Who's That Little Ole Wine Maker? Me!

Michael Patinelli

In our June newsletter, I talked about my unique hobby - - wine making - - and readers responded with requests for more details on exactly how I do it. So, I'm going to share with you my 6 step wine making process (just in time for the coming fall grape harvest, in case you want to take a crack at it too!).

Step One:
Back to School!

About seven or eight years ago, my wife and I started making our own wine with two of our very good friends, one of whom took a class online at UC Davis. You might not know this, but UC Davis is a big agricultural university, considered by many to be the wine making capital of the world! Any good local wine maker has probably gone to UC Davis. Our good friend Chris took the course and did very well at it, then he talked us into joining and helping him make wine.

Step Two:
Buy Some Grapes (and Bring Them Home With a U-Haul Truck!)

Every year for the last six or seven years we have purchased a thousand pounds of grapes, usually from the Paso Robles area of central California. We each make approximately 330 bottles of wine. We used to get different varieties of grapes. We would split it up into 200 pounds of Syrah, 200 pounds of Merlot, 200 pounds of Cabernet, etc. and we would make different wines. But lately, the last few years, we've been getting 1,000 pounds of the same grape and just focusing on trying to make one decent kind of wine. One key thing I've learned about wine making is it's all about the grapes, so choose them carefully.

We drive up to Paso Robles in a pickup truck and we attach a U-Haul trailer to the back of it. It's a big, square bin that can hold up to a ton of grapes. It kind of looks like a hot tub. We drive up and get our grapes from a really great winery called Alta Colina. When we pick up the grapes, we put dry ice on top of them because we have a four hour trip back to Los Angeles! Then we split the grapes with our friends.

Step Three:
The Real Fun Begins! (De-stemming, Pitching, Punching and Pressing)

We have a machine called a "de-stemmer". We put the grapes into the de-stemmer and it spits out the juice and the skins on one side and the stems on the other side. So you get rid of all the stuff you don't need - - what you may recall Lucille Ball doing with her feet! You can now do this with a machine that's not too large, and is portable. Slowly, but surely, we put the grapes in there and move the juice and the skins into large trash cans (we don't use these cans for garbage, only wine making!)

Then we put in yeast or do what's called "pitching the yeast". You sprinkle it on top of the grapes in the can and they start to ferment and as the gasses rise, the CO2 comes off, it pushes the skins to the top. Twice a day, you've got to push that cap down; wine-makers call it "punching down" - - you punch the skins down to the bottom of the barrel. You don't get rid of the skins because the tannins from the skins give the wine a great deal of flavor.

Next, the fermentation process takes anywhere from a week to 10 days. By then, you know the sugars have all been converted to alcohol and at that point what you do is put it into what is called a "carboy" (kind of a big, glass five gallon Sparkletts bottle, with an airlock on it). It allows - - if there is still some fermentation going on - - the carbon gas to come out while not letting oxygen in. But, before you put it all into the carboy, you have to take the skins out. You do something called "pressing the grapes". We have an old, traditional winepress. It's called a "basket press" and it is very small and fits in my garage. What we do is take those skins, pass them through this basket press and squeeze them until we get all the juice out and all that is left is the skins. We then discard the skins; we throw them into the garden and use them as fertilizer!

Step Four:
Let The Secondary Fermentation Begin!

So now we have these five-gallon carboys of partially fermented wine. If you go into my office at home, you'll see a number of carboys filled with red wine and also two eight-and-a-half gallon French Oak barrels. In a real winery, the wine would all be put into barrels at the same time. But, because our barrels are not big barrels like in a winery, we have to rotate our wine through the barrels. We'll put eight-and-a-half gallons into the oak barrels, and we'll let it sit there for anywhere from a month to three months usually and we'll taste it periodically to see how it is going because the wood is what actually gives the wine a lot of flavor. When you think you've got it tasting like you like it, you take it out of the barrel as quickly as you can and put it back into a carboy and just airlock it. Then we pass all the rest of it through our two barrels in stages. It might take us a year from the time we actually get the grapes from the winery to the time that we actually have it ready to put into a bottle.

Step Five:
Bottling Day

Then what we do is we spend a whole day bottling, which is a big job. First of all, we have to get wine bottles (we typically use store bought wine bottles that we've already drunk and scrape off all the labels and sanitize them, which is a big pain). We take all the wine we have in the carboys and in the oak barrels and transfer it into individual wine bottles. That is a busy day, filling and then corking over 300 bottles! Let me tell you - - the corking takes a lot of elbow grease!

