Best of Orange County 2020: Navigating a year unlike any other


Ron Hasse

Last year at this time, few among us attended family get-togethers via Zoom or wore facemasks to do our grocery shopping. But the events of 2020 have required us all to adapt to a new environment.

The Best of Orange County has had to adapt as well. In its 27th year, the annual reader survey of our community’s top destinations, attractions and businesses faced some unprecedented challenges.

For starters, the places we’d go, such as movie theaters and music venues, closed because of the novel coronavirus pandemic in March and have remained so for months. The popular fairs and festivals we’d previously attended didn’t take place in 2020. Restaurants had to pivot to delivery, takeout and patio dining. Some longtime businesses threw in the towel.

However, like our hardworking local businesses and workers, Orange County Register readers didn’t miss a beat. They cast tens of thousands of votes, a 22% increase over 2019. The businesses and attractions they voted for in scores of categories are in the magazine you’re holding right now.

Besides popular perennial categories such as the best beach, burger and city to live in, this year’s guide features readers’ choices in several new categories. The Places to Go + Do chapter has voters’ recommendations for the best family outing and the best Orange County college or university. The Luxury Lifestyle chapter honors the county’s top charitable organizations and the most breathtaking waterfront dining spots. The Food & Drink chapter calls out the best date night restaurants and food halls.

We hope you enjoy the 27th annual Best of Orange County publication and use it as a resource as you explore the county in the months ahead. Many of the locations profiled here are available for you to visit or patronize right now, while others will have to wait until conditions change to reopen their doors.

If the past year has taught us anything, it’s that circumstances can be highly unpredictable. However, one thing you can count on is that Orange County will remain a beautiful place to live and experience, with perfect weather, a stunning coastline and amenities that rival anywhere else on the planet.

The Best of Orange County celebrates the attributes that make our community a world-class destination. Even when terms such as “social distancing” have fallen from use, these places, events, restaurants and other businesses will continue to attract people seeking to experience the Orange County lifestyle.

Ron Hasse

Publisher, The Orange County Register

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Will commercial real estate pause for presidential election?

My inbox is full! Today, I will parse through the noise and attempt to make some sense of the questions I receive on a daily basis. Plus purging is good. From cleared clutter to sanitized sanity — here it goes.

Does the presidential election slow commercial real estate activity?

Certainly, some small business owners take the political landscape into consideration before making a commitment to lease or purchase buildings.

Specifically, how does the current administration deal with ownership? Are there tax breaks if you occupy your business home? What about borrowing costs? The vast majority of commercial real estate financing is originated through loans either made or guaranteed by the Small Business Administration.

Frankly, in the year of the pandemic 2020 – most companies are concerned about their survival. What happens in November appears to be a distant outpost.

Will office space ever be used as it was pre-virus?

Prior to the lockdown — which sent workers scrambling home to find enough internet bandwidth and clear the guest bedroom — the trend in office space was toward more density. Meaning – doing away with fixed walls, creating a more collaborative work environment, fewer private offices and more employees per square foot.

Concepts such as WeWork – executive suites on steroids – became popular. For a small monthly fee, companies can pivot as their space needs morph. Add a few bodies? No problem. Lose a contract? Just downsize next month. The appeal of coding alongside several strangers advanced.

Now, decision-makers are re-imagining the way their spaces are occupied. Visit my office on a typical day and you’ll find four or five agents bouncing around a vacant suite. Many of us have found working from home advantageous, productive, and efficient.

Will I return to the office on a daily basis? Maybe. But taking a work break and watching “Frozen II” with our 2-year-old grandson has its advantages.

Is there a “virus discount”?

Simply: It depends. As aforementioned, office space is experiencing some uncertainty. Therefore, if you charge out into the leasing market, chances are you’ll find a deal. Retail? Who knows?

We are actually witnessing a virus premium in industrial real estate. Our vacancy was historically low at the beginning of 2020. Even the catastrophic nature of a COVID-19 pause has had little impact. I suspect the bump is largely due to cheap borrowing rates.

Are touring protocols in place – similar to residential?

Last week I read with great interest Leslie Eskildsen’s column on home-selling tactics. Outlined were the hoops required to simply walk through a house before buying it. Good grief!

No more open houses, safety gear, financial pre-qualifications prior to touring, handy wipes at the beckon and plenty of masks. Yet houses are leaving the market at a record pace!

We can still tour without much hassle. Sure, masks are required. In the case of a new build, plan on safety vests and hard hats. But, these are a good idea whenever walking a construction site. I showed up at a building in shorts a couple of weeks ago when the mercury surpassed my patience. You can imagine my embarrassment when my client perused the space alone. Long pants required. Whoops!

How is 2021 shaping up?

