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Paul H. Melbostad SB#99951
GOLDSTEIN, GELLMAN, MELBOSTAD,
HARRIS & McSPARRAN, LLP
‘ ELECTRONICALLY
1388 Sutter Street, Suite 1000
San Francisco, CA 94109-5494 FILED
415/673-5600 FAX:415/673-5606 a ao
Email: PMelbostad@g3mh.com
= 02/47/2016
Attorneys for Co-Administrator eva aleatetee
YATES F. WATSON Pr lepay cre
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
Estate of Case No. PES-14-297467
DECLARATION OF PAUL H. MELBOSTAD
SHIRLEY A. HENDERSON IN SUPPORT OF REQUEST FOR SPECIAL
SETTING OF HEARING ON PETITION
Deceased. FOR FINAL DISTRIBUTION
I, PAUL H. MELBOSTAD, hereby present this declaration in support of my request for
special setting of the hearing on the Petition for Final Distribution and declare as follows:
1. Iam an attorney at law duly admitted to practice before all of the Courts of the State of
California. I am a partner with the law firm Goldstein, Gellman, Melbostad, Harris & McSparran,
LLP, the attorneys of record for Co-Administrator Yates F. Watson in the above-titled action. I have
personal knowledge of the facts stated below and if called to testify, I would testify competently
thereto.
2. I must request that the Court specially set the hearing on the petition for final distribution
of the Estate of Shirley Henderson on the first available dated within the required minimum fifteen day
notice period after the date it is filed. This request is being made with the consent of the attorney for
Co Administrator Ann Yolanda Ridge, Jennifer Brown. There are two reasons for the necessity of
special setting.
60113B.docx: Declaration Of Paul H. Melbostad In Support Of
Request For Special Setting Of Hearing On
Petition For Final Distribution27
28
3. First, the CPA preparing the fiduciary income tax returns for the Estate, , John San
Agustin of Morling & Associates strongly advises that the assets of the Estate and, in particular, the
capital gain income from the sale of Shirley A. Henderson’s residence at 111 Hahn Street, San
Francisco, be distributed within 65 days of the end of calendar year 2015. He confirmed to me that by
doing so, the substantial capital gain income of almost $175,000 gross the Estate realized on the sale
of decedent’s house could largely be offset by the deduction of administrative expenses of the estate,
including compensation of the Co-Administrators and the attorneys (both ordinary and extraordinary
compensation in the amounts determined and approved by the Probate Court) and the tax on the net
amount of income can be paid at the individual tax rates of the beneficiaries, rather than at the highest
rate which the Co-Administrators would be required to pay as fiduciaries. None of the beneficiaries
currently have high enough incomes to be in the highest tax brackets which would be applicable to the
Estate. The CPA advises that substantially less tax would have to be paid by the beneficiaries, and
they would each receive a significantly greater net distribution, because there was such a substantial
difference between the sales price of the house of $625,000 in 2015 and the total of the Inventory
values determined by the Probate Referee, Warren Wong, of only $450,000 as of the date of Shirley’s
death in 2013. CPA San Agustin has advised me and Jennifer Brown, the attorney for Co-
Administrator Ann Yolanda Ridge, that the Estate might have to pay as much as $14,000 in federal
income tax and $7500 to the State of California if the income tax on the capital gain is paid at the
Estate level by the Co-Administrators. In contrast, he advises that if the income is passed through to
the 4 beneficiaries by issuing them Form 1099’s for 25% each, most likely they will only have to pay a
small fraction of those amounts in total, possibly no tax at all, after deductions are taken which would
be available to them on their individual tax returns.
4. The second, and even more immediate reason for the necessity of specially setting the
hearing is that one of the beneficiaries, Sytheanah Z. Baylor, on August 20, 2015, assigned the sum of
$25,200.00 of her distributive share to Inheritance Funding Company, Inc., in exchange for a loan of
$15,000. The executed Assignment Agreement, Sale and Transfer of Beneficial Interest in Decedent’s
Estate has been filed with the court by Inheritance Funding Company, Inc. The Assignment
2.
60113B.doex:1802-02 Declaration Of Paul H. Melbostad In Support Of
Request For Special Setting Of Hearing On
Petition For Final DistributionAgreement is attached to the Petition for Final Distribution as Exhibit D and incorporated herein by
reference. It provides that if the lender is paid back within 6 months of the date it funded the loan, by
no later than, February 21, 2016, Inheritance Funding Company, Inc. will refund Sytheanah Z. Baylor
$5300 of the amount assigned, versus only $2800 if repaid within 12 months. That difference of
$3000 is substantial in relation to the amount of Ms. Baylor’s distributive share of the Estate. To
forfeit that additional $3000 would be a hardship for her and a waste of Estate assets. | am going to
ask the lender for a brief extension of time to repay the loan and be refunded the $3000, if prior to
February 21, 2016, we have a hearing date set for the Petition for Final Distribution on the first
available dated within the required minimum fifteen day notice period after the date it is filed.
I declare under penalty of perjury, under the laws of the State of California, that the foregoing
is true and correct and that this declaration was executed on February 16, 2016, at San Francisco,
California.
aul H. Melbostad
3.
