the Budget Committee meeting. This revised plan is our response to feedback from the public and colleagues this is not the final list. Were figuring out how to give feedback on more priorities. Programs and services cut or reduced in the mayors proposed budget. Targeted investments in black communities and covid 19 response and food security. We have some business to get to this morning and well recess this meeting to finish doing our work to finalize the spending plan. This morning i would like to have a presentation to item number one. We h have some final work to Don Department of public health. We also have the ability to further reduce departments budget without calling departments back to this committee. We will include those deliberations as we finalize the budget. With that, let me call our controller and also our mayors budget director to discuss item number one. You have the floor. Good morning, madam chair. The city has a number of financial policy thats have been adopted under procedure nz ths inthe charter. One time revenues should match one time uses in the budget. That policy was adopted eight years ago at this point. The budget thats before you though has three hundred thirty two Million Dollars of one time revenue resources and less than that in one time uses. Theres an imbalance between those as we talked it out earlier in previous weeks. Thats permitted but it does require the board to suspend that financial policy for the upcoming period. Thats what the legislation before you here today does. Thank you very much. Do you have anything else to add . No, madam chair, nothing to add. Thank you very much. So, i think well helpany colleagues have any comments or questions about item number one . Seeing none, lets go ontooh, yes. Go ahead. I just wanted to say that im very supportive of this item. I just wanted the public to know that while this is not normally a prudent budgetary strategy were in a very very unique and strange year where we have many Revenue Generating measures on the ballot that we hope will pass in november. That will make this one time usemake the use of one time funds for ongoing costs a prudent strategy right now to teal with crisis we have in the city. Because we have potential new revenue coming in that could fulfill those needs in the future. I thought it was important to explain to the public why im going to be supportive of this resolution. We do have a plan for those on going costs in the future. If those crucial ballot measures didnt pass, which i hope will not be the case, well have to come back as a committee and redo the whole budget any way. Well take care of this issue. Just to explain to the public what the thinking is behind this measure. It might appear financial irresponsible, it isnt. Thank you for that clarification. I think it was very helpful. Thank you supervisor for giving that explanation. Since were not going to be able to find out until after november, i doubt if this particular budget compli commitl be handling it but yes. Good luck to everyone. We cant do it without supervisors until we finish the bummingebudget. Okay. Here we go. With that lets here from our departments. Department of public health. First i wanted to make an announcement that we have asked also, we have two departments that we asked to come back. One was the Fire Department. We were able to come to a agreement with the Fire Department that we will not be bringing them back today. This committee would like to reject to cut the funds the department is able to identify six hundred fifty thousand dollars in cost savings in two years. Is this committee in agreement with this plan. I think i see agreement. Mr. Controller no. Sorry. I have a question. The only question i really have is the identified additional cuts. What are they . They found additional cuts in overtime and in the travel budget. Overtime cut is how much of the cut is left . Mr. Controller, do you have those numbers . I do, madam chair. Let me pull them up. Its three hundred ten thousand dollars in the first year of the two year budget. Three hundred five thousand in the second year of the two year budget. All but a couple thousand dollars of that is to overtime. That couple thousand dollars is the reduction to the travel budget that the chair mentioned. And whats left in that line item . Are they cutting anything . They are eliminating the travel budget in year one with those reductions. The reduction to overtime does leave a remaining overtime budget for both years but its reduced by those amounts. I could get you those amounts if that would be helpful. Yeah. The only thing im worried about is all these fires. Were going to be extending these for mutual aid. I want to ensure that the budget will be able to cover that. Through discussions with the Fire Department and the chief and the financial officer. They recommended this cut from their overtime. It was their recommendation not the bla or our recommendation. They assumed they had enough then . Okay. Thank you. Thank you very much. Are we in agreement. Lets give the controller the indication that we are. Can you please note that theres a thumbs up. We accept the recommendations for cuts this department. Thank you very much. I just want to say because i do have the floor and ability to that i have three Fire Fighters who are in my district and i want to wish them great health and be safe during this time of the fires and thank them for their service. Now we go to the department of public health. Dr. Ko colfax. I believe there were a few residual issues for us to address. Can you give us an update that shows your existing budget. I personally would like to followup on a conversation on infant health investments. Are we able to dedicate general funds money into these programs. I believe theres a question about Testing Capacity for the Community Hubs. Dr. Colfax you have the floor. Thank you. With regard to the three items that you mentioned. We will go in order and our budget director will provide further information to the conclusion for health sf and the other questions you had. I will turn it over to mr mr. Wagner. We have a solution that appears to work from a technical and budgetary perspective to get us where we hope to be. Essentially what this is is in the mayors budget submission there was an assumption thati dont have the exact figure but eight point x Million Dollars was associated to the Capital Budget for Mental Health sf plan. Were able to fund that cost with a one time cost measure. That creates a surplus available for the first year in the two yeer budget. Year budget. It allows us to expand the number of joint crisis teams to six which would provide 24 seven coverage to those teams. That budget balances over two years and then of course as we discussed that the previous hearing, it does leave the issue in the third year, theres a deficit of eleven point four Million Dollars that would be unfunded and i understand theres conversation about the use of additional revenue it fill that gap. Just that third year issue that this expansion would not be in this budget funded in the base for the third year. Any comments o comments or q. No questions or comments with gratitude for all their scored nary work oscorednaryscorednart. Good morning supervisors. Thank you, chair for giving me the opportunity to respond to the concerns youve raised that weve heard loud and clear. Were fully committed to addressing Prenatal Health disparities. Up to this point we have really relied on state and federal funds, grants and philanthropic gifts as youve noted to help health disparities. This new item in the budget this year is our first major investment to augmenting those funds most of which continue in building a sustainable cohesive coordinated program thatto bring those together into a coordinated set of programs all with the same Population Health projects which are to reduce disparities due to preterm birth among African American birthing and low birth weight and moabith morbidity and mortality. Address different silo ses and address different points of this complex problem. We know many disparities in this determinants of health that impact pregnant women including depression, including poor access to prenatal care during the first trimester, including gestational hypertension. We know there are disparities. Instead of the number of programs coming at it from different points our commitment with this new funding is to continue and augment some of the successful initiatives which have been started at the state and federal level building on the gifts that we have received to support this work. Were excited about the direction were going but we know what weve been doing up to this point is a thousand flowers blooming phenomenon. With a collective impact approach, we think we can do better. Thats where were going in the future. I hope to report back to you on what our targets are. How to track those targets, narrow disparities and really address this in a very meaningful way for our families in the scommin coming year. You mentioned there was a new investment . In this years budget almost six thousand dollars of new funding for these programs. I think theni understand what youre saying. I think it is in the right direction. As we sit on the legislative branch. This could also be recommendations brought to this board around things like housing, food insecurity, and those types of safety nets that we need to get to actually before these women are pregnant. How do we support their children afterwards. I think that working in coordination and everyone, when you look at these Health Determinants it starts before then. Before even pregnancy. How do we create a safety net around these women so when they do give birth and have children they are healthy and able to thrive. What i was really looking for was a general Fund Investment in this. I feel like San Francisco need it put some skin in the game. Its not just enough to say philanthropy. In San Francisco this is an important issue and were going to dedicate our hard earned tax dollars to this because this is what San Francisco does. Thank you so much for your attention to this major issue. You did draw out the number of investment which is 600k. Is this for other programs to address infant mortality. Yes. That budget item includes 200,000 for the dual Access Program which as you may know started up this year with seed money from San Francisco health plan and bpm c. It also includes two hundred thousand dollars for the abundance birth project and another almost two hundred thousand dollars which actual ri would blywould be in our officeh equity. That would provide staff which we hope will help us do this coordination work to bring together the different programs and see where we have synergies. Really through this collective impact approach pull together all these programs with Community Input and make sure our dollars are used in a meaningful way where we see the health impact. Community and likely to be greater risk than there was earlier in these settings with children. It was also clear on the call this morning with the cadence of testing in these situations certainly there needs to be testing of those adults and children. The degree to which theres a optimal benefit is achieved is not clear. There obviously has to be balance of many of the testing needs that we havethe science around how to do this the best is rapidly evolving. In the context of where we are for covid 19 more resources for testing will allow us to do more. Were looking at having many of the people who would be engaged in this activity to have coverage through private insurers and have private insurers cover this. Were looking at all of the options on the table. Our testing budget is substantial thats proposed and cad icandidly, i think had we n the covid 19 spread, weve been clear that more resources may be needed to do everything as practically as possible. Now having said that i just want to reiterate that there will be some risks in these contacts and in certain situations there will be out breaks even with mitigation. In the context of prevention activities the maps and cohorting of groups and good hygiene practices. There are differences in terms of transmission risks versus Young Children versus middle schoolers. I know you are focusing on the hubs right now. I think what we do to engage in the hubs just as we take the learning from the camps and day care for the hubs. The hubs would help better inform what we do in other educational institutions as they reopen. Unfortunately, i dont have a concrete number for you to tell you, this is absolutely enough. Because this such an evolvingthats what i would say is in the context of where we are and where were headed, certainly i think having Additional Resources in the budget would give us more ability to expand more testing. This is one of my Top Priorities in the budget. I think these hubs are the most essential way that we can help families get through this crisis and fight the achievement gap that has plagued our School System for a very long time. We want parents to feel as comfortable as possible and we want the adults to be as safe as possible in there. I will fight for, i know my colleagues feel the same way. Well fight for what you need and were try to go come up with a figure that makes sense. The figure that we came up with is three point five million, and matching money so it would be seven million matching for the hubs. I know you cant say with certainly but does that say its a fair estimation to greatly run the risks of the hubs . To appease every concern we would test everybody everyday. But thats not feasible. This will certainly help and give usi dpes m guess we havenn able to weigh in on this with the cadence and subject matter that our proposing here. If those resources were made available and we talked to subject Matter Experts at u c sf and there were a site modification or modification of that cadence of best evidence available at the time. I would say based on the current state guidelines as we currently reviewed them, this is more adoptive than what the state is recommending for schools at this time. Once again San Francisco would be lead inning our efforts to mitigating the spread of the virus in these situations from a health perspective, we obviously want to focus on covid 19 but the educational component, the warning gap, we know this has direct Health Effects on kids and their developments. I want to emphasize this is a Health Development mitigating because learn sing can key to familys health. Lastly, i just wanted to followup on the west side Community Health center, a main provider of public health. I wanted to make sure that i restated the black community has been very vocal about not tieing up investmen investment in the k community. We would not like to put it for the black community on reserve. He did give us a blue print on how to ensure transparency through reports of proposed expenditures, this will eliminate the bureaucratic barriers and allow the black community along with the hr c to decide how these expenditures are expended. This is the black communitys request. We asked you to come back to us withare you saying that you are suggesting what we did with director torres recommendation to put this on reserve and replace it with a report back to the board on expenditures and spending plan; is that correct . Correct. And actual expenditures, yes. Okay. Thats great. We have an agreement with our colleagues. President yee are you raising your hand . This actually has nothing to do with the department of public health. Ill save my statement. Thank you. I think were in agreement then. One, tomr. Controller whatever we said here and also, im sorry. And also that were rejecting the recommendation to put that money in reserves and instead what has been proposed to a proposed spending plan to the board so we can keep track of where these expenditures go and not put that money in reserves. Okay. Thank you department of public health. We greatly appreciate you are coming back. Thank you for all