I’d only be guessing. However, I suspect the fourth quarter of this year will portend what’s next. If businesses reopen fully, a vaccine is discovered and most importantly, confidence returns, we could see a bounce back like no other.

Remember, not so long ago, folks were optimistic about a banner 2020. Man. That is SO 2019!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Family of nursing home resident who died: ‘She had 3 really good years there and 1 really bad week’

Karen Johnson, 77, spent about three years in the Highland Springs Care Center in Beaumont.

“She was at an unlocked memory care facility in Hemet, but she got to the point with her Alzheimer’s and dementia … where she needed to be in a locked facility,” said her daughter, Dena Garcia.


Eye of the Storm

Southern California Nursing Homes during the Coronavirus Pandemic

Latest installments in a continuing series

  • Part One:  What do Southern California nursing homes hard hit by COVID-related deaths have in common? We spoke with experts, nursing home administrators and advocates to find out.
  • Part Two: A tale of two Pasadena nursing homes. One, Gem Transitional Care Center, hard hit by COVID deaths and another, Camellia Gardens, about four miles away, that wasn’t.
  • Today, Part Three: Highland Springs Care Center in Beaumont has one of the highest percentage of COVID-19 deaths per average daily number of residents of any skilled nursing home in Orange, Riverside or San Bernardino counties.

The series was produced by correspondent Brenda Gazzar and SCNG staff writer Beau Yarbrough, participating in the USC Annenberg Center for Health Journalism’s California Fellowship.


Garcia, who lives in Moreno Valley, would visit her mother regularly.

“I had a really good relationship with people who worked there. I knew them, they knew me, I could show up at any time,” she said.

And her mother seemed to like Highland Springs:

“She was a very outdoorsy person, so I think she liked getting outdoors and still feel like she was getting outside,” Garcia said, although she noted that Johnson still wasn’t allowed to leave the grounds.

In March, as the coronavirus pandemic swept into Riverside County, Highland Springs stopped all visitation. Management told residents’ families they had a rigorous routine for keeping staff, residents and the facility clean and virus-free. All employees were screened for temperatures when they arrived each day, for example. According to her family, Johnson even appears in a March 23 video about hand washing on the Highland Springs Facebook page.

“She had three really good years there and one really bad week,” said Johnson’s grandson, Kyle Garcia, who lives near Fort Worth.

On April 11, Dena Garcia was told that her mother was running a fever. Three days later, Johnson was sent to the emergency room at Banning’s San Gorgonio Memorial Hospital, where she was nonresponsive. Previously, she was capable of holding conversations and, her dementia and Alzheimer’s aside, was in generally good shape, according to her family.

Highland Springs spokeswoman Liz Tyler blames asymptomatic spread for the virus getting into Highland Springs.

“It’s not like the memory care facility created this virus or served it with breakfast,” she said. “It came in from the outside.”

Despite housing those most vulnerable to COVID-19, nursing homes don’t have the same tools as hospitals do to fight it, she said.

“Nursing homes, they don’t have negative space rooms like you have in hospitals. They have shared ventilation,” Tyler said. “It is an extraordinary effort to contain it.”

Highland Springs stopped admitting new residents on April 13, after the facility was first informed a resident had tested positive for COVID-19.

On April 17, Highland Springs was told Johnson had tested positive for COVID-19. Staff ended up testing all of their patients that same day, Tyler said. Sixty-one out of 86 residents tested positive, most of whom were asymptomatic.

“Their suspicion is it came with an asymptomatic staff member and it may have been a staff member who had a job in more than one facility,” Tyler said.

The facility gave employees an ultimatum, requiring them to only work at one facility, and residents who had tested positive were put in isolation.

Johnson died April 19 — the only person to die of COVID-19 in Riverside County that day, according to county health officials. She was the 75th person to die in the county of the disease.

A nurse at the hospital held up the phone so Dena Garcia could say goodbye to her mother.

“I just told her that I loved her and that we didn’t want her to suffer,” she said. “If it’s your time, it’s your time and you can go. Even without the coronavirus, Alzheimer’s is just a terrible, terrible disease.”

It has been a tough year for Dena Garcia: The last time she saw her mother alive was the day before Garcia’s father was buried. Two of Johnson’s six other siblings also have been diagnosed with COVID-19.

As of Sept. 11, 20 Highland Springs residents have died of COVID-19, roughly 24% of their 84 average daily residents, according to an analysis of data from Medicare’s Nursing Home Compare database and the California Department of Public Health’s Skilled Nursing Homes COVID-19 database.

According to Tyler, Highland Springs hasn’t had any new residents test positive for COVID-19 since the beginning of June.

“They got hit with an invisible bomb, they jumped on it, they did the isolation necessary,” she said. “Even with their dementia population, they kept it from spreading.”

