Posts filed under 'Estate Planning'
I’ve spent a lot of time so far this year traveling to various meetings and conferences where there are gatherings of small pockets of advisors, financial and legal professionals mostly, all of whom are totally dedicated and committed to improving the way they serve their clients. Advisors in Philanthropy, Legacy Wealth Coach, National Network of Estate Planning Attorneys, Sudden Money Institute and SunBridge so far. The various meetings and conferences are all good, maybe even great. Good content, great ideas, great hallway conversations. Each organization has a slightly different slant or approach but they are all delivering a similar message. We keep talking about professionals working in silos and the need to take the silos down. Well these groups are just (slightly) bigger silos.
It’s very inspiring. And very frustrating. Frustrating because these pockets of advisors are so small. Frustrating because they’re so dispersed professionally. Geographically. I’d love to find some way to get all of these professionals in the same place at the same time just to see what would happen. Any ideas?
May 28th, 2008
Why did we start The Safe Asset Plan (TSAP to us insiders), you ask? Aren’t we busy enough? Well, lots of reasons, actually. And, yes, we are busy. Really busy. But we saw a need and decided we’d try to fill it. Stay with me here, but you’ve been asking. And, frankly, as we’ve reviewed the hundreds of high net worth cases that have come across our desks we’ve taken note of the fact that not only do these families need good estate planning but they also need asset protection.
Now, I’m not just saying that. There are estimated to be 41,000 lawsuits filed every day in this country. That’s about 15,000,000 per year. A lot by any measure. That means that every one of our clients is possibly exposed. We’ve had several instances of families being brought to us where it was already too late. One, who’d been in an unfortunate car accident was sued and basically lost everything. Nothing we could do. Except not let this happen to others.
Yes, we’re capitalists and seizing what we think is a great opportunity for you and for us. But we’re also conscientious about the risks the families we’re working with face. Honestly, we can’t just shrug and say it’s someone else’s problem. This is both opportunity and responsibility.
May 19th, 2008
InKnowVision member I. Mark Cohen (an attorney and financial planner) from McLean, VA just finished his work on BNA portfolio 864 on the Uniform Trust Code. For those of you who don’t know, the BNA portfolios constitute a major and well repected resource for planners in all areas of taxation. Hats off to Mark for this significant accomplishment.
Scott Hamilton
May 7th, 2008
If you think about it, the only way any of us can ever get paid is by adding value to something for someone. The more value we add, the more we might expect to get paid.
For instance, whole grain, organic, artisan bread is more expensive than store bought, off the shelf, white bread. Why? Because we believe that someone added value. By adding better ingredients and making something healthier for us and better tasting, we perceive it as more valuable and are willing to pay more.
If you’re an estate planning attorney and your client is comparing your price for estate planning to that of the lawyer down the street, you’re not being perceived as adding enough value to differentiate yourself from the other guy. How do you do that? Prettier binders? Doubtful. What you really need are better questions. Deeper relationships. More care and concern. Better process. Something that your client understands and interprets more readily. Clarity.
Same holds true for the financial advisor community. Can you compete with “the guys who will do the planning for free?” You must to survive.
Think about all of the places you add value. Think about how you can add more.
Randy Fox
April 30th, 2008
I’m a Starbucks person, I admit it. In fact, I got so addicted to having a latte in the morning that I bought my own automatic espresso machine (from Starbucks, of course). I did the math, and it was better than break even in less than a year. Even after ingredient costs. A great deal for me and too bad for Starbucks. They wouldn’t see my smilin’ face everyday with a chance to up sell me on some high calorie breakfast pastry to go with my $4.00 daily habit. This worked great for about a year until the machine broke. Calls to customer service ultimately informed me that the machine couldn’t be repaired and all they could offer was a “new” machine at the best sale price they offered.
This hardly seemed like a fair proposition or even a good offer. Shouldn’t an expensive machine last more than one year? Shouldn’t there be some opportunity to have it repaired or replaced? Apparently not. Nonetheless, being the loyal and naïve addict that I was, I though I’d give it another try. After all, I was at about break even for my efforts. I was only out a little aggravation. And I’m a glutton for punishment. This time the replacement model was by De’Longhi a relatively well known Italian appliance maker. Maybe this would turn out better.
Lo and behold, the new machine started to sputter after just about one year of usage. Planned obsolescence? Shoddy quality control? Bad design? Who knows? This time, however, the rest of the experience was different. Customer service was different. They shipped me a box to return the unit in, told me it would be two weeks before I heard anything and that someone would be in touch. Within a week after returning the unit, someone called, only with a tracking number, and that same day a brand new unit arrived. Brand new. No charge. As it should have.