your work. Thank you for your investment in the black internal health. I want to have a conversation about attrition. We can have mr. Rosen field come. Weve asked the controller to do an analysis for us on attrition saving trends over the last few years. We have the ability as a board to actually take more savings from the departments without the departments coming back to us. I think this is analysis is really important for us to look at because there may be money left on the table. Having said that, could you please give us the report. Certainly, i can give you an update. Were not yet completed with this work. As you said to review pattern ses of Department Spending o pah an eye towards reasonableness of the budgets towards years ahead. I hope to have a report for you later in the day. Were making progress with it and should have it to you shortly. Having said that. Yes, president yee. This is going to be a random statement. I just didnt know where to interject this. Just say it. Just say it. This is related to the community hub, i know theres been some discussion around the risk factor of the people that are going to operate this. It will be operated by nonprofit organizations that dont pay much. Certainly less than a teacher would make. I dont know how far weve got wen the discussiowith the discud way with those workers. Its something that im interested in pursuing if somehow we can find the funding for it. I dont really have a price tag because at this point we dont know how many people are going to be involved with the Community Hubs as they keep expanding. This realization that if we dont increase it at least during this time, this period, they are going to run out of people to actually work in these homes. I just want to put it out there that we should think about that. Thank you. I think another consideration is existing contracts with the c bo and this extends beyond their contracts and compensation for that. Thank you very much. I just really wanted to agree with both of you on that point and just, you know, maybe work today. Im happy to take on this task of working with maria to try to cost some of this out. In terms of equity during this time in this city, i cant think of anything more important than these hubs for families. I think we have to do them right. I just agree so much with both of you. I think we could do our best to cost that out today and make it a priority of this committee and would be happy to take the lead while supervisor is working non stop to try to get us to a global deal if thats something the committee would like me to do. I think that would be helpful. I think it would be helpful to bring to the Committee Meeting on friday too. If we are saying well open the Community Hubs, what is the total real cost of hoping these Community Hubs. It will lead us to how many we can open. If were going to open more, we should have a real budget that we can do this safely and very well. Because these are our childrens lives that we have at stake here. Thank you very much. Having said that. Committee members, i would like to recess this meeting now until 3o clock this afternoon. Ill just make a brief statement to the members of the public who is watching, Public Comment has already been satisfied today. Thank you very much. Thank you to everyone who offered Public Comment. We will recess until 3 00 p. M. Today. Thank you very much. Bye. This is the First Digital Family Wealth forum. It is put forward by elected officials since 2017. We have served over 1300 families so far. We are honored to support you through the pandemic. We will be join by Financial Planners and experts to answer your questions. I would like to go over a few housekeeping continues with you. We are offering spanish and chinese interpretations. Please select the language channel at the bottom of your screening. There is an icon and q a function at the bottom of the screen. If you have any questions, type it in and we will try to address it during the webinair. If we run out of time we will follow up afterwards. I will ask vivian to go ahead. Thank you, vivian. Mario, will you please explain in chinese. Thank you so much. Before we get started. I want to remind our panelist to please mute yourself and stop your video until it is your time to present. I feel like some of the guests say there is an echo. Please mute yourself until it is time for you to present for your session. I will ask our leader, carmen chu, to give opening remarks before presenting our questions and to quick start session one. Personal finance management. Thank you. Good morning everybody. I hope you are ready for a morning of Financial Literacy and good information. I want to say thank you to the folks who helped make this event happen. We are going to try our best to make sure this format is as helpful as possible. Be patient with us as we start to experiment with new technology and a good way to relay information during covid19. I want to thank everyone for joining us this morning at our first ever digital Family Wealth forum. We had first started this program in 2017. As we were out apabout in the community we kept hearing questions from across the city how to be plan for the future. It wasnt just about if i have a house, what should i do with it . What should i do for your own personal finances to achieve big goals. Education, buying a home or other things. We really wanted to put together good information to our San Francisco residents to benefit from hearing from many experts. I think especially right now as we are in covid19, a scenario we planned for may in person forum we wanted to make sure that we brought credible Financial Information straight to you. This is incredibly important especially during this time we have heard so many scams that might be happening. We have heard unreliable information that people are trying to understand, figure out for themselves. What we wanted to do was to bring a program together today to address some of the big concerns we are hearing about, especially with covid19. Today we are going to talk about a number of different things. One, personal finance. We want to make sure we bring our cpa and Financial Planning professionals to talk to you about what you need to know for personal Financial Management. What is in the cares act, how do we maximize tax benefits and financial considerations during this time . Second hour of the program is going to focus around resources for families. For homeowners, individuals, people who need assistance at this team. Shannon with homeowners sf will share information with you. We want to focus on the topic of Estate Planning and healthcare directives and what information and documents you need to pull together for the future. This is really important especially now with the Global Health pandemic. We are doing the best to stay home, stay safe and protect ourselves and loved ones. Up of us will know if we contract covid19 and what that consequence might be. It is a good reminder it is a good time to plan for the future. We have served over 1300 families. I know that we had actually hundreds of people register for this event today. We hope we are able to provide a good program for you so you have the first step forward of being able to plan for the future. Before i introduce our panelist and get to the questions, i want to thank my team at the Assessors Office who worked hard to transition to online. Vivian, arian and al are here and available to help not only with technical but also the questions that might come forward later from folks participating. Thank you all for joining us, and i will jump right into introducing our first workshop participant. We are going to be talking about personal Financial Management in our first session. I am so excited to be able to have francis and heather join us. I will read you theirbios. It is an impressive history and great passion. I want you to know about them. Frances is a San Francisco based cpa. Part of the finance team at ria family office. Worked for accounting terms for much of his life in private equity and venture capital. In spare time he enjoys volunteering and helps with the Financial Planning day and helps with tax aid to make sure he is giving back to the community on weekends and helping folks who might not have access to services the way other people would. Outside of work you will see that he loves to do a lot of reading. He is learning to play the ukulele. I dont know that he will grace us with those skills today. We hope to learn more from the financial side of his mind. We also have heather a certified Financial Planner and involved agent at Uc Berkeley Program director for Financial Planning and accounting. She teaches Retirement Planning and employment benefits. She is Vice President at hargrave advisers doing the Financial Planning and has a private practice as tax preparers. Her writings have appeared in Harvard Business Communications Letters and elsewhere. We have two great distinguished guests to join us. Welcome, heather and francis. Thank you very much for the warm production, carmen. Thank you. Hi, heather, thanks for joining us. First question. We have a question about congress act. Under covid19 there is a lot of activity happening in terms of programs available to individuals. One of the questions we received was around the cares act coronavirus aid relief and Economic Security act. People want to know what economic repercussions are associated with it. Any programs or things they should know about relating to this. I think heather will take the lead on that question. The cares act, like most acts is quite complicated with a lot of pieces to it. The ones most important for you are people whose income in 2019 was less than 99,000 have probably already gotten a stimulus check of 1,200 in the mail. If you didnt get that and your income is not very hi, check on it. You can go to irs. Gov to see why you havent gotten it. There are loans for Small Businesses and other important things. If you have a flexible spending plan or Health Savings account. Those are both ways to save tax free money for medical expenses. Two changes. You can buy overthecounter medications with those. The last five or six years you were not able to. Now you can buy aspirin and things you need at the drugstore and you can use those to buy feminine hygiene products. That was never true before. If realize now that your Health Insurance or ssa or plans may not have the amount you want or type that you want, your employer is allowed to let you change midyear to put more or less money in the flexible spending plan and change your Health Insurance if the employer offers more than one plan. You can withdraw or borrow from the 401k without penalty. You have to pay tax but there is no extra penalty if you are not 59. 5 yet. Those are the key points that affect individuals. Can you tell us about the differences on the topic around 401k and i ras. This is often a point of question that people will typically raise. Yes, in general 401k or work place plan is a great plan. The most common type is 401k. Same is for 403b, 457, simple ira, sep or deferred compensation plan. Those are workplace plans. If you dont have that at work you may have ira, traditional or roth. Big differences. Workplace man you can withhold up to 19,500 of salary in tax deferred. If you have over 50 you can withhold another 6,500 for 26,000 altogether. If you have an ira, you can put up to 6,000 per year and 7,000 over 50. Do the workplace ma plan to save more. Can you expand on this. There is a difference when we talk about whether something is pretax or aftertax contributions. Can you clarify . If you put money in the 401k or traditional i ra, it is pretax money. You put money in and dont get taxed now. That saves income tax in the current year that you put the money in. That is sheltered. When you take the money out later when you are retired, you pay income tax on it then. That is good because you havent paid tax for years, you are able to save money and are probably in a lower tax bracket when you retire. That is tax deferred. Putting pretax money in and tax when you take it out. There are accounts where you dont save now but a lot in the long run. The roth ira if you put it in this year you will not save this year. It is after tax money. As that money grows over the years if you have got it invested it will earn income and dividends, Capital Gains growth, when you take that out you pay zero tax. Both plans are good. If your 401k offer an option to put some pretax and some roth. I usually do both. Both plans are really good. Is there an income criteria for roth ira . It is on the screen. If your adjusted gross income is more than 139,000 and you are single or 206 and you are married filing jointly you cannot contribute directly to roth ira. Important if you are married filing separately you cant contribute to any ira. Take that seriously you probably shouldnt file separately. Most people file single or married filing jointly. There are lower income limits for traditional ir a. If up high income and would like to contribute to roth ira. Call th the bank and say backdor roth. They will help you. That is a code term to get money in roth ira with a high income. If you talk to a finance professional they can help you do that. Speaking about retirement. I think under covid19 right now a lot of folks are stepped for cash flow. If we are talking about disruption in jobs because the employment has gone away, people are temporarily or permanently laid off or people with a shelterinplace order and businesses not opening there is a need to make it through. People have been trying to figure out do i take out loans, should i be pooling money back from stocks and investment, taking money out from retirement funds, those kinds of things. Should i stop contributions when i have more immediate needs right now . Can you talk about what people should be considering or thinking about in that way. It is easier with a lot of money. You can shelter from risk with a lot of money. If you had all you needed right now to retire and live on for the rest of your life, you dont need to invest. You can keep it under the mattress with no risk. Most of us are not in that situation. We need to invest money to grow in the long run. The problem is we dont know exactly how the timing works out. Probably now you need more cash than usual. Not everybody but many people especially if you lost a job. You need more money available in your Checking Account to use it easily. I would say try to have a little bit bigger cash nest egg right now than normal. Dont give up on investing completely. Should we not contribute to 401k for a while . Try not to stop contributing. This is human nature to do the opposites of what is good for us when it comes to money. The stock market falls and we dont want to be involved. We are going to stop contributing and saving. When it is falling that means prices are low. Ideally you want to buy when prices are low. Like buying things on sale. We have the opposite reaction when things are high. The stock market is doing great so we buy at the top rate. The best way to manage is if you can spare any cash from daily Household Budget absolutely keep contributing to 401k, keep saving that money and this period of time when stocks are low you will be buying cheap. You will have more potential for gain in the long run. Try not to stop contributing. Try not to borrow or cash out your 401k if you dont have to. If you lost your job with no money for food the relief in the cares act allows you to take out money without penalty. You will lose the benefit of the long time savings. Related to that question. Someone had asked should i hold back my Retirement Plan when the market is crashing . What do i do with my stock and Bond Investments if i am planning to retire . It is all about timing. If you have got a long time until retirement, you want to be in stocks mostly. Over the long one they do well. People usually start shifting their portfolio to something more conservative as they approach retirement. As you get older, people