The Garcias feel Highland Springs wasn’t as forthcoming as it should have been about the spread of the coronavirus in the facility, something Tyler denies. But the family is sympathetic to the challenge that Highland Springs faces trying to keep dementia and Alzheimer’s patients from contracting COVID-19.

“You can’t teach them to not eat off each others’ plates. You can’t teach them to keep their hands to themselves. You can’t teach them to not pick up a half-smoked cigarette and smoke it for themselves,” Dena Garcia said. “It’s just going to happen.”

According to Tyler, the big challenge isn’t keeping the virus controlled inside nursing homes; it’s keeping it from coming in from the world outside, where, six months on, the public still can’t agree on how to prevent the virus’ spread.

“This bug is easy to kill. You just have to know it’s there. Once you know it’s there, you separate, do all the cleaning and all the things like that and you get rid of it, like this facility did,” Tyler said. “But any facility in this country, no matter how good their protocols are, they’re just one day from an asymptomatic person coming in.”

This article was produced as a project for the USC Center for Health Journalism’s California Fellowship.

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A tale of two Southern California nursing homes in the era of coronavirus

Administrator Hrag Bekerian felt confident, he said, that they were taking the right precautions at Gem Transitional Care Center before the coronavirus struck.

The four-star-rated nursing home on South Fair Oaks Avenue in Pasadena had closed its doors to visitors a week before the state’s guidance. Managers held frequent training sessions, screened all entrants and ramped up hand-washing checks.

“We believe we were well-prepared,” said Bekerian, 31.


Eye of the Storm

Southern California Nursing Homes during the Coronavirus Pandemic

Latest installments in a continuing series

  • Sunday, Part One What do Southern California nursing homes hard hit by COVID-related deaths have in common? We spoke with experts, nursing home administrators and advocates to find out.
  • Tuesday, Part Two: A tale of two Pasadena nursing homes. One, Gem Transitional Care Center, hard hit by COVID deaths and another, Camellia Gardens, about four miles away, that wasn’t.
  • Wednesday, Part Three: Highland Springs Care Center in Beaumont has one of the highest percentage of COVID-19 deaths per average daily number of residents of any skilled nursing home in Orange, Riverside or San Bernardino counties.

The series was produced by correspondent Brenda Gazzar and SCNG staff writer Beau Yarbrough, participating in the USC Annenberg Center for Health Journalism‘s California Fellowship.


 

Yet since mid-April, nearly 55 residents at Gem Transitional tested positive for COVID, more than a dozen of whom died. With typically around 65 daily residents, the nursing home has one of the highest COVID-related resident death rates in Los Angeles County for its population, according to a review by the Southern California News Group.


A caregiver gets a temperature check while Nelida Arlante, administrator of Camellia Gardens, poses at the Pasadena care center on Friday, August 7, 2020. Arlante says a dozen staff members and three residents tested positive for COVID-19, with one patient death. Arlante believes the strict rules, educational sessions and oversight she implemented at her facility helped curb the spread of the virus. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

About four miles up the road is Camellia Gardens Care Center. As a one-star facility, it has the lowest possible overall rating on Medicare’s Nursing Home Compare. The slightly larger home had three residents contract COVID and only one death, said Nelida Arlante, the home’s administrator.

Arlante believes their vigilance helped curb the virus there. As a former physician in the Philippines, Arlante said, she may have had an edge.

2,900 deaths in region

More than 2,900 nursing home residents have died of COVID-19-related causes in Los Angeles, Orange, Riverside and San Bernardino counties, comprising about one-third of this region’s total coronavirus deaths, according to data from the California Department of Public Health.

Nursing homes across the region have touted early studies showing that location and size largely determine how they’ve fared with the virus. But it’s becoming increasingly clear that several other factors can help seal a home’s fate.

Mass testing with quick results and adequate personal protective equipment are clearly important, experts say. Nursing staff levels, infection-control practices, resident demographics, leadership and even a home’s for-profit status also can contribute to the death toll.

“It’s all those factors,” said Charlene Harrington, professor emerita at UC San Francisco and a registered nurse.


Hrag Bekerian, administrator of Gem Transitional Care Center, poses at the Pasadena center on Friday, August 7, 2020. The nursing home had a high number of patients and staff including Bekerian who contracted COVID-19. Today they have no coronavirus patients. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

Behind the high death toll

Bekerian believes the high death toll at his for-profit facility is due at least partly to the type of residents it serves.

“We take high acuity patients,” said Bekerian, whose Gem Transitional facility often accepts patients from neighboring Huntington Hospital. “We had residents in the building that had higher and severe chronic conditions.”

People of color, who are disproportionately affected by the virus, also made up nearly 60% of their residents, according to data Bekerian provided.

California nursing homes with overall quality ratings of four and five stars were less likely to have COVID-19 cases and deaths when adjusting for a home’s size and patients’ race, according to a study in the Journal of the American Medical Directors Association. Nursing facilities with smaller white populations and for-profit ones were more likely to have higher cases and deaths.