Step Six:
Enjoy the Fruits of Your Labor

Over the years we've made 30 different wines and I'd say two or three we've had to dump out because they were just terrible, two or three we're very proud of and the vast majority have been in the middle somewhere. Regardless, we always throw a party and invite friends to sample our new vintage - - and when it's not so good, we drink a few bottles of store bought wine first (so hopefully our guests' judgment won't be quite as alert by their third or fourth glass!). Or we mix our wine with apples, oranges, lemons and limes to make Sangria out of it. Either way, it's always fun in the end!

Some Final Tips

If you're interested in making your own wine (for your own consumption, not resale!), don't believe you can't do it, because it is not rocket science. Get a good book on wine making or go online to UC Davis and take a class. The whole process only takes about three hard days of work - - the day you get the grapes, another hard day when you've got to press all the grapes and get the skins off, and then the bottling day. It may take about a year to get the entire process done, but it's only about three full days of hard work. Plus, it's kind of fun tasting a lot of different wine. Enjoy!

Cohabitation Complexities

Cohabitation Challenges

Cohabitation Complexities

The national debate over same-sex marriage has obscured a different trend: cohabitation. Whether Americans are gay or straight, it is more popular than ever to live together, outside of marriage. In fact, research shows that in 1930, married couples accounted for 84 percent of American households. And just 75 years later, married couples were the minority at 49.7 percent. Remarkably, the number of unmarried cohabitants increased by 88 percent between 1990 and 2007.

The state of Virginia earlier this year repealed an 1877 law prohibiting cohabitation ... leaving only Mississippi, Florida and Michigan as the three remaining states in which it is a crime for unmarried couples to live together.

While the topic of cohabitation causes political and social divides, there is no disagreement that unmarried cohabitants face unique estate planning challenges regarding incapacity, inheritance and estate taxation. In this article we will review such challenges and some of the potential problems they can cause.

Incapacity Challenges

Unlike their married counterparts, unmarried cohabitants may not be able to make fundamental health and financial decisions for one another in the event of incapacity. Absent prior legal planning or specific statutory authority, they have no legal standing over blood relatives in a court of law.

For example, consider John and Jane, an unmarried, childless couple who have chosen to cohabitate.

Jane is in a severe automobile accident and is left in a coma. If Jane's parents and John disagree over Jane's healthcare decisions and both parties seek to be her guardian in a court of law, the preference will be for Jane's parents. In addition, Jane's parents may legally bar John from visiting Jane and even have the authority to make end-of-life decisions without John's input.

Similarly, John would not be able to manage Jane's finances. Jane's parents likely would be appointed as conservators for her financial affairs as well.

Inheritance Challenges

Absent proper legal planning, the death of one cohabitant may leave the surviving cohabitant in financial distress. State intestate succession laws (i.e., state laws that determine the distribution of assets of persons who die without a will) only distribute assets to blood relatives. Thus, a cohabitant will have no legal standing to claim ownership of the decedent's assets.

Consider John and Jane once again. They reside in a home titled in Jane's name alone. If Jane dies intestate, her parents likely will inherit the home, and the legal authority to remove John from it.

Estate Tax Challenges

Under current law, most Americans won't face a federal gift or estate tax. Everyone gets a $5.25 million exemption, which effectively eliminates gift and estate taxes for most people. However, assets left to a surviving spouse are not subject to federal estate tax, no matter how much they are worth. This rule is called the unlimited marital deduction.

However, be aware that the unlimited marital deduction is just that: marital. It is only available to married couples. So, if you are a wealthy couple electing to cohabitate, you should consider speaking with qualified legal counsel to minimize or eliminate adverse tax results. Failing to do so could prove costly.

Consider this scenario: Jane's estate is worth $10.5 million, chiefly consisting of a family business, an IRA and a life insurance policy designating John as the beneficiary. Without proper legal planning, her estate could be facing a hefty tax bill on the value in excess of $5.25 million. In fact, Jane's estate could pay about $2 million in federal estate taxes on the remaining $5.25 million.

Now contrast that result with Bob and Barbara who are married. Barbara's estate is also worth $10.5 million. Bob will inherit Barbara's $10.5 million estate federal estate tax-free.

Cohabitating couples often do so to avoid some financial and legal complexities, only to face other financial and legal complexities.

The Marital Estate Plan

Marital Estate Plans

Not surprisingly, very few married couples - whether they are newlyweds or celebrating sixty years of marriage - realize the importance of estate planning. However, every married couple needs some form of estate planning to protect and provide for their spouse - in sickness and in health. In this article, we review some fundamental legal tools and techniques that are essential for every married couple.