put less money to stocks and move more to bonds and cash, which are safer. Not likely to crash but dont grow much over the long run. That is a reasonable plan gradually shift from stocks to bonds and cash. Dont do it suddenly. If you try to guess the perfect day, you will guess wrong. Do it gradually. Dont give up all stocks. You need growth. Bonds and cash are not going to grow. Next question is related to Social Security income. This is a question i want both heather and francis to weigh on. Is Social Security income taxable . Are there ways to qualify for the federal stimulus credits . I will jump in with taxable then to francis. Your Social Security might be taxable but never all of it. If you have a relatively if Social Security is your only income, it is not taxable. If you are getting Social Security and you have Investment Income or still working so you have other sources of income, then it probably is partially taxable. If your income is over 32,000 a year, you are married or 25 thousands if you are single. Half of the Social Security income is taxable. If your income is over 44,000 a year 85 is taxable. That does not mean you are paying 85 tax. It means whatever your normal tax rate 12, 24 that will be applied to 85 of your Social Security. When you said 32000 does that include Social Security income . That is complicated. It includes half of the Social Security. There is an equation. Add half of the Social Security to other income and add back the modified adjusted gross income. This is a rough guide. These are relatively low salary numbers for california in 2020. That is because these were set in 1983 and 1993. It deliberately is not indexed for inflation more and more people pay income tax on their Social Security each year. Francis. I think heather has done a fantastic job. I can jump in on how to lower your agi or household taxable income. I think one of the things i want be to clear up is that all of the discussion about the Economic Impact payment the 1,200 that attendees read about. That is based on your 2018 or 2019 tax information, whether you had information earlier or not. Now we are past july 15th deadline, information, i believe like as Congress Works on some other package they are working on, it may be based on the 2019 information. The information here how to lower Household Income is going to be based on how you can lower your Household Income for 2020 and forward. Heather covered a good portion of these things. It is going to sound like i am going to sound like a half broken record. You can never hear this stuff enough. The traditional 401k. What is that . Did i lose you . You are fine. I was saying you can never hear this information enough. I listed on the different accounts like your biggest at the top going down. Use traditional 401k has an annual limit as of 19,500 depending on your age you may qualify for catch up contributions. She mentioned workplace Retirement Plans. What if you are selfemployed are these available to you . The answer is yes. There is a range of plans. If you want be the higher 401k limit, especially if you are a solo entrepreneur or Small Business plan in the sense it is you and spouse working together in a business. Consider setting up a solo 401k for higher limits. This is the traditional ira. Individual retirement account. You set it up not so much with an employer separately. This is something that everybody is not aware of. If you are married only one spouse earns an income you can consider setting up and contributing to an ira for the nonearning spouse. You have read about it, you have come about the term spousal i ra. It is this concept setting up an ira for the nonearning spouse. The next one is the Health Savings account. Different limits depending on the plan you signed up for and your age. There may be catchup contributions available. I listed the figures on the side. I am not going to read them. Last, same thing heather mentioned consider the flexible spending account. Something to think about. If you have signed up for Health Savings account. Behind full of expenses to run through an ssa, the flexible spending act, if you use it with the Health Savings account, the ssa is a limited flexible spending account. If you did not have an hsa, you can use the ssa for run of the mill copayment costs, drug costs, health, vision and dental. You can run those through. If you use an hsa and ssa together. Ssa can only be used for vision and dental. Francis, i did see a question that came in from one of the folks participating who just wanted to know what can you spend in an ssa versus hsa. Can you say again what can you spend out of hsa and ssa and if you have both what does that mean one more time. Typically the two in terms what you can spend it on, congress has expanded the types of expenses you can spend it on. You cant tell you right now the list. The typical is a matter of expenses to see your doctor, some type of physical therapy. I am quoting off the top of my head here, drug costs, these are things you typically would run through the h sa and ssa. You would only be limited to dental and vision expenses. You can still do that with hsa as well. When you have them in tandem, the limitations apply for ssa in this case. The list of things that you can count as medical expenses for the hsa and fsa is long. Doctors and medical and dental and overthecounter drugs are part of it. If you have questions about specific things, publication 5021 an irs publication that you can google off the web. That lists every item. If you are wondering my doctor said i should install a swimming pool, those gray areas, 502 is the final answer. One fun fact about this i just checked for a client. She is buying longterm Care Insurance and could she use a plan to pay the Insurance Premium on her longterm premium on the longterm care . You can payout of hs a, not fsa. Pay the longterm Care Insurance and some cases Health Insurance and do that tax free, which is great. Anything else you want to add before i go on . I think in terms of united effort that people can lower Household Income. In terms of limits and accessibility these are the ones that most people want to look at. Thank you for that information. Heather, there is a question that folks asked participants asked. Does it matter if i transfer property before my required minimum distribution age and are there taxes on inheritance . Second part first because it is easier. Taxes on inheritance, likely not. California no longer has a state inheritance tax. A few states do. Federally there is an estate tax that doesnt affect you until you have more than 11. 5 million or if you are married more than 23 million. For most of us, no problem at all. If you do have more than 23 million call an estate attorney. There are many good ones. One will speak later. They will shelter your income. You dont need to worry about inheritance taxes. The other part was about transferring assets before would you read that again. Does it matter if i transfer property before or after my minimum distribution age . It depends on what you mean by transfer property. Your required minimum distribution begin at 72. For many years that was 70. 5. The secure act a few months before the cares act changed that. It begins at 72. Can you explain what the minimum distribution age is first . That means if you have saved money in an traditional i ra or 401k the government doesnt want it from this forever. At 72 you have to take some money out each year there is a formula based on your life expectancy. When you turn 72 you have to take money out each year. That means you move from one account to another. Key thing is it becomes taxable at that point. If you have a very high income when you are over 72, you want to spread that out as slowly as possible so you are not paying a lot of tax every year. When you turn 59. 5 you are allowed to take money out without penalty. When yout you turn 72, you haveo take money out. Between that you are flexible. You can take money out and make it taxable or leave it where it is. That is a good time to think about how much tax do i want to pay this year so it doesnt become a big burden later all at once. Does it matter if i transfer property before or after the minimum distribution age . It is not clear what the question is trying to get at. It may be whether they should transfer Real Estate Property before or after the minimum age. It doesnt have an impact necessarily. The minimum distribution age is when you are required by the federal government to take money out of the retirement accounts. It is unrelated to when it is appropriate to transfer a piece of property. It is unrelated. The only thing required minimum distributions start triggering taxi effects. If you are doing something to trigger taxes, talk to an adviser and look at the picture to see if you are creating a big tax burden in a particular year. Otherwise no connection. One question people have put in here. What are the best options to finance my Childs College Education . Francis, can you take that one . I enjoy thinking about. It covered so much of what we talked about. So much of the things you do for yourself in future years when you plan for your retirement can benefit your childs eligible for Financial Aid as well. The way that i went through this. The amount of effort that you go out of your way to do. Regardless of what is in front of you, be looking at scholarships and grants for your child. One thing that people are thinking about is Community College for the general e education portion requirements of the four year degree. They have transfer agreements with four year schools. One example is university of california. I think it is one of those things where i know for a lot of High Schoolers in junior and senior year they are looking at all of these things and asks parents, parents are going across the country where do i want my kid to go . There is an option that it can definitely bring down the cost when you think about two years worth of university and housing and living costs for your child. That is a big chunk. One thing to do is if you pay down debt as well as lower Household Income. Contribute to 401k and that helps with eligibility. Certain things are not considered in financial said. The primary equity, unsecured Credit Card Debt. Say, for example when you fill out fasfa how much do you have today. 10,000 in cash and 10,000 in Credit Card Debt. If you fill out the fasfa you have 10,000 in cash they will not be concerned that you have 10,000 in Credit Card Debt. They will see 10,000 and that is going to affect the aid formula in a way where you are going to seem like you can contribute more to your childs cost than you could realistically. The best thing to do is net it out. If you took the 10,000 in cash and paid off the debt you made yourself 10,000 poorer as it related to the Financial Aid formula. The last one and i think this is something most people have come across in terms of effort and going out of your way to put an effort this is 529 plan. One of the things that people dont realize. Hey, i want to do this trip or i have this medical expense coming up. You can do that with 529. I recommend this to my friends. I am sort of at the age where friends are getting married. Set up a 529 and send me the link. I will put in what i can. I basically have sort of contributed to your kid 18 to 20 years down the road if you invest the money properly. I mentioned in the first bullet point instead of toys ask to contribute to the 529 account. Most sponsors, i had a friend who set it up, not a recommendation, she set it up with fidelity. She had a link and used to email to friends. Contribute to my kids 529 plan. The contribution limit is up to the annual gift exclusion every year. 2020 that is 50,00 15,000. If you have a generous grandma or grandpa, it can be their time to shine. There is a term called front loading. You can contribute up to five years in one year. It is more complex than just doing the 15,000 per year and asking too much of people right now. It is an option available, also. The last and probably most important is invest money in the 529. If your child is 5 years old right now. Some type of age where they are not at college level, you dont want the funds you have gone out and collected from friends and family to be in cash. It is not as much help five or 10 years later when your kid is going to college and you were earning 0. 5 interest on the cash when you could have got a better rate of return. To recap, those were great ideas. Tangible things parents can do to get ready for kids. One, reduce income by contributing to retirement and natural ways to bring down the income level so you qualify for Financial Aid. Two, pay down debt because under the fasfa formula they dont consider your debt. If you pay it down, it benefits you and reflects th the right wy so they consider what you owe. Set up accounts that are savings account that you can invest in that grow with your kid until they need to use that funding. Can you just expand quickly on are there drawbacks to these plans . I have heard some parents have asked the question shall i just invest in the stock market as opposed to opening up a 529 . It sounds like they can only use it for education. What if we dont use it or the situations change . Can you talk about the pros and cons what people should think about . I think people like to be concerned not knowing how much they will need. I think it is safe to say given the cost of Higher Education it is such a small sub set that are not utilizing the money in the 529 plan. The benefit of 529 versus regular brokerage account, the gains that you use for Higher Education cost, they are not treated as income. Strictly in that sense you are putting money in you dont get a deduction for. The gains are used for education expenses. You dont get taxed on. Now one way to definitely mitigate the risk. What if my child doesnt want to go to child . What if my child qualified for scholarships and grants and we didnt need the 529 plan . One way to mitigate is set up 529 for theeldes for the oldest. Life changes and you can reassign the 529 plan. You can reassign th the 529 plao the younger brother. There are more considerations to talk about different i guess not so much lineage but i i am losing the word. If you try to go from child to grand child there are considerations in there. Like the gift and tax planning considerations. It is such a small subset of people with those issues. More people are trying to come up with funds to pay for college and end up taking out loans. If i remember correctly, publication 502, i believe the 529 plans are revised a bit. I forget the exact dollar. You can take out to pay for Student Loans. Is that right . You can pay for Student Loans out of it including your own. Francis was talking about transferring to another Family Member. One child doesnt need it and you can transfer to a Family Member. This is apart tha a part of thet you can transfer upwards to parent or grandparent. If you are saving for the Colleges College you can pay off your own loans or take a class somewhere, get your masters degree and use that money. 