Learning hard lessons

Like with many homes, there were also hard lessons they learned in real time.

First, Bekerian said, guidance from local, state and federal agencies kept changing.

He also realized it would have been best to quarantine staff working at multiple facilities at home for 14 days right away. Instead, Gem Transitional had at first waited for COVID-19 cases to surface at an employee’s second facility before doing so.

The nursing home, which has a four-star rating for staffing, eventually told employees they had to pick one facility after the Pasadena Public Health Department directed nursing homes to avoid using employees with multiple jobs “by any means possible” on April 12.

“I think it would have shown us good results if we had done it much, much earlier,” Bekerian said, noting the facility was simply following the guidance given by local health officials.

The vast majority of their employees stayed, he said, and all received hazard pay. He declined to say how much.


How to find nursing home ratings, deficiencies


 

Employees work at other facilities

Sometimes, employees work at nursing homes with known COVID outbreaks and then are allowed by employers to work at a second facility, said Molly Davies, who oversees L.A. County’s ombudsman program that investigates concerns of residents in long-term care.

Along with a lack of adequate staffing and training, Davies believes this has been a main reason why some nursing homes have been harder hit.

“Part of that is because facilities don’t want to pay overtime so they’d rather have you work even at another building because it starts the clock again,” Davies said.

Watch employees ‘like a hawk’

Arlante has pondered how the for-profit Camellia Gardens, which has below-average ratings for staffing and health inspections, had managed to escape a harsher death toll.


Nelida Arlante, administrator of Camellia Gardens, poses at the Pasadena care center on Friday, August 7, 2020. Arlante had a dozen staff members and three residents test positive for COVID-19 with one patient death. Arlante believes the strict rules, educational sessions and oversight she implemented at her facility helped curb the spread of the virus. (Photo by Sarah Reingewirtz, Los Angeles Daily News/SCNG)

“Maybe (it’s because) we are strict with our employees and we watch them like a hawk,” Arlante said. “Hand hygiene seems so simple but if you are lax, you will forget the steps and do the shortcut.”

Calming employees’ fears with regular shift training was important, she said. Being available to answer questions at any time was as well.

Arlante and Camellia Gardens’ director of nursing slept on couches in the conference room for a week after their first COVID case, she said. They later often stayed until 10 or 11 p.m. at night to supervise the employees.

“I treat the facility as family and these employees like children,” she said. “If they are afraid, they can do something drastic unless the mother hen is there.”

Camellia Gardens also provided its employees with meals three times a day to reduce their trips and their exposure outside, Arlante said.

OT and double-time allowed

The home began requiring nursing staff to pick one facility in May, she said, and lost 15 nurses in the process. But Camellia Gardens gave “bonuses” to all employees and allowed for overtime as well as double-time, which enabled them “to get by.”

Bekerian believes the local health order directing facilities to avoid using employees who work at other facilities helped turn things around at his home. Gem Transitional also learned to adapt to a new, stringent reality.

They had separate entrances for those caring for COVID patients, separate areas to put on their PPE and separate break rooms. The nursing home became vigilant about watching its staff put on and take off their masks, gloves and gowns.

It was “being very strict with every policy and procedure we have put in place,” Bekerian said.

New residents accepted

In mid-August, the city gave the nursing home clearance to accept new residents again. New residents are put in an observation unit for 14 days before they can go into the “green zone” with patients who don’t have the virus or have fully recovered from it.

As of Sept. 10, Gem Transitional had 44 patients in a home with 75 beds.

With all the different zones in the building, it has “beds ready in case a breakdown happens,” Bekerian said. But ultimately, he would “love to get back to full capacity.”

“It’s a little challenging but that’s our goal down the road,” he said. “We’re taking it day by day.”

Contributor Elissa Lee contributed to this report. This article was produced as part of a project for the USC Center for Health Journalism’s California Fellowship.

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Are 1031 exchanges at risk if Congress closes the tax loophole?

As we have now surpassed Labor Day in the election year of the pandemic 2020, expect political rhetoric to reach a fever pitch. Sorry. Pun intended.

As our nation slowly recovers from business lockdowns, distance learning, storms along the Gulf Coast, wildfires in California and upheaval in our streets – all while the government responds monetarily to stem the bleeding – expect the next question to be – “how on earth can we possibly pay for all of this?”

California has proposed a 16.8% marginal tax through Assembly Bill 1253 aimed at those who earn more than $5 million annually. Who cares, you may ask? They should pay their fair share. What’s another 3.5% of their income to help the greater good?

Consider this. Many small business owners could tip this scale and face the extra burden. How long will they remain in California when Nevada, Texas, and Washington have ZERO state income tax? If we export a significant amount of our tax base – who’ll be left to foot the tab?