60113B.docx: 1802-02 Declaration Of Paul H. Melbostad In Support Of
Request For Special Setting Of Hearing On
Petition For Final Distribution
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27 28 Paul H. Melbostad SB#99951 GOLDSTEIN, GELLMAN, MELBOSTAD, HARRIS & McSPARRAN, LLP ‘ ELECTRONICALLY 1388 Sutter Street, Suite 1000 San Francisco, CA 94109-5494 FILED 415/673-5600 FAX:415/673-5606 a ao Email: PMelbostad@g3mh.com = 02/47/2016 Attorneys for Co-Administrator eva aleatetee YATES F. WATSON Pr lepay cre SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO Estate of Case No. PES-14-297467 DECLARATION OF PAUL H. MELBOSTAD SHIRLEY A. HENDERSON IN SUPPORT OF REQUEST FOR SPECIAL SETTING OF HEARING ON PETITION Deceased. FOR FINAL DISTRIBUTION I, PAUL H. MELBOSTAD, hereby present this declaration in support of my request for special setting of the hearing on the Petition for Final Distribution and declare as follows: 1. Iam an attorney at law duly admitted to practice before all of the Courts of the State of California. I am a partner with the law firm Goldstein, Gellman, Melbostad, Harris & McSparran, LLP, the attorneys of record for Co-Administrator Yates F. Watson in the above-titled action. I have personal knowledge of the facts stated below and if called to testify, I would testify competently thereto. 2. I must request that the Court specially set the hearing on the petition for final distribution of the Estate of Shirley Henderson on the first available dated within the required minimum fifteen day notice period after the date it is filed. This request is being made with the consent of the attorney for Co Administrator Ann Yolanda Ridge, Jennifer Brown. There are two reasons for the necessity of special setting. 60113B.docx: Declaration Of Paul H. Melbostad In Support Of Request For Special Setting Of Hearing On Petition For Final Distribution27 28 3. First, the CPA preparing the fiduciary income tax returns for the Estate, , John San Agustin of Morling & Associates strongly advises that the assets of the Estate and, in particular, the capital gain income from the sale of Shirley A. Henderson’s residence at 111 Hahn Street, San Francisco, be distributed within 65 days of the end of calendar year 2015. He confirmed to me that by doing so, the substantial capital gain income of almost $175,000 gross the Estate realized on the sale of decedent’s house could largely be offset by the deduction of administrative expenses of the estate, including compensation of the Co-Administrators and the attorneys (both ordinary and extraordinary compensation in the amounts determined and approved by the Probate Court) and the tax on the net amount of income can be paid at the individual tax rates of the beneficiaries, rather than at the highest rate which the Co-Administrators would be required to pay as fiduciaries. None of the beneficiaries currently have high enough incomes to be in the highest tax brackets which would be applicable to the Estate. The CPA advises that substantially less tax would have to be paid by the beneficiaries, and they would each receive a significantly greater net distribution, because there was such a substantial difference between the sales price of the house of $625,000 in 2015 and the total of the Inventory values determined by the Probate Referee, Warren Wong, of only $450,000 as of the date of Shirley’s death in 2013. CPA San Agustin has advised me and Jennifer Brown, the attorney for Co- Administrator Ann Yolanda Ridge, that the Estate might have to pay as much as $14,000 in federal income tax and $7500 to the State of California if the income tax on the capital gain is paid at the Estate level by the Co-Administrators. In contrast, he advises that if the income is passed through to the 4 beneficiaries by issuing them Form 1099’s for 25% each, most likely they will only have to pay a small fraction of those amounts in total, possibly no tax at all, after deductions are taken which would be available to them on their individual tax returns. 4. The second, and even more immediate reason for the necessity of specially setting the hearing is that one of the beneficiaries, Sytheanah Z. Baylor, on August 20, 2015, assigned the sum of $25,200.00 of her distributive share to Inheritance Funding Company, Inc., in exchange for a loan of $15,000. The executed Assignment Agreement, Sale and Transfer of Beneficial Interest in Decedent’s Estate has been filed with the court by Inheritance Funding Company, Inc. The Assignment 2. 60113B.doex:1802-02 Declaration Of Paul H. Melbostad In Support Of Request For Special Setting Of Hearing On Petition For Final DistributionAgreement is attached to the Petition for Final Distribution as Exhibit D and incorporated herein by reference. It provides that if the lender is paid back within 6 months of the date it funded the loan, by no later than, February 21, 2016, Inheritance Funding Company, Inc. will refund Sytheanah Z. Baylor $5300 of the amount assigned, versus only $2800 if repaid within 12 months. That difference of $3000 is substantial in relation to the amount of Ms. Baylor’s distributive share of the Estate. To forfeit that additional $3000 would be a hardship for her and a waste of Estate assets. | am going to ask the lender for a brief extension of time to repay the loan and be refunded the $3000, if prior to February 21, 2016, we have a hearing date set for the Petition for Final Distribution on the first available dated within the required minimum fifteen day notice period after the date it is filed. I declare under penalty of perjury, under the laws of the State of California, that the foregoing is true and correct and that this declaration was executed on February 16, 2016, at San Francisco, California. aul H. Melbostad 3. 60113B.docx: 1802-02 Declaration Of Paul H. Melbostad In Support Of Request For Special Setting Of Hearing On Petition For Final Distribution