529s under correct tax law you can use 10,000 per year per child for private school, not just for college any more. One more point to make. In the original question, you said Something Like should i just put my money in the stock market instead of 529 . That is not either or. 529 then invest it. You are putting in the stock market within the 529. You do have potential for good growth in there. Absolutely. As francis mentioned you dont want to just put it in there and sit in a cash account. It was more so that the question was more geared toward instead of a 529 is it better to have more flexibility in an independent brokerage account. Francis covered it in terms of the considerations there. Thank you, heather for adding to that as well. We are getting to 10 45. I have a final question for you. I have seen a lot of questions coming through. I want to make room for that. The last question is a quick one for both of you, francis and heather. The Financial Planning and getting educated is complex. People are stuck because they say where do i begin and start . It is hard, right . Sometimes there is a million resources. Based on your professional path and things helpful for people can you give us recommendations on how to start the journey on Financial Empowerment and personal growth and finance . You want to start, francis . Sure. I put together my distilled version of the resources. Number one is the website called humble dollar. I came across it one or two years ago. I am impressed how broad the topics are. It is an in depth personal finance resource. Now, i tell them to go to the website. There are guides on all sorts of subjects including retirement, college, investing. It is not one all and end all. It is not going to answer everything. It would argue it is a good job of it. It is amazing to me. I think if you are like me you are a big fan of stories. The richest man in babylon, a lot of you have heard about it. I include that. That is my biggest take aways from the three next books. A good savings habit is the bedrock of financial life. Everything else flows from it. If you have really you can be an amazing investor. If you dont have good savings to come up with capital to put the investing skills to use it is not going to do as much good. That is one of the things that resonated with me. Again, i am sure you have seen this book already. Your money or life. It is an idea that money equals time. People are well aware of, but it is limited and finite. That is intentional with your spending. The last one simple enough to pass to while you are working on it. You have one or two options. You can be rich or look rich. It is hard but i think people realize nobody can truly multitask. It is putting yourself into one thing at a time. If your goal is to become financially independent secure it is easier if you focus on one thing at a time. Those are my one page resources especially the website. Fantastic. Thank you. How about you, heather . I wont top those great general books. There may be some websites in front of your face that you dont think about. Irs. Gov. They get the final answer. I tell tax students if you find a different answer on irs. Gov, you win. It is well written. The answers are there about taxes including Retirement Planning. It is easy to understand. Medicare and Social Security also have good websites. Medicare. Gov and ssa, Social Security administration. When you get ready for medicare, it is complicated. You have to make a lot of decisions. It is not easy. One resource is California Health advocates. Hicap provide free advice when you are making decisions about medicare. They have branches in San Francisco and elsewhere. Invaluable tool. Take advantage of it and use that. Thank you. I have learned something new here. As i have been sheltered in place i had to shelterinplace with my parents. We are talking through medicare conversations with them. This is timely. I am going straight to these sites to find out more. I would like to recommend another pair of books. There are some smart guys who wrote get with yours about details of Social Security. Get with yours for medicare is another one. Those are easy to read and have answers to every scenario. Thanthank you, heather. With that i will turn it over to annie for some assistance in getting to the questions that participants have been asking as we have been talking. You guys are timely. I was going to interrupt you for the q and a portion. We have a question for francis. In your scenario instead of paying off credit card, can you pay into the house mortgage . Could that be an Investment House that is not your residence . Thank you. I appreciate the question. I can give a yes or no answer here. If you use the 10,000 in cash and 10,000 in Credit Card Debt. If you use that and say you had a mortgage on your primary residence, yes, the same. Because year primary residence equity is not counted in the Financial Aid formula. When it comes to Investment Property it doesnt work that way. The value of Investment Property is going to determine the value of the mortgage or debt on that property is not considered the same way your Credit Card Debt would be considered. In this case if your goal is to make yourself Better Qualified for Financial Aid because of the formula and the differences that it looks at your assets and debts you are better off paying other things than Credit Card Debt and primary residence mortgage right after that. Thank you. Here is a question. For roth 401k if you leave the job and roll over, if the Financial Institution requires you to selling, will you be taxed if you are under 59. 5 . No, it is not distribution if you roll it directly from roth 401k to ira. Do not tell employer to mail money to you. Have it trustee to trustee transfer. Send the money from the 401k to ira. One little secret tip. Roth iras one of the reason they are so great. They are no required minimum distribution. If you have money in roth you can take it out when you have to. You never have to take it out. You can leave it for children. Roth 401k do have required minimum distribution. Rolling the roth portion into a roth ira when you leave your job. Thank you. We have time for one more question. That is about Student Loans. Is there any advice about programs other than deferment to help with student loan payments . Are there forgiveness programs for those not in an Education Career . I will chime in on the second portion the forgiveness portion. The careers that qualify are not limited to education. It is expanded into some other roles within government. I couldnt tell you all of the different roles that qualify. It is not just education. Irow hate for people i would hate for people to think only teaching jobs qualify. You have to understand that typically for forgiveness type loans they are only for loans that are from the federal government. It is not typically private loans that qualify for this. A lot of people have a good understanding of the type of loans that you have and options available. Sometimes i know it is asking a lot of people. Try to have a conversation with your lender. I think it is no surprise people are una lot of stress financially and just Everything Else going on in life. Lenders are very receptive to conversations. It is getting close to the end of session one. At this point i want to ask you to wrap up with any Closing Remarks. I will say thank you to francis and heather. I think the hour went by fast because you covered a lot of ground and had a lot of different questions. I hope the questions and answers were helpful. The recommendations you gave in terms of how we can begin the path and journey in terms of Financial Education is good. It is never too late to start. The more you read, the more you know, the better you can engage in conversations and ask more detailed questions and learn more the more you go. There is no wrong question. There is always a good time to start. I hope this helps people to get on that first step. Thank you francis and heather for taking time to be with us. Thank you. You are very welcome. Thanks for having me. Thank you so much. It was an insight full conversation and providing resources for participants. We will share the recording afterwards. You are letting us know you are unable to assess them. We will answer any questions we did not get to. We are going to take a five minute break before the second session. Please look at the bottom of your screen. There will be a survey. Give us feedback about session one. We will take a break and be back in about five minutes. Thank you. If you are just joining us, welcome to the first family forum. Before we begin the second session, i would like to let you know this is being recorded and shared on youtube live and sfgovtv. I will ask our interpreter to explain in language so all participants can understand. Can you please also good ahead and explain so everyone can get settled in their channel, please. Thank you to the family Digital Wealth forum. It is put forward buyer our assess or since 2017. We have served 1300 families and we will support you through this pandemic. Before we start the second session, i would like to go over a few housekeeping continues. We are committed to serving all populations. We are offering spanish and chinese interpretations today. If you prefer those select the language channel at the bottom of the screen. Click on the icon and select the language. There is a q a function at the bottom of your screen. At any point you have questions type it in and we will address it during the webinair. If we run out of time we will follow up with you. I would like to ask vivian to explain so participants can get settled in the channel. Thank you. Right now it is 11 10 a. M. May i ask our leader carmen chu to join us as we get started with the second session, Financial Assistance for families. Thank you everybody for either joining us for the session or continuing on with us. We think especially during this time having access to credible and good Financial Information is more important than ever. I am really excited t to introde shannon. Especially now as we see so many different families and people struggling with covid19 because of job loss or because their businesses are on hold, i think it is important to try to provide as much financial help as we can and this session is going to talk about the resources that are available to families and to individuals to be age to plan for the future. I want to introduce shannon before we get to the questions we have received. For shannon she is one of our longest standing partners when it comes to Financial Education for citizens. I want to thank shannon today. She is the executive director for homeowner ship sf. She believes Financial Education is personal empowerment. She ran before in this role a real estate business for 10 years working with first time home buyers and small investors and helped them to make sure they understood what local home buying assistance programs were and other resources. She transitioned to Nonprofit Sector i in 2011 to advocate for Home Ownership. She has seen all of the different transitions in the bay area. As she developed the Financial Services and First Time Home Buyer Program at San Francisco Lbgt Community center and administered the Lending Circles Program in partnership with Mission Asset fund previously. She served as vice chair for habitat for humanity from 20132014 and was on the board of directors for Home Ownership sf prior to joining as staff member and now executive director. We are fortunate to have shannon join us and to be able to share her experiences and really help us to get good information so people with understand what is available to them. I want to jump right into this and ask you, shannon, welcome, to ask you. I understand Home Ownership sf has a network of counselors to provide one be on one services to families in different neighborhoods on the ground what are you hearing from families . What are the big issues that are really arising in particular because of covid19 . Thank you for inviting me here today. We really value the partnership with the Recorders Office and you are helping with to get people more options. That is very important part of the work we do. Thanks for inviting me here today. Thank you for having this fantastic event. We know it is a challenge to try to bring information into the community with shelterinplace. Woe ar areHome Ownership sf hass that are the approved housing agencies in San Francisco. Asian inc, San Francisco lgbt center, Mission Economic Development Agency and San Francisco Housing Development corporation. These agencies came together in 2008 with the Mayors Office of housing to create Home Ownership sf as a way for these different agencies serving different populations and parts of the city to be able to come together in response to the foreclosure crisis happening at that time. We are excited to Work Together to ensure that regardless where you go that we are having the same standards with Service Available to make sure we are providing the services. The member agencies are doing the direct services, provide housing counseling and workshops and education and services. Our role is to help coordination and the convening of in network, and also we work more broadly speaking with other agencies in the city. We frequently partner with San Francisco Bar Association and housing economic advocates for legal services, we work with the Tenants Union and housing Rights Community and other agencies to provide eviction defense to avoid being a victim and displacement. It is everyone coming together to understand the importance of this work and that no one agency can do it alone. We need to be proactive and very coordinated. The to ensure they get the services quickly. One good thing, i would say, if we can start with a lake at the end of the tunnel is that from the perspective of Loan Services and Banking Institutions, you know, we know that it took them a while to get on board when we had the 20082009 foreclosure crisis happening. There has been some infrastructure that has been developed in the meanwhile that we are able to tap into at this time. We have seen the loan versus coming to the table much sooner and with valiant efforts to help prevent another foreclosure crisis to work with people experiencing financial distress and really what we see is that the more open that conversation is the more the versus are understanding what people are going through, where they experience financial distress, particularly related to covid and shelterinplace. The more understanding and flexible that they can be. You cant get help if you dont ask for it. We are involved in trying to help people not only to have the individual support and education and resources that they need, helping people who have had credit issues or undebtor relying on credit card goes to get through. We can work with services directly with the authorization and approval from the homeowner to negotiate with Banking Institutions for your mortgage as well as for other creditors . This is important. For many people going through a tough time it feels like they are going through that time alone. It feels like a big stress not to deal with only financial instability but figure out the solution on their own. I want people to know that we do have this resource here, Home Ownership sf, with counselors and people to help you. I want to make sure people know that because you dont have to do it alone and you can get help from people who are kind of doing this daytoday and know what to share with you. Just make sure that folks organize and have links. Home ownership sf is there to help people through this process. I wanted to ask you. You mentioned that Home Ownership sf or affiliated organizations can help with negotiations with banks. It sounds like you said a lot of banks are coming to the table faster or Financial Institutions are coming faster. Is that what you see in terms if people are asking for assistance are you seeing the banks are willing to engage in conversation and Home Ownership sf is providing assistance with those conversations as well . Absolutely. I do think that we are in the calm before the storm here. We know as we have looked at people who are unable to pay the mortgage payment or Homeowners Association dues in march, april, may. As compared to july we see people struggling. As i mentioned the sooner you reach out, we are finding that many of those services are absolutely willing to work with people. You know, not going alone is huge. This is very, very overwhelming kind of stuff. Often times just the very basic being able to get somebody on the phone can be a real challenge for homeowners. The great thing with our housing counselors is to leverage the contacts and relationships they have. Where we might be struggling for a response from the loan servicer. We might have a way to the backdoor or to help encourage communication to happen more accurately and consistently. It does require