Proposition 15 — on the California ballot in November — proposes to split the property tax roll and tax commercial properties differently than residential parcels. I’ve written ad nauseam about where the ultimate bill will be paid. Yep! By you as the consumer of goods and services.

You see, if the cost of commercial real estate rents rises through an increase in property taxes, businesses who occupy the industrial buildings, office space, and retail storefronts will be forced to pass that expense along to their customers — you.

A target for a significant tax grab could also be the way in which capital gains taxes are deferred through 1031 exchanges. I’ve not seen any storms massing on the eastern horizon – but it’s always calmest – so the saying goes.

Congress could propose eliminating this “loophole” and generate billions in tax revenue. It currently works like this: If you sell a piece of income property, you are allowed to defer your long-term capital gains taxes. Simply, the seller enters a contract, creates a qualified intermediary before closing, closes, net sale proceeds go into an accommodator account, the seller identifies an upleg purchase within 45 days from close, and buys the upleg at the earlier of 180 days from close or the filing date of next year’s tax returns. Easy!

Literally thousands of these are done each year. Deferred are federal long-term capital gains of 15-20%, depreciation recapture of 25%, California state taxes on capital hains of $13.3%, and 3.8% for the Affordable Care Act. A whopping amount! Assumed is – if we tax those sales today vs. allowing a deferral – think of the revenue we’d generate!

Good in theory – but here’s the rub.

Commercial property owners often ask me this question when I visit: If I sell, what will I do with the proceeds? After all, I don’t want to pay close to half my gain in taxes! We then have an in-depth conversation about tax-deferred exchanges. So, if Congress were to change the rules or disallow 1031 exchanges altogether, sellers would be left with very little motivation to sell.

Some might say this argument is quite self-serving. After all, this guy is paid to sell commercial real estate. True enough. However, please don’t forget the multitude of industries that benefit from the sale and purchase of commercial real estate. Title companies, escrow holders, transactional lawyers, CPAs, qualified intermediaries, lenders, property inspectors, environmental engineers, contractors all drink from the trough of a commercial real estate transaction. Behind the scenes are real people – with families – whose livelihoods depend on property sales.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Aging relatives could be hiding their frailty

I have a client who is in her early 90s and lives independently in a senior apartment living complex. She pays her bills, buys her groceries, showers regularly and cleans her home daily. At least that is what she will tell you if you ask her.

Recently, I scheduled an appointment with her to drop off a small bistro table for her patio. At one period in her life, she was a nun and continues to live by a vow of poverty, spending only enough money to survive. She had completely forgotten that I was coming, even after two reminder phone calls. Once I arrived, I spent the afternoon helping her organize the patio, tossing trash, and putting items away to make space for the new furniture.

When we shifted into the home, I discovered it was a complete mess, just like the patio. Papers were stacked a foot high on the kitchen table, flowers were sitting in vases of rancid water, the kitchen cabinets were sparsely filled and the bathroom was filthy. The overall living conditions were not acceptable. I helped take a few items to the trash bin outside, vacuumed the carpet and took many mental notes.

As soon as I left, I reached out to her only local family member and explained what I had observed. We had a difficult, lengthy conversation discussing how her loved one has reached a point where she needs additional assistance. We brainstormed until we had a plan in place that seemed to address the current situation.

It is difficult for most people to notice and accept the subtle changes in their loved one’s behavior that indicate that they may need additional assistance. Usually, the elderly person will not ask for help, knowing that they may be losing their cherished independence.

For the caregiver, acknowledging these changes pushes the awareness that our loved one is not immortal to the surface, reminding them that death is looming in the future. Sometimes family members believe they have failed because their loved one cannot live independently. The logical side of us knows that this is not true. Unfortunately, our emotions can interfere with our ability to accept that change must occur.

I did notice several signs that perhaps by themselves would have gone unnoticed but combined were a red flag. The signs were:

Forgetfulness: Recently, I have observed that this client is more forgetful than in the past. If we are scheduling a meeting, I ask her to grab a pencil and write down the meeting date and time. Sometimes she calls me several times before the meeting because she knows it exists but cannot recall when it is.

Disorganized, dirty home: My client has always lived a simple life, living in a clean, tidy home. However, because of her age, she had reached the point where doing laundry is physically difficult and where scrubbing the shower and changing her sheets is impossible. When I visited her home, it was a mess.

Lack of personal hygiene: My first observation when I arrived at her home was her appearance, and I immediately wondered if she was bathing. I peeked into her bathroom to observe if it was even feasible for her to bathe. It was not; the tub is about 16 inches high, which would be an obstacle for her to climb over. Her clothes did not fit and were secured by what appeared to be a man’s belt. This was not the typical outfit of a blouse and pants that she had worn for years. She almost looked as if she were homeless.