Durable Power of Attorney

Most married couples have the mistaken belief that they can make personal, health care and financial decisions for one another should either become incapacitated due to illness or injury. But in reality, nothing could be further from the truth. The law requires further and more specific written legal authority.

Every adult American citizen is responsible for making his or her own personal, health care and financial decisions. Accordingly, if one spouse is legally disabled, then the other spouse will not automatically have access to the disabled spouse's medical information, bank accounts, retirement plans, etc. In fact, the healthy spouse will not even be able to file a joint income tax return for the couple.

Hiring an attorney now to prepare a durable power of attorney to appoint your spouse as your agent is much less expensive and much more efficient than hiring one after the fact. A durable power of attorney may be prepared to cover both financial and health care matters in one document. Alternatively, separate documents may be created with one for financial and the other for health care.

Wills & Trusts

Once you have made arrangements to care for each other in the event of incapacity, make arrangements for the transfer of your assets to one another upon death. These transfers may be outright or in trust. Also, do not forget to make arrangements for any eventual inheritance that may be left to your children. Sometimes it is wise to protect an inheritance both from and for your children. Inheritance trusts, whether established under a last will and testament, or under a revocable living trust, can provide considerable inheritance protection for your children from potential divorces, lawsuits or bankruptcies.

Estate Tax Challenges

Most people think they don't need to worry about the federal gift and estate tax, especially married couples. Under current law, everyone can exempt $5.25 million from federal gift and estate taxes. Additionally, married couples have an unlimited marital deduction when passing wealth from one spouse to another. They also can combine their exemptions to protect a total of $10.5 million of estate assets, under a concept called portability.

However, portability is not automatic, and these are not do-it-yourself projects. Appropriate legal counsel can help you preserve and protect your estate from unnecessary taxation, now and in the future.

Where is he now...?

Michael Millea

Spotlight

You may recognize Mike. He worked as an attorney with our firm from 1992-1997. His personal journey before and after is an interesting story of life coming full circle.

When Mike was just 21, he started buying investment real estate in Manhattan Beach. He loved everything about real estate - - selecting it, buying it, running it - -and thought a legal degree would help. So he decided to attend UC Berkeley, where he got his J.D. Degree in 1983, and then NYU where he earned his Master Degree in Tax Law the next year.

Mike soon found he enjoyed the legal specialty area of estate planning, where he could apply his unique combination of tax and real estate knowledge. While working with us, Mike handled advanced level estate tax planning, including family real estate partnerships, and he obtained his Certification by the State Bar as an Estate Planning Specialist. "I always liked getting hugs and positive feedback as an estate planning attorney at Kavesh and Minor (as we were known then)", he says.

But Mike also felt something was missing. So he left our firm for the big downtown accounting firm of Deloitte and Touche, where he would have the opportunity to service more, ultra-high net worth clients. However, Mike still felt there was "an itch I hadn't scratched". He knew, somehow, he wanted to return to his first, true love - - real estate investing/brokerage.

Mike then decided to obtain his real estate license and in 2004 he joined the nation's largest commercial real estate brokerage firm, Marcus and Millichap in Long Beach. He had finally found his dream job! From there, he went on to work at the brokerage firm Remax. By 2012, he had become a member of the #1 commercial real estate team in the country!

And now Mike's team has gone out on their own as the Ensbury Group, located in Manhattan Beach, and associated with Keller Williams Commercial. Mike has truly come full circle - - to his love of real estate and his hometown of Manhattan Beach "It doesn't even feel like work", he says.

Backpacking

Mike no longer practices law, but he uses his background and experience as an estate planner to help families grow their rental real estate "empire" - - everything from making decisions whether to buy, keep, sell or exchange property, to managing it and passing it on to future generations.

In reality, Mike has never wondered far from his Kavesh and Minor roots. He has continued to help our existing clients with their real estate matters... and he continues to run into his old clients too, in surprising ways. "I got a beautiful personal note from an ex-client a month ago, responding to a marketing postcard I sent, saying how much she appreciated how I had helped her and her family at Kavesh and Minor".

One last interesting note. When asked what he does as a hobby, when he's not at work, Mike remarked "I select and import coffee beans from around the world and roast my own specialty coffee". Then he quickly added, "I make a cup or two every morning, get fired up and go do real estate!" That's real dedication for you!

If you'd like advice or help with purchasing or selling real estate, please contact Mike Millea at (310) 546-8116 or [email protected] - - and if you let him know that Kavesh, Minor and Otis sent you, Mike will offer you a free market valuation of your real estate holdings!