an initial assessment. The first thing and one of the reasons why nose relationship those relationships are valued is because they know we have met with the clients. We have assessed the situation and we can quickly and accurately relay what is going on. The first step, of course, would be to come in and meet with the housing counselor, bringing the documentation you have. We can help you make sense of that and figure out what is the best game plan and solution i would like to proceed with. They will sign thirdparty authorization to give us ability to talk to the servicers. That is confidential information that needs to be authority to happen, but we are able to then step in and help guide those conversations especially for people who may still be working or have other obligations dealing with home schooling and family situations. Finding the time to be able to do that and follow up and, you know, make sure we are staying on them. That can be a real challenge and that is a huge burden the counselors can help alleviate. It doesnt mean we do it all for you. There is some participation required on the part of the homeowner to make sure things are moving forward and to provide documentation. We help guide that process. The other thing to say is important that if we do start seeing foreclosure numbers rise we will see a rise of scams that come along with that. There will be people who are in the business of accepting money to try to counseling or to try to negotiate on the homeowners behalf, and that is kind of a big red flag that they are charges, especially if they want thousands of dollars upfront to do anything. That would be an opportunity to run in the other direction because all of our services are provided at no cost. The city helps to fund to make that possible so these services can be provided free of charge to the homeowner. We have seeing an increase in the fraudulent behavior happening. People are vulnerable at this time looking for possible hope and help. It is overwhelming. They are more susceptible to when people come to them and say i can help fix the problem and make it go away but you have to pay me ahead of time. We want be to caution people and reach out to nonprofit partners like Home Ownership sf to make sure you are connected to credible information. I think this idea about credible information and help is really important especially at this time. If you or somebody you know are in need of this kind of assistance, make sure they hear this message and that you share this resource with them. I am going to jump into a lot of people are curious to know whether there are Financial Assistance programs currently available for families or homeowners or tenants. Can you tell us what you know is out there . Absolutely. The most common solution we are seeing at this time, which is quickly and readily available to the majority of homeowners, is forbearance. Now this is a very general term that can mean a lot of different things. There can be different terms depending upon the Service Error the investor be that is behind the loan. Basically what forbearance is temporary suspension of mortgage payments that is agreed by the servicer to allow somebody to recover from financial hardship. Loan servicers are in the business of servicing loans, not necessarily wanting to do foreclosures. Obviously foreclosure is a last result for many of them. Often times we do find that those servicers will easily agree to forbearance when you can document the financial hardship. What that means you have to pay the amount at a later date. It would allow you to skip payments for three or six months, up to a year, during which time interest will continue to accrue, but no Monthly Payments will be due. Typically the late fees are waived. In some situations late fees are included, for the most part they agree to waive late fees. Repayment is where you are going to see the biggest difference. In terms of the terms different forbearances, person to person and bank to bank. It could be there is a lump sum, balloon payment due at the end of the loan. You pay for 30 years and there will be an amount set aside that needs paid at once. Sometimes you will see where however many payments were miss will be tacted on to the end of the balloon. You would pay into that 30 year term to pay the loan in full. What we see more commonly is repayment plan over agreed upon period. Perhaps temperature institution will say, you know, six months we will agree to this forbearance. At the end of six months, you know, you can either pay a lump sum that is due at the end of the forbearance or more commonly we will give you 12 months where we slightly increase the payment you are making when you make mortgage payments again to pay that off over 12 months what you didnt pay for that sixmonth period. If you have been offered a forbearance, it is really a challenge to get those terms documented. It is really important to ask to make sure you are clear on what the conditions of that forbearance are. This is something that we have been seeing where the counselors are having to make that extra effort and push to help make sure that we get something in writing, not just verbal yes without proper clarification and documentation of those terms. That is important to not just on the phone, yes, this is what is going to happen. To know what is going to happen aten of forbearance period. Especially now it is hard for folks. If they dont have the ability to make the ends meet right now, it is tough to imagine if things dont change they will be able to do that in a few months time. Can you tell us about any loan programs that might be available to folks . Absolutely. The forbearance is the first step. It is pretty much insure for most federally backed mortgages. That means the mortgage has been insured or is completely owned by a federal agency. If your loan is insured by fannie mae or freddy mack. Fma or va loan, that is an automatics forbearance that is required of the servicer before they proceed to a foreclosure process. That really is the first step. For people for whom this does not apply, for people whom this does not solve the problem. There is city money available. We have the help loan which has been in place for several years now to provide 50,000 for homeowners who have become delinquent or need additional financial supfort from the city to get through and retain housing and keep their home. Iin response to covid, the city has laxed some requirements and created a special loan for people experiencing financial hard ship due to covid19. This is Available Online at the Mayors Office of housing to apply. A housing counselor can help you apply for it. That can be an amount of money between 12 to 25,000. That is to help with either current or or future hoa dues, back mortgage payments, and also that can be applied to special assessments if that is something somebody has a condo with a special assessment situation. We are seeing the help loans focusing on the mortgage, needing assistance with the mortgage. Of course, to prioritize this money for the people who need it the most the city is going to want to see that if you have a mortgage forbearanc forbear fore possible they want you to use that first before reaching out for the possible funding. Next question is for me. This is a question that came in from participants who asked about generally property taxes. We understand that in addition to typically for many people if you are still servicing alone your mortgage payments typically are a large expense in terms of maintaining your home. On top of that there are property taxes that are a portion of what you are paying. The question here is will this years property taxes be delayed or reduced . Are there tax savings for seniors . One thing is important for people to know. In San Francisco we have to follow the same rules that every other county, all 58 counties in the state of california follows with properties taxes. It is a county function basically governed by state law and state constitution. Probably many, many people know part of the property tax laws are governed by proposition 13 as well. Some of these things are not changeable even by the state legislature. There are some elements that could be changed by the state. That is to say that we have had a lot of questions from people about whether we can in San Francisco just simply not collect property taxes or do something different. We are tied to state law. If the entire state is doing something, we can do it. We cannot have a different outcome in San Francisco that way. There are things important to know. There is a senior through the controller, state controller, there is something called a tax Postponement Program for seniors. This is for seniors and individuals who are disabled. The Interest Rate is Something Like 6 or so. More information on the state controllers website. That means that if you qualify for the programming, you meet the income threshold for senior you could have your property taxes postponed and not pay them and you would pay them back with interest when you sell them or when you sell that property or if the time comes you pass away and your home is basically transferred to a new owner. There is an Interest Rate associated with it. Not probably the right program for everybody. It exists at the state level. We will share that link with you. This is for seniors. There is an income threshold in terms of people who qualify. I want to go to our slide, if holly can put up the slide to show the considerations for how it is to think about whether or not covid19 impacts property taxes. The first thing to make sure that you understand is just the timeline for how property taxes are created. You are going to see that there on the very left of the slide you will see january 1 is an important date every year in the. [ a brief recess wain theassess. It is the day when we decide what your values are at that point in time. We look at the value of your property at that time and compare to your protected value. Whichever value is lower is what we use in terms of value to calculate your property taxes for that upcoming tax year. Why we show you the property tax timeline. From january 1 when you receive the bill and make the payment. There is a lag. We are looking as of january 1 every year for what that market value comparison is you wont receive the bill for that payment until october of that year. For january 1, you receive the property tax bills in october. They dont become due until december 2020 in this case and april 2021. There is a full year plus lag when you make the property tax payment for the january 1 date. Under the covid19 scenario it is unlikely in general we will see a big Market Impact to january 1, 2020. Why . Everybody can recall in San Francisco we did not have a state of an emergency declared until february. Past that day. Shelterinplace didnt happen until march, much later than the january 1 date. The shelterinplace and covid19 didnt Impact Market values january 1, 2020 which is used for your up coming tax bill. We know there is an impact in terms of market and what we can see going forward. If we continue to see the shelterinplace scenario for a long time, if we continue to see significant drops in terms of Business Activity and economy and market values of property going to january 2021. What we expect to see it could have an impact on your value at that point in time and we would see an impact in that out year. In terms of property taxes for this upcoming year, we dont think there is a huge impact related to covid19. The out year we might see that impact. There is another slide we want to share with you. This is something that is important to understand for prop 13. Remember when i mentioned that we take a look as of january 1 about what your market value is and compare to the prop 13 value. People ask what is my drop 13 value . This chart helps to understand that. If you take a look at the lower line on the graph and it is a solid line, this is something that illustrates what the prop 13 value would be. What happens in this scenario. You purchase the property in 2019. You bought for 700,000. Under prop 13, the way we have to tax you is we would essentially have that value 700,000. That was the market value when you bought it. We would increase assessment or taxable value by no more than 2 or the california cpi, whichever is lower. We have seen the cpi has been roughly 2 . It is a cap how we can increase it. It has rarely fallen below 2 . That is the inflation factor. As you can see in 2019, it was 700,000. In 2020 we would generally be taxing at 700,000 plus 2 increase. Every year there after. Now take a look at that line, the dotted line above. This might reflect and actually this number here in terms of the in my example that 1 million should be connected to that 700,000 there. The way that works we would say what is your market value as of eachtieach particular year . In 2 2020 it is 700,000. Perhaps at that time the market value if you tried to sell the home or buy a like property is 1,100,000. We would take the 700,000 value and use that number to tax. It is the lower of the market value or prop 13 value. If we go forward to 2021 value, i think this is an example where in 2021 we see a drop or reduction in market value of your home. In this case you still wouldnt see a property tax reduction because take a look. Your prop 13 value is still lower than that reduced market value. I think this is why we want to be illustrating how we would take a look at it according to the law. We are taking a look at every january 1 what your prop 13 value is compaired to market value, whichever is lower we will use for taxation purposes. Not only are we taking a look at the Market Conditions in terms of if the values are dropping, these would be the prop 13 value. Is it higher or lower . If the market value is lower, that will impact property taxes. Hopefully this is helpful for people to understand how the property taxes work and how it is tied to state law as a whole. In the next slipped we want to share that we do have in the next slide we will share the property tax programs. For People Living in your home. If you are a homeowner and you live in the property you qualify for homeowners exception. We send out the notice in july. On that list or sheet you are going to see a line that points to homeowners exemption. If you live there the home and dont see the deduction or credit for the homeowners deduction, please contact or office and fill out a form. We will make sure we can apply that so you will savings. It is a 7,000 reduction to your assessed value. It translates to 70 to 80 in terms of tax savings annually. It is not a lot but better than nothing. A lot of people ask why that is so low. That 7,000 reduction number was passed at state level in 1978. The state legislature hasnt changed that and it hasnt gone up since that time. That is why the number was low. I used to be more meaningful in 1978. It is different now in 2020. The other program that we want be people to know about is you also have special assessments on top of your regular property taxes. These are because of lower approved voter approved ballot measures. It could be a San Francisco unified parcel tax or city college parcel tax. With the School District there is a Program Available for seniors to be exempted from paying that tax if you live in the property or if you own that property. It depends which ballot measure it is. We encourage seniors to reach out to make sure you apply if you are eligible. That can save you Something Like 2 to 300 annually if not more. That is meaningful for many individuals. I think that is it in terms of property taxes, how it would work in terms of covid19 and savings available. Individuals over 54 and people have asked if i am over 54 and want to keep the tax basis and consider moving out of San Francisco, what are the criteria . Shannon, this is a property tax question for me. I will share it quickly. This is a question about can i transfer protected base value to another county. There are two programs