Minimal groceries: The kitchen cabinets were bare. I noticed a few Top Ramen containers of noodles. The refrigerator was sparsely stocked as well. The stove was piled with objects, and the counters were cluttered with stuff. Cooking any type of meal was not happening in that kitchen. In fact, reading instructions and opening certain types of food containers were probably not occurring either.

Consumed by loneliness: COVID-19 has been paralyzing for this individual; she is terribly lonely. Her local family member has not been able to visit since March due to health risks. She is possibly depressed due to the lack of social connections.

After I reflected on these observations, it was clear that additional assistance was needed. At this point, it seems that my client does not need round-the-clock care but would benefit from in-home assistance. She needs someone to help with meal preparation, laundry and bathing.

So initially, an in-home care company was vetted and contracted to provide two days of service. Additionally, a house cleaner was hired to clean the apartment and change the sheets weekly. Meals on Wheels now provides one freshly prepared meal a day. The family member, who also is the agent for the power of attorney and trustee for the trust, understands that she needs to provide oversight and possibly assist with the finances.

The most difficult and important step in this type of scenario is accepting the fact that a loved one is aging and needs additional help. Most likely, they are not going to admit that they are having a difficult time. It is possible that they may even tell little white lies to cover up the truth.

Look for signs that they may need assistance, brainstorm for solutions, and offer to help. If you feel frustrated because of the necessary changes, place this aside. Remember, we begin our life needing a caregiver and often end our life needing a caregiver. It is the circle of life.

Teri Parker is vice president for CAPTRUST Financial Advisors. She has practiced in the field of financial planning and investment management since 2000. Reach her via email at Teri.parker@captrustadvisors.com.

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Why business transitions are soaring: Sales, exits and shutdowns

Family-owned and operated businesses are the lifeblood of our California economy. I am passionate about helping them create legacy wealth through commercial real estate ownership.

One of the coolest things I observe during my daily grind is the many ways Californians make a living. The entrepreneurial spirit is amazing. However, many of our family-owned and operated manufacturing and logistics clients are facing a transition in their business which leads to a commercial real estate decision.

These transitions include:

Reorganization from COVID-19 upheaval.

Sadly, the pandemic has brutally thinned some industries. Others have crushed it. I walked the bulging warehouse with a chief operating officer of a family-owned and operated business last week. They supply fabric to the likes of Walmart, Joanne’s and Target. With stay-at-home orders, more folks are sewing and their sales have exploded.

Forward-looking, their facilities will not handle the uptick in orders. We are exploring ways to minimize their short-term pain, finding them more space, for now, vs. a longer-term solution.

On the flip side, a client who once supplied lights, video screens and temporary power to concerts, festivals and sporting events has no more business. Gone! Just like that. A thriving enterprise evaporated. Our task is more somber as we work through an excess of space, relieving this company of its lease obligations.

A sale of their operating company or acquiring a competitor.

Never since the halcyon days of Gordon Gecko have we seen a spate of mergers and acquisitions like now. Private equity capital – seeking favorable returns – has poured into traditional manufacturing. Plastic injection molding, aerospace tooling and packaging have found renewed interest from these groups. Common is a “roll-up” of these separate operations into a larger entity.

Generally, the play is to manage the companies for a few months or years, continue to acquire additional units, shed the unprofitable pieces and then resell the consolidation.

What is created is a duplication of facilities — akin to a “yours, mine, and ours” that occurs when a family is blended. Cultures must be morphed, excess real estate shed and a balance struck.

Relocation out-of-state.

California has made life quite difficult for anyone starting or managing a business. A noose of strangling regulation – licensing, enviro compliance, conditional use permitting, zoning – hangs over new and existing companies.

Layer in a few wacky – sorry – new laws such as Assembly Bill 5 (which unravels the way in which independent contractors are classified), the pending Proposition 15 (if passed, would tax commercial real estate differently than houses), and the new marginal tax rate – highest in the country – and you too might consider a moving van to tax- and regulation-friendly states such as Texas, Nevada and Arizona.

The outmigration is startling yet understandable. Left behind are industrial buildings that must be leased or sold.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

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You win big: Don’t go out and buy cars for your friends

Over the past few months, our weekly column has focused on the sad realities of the death of a loved one, divorce, disability and COVID-19. These are not happy topics but do reflect how we spend much of our time and energy, helping our clients through tough times. Because of this, we are thrilled when one of our clients has a big win.

Whether they have won the lotto, sold the next brilliant idea, or received an inheritance or legal settlement, when our clients win, we also vicariously experience their joy, satisfaction, and hopefulness for the future.

There are a couple of recurring truths I have found when dealing with these unexpected windfalls. First, it is shocking how quickly people are able to burn through large amounts of cash, and, also, it is unbelievable how smart people can make terrible snap decisions about managing vast sums that should be enough to last a lifetime.