available. First is an intercounty program. People living in San Francisco. It is called prop 60. The way that would work is essentially if you own a property in San Francisco right now and you meet the age criteria, you are 55 years old or above, and you decide you want to switch out your property to another one within San Francisco, you can potentially keep that prop 13 assessed value and take it with you to the new property. There are a couple of conditions required. I mentioned eligibility. You have to be 55 years and older, a property within San Francisco, replacement property. The new home and old home must have been the principal residence. The home you lived in and the replacement front you will live in. The new omahas to be purchased the new omahas to be home will have to be purchased. Then finally the market price of the new omahas to be lower or the same value. As the market value of the home you are replacing. There is some criteria associated with it that you would need to know about. There is another program that is available for individuals. That program is called proposition 90. This is something whereas the question had asked. If i move out of San Francisco do i have the same benefit Program Available . Under prop 90 if you are moving to a county that is actually okay with receiving that property tax prop 13 value, you are able to transfer from San Francisco to another county. Not every single county is a recipient of prop 13 values. There are 13 or so counties that do take that property 13 value from other counties to their county. We encourage you to go to the state california board of equalization website to look at which counties are participating. Alternatively if you know you are going to move to a different county, whether it is riverside or different one, you can call that county assessor and ask whether they receive prop 13 transfers from other jurisdictions. The same Program Conditions apply. It would just be required that the receiving county has that Program Available. I think holly has pulled up the counties that are participating. You can see alameda, los angeles, riverside, these are the different counties that do receive prop 13 based year transfers from other jurisdictions. This is on the website. We will put a link up so people have that as well. Shannon. Is cash out refinance appropriate during the pandemic time . How best should i receive a good interest loan . Thank you. It depends. Every situation is unique. It depends how much time you have left working. What your ability to repay would be, your duty to remember in taking cash out of your home you will have to pay that back and have a new loan to incorporate that higher principal balance. This is a tool to help you access your home equity to be able to get by financially through these financially trying times. That is one of the wonderful things about Home Ownership, the ability to leverage the equity and pull it out when you need it. One thing i will say is that a cash out refinance will typically have a higher level of scrutiny from a lender perspective than doing a rate and term refinance. A rate and term would be where you do fought pull money out but could get a lower payment by refinancing because you now have a better loan to value ratio or because you have a better Interest Rate. If you have purchased your home with a 5 Interest Rate right now, certainly there can be opportunity to potentially get a lower rate, and qualify for even cash out on a payment that is equal two or lower to what you are currently paying. In that situation, it could be very appropriate to recapture that equity and utilize it to help you out financially. In terms of the best Interest Rate. First have good rea credit. That is the number one fact for that lenders use to determine the Interest Rate. One of the things to view with the housing counselors we can pull your credit before you apply to review what is the information that is on the credit report. You would be surprised how many people have errors. Things not reported accurately and that can be easily removed to give you that bump in your credit record that is necessary. There may be things that the housing counselor can advise how to increase your score. When you shop with the lender and talk to did lenders you will get the benefit of the higher credit score. The other thing is that it is really important to talk to a bunch of different lenders. Who is a good lender . I want to talk to a good bank. This is not as much about good and bad banks but which have the programs and Services Targeted to the situation most like yours. There are banks that are going to be far morleneient for better for selfemployment or lower Credit Scores whereas other banks might have different requirements around that. You will see a surprising disparity. The other thing of value in talking to multiple lenders. We recommend at least three. The reason is because that first lender you talk to, you are understanding what is going on. The market changes all of the time, loan requirements change all of the time. You are getting a basis of what is going on. It is really hard to contextua contextualize and understand that until you have something to compare to. Second lender now you are comparing second lender to the first one. In your mind you cant help but link them as good or bad according to this information you have received. The magic happens with the third lender. Now you can know you are getting a representative perspective on a variety of options and having the information and the learning curve that you have gone through to get to that point will empower you to be more solid in your decision and really understand some of the differences between the requirements that different lenders will have. Annie has jumped on. She is about to tell me we have to go to q and a p. I want to adjust one more question to shannon we received ahead of time because it is relevant. There are people who have talked about having helok payments or home equity line of credit. They lost jobs to make the payment. People want to understand if there is opportunities to refinance to fixed rate to take advantage of lower Interest Rates at this moment. The other question related to that is there is conversation that some people had around should they take out an equity loan if they didnt have one already or should they take into account a reverse mortgage loan, those kinds of things . What should people know about the different products and options for folks on refinancing . There are a lot of lenders eager to refinance due to the lower Interest Rates that we have been seeing in recent history as compared to even five or six years ago when Interest Rates were significantly higher. There will be costs associated with refinance. Couple of thousand of Closing Costs and those can be rolled into the loan so you dont pay them upfront but they are added to the principal balance. Again, with the refinancing, shop around, talk to a wide variety, at least three different Banking Institutions to get a good perspective on what good means. It depends upon your situation. One thing i will say that we do sometimes see where people get in trouble with reverse mortgages. That is because they look at reverse mortgages as an alternative to a home equity loan. Maybe what they might need is the ability to refinance and take cash out or the ability to take an equity loan and access that equity, but then because they dont have the income to qualify or for other reasons they will derm instead to get a reverse mortgage. That is a very different loan product than a home equity loan. If you are in that situation where you are considering refinancing, particularly if you are considering taking out reverse mortgage. We want to encourage you to set up that free counseling appointment and sit down and discuss that with a housing counselor so make sure you understand what the loan product itself is going to require of you, what happens at the end of that term and to determine what is going to be the best product. There may be things you can do to help adjust some of the problems that might prevent somebody from being able to refinance or take out an equity line of credit to prevent them from having to get a reverse mortgage. We want you to explore those options before takin taking takn and signing paperwork on the line that might affect what happens to the property at the end of the term. Lightning round of questions. There are so many questions we only have five minutes of q and a. I apologize. We will get to you individually afterwards to answer the questions as best we can. A question here. 7 0yearold living in San Francisco to use prop 60 or 690p 90. If you have a current property from San Francisco and meet the eligibility for prop 60, we would likely transfer the property 13 value so you would benefit from the lower value. If you plan to use the property as rental then you are no longer eligible. You have to use the home you are living in and replacement has to be primary. There are eligibility requirements to benefit from that transfer. Do i need to pay transfer tax if i add my sister to my house title or remove her from the title. This is great. I will ask adrian to answer that specific question. Can you repeat . Do i need to pay transfer tax to add my sister or remove her from the house title . Transfer tax depends. I think all transfers you have to pay transfer tax. Is it a gift . You would be exempt. We would have to look at the ownership how you add your sister to the title. In general all transfers are change in ownership. We would have to look at the specific situation. Let me color that. A few things. Adrian is with transactions division. She talks to whether or not a transaction is considered reassessable to market value. When people add names to a deed it is adding a new owner to a property. I think that is something people need to be thinking about. There are certain conditions in which transfer taxes would not apply. We will put a link to the transfer tax website because you can see specifically what are some of those instances when transfer tax would not apply. You have to fill out an affidavit affirming and promising you are telling the truth that is the way the transaction is happening. That is important for people to know. Often times people put names on titles to qualify for refinancing. We get that question a lot when i put a name for refinancing does that trigger reassessment . We will take a look to say after a period of time would that name remove or has it stayed on . Those are the things we would consider in looking at to see whether a true ownership change happened or if it was for refinancing purposes. There is a difference. We would encourage you if you have specific questions to let us know. Just remember if you are putting names on titles, the way we see it without knowing anything else about the transition it looks like there is a new owner on the property. Remember that may trigger reassessment. Look at that closely. Thank you. We are just about running out of time. I would like to ask you for Closing Remarks for viewers. I wish we had more questions. We will promise to get back to the questions on the chat and try to get you links. I want to thank shannon for all of your help throughout the years in terms of joining us on the forum and providing good information not only with us but with the community. We know we depend on you when we see notices of foreclosures. We send that to you to reach out to folks. We appreciate you and your organization to help san franciscans. I am sad we dont have more time for q a. I could do that all day. I love hearing peoples questions. I see my Contact Information is here. Definitely reach out. We are happy to talk offline and really have that opportunity to go deeper to the individual situations people are dealing with. Really just develop a plan that is right for you for wherever you are at and whatever is going on. I thank you thank you for puttis together. On behalf of the team you have worked so hard at this. It is really important to get the word out there and really help people to engage with the difficulties that are happening for you right now. That is really the only way to work it. Sitting and being scared and doing nothing and feeling alone is no way to live. I personally have been through that situation myself. Reach out, get the help you need. I want to encourage people to utilize Resources Available. There is a lot more that i think people realize that is available in terms of resources within the city and through our nonprofit housing providers. We are happy to help connect people not only to members but to the broader coalition of partners we work with. That is a fantastic way to close this. No matter where you are in your financial situation, please dont feel embarrassed by where you are, dont feel ashamed in terms of feeling alone and there is no help out there. There is. I want people to know that. It is a difficult time that people are in right now. Dont feel embarrassed or ashamed to refer out for help. That is why Home Ownership sf exists to help to make sure we help you get on your feet. Thank you again, shannon. Thank you so much for such an informative session. We are going to take a five minute break before the last session. I want to remind folks to look at the poll at the bottom of your screen and we encourage feedback in terms of the session today. We will resume in a couple of minutes. We are honored to support you and your families during this time. Before i invite our leader for the last session. I would like to go over a few housekeeping continues again. We are committed to serving all population we are offering spanish and chinese interpretations. Please select the language channel at the bottom of the screen. There is also q a function at the bottom of the screen. At any point you have questions type it in and we will respond as much as we can during the webinair. If we run out of time we will reach out afterwards. I will ask vivian to explain so participants can get settled in their channel. Vivian. Thank you. Mario, can you explain in language for the channel. Thank you so much. May i ask our bold leader carmen chu to join us for the third session. Estate planning and ownership transfers. Thank you very much, annie. I like how every time we enter a new session there is a new description for me. I appreciate her trying to life venup the transition. I am excited you are joining us for the new station or have continued with us through the forum this morning. As i mentioned earlier, especially with covid19 we know how posh it is to how important it is to provide as much credible Financial Information as possible. We talked earlier about personal finance continues and we shared about Resources Available to homeowners abfamilies, and now we are really excited to kickoff the last part of the session around Estate Planning and planning for the future. I want to introduce our guest. I want to say how important this is especially now. I think it is often hard to think about planning for the future in a situation where we wont be there. When we pass away or loved ones pass away it is not an easy topic to talk about. It puts us at peace of mind and is protection for loved ones. It helps to make sure when they are going through grieving and a very difficult time your wishes they understand well and there are no you can present a lot of arguments that might happen what people think you wanted when you pass away. I know it is uncomfortable conversation but one of the ultimate acts of love to plan and help put at ease what your family will have to go through or loved ones will go through. I hope people will learn a lot from kendra today. We are in the middle of an active Global Health pandemic and health is more and more important than ever. Kendra is joining us from staff attorney from the housing and economic rights advocates. It is the inauguration organization from the beginning when we started the Family Wealth forum and great contributor with great information every time. Before we