Approximately 70% of lotto winners lose or spend all of their winnings in five years or less. So, here is some practical advice, with examples, for how to manage an unexpected windfall and make it last.

Deciding

Aside from signing your lotto ticket, the first step would be to hire the most qualified attorney you can afford to review the documents that led to your windfall. These could include the sales agreement, settlement, trust distribution documents, or prenup/divorce agreement. This way, you will not be left to wonder if you received everything you were entitled to, with the best terms that were available.

To maintain privacy and security, you might want to consult with a qualified attorney about setting up a trust to receive the funds. It would be best if you also put a freeze on your credit bureau files to prevent identity theft and keep your windfall secret until your plans are in place.

There is often discussion regarding whether to choose a lump sum or annual payments. It depends on your age, your plans, tax rates, and the annuity rate versus what you can earn if you invested the lump sum. You will need to consult with a certified financial planner and certified public accountant to determine which will work best in your situation. They should be able to provide you with clear graphs and computations you can understand.

For example, a client won a $5 million settlement. He wanted to purchase and live on a remote ranch in Mexico. They took the lump sum because financing in that location was not an option, and they invested the balance for an income stream.

A CPA will also help you plan, minimize and set aside funds for the taxes. Do not skip the tax planning before you count on how much you have to spend. The combined top federal and California tax rates are now over 50%. With proper tax planning, the tax rate could be far less.

Spending

Next, realize that you are human and you are going to want to spend some of the windfall right away. This is why we suggest that our trustee clients make a small, early distribution to beneficiaries. It helps them get some of the spending out of their system. So, pay yourself a small distribution and have a party or go on vacation — make it something memorable. Set the rest aside.

Vehicles seem to be the first purchase people make with their windfall.  Before buying cars for all of your friends and family members, consider the income and gift tax implications and if the purchases are the best use of your winnings to help your family members.

Protecting

Most advisers recommend letting your windfall sit for six months while you pray, meditate or just think about your plans before making any large purchases or significant investment decisions.

Within a month of the death of her husband, a widow said she felt coerced by a “friend” into purchasing an annuity with all of the proceeds from her husband’s life insurance. She explained that she was not thinking right when she did it because of all of the grief and shock. The annuity payments were not sufficient to pay debts and to support her children and contained excessive commission payments to her friend.

Fortunately, the supervisor at the life insurance company agreed to refund the widow’s investment after we threatened legal action.

If you are feeling coerced or burdened by friends and family members asking for hand-outs or investments in their latest scheme, the easiest response is to blame your professionals. For instance, you can tell them the funds are in trust, and your trustee will not allow it, or that all of your assets are tied up due to the way your CPA has structured everything for taxes.

Fixing

A strong urge people have when they come into money is to correct everything they have seen as wrong or off in their lives. I always tell clients to take their time and enjoy the process of “fixing” everything.

One mature, newlywed bride who married a wealthy man came to see me, and I gave her that advice. Sure enough, after buying the new car, new clothes, dental implants, new home on the beach, and plastic surgery within only two years, she came back to see me, and asked, “What now?”

Her new wealth did not bring the happiness she expected.

Helping

If you are thinking of giving away large amounts of cash to your church or favorite charity, consider seeking advice about charitable gift planning to maximize the impact of your gift while also minimizing taxes and supporting your other family goals.

The clients I have seen who were happiest with their windfall and were able to preserve it were less changed with the new wealth and acted more of stewards of their fortune. The plans they developed with their professionals provided for a much-needed sense of long term security while allowing for enjoyment of the newfound resources.

During these tough times, it is an excellent diversion to muse about all the good we could do with an unexpected windfall.

Michelle C. Herting, CPA, ABV, AEP specializes in estate, trust and gift taxes, and business valuations. She has three offices in Southern California and is president of the Charitable Gift Planners of Inland Southern California.

 

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Jill Biden’s path from reluctant politico to possible FLOTUS

By ALEXANDRA JAFFE | Associated Press

WILMINGTON, Del. — Jill Biden is a prankster.

It’s the first thing most of her friends and former aides say when asked about her character. She once sneaked into a close aide’s birthday party dressed as catering staff and surprised him with a drink. She has dressed up as the Grinch to toy with colleagues during Christmas. And she likes to put on a red wig with a bob to pop up unnoticed at events or make her husband, Joe Biden, laugh.

That sense of humor has helped Joe Biden navigate decades in public life that have been marked by achievements, defeats and considerable personal loss. As she prepares to speak Tuesday at the Democratic National Convention, those who have worked closely with Jill Biden say her warmth will appeal to Americans confronting tough times of their own.

“She has a very good sense of, especially in these times, that bringing a little smile, some joy, some levity into moments is important,” said Courtney O’Donnell, who served as Jill Biden’s communications director during her husband’s first term as vice president.