get to the questions i want to read the quick bioabout kendra so you know who we are joined with on this program. As a San Mateo County native, we will forgive you. Kendra obtained great satisfaction using the law to assist bay area residents and homeowners to avoid time consuming costly and disruptive probate processes. She graduated from Hastings College of law and uc davis and guides residents through Estate Planning in a fun way. Her positive approach ensures each client with the right decision. While performing thousands of estate plans she worked through every possible family and estate situation including her own journey with two deceased parents. Most clients comment this process is much less of a chore than they thought and they are happy to work with kendra the get affairs in order. Ken address has great energy and i am excited to have you on. Welcome, kendra. First question. People want to know what does Estate Planning involve . Can you give us broad overview what that looks like . Absolutely and thank you for the warm welcome. Estate planning involves a host of issues many of us face or at least families face. It involves what we want to happen one day when we pass away or when ourselves and spouse pass away. Equally important is what happens when we are alive but permanently or temporarily incapacitated. That is why we started this. We were hoping to save peoples homes but if they were to become incapacitated we didnt have anyone to deal with issues, assessors, irs, anything like that. It is two different topics and scenarios and legal documents to take care of it. I will break it down to the two larger topics to prompt thinking about this. We begin with th the scenario. You are in an accident. You are in the hospital for five or six weeks. A lot of things will arise. If you are a renter your rent will be unpaid. If you are about to file taxes and didnt get back to sign the final tax return that would be undone, lets say you just needed someone to pay your bills but you and your spouse were in the hospital. With certain legal documents you can put someone in place to handle those tasks so when you recover and get back to normal life things are as they should be. Rent paid, mortgage paid, financial issues. On the flip side of that, once again you and your spouse are in the hospital and you were not able to communicate yourself to convey what you want for yourself and perhaps what you dont want for yourself. If yo you are in dire medical situation, you need someone there to advocate for you with those medical professionals to make sure your wishes are implemented rather than someone else imposing their wishes on what you think is right or not right for yourself and your body. Certain legal documents we can while we are feeling good and when we dont need it indicate someone to take over so that takes place. So our desires are communicated to medical professionals and we are from control what happens to us. That is the part of Estate Planning that when we are alive but if we are incapacitated and we are not able to handle financial or medical issues. People only think of Estate Planning what happens when we pass away and what happens to our stuff when we pass away. The second part is that when we pass away what do we want to have happen to our stuffer . Where do we want our estate to go . What do we want that to look like. When we feel good is when we plan to plan for transfer on death deeds, putting will or trust together and we will discuss this shortly, through those tools we are able to make sure our assets passion with the least amount of chaos, expense and maintain harmony within our families to make sure that does take place. There are legal documents to handle that situation. Absolutely. Just to reemphasize as kendra mentioned. Estate plans is more than saying what do we want to happen to the things i own after i pass away . It is about how it is that you want affairs to be taken care of financial or health if you are not able to communicate. If people get in an accident, you are unconscious those things that do happen in life. How is it that you are going to have your bills continue to get paid, how are you going to be able to have medical decisions be made for you especially if you are not able to make those yourself. It is much more broad than what happens if you should pass but also what can i be doing to prepare now for a situation where i cant speak for myself or make those decisions on my own. I really appreciate you bringing that up. That is especially important right now in the middle of the health pandemic. Maybe we can jump into the point you were making earlier the difference between a trust or will. I think people say, lets talk about th the leaving assets. People are done it. Trust and people say which one should i do. Tell us about the differences. Absolutely. Those legal documents to do property at death. A will is appropriate for people if their estate is under 150,000. If your assets are over 150,000 and you cannot put beneficiaries on those assets even if you had a will unfortunately there is a probate process in california which is expensive, public, your executor needs to public things in the payer. Pay paper. It is unnecessary if you take steps to avoid that probate. Both documents leave certain assets. You can put beneficiaries. On retirement accounts, Life Insurance, certain types of other financial accounts. You can put a beneficiary or two beneficiaries on that asset. When you pass away, a death certificate will be presented and that asset will be presented to the living people. On the transfer on death deed. If you put beneficiaries down when the death certificate is presented that property could be distributed and avoid the probate process that we have here. If people have businesses that are worth a lot of money. The Business Plan can handle that but if that business is worth over 150,000 a trust would be warranted. If somebody is not going to prepare a transfer on death deed and not satisfied with the limited options available there then if you own a piece of property in california you certainly own an assets worth over 150,000, a trust is in order. Keep in mind by gross value the court does not care about leans against the property. In california you own something over 150,000 so a trust may be warranted in that case. Can i clarify for a moment. The threshold is 150,000 for probate. Does that exclude situations where a beneficiary designation is possible . For example i have savings account worth 10,000 but i have a home worth 1 million. If on the home i was able to file for something called transfer on death deed that can avoid probate, would the 150,000 apply to that 10,000 remaining or is it cumulative . That is correct. It would only apply to the assets which you have no beneficiary. If you did take the active step of placing the beneficiary on the account there would be a mini probate. It is assets. It could be expensive cars or when someone has not taken the steps to do transfer on death deed. Another instance if people put one beneficiary on an asset, lets say significant retirement account or Life Insurance policy and that beneficiary is no longer living. It is a good time to revisit your beneficiary designations on retirement, Life Insurance and any accounts on which you place beneficiary. We hope you will do so now to make sure that makes sense in your life and make sure you have a second choice. Just for recap. If i hear it correctly what i understand is that there are certain weighs in which people are able to pass on assets without having to go through probate. One through a trust you can create to do so and that would avoid going through probate. Second is if the law allows for certain Financial Assets accounts designate beneficiaries through the institution and those instances sort of like as you mentioned retirement accounts, savings or Checking Account, those are able to buy pass probate s so long as you designate the beneficiary with the institution. What you are saying if there are anything outside of those state allowed ways to bypass probate in terms of Beneficiary Information if the assets exceed 150,000 you have to go through probate and hire an attorney to go through it. Wills wont absolve you having to go through probate if you have more than 150,000 essentially, is that right . That is correct, yes. With respect to beneficiaries as long as the beneficiary indicated on the account is stillal live and can be the recipient. That is true. The will has to go through the probate process if it is going to distribute 150,000 or more in assets. Kendra, can you speak about the difference between revocable andi irRevocable Trusts. 99 are revocable. If it is used to create this structure, it can be the jones family trust. After that is created we help you put assets into it. Typically it is an account and a home, piece of Real Property. You are free to change that trust at any time because there is language to allow you or in the case of a married couple to change beneficiaries, trustees, you can add things to the trust. You are putting assets into the trust. That is revocable. You have control ever everything. You are accountable to no one. You can sell or spend it or do what you want with the assets in that trust. Once in a while we doir reckaftrust. You can not change. You do not own the assets once you sign the assets over to that trust. It is 11 million. Sometimes people want to take things out of the taxables state and we doir Revocable Trusts. Most of the times you want control of the assets and you want to change beneficiaries or successive trustees. You would have Revocable Trust. That is why when you put Real Property into that Revocable Trust there is no reassessments because the county views you as the primary trustee, trusttor, you own that asset. It is a different way to hold title. Absolutely. That gets to one of the questions we get often where we will be looking at in terms of the Assessors Office who owned the property prior to something going into a trust. Then who are the owners. If they are the same, i think it is important to recognize that we are understanding that there are differences in how people are holding it. So long as the owne ownership ht changed it doesnt trigger reassessment. Sometimes people are hesitant they feel like they are giving up control. It is theirs. They are the only people who can change beneficiary designations. They can sell it and the money is theirs. They are accountable to no one other than themselves. Next question where someone had written in how much Estate Planning can i do on my own . Are there online trust documents vailing lid in the state of california . I will answer part of that and i hope kendra can add to this. I think as we were speaking about earlier, what you decide to do trust or filling out Beneficiary Information does depend on your financial situation and what you own and how complicated it is. I think trust they do come at a cost if you do it. It is more expensive. If you do have a complex scenario and own a lot of property or something more complicated you might want to consider going down a path of trust because you can also benefit from getting legal advice, Financial Accounting and advice associated with it. That is something to consider. For people who have a really simple situation where maybe they just own a bank account and that is all they have under 150,000. They know who they want to give it to, maybe a trust or will is not necessary. It is just something you want the think through what your desires are. In the scenario where i have a 10,000 bank account. I want to make sure my daughter receives it when i should pass. Since it is under the 150,000 limit and i have nothing else i could go the bank and ask to fill out a Beneficiary Information designating my daughter would receive it. After i pass so long as the death certificate is provided she will get that 10,000. That doesnt create a trust to do that. If you own just a home and that is all you have, there is something that the state law has created called a transfer on death deed. This is new. California passed this in 2016. It allows people to record a simple document with the recorder in your county that says who you would like your property to pass on to should you pass. Transfer on death deed. We are going to include that ling on the chat to have access to the information. Generally the way it works for Small Properties one to four residential units, condos or Single Family homes. Generally the beneficiaries are coowners in equal shares. If you want something complicated and want someone 1 and another to have 10. 5, this may not be the avenue for you to go. This is a scenario. I have one house, one daughter, i want her to have it all. Designate that and get it recorded at the county Recorders Office to apply it. Like a Revocable Trust you can change your mind with t on. D. This is something that is important to know. Lets say you want to designate to give it to your daughter, you have a falling out or perhaps make something happened and you want to give your property to someone else. You need to remember to either file a new transfer on death deed so the most recent one filed is going to take precise dense. You can also file other documents to cancel it to record what is a revocation form saying i cancel that previous tod and or if you sell that property it essentially takes precise dense over that because you no longer own that property. for folks who may not be aware when you do kind of inactive a trust you may be designating someone who is going to the desires of that trust or what is specified. Many times people end up asking someone they trust, family or relatives to do it. They may also ask a professional to do it. Can you talk a little about that. absolutely. In a will or a trust or frankly a power of attorney, youre going to indicate a first point person that youve taking the time to pay sm you can choose someone within your circle. It could be a Family Member or a child. It could be a friend. But i think its very wise to be honest about the strengths and weaknesses of the people you are considering. You know, the person indicated either on a power of attorney as an executive of a will or trustee needs to be good with details and finances. Typically those people have gone through some education as how to act as a fiduciary for individuals. I would talk to three and see how you get along with them and assess their experience as having work as a professional fiduciary. For some people they want their banks to ak a act as a fid fidu. Some will act as a power of attorney and some will not do so. Banks will typically charge between two and 5 of what they are dealing with. Make sure to get their Fee Structure if you are thinking of using the bank. Fiduciaries are a little less than a bank. If you name a friend or Family Member, you may want them to have a fee or may not want them to have a fee. Thats up to you. I think in a nut shell its very important to really assess the strengths and weaknesses if youre thinking of using a Family Member. A Health Care Agent if you happen to have a nurse in your family, thats a great choice. I think its also wise to have someone who is kind of objective so when they read your health care objective, they will implement what they want for yourself. They boant bthey wont be imposr wishes upon you. Things are taking place in the manner that you wish. i think in particular on advanced Health Care Directives how you want the process to go. Its often a good time to talk to the person who you want to execute that portion about what your desires are. Because i think sometimes its helpful for people because you know, when people have to make a decision about your Health Outcomes whether, i think its often a very weighty thing to put on someone. And because of that, i think its really important to have Clear Communications and really have a conversation with people before the time comes so they really know that you meant what you said and they really have a clear idea of it. Because i think, you