Jill Biden married the presumptive Democratic presidential nominee in 1977, more than four years after his first wife and young daughter were killed in a car accident. She helped raise his surviving sons, Beau and Hunter, before giving birth to daughter Ashley in 1981.

As Joe Biden commuted from Delaware to Washington while serving as a senator, Jill Biden built a career as a teacher, ultimately earning two master’s degrees and then a doctorate in education from the University of Delaware in 2007.

Along the way, former coworkers say, Jill Biden, 69, became one of her husband’s most valuable political advisers, someone whose opinion was paramount in most of his biggest decisions, both political and personal. She was skeptical of his 1988 presidential campaign, but pushed him to run again in 2008, according to her memoir.

After Joe Biden became the presumptive nominee this year, she played a prominent role in auditioning many of the vice presidential candidates, appearing with them at various events. During a recent interview on CBS, Jill Biden acknowledged that she and her husband “talked about the different woman candidates.”

“But it’s gotta be Joe’s decision,” she added.

But those who know Jill Biden best say she’s slightly perplexed at being called one of her husband’s most significant “advisers,” insisting that her relationship with her husband is far deeper and more nuanced than such a label would suggest.

“He’s got plenty of political advisers. That’s not what she is,” said Cathy Russell, who was Jill Biden’s chief of staff during the Obama administration and is now a vice chair on the campaign. “She is his spouse, and she loves him and she talks to him about all sorts of things, but she has a unique role, and it’s not being a political adviser. That’s not her thing.”

Jill Biden does remain one of her husband’s closest confidantes — particularly now, at a time when both Bidens are largely confined to their Wilmington home due to the coronavirus pandemic. Aides say the Bidens often pass each other in the halls during the day as they head from a briefing to a virtual event to a fundraiser.

“They see each other a lot, but there’s a lot of passing and crossing each other. In the evening they try to sit together and just kind of regroup and chat about things,” Russell said. “They’ve got grandkids and kids and two dogs. They’ve got family and lives that are sort of spinning around them, and I think they just try to always find time for each other.”

A self-described introvert, Jill Biden was initially a reluctant political wife. In her memoir, she writes of giving her first political speech and having no desire to “give any speeches, anytime, anywhere — just the thought of doing so made me so nervous I felt sick.”

But after eight years as the vice president’s wife and then giving speeches and appearing at events after her husband left office, Jill Biden has become one of her husband’s most prominent surrogates. She has appeared in virtual events in more than 17 cities since May, and is one one of the campaign’s primary surrogates to Latino voters, headlining town halls and holding frequent calls with members of the Congressional Hispanic Caucus.

In one week this month, Jill Biden appeared at everything from a science-focused fundraiser to an event with Joe Biden’s faith coalition to one focused on LGBTQ youth, speaking with emotion and fluency about her husband’s plans for each constituency.

She’s also one of his most protective surrogates, a quality she writes about in her memoir — and one that was on full display during a Super Tuesday speech Joe Biden gave in March when a handful of protesters rushed the stage. Jill moved between the protesters and her husband, pushing a protester away.

But the resistance to being called an “adviser” on Biden’s team reflects Jill Biden’s persistent and successful efforts to carve out her own career and identity independent of her husband’s political ambitions, something she prioritized even during his time in the Senate.

“They lived in Delaware always, through all those Senate campaigns, and she had her own life. She was raising her children, she was teaching, she was going to school at night at different times,” said Russell. “She was never a part of the Washington scene. That political life just wasn’t her life.”

Jill Biden continued to teach at a community college while her husband was vice president, against the advice of multiple aides at the time.

“Being a teacher is not what I do but who I am,” she wrote in her memoir, and described “scrambling into a cocktail dress and heels” in the bathroom at her school to make it to a White House reception, or grading papers on Air Force Two, with relish.

Indeed, she has said she plans to continue teaching if she becomes first lady.

As longtime friend and teaching colleague Mary Doody described it, the classroom offers Jill Biden a bit of an escape.

“When you’re in a classroom, for an hour and a half or two hours or however long you’re with those students, it’s just you and them, and you build this rapport. It’s like you build a little family,” Doody said. “And I think that’s why it’s so important for her to teach.”

Aides say she’ll continue to advocate for many of the same issues she championed as the vice president’s wife if she returns to the White House as first lady. During her eight years in the Obama administration, she focused on military spouses and families, advocated for community colleges and sought to raise awareness around breast cancer prevention.

All the while, Doody notes, Jill Biden is known for being impeccably dressed, always offering up a good book recommendation, writing small notes or sending flowers to friends, family and staff who need a pick me up, and making sure to get to all her grandkids’ sports games. Doody expects her to continue it all.

“If I could figure out how she does all that, I would have a really good secret to share,” Doody said.

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