know, especially because its such an emotional thing, its often a very hard topic. Ive heard that advice as well. thats very good advice, absolutely. Its enough of a burden at that stage when they are feeling depressed and vulnerable. If they are absolutely sure what you put on your Health Care Directive is what you want it makes them feel strong in a medical setting. there was a question where someone asked if there was anything they should be aware of when transferring property to Family Members. Whether it mattered or not if the transfer happened before or after death and what were the Tax Implications one way or another. Thats a big question. Im going to try to answer a bill part of it and maybe you can followup with some of the Tax Implications as well. this is something that i really want to make sure we spend time on here. I have heard from a number of different people who come to my office on a couple of occasions. Weve heard from a lot of Family Members that say, im go to go transfer my property to make sure they dont get reassessed. I want them to not have a very high property tax burden as a result of it. I just want people to know that in terms of an exclusion, there is currently an exclusion where are you able to pass on your property and savings to a child if you fill out a form. Thats something for people to know. There are restrictions associated with it but i just want you to know that it doesnt matter if you actually transfer it when you are alive or if it happens after your death. If your primary home is pass frg you to your child, that entire amount is protected with your prop 13 value if you fill the parent to child exclusion. That works both ways. The parent can pass it to the children or the children can pass it to the parent as well. Theres a Program Available if your child predecreases you a grandparent can pass on the prop 13 from their primary residence to their grand children. Thats is not reversible. In both of those instances it doesnt really matter whether its happening before or after someone passes away. I wanted to spend a little time on this because weve heard weve had some seniors come in and said i did this where i passed on and legally gave my property to my child because i wanted to help them with this tax issue sm now they are kicking me out of the home. I thought they were going to keep me in the home and i would have a place to live. Now im in this bad situation. I want people to be aware if what youre hoping to avoid is this rei reis reassessment. As long as the laws dont change. Its true if you pass away after or before. What protections do you have for the assets. When you own the home you have complete control on how you want to use that asset. Whether you pass it or sell it. Once you pass it on, they own that property and can do whatever they want with it. I want to put that out there for folks so you do know that. I wonder if you want to add to any of this in terms of taxation impacts. yes. In the same vain associated to another reason to not transfer title to children while youre alive and would want to control the rest of your life would beas a lawyer, i need to present this. Lets say you even put your child on as a joint tenant. Lets say that child purchases the minimum Auto Insurance policy and gets into a wreck where the damages are more than the limits of that policy. If the Insurance Company or the defend in a case like that wanted to come against your childs personal assets, your home would be subject to that claim. Lets your child and you put your child on a deed either solely or with you gets a divorce, even though that was separate property because you gifted it to that child, youre going to have to spend money and have some very stressful months if not years where theyre going to discuss if that really truly was separate property and not Community Property in that divorce. Theres really not a good reason to put your child on a deed prematurely. The second big reason as far as taxes go, if something is conveyed as death rather than during life, you get the market value as of the date of death when they are determining any Capital Gains thereafter if its bought or sold. You dont get that benefit while child is alive. If the transfer occurs at death, the basis of that property is the fair market value at death. That could be a heumg difference in what you would potentially pay. thats actually a really great point. Clarification. Lets say someone wants to transfer the property while they are still alive to say their child. Is the basis for Capital Gains the price at which they purchase the property or is it at the transfer point . it would beif they transfer the property to the child, it would be at the time ofthey inherent the basis of parent at that point. Yes, the parent may have done some Capital Improvements that may increase that base number, it could be a huge difference than having the position of having the fair market value at death. Parents sometimes own homes for forty years thats a huge difns in the badifference in the bay. if the person who ends up inherenting the property decides they want to sell that property at some point in time, you would be subject to Capital Gains tax. Basically they are saying what is the gain that you made on this particular property and were going to tax you a serp portion. Icertainportion. If you are seeing a transfer occur during a lifetime, the basis in which they are calculating that profit essentially and youre going to be taxed on is based on what your parent actually bought that house for. If it gets transferred upon a death, lets say it happened in january 2020 for example, what happen ss is under the federal w they reset that basis, that differential in which they are going to calculate on the data transfer. If it happened to be a Million Dollars at that time, they reset it to a Million Dollars for the base ace. Basis. If you sell it the next day for a Million Dollars. Theres no gap, you wouldnt pay much in terms of federal gains taxes. Thats what she is getting at as far as resetting the Capital Gains if you were to sell the property at a future point. Did i describe that correct . Ly . you did. great. The next question that we have from folks has to do with making sure that their children inherent as little debt as possible when they die. Are there some tips and thoughts about how people can put things in order so that does happen . essentially unless your child signed something individually assuming your debt. That child would not have personal liability on death of a parent when that parent passes. If the child is executory or trustee of a trust and there are deaths of the estate of the person who passed away, the first duty of that individual is to pay off the debts of the eft kate beforestate before making y distribution. That child will not be personally libel for the death of a parent unless they sign something themselves obligating them to pay that debt. got it. Thats good to know. The other question that came in was putting their property into trust. To quickly recap, if i put my property into trust do i incur a reassessment. How do i keep my Property Ownership anonymous. If i own a property with my husband and we create a trust and continue to the own the property the same way, typically that would not trigger a reassessment because there was no change in ownership. The ratio disont chang doesnt e people dont change. Are they the same people who are oafning it anowning it and are t in the same proportion. How to keep your Property Ownership a non mouse. Onownership a anonymous. The recorder function is an entity that maintains all public records when it comes to deeds and sales and purchases of property. Thats really important because if we didnt have a credible source of information about all ownership information, you couldnt sell or verify that anyone owned anything. Its important that we have a clear chain of ownership. So when someone sells something they have the legal right to sell that thing to you. Can i keep my ownership anonymous, unfortunately those records are public records. When Title Companies do transactions for a home transaction, they typically are looking up records in our office to make sure that chain of ownership is right and clean. There are times when people try to put property into legal entities and others, just know that that information is also potentially searchable in a state database. I think ultimately ownership information is supposed to be public records acceptable. People can find that information out. Just information for folks to be aware of. She popped back on thats our queue that the question and answer session is going to start soon. Im going to just end in it terms of our presubmitting questions to kendra. Where can i find help to set up in the state plan quickly. okay. Several other things we discussed today can be done rather quickly. If you have accounts, if you have retirement ats, if you hate insurance. Designation forms, review that. If it doesnt have a contingent beneficiary, add one. You can also hold down a Health Care Directive from your medical establishment. You can indicate preferences there and have it notarized. That can be done relatively quickly too. A transfer on death also can be properly executed and filed. Doing a will or a trust may take a little more time. Typically a couple of weeks. Our office does them in that time line. Its usually two to three weeks or so to meet with people, now of course, its virtual to prepare drafts and adequately review and get around it signing them with our notary and witnesses. Some of them you can do on your own. With a lawyer its going to take two to three weeks. just for folks to know she is a nonprofit providing these services. We want to let people know they have help out there especially from our nonprofit partners. Im go to go turn it over to you. we have so many questions coming in. We have a question from cony. Two Single Person bought a house with 45 and 55 separately. After being married for two years they did not change the title. Now the husband wants to change his 45 to his wife. Will that change the property tax . sharing of ownership information between married couple r. In that situation we wouldnt expect a reassessment. they can own their property together as Community Property within that marital trust, there are some benefits to married couples in owning property as Community Property in a marital trust. Essentially if they own property as Community Property and one of them passes away. If they property is sold even though both of them havent passed, that surviving spouse will dpet the full basis. Thats a unique thing for people who own properties as Community Property. thats something that isim glad you brought that up. I think if youre like me, when you first bought a home you were not paying attention to all of these legal documents, nor did you know what they really were. One thing i suggest you take a look at for properties because its a big part of what we own. Take a look at your deed and how it is that you have recorded holding title. Youre going to see on that line theres actually very specific legal language that speaks to how people are owning things. What is the reeght o right of survivorship afterwards. We own the property as Community Property. Kind of speaking to what she is saying rk th, the designation oe deed is how we own the property. If i purchase the property with my partner, wasnt my husband yet. We own the property together. We may have opened it as tenants in common. We each have a real proportionate share and may have no rights to survivorship. That may say i own my 50 share and he opens his 50 share. Unless i designated it somehow with a tod or if i had put up a trust or will or something that strig nateed it wouldesignated. Who is in the chain of inheritance for me. Im designated in my deed that were owning separate portions of it. He doesnt have a right to receive my portion if i pass away. I recommend because i think especially when we first buy property its such a blur you dont Pay Attention to the language in your deed. You may want to pull that document up and see what it says. It speaks to not only how you are owning it but what happens in terms of survivorship and where that property passes passs afterwards. i would say thats for people who purchase property prior to about 2000 or so a lot of people were taking title as joint tenants with their spouse. Without the writership and being Community Property, i believe that if one of them passed and then it was thereafter sold, they would only get the basis on that 50 rarymg than the 100 . Its very important to pull out those old deeds. I see deeds indicating all kiefneds okinds. Thats a great tip. right. we have one last question. Well get back to the rest of you after the webinar. The last question istheres so many to choose from. Should we put a trust name or actual beneficiary, for example, a child on the beneficiary form. on a retirement account or Life Insurance . its not specified. okay. Can you read that again . should we put a trust name or actual beneficiary for example children on a beneficiary form . you can put someone down as a primary beneficiary. If the child is a responsible adult you could put that child down as a beneficiary. I dont know how old this persons child is. If the child is younger, you have to think about if you just put someones name down on a beneficiary form that person would attain that asset at age 18. You can think about being 18 and you came into a large sum of money that may not be a good thing for us. If you have younger children and they arent financially responsible yet, you can put a trust down and certain restrictions. For instance, that money would only be for health, education, support, or maintenance until that person is thirty years old or 25 years old. That person would have Living Expenses and attend school but would not receive the check book until age 25 or 30. You want those assets to be controlled. i think thats a great point to wrap up with which is again, i think each one of the different tools that weve talked about today whether its a will, trust, descrig natein da beneficiary. What are your wishes . How things are . The intended beneficialary is five years old, you may want to think about how you want to set that up. Theres more flexibility in terms of designating condition nz which that person is cared for until they are of the age that you think they should inhaisht or receivinherit. I hope you begin thinking about these questions. Im sure theres resources to help you get through some of those questions and pros he is s we move forward. in discussing children because i didnt have time to get into that. People with Young Children, children under the age of 18, they should probably prepare at least a will if they own a home, they can prepare a trust as well. In those documents, you would typically designate who you want to be the guardian of your children should you pass away. This avoids chaos between well intentioned Family Members. Its be best to make that very clear because the court gives deaf randeference to that choic. it drives home the point when we talk aboutest at about e planning, its about love. How do i take care of the people who survive me and make sure they are set up in a good way, they dont assume burdens or things without clear understanding with about where you want things to go. Especially for Young Children as well making sure that, you know, who you think are the best guardians and folks who take care of them are actually going to be the ones who can. I think thats really important. Thank you for spending time with us and all the panelists who joined us. Our translator for making sure that everything is accessible to our participants. We hope that you learned a lot. Thank you so much for joining us. thank you, everyone. thank you, so much. I just want to remind folks were going to put up the poll one more time to you can give us feedback for our first dij cal famildigitalforum. 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