Something fundamentally changed in the Starbucks process chain. They must have realized that their policy was costing them business and it was worth eating a few dollars to keep good customers (those of us that make big ticket purchases at their stores) happy. More than happy.
Examine your service policies. You might be “right” about your decisions. And making people very unhappy at the same time. Is it worth it?
April 23rd, 2008
It seems I’ve been traveling a lot in and out of the country and in and out of meetings and conferences, thus I haven’t been writing a lot. However, I have been gathering much to write about. So, there should be a fair amount of new material flying for the next little while.
Let’s start with a subject near and dear to my heart, a customer service experience (we professionals call them clients, not customers but as far as I can tell, they’re the same person no matter what you call them).
I was in Macy’s with the hopes of buying some new sheets. It was around 5:30 P. M. not exactly prime retail shopping hour. Bedding is on the lower level at my local Macy’s and I rode the escalator down and started wandering through the department, identifying possible selections. I had a few questions that I needed to ask before I made a purchase (I wasn’t a shopper, I was a buyer) so I began to look for a salesperson. I spent fifteen or twenty minutes looking. Really. I couldn’t have made a purchase if I tried. In fact, I did try. I don’t know where everyone was but they weren’t on the lower level. No cash registers were attended. It was ghost town like spooky. In fact, Macy’s doesn’t seem to have salespeople. They have check out clerks. Sometimes. Like Target.
If you want to have a high style practice (Macy’s intent), then you absolutely must provide a level of service that exceeds the commodity competition (Target). If you fall short in any way, your customer/client will do what I did. They’ll go to Target, get what they want quickly and easily and you won’t ever know what happened.
Randy Fox
April 18th, 2008
In this case, decedent transferred patents, patent licensing interests, and securities to an LLC, and then died unexpectedly immediately after the transfers. The court found that she had properly attended to her facts and documentation, all faithfully as set forth in the Tax Court’s 99 page opinion. The court further found that significant non-tax purposes supported the creation of the entity; for example, the desire to jointly manage assets to foster family cohesiveness, the maintenance of the assets in a single pool to take advantage of lower fees and greater investment opportunities, to equally provide for her children and eventually her grandchildren. Estate of Mirowski, TC Memo. 2008-74, March 26, 2008.
Thought this might be of interest for some of you.
Randall Borkus
April 8th, 2008
Larry Ellison, founder, CEO of Oracle Corp, billionaire and eccentric recently won one for the team. Ellison purchased a 23 acre estate on which he built a house that was modeled after a 16th century Japanese emperor’s country home. By the time Ellison, whose net worth is estimated at $25 billion, completed construction of the residence (8,000 square feet), a guest house, three cottages, a man made lake, a separate gymnasium and extensive gardens and landscaping, estimates are that he spent close to $200 million.
The local property tax assessor sent Ellison his current real estate tax bill which valued his property based on “reproduction costs” at $166.5 million. Ellison and his attorney disagreed. They claimed the entire property should be valued at $64.7 million. Their reasoning was based on the “significant functional obsolescence” of the residence. Freely translated, this means, there are simply not many buyers for this type of place and he’d be lucky to sell it at all. Essentially, he claimed a discount for lack of marketability. And won. Total discount slightly over 6o%.
You go, man.
Randy Fox
March 27th, 2008
Friend, colleague, and industry leader Paul Schervish has just been named this year’s recipient of the International Association of Advisors in Philanthropy (AiP) Scott Fithian Leadership Award. The award is presented annually by AiP to a leader in the philanthropic planning community whose body of work and knowledge exemplifies excellence and commitment in the world of philanthropic planning. The fact that he was a close colleague of Scott Fithian only makes the award more fitting for Paul.
Paul will be presented the award at the AiP Annual Conference which will be held in Chicago April 24-26. And, just to make things better, he’ll be a featured speaker on an already packed agenda.
Congratulations, Paul, there is no one more deserving.
Randy Fox
March 19th, 2008
We are in a recession. At least according to Chicago’s very own Mayor Richard Daley. He’s putting on a hiring freeze and cutting spending (shouldn’t he have been cutting spending anyway?). Is your business under fire? How should you react to the current economy? Your clients are paralyzed with fear; your competition is cowering under their desks. Maybe you should stop spending on marketing, start taking Fridays off, close earlier, communicate less. Let everyone know that the sky is falling.
And pretty soon it will be.
March 14th, 2008
We all have processes in our business. Sometimes they’re conscious, though often they’re unconscious. This last week, I spent two of my days at phase two of “Mastering the High End Close,” the program developed by Brad Hahn and Scott Farnsworth. We spent a lot of our time taking every step of our client engagement process and breaking it down into rational pieces, expected outcomes, task assignments, goals and expectations. Rob Slee calls this “rationalizing the process chain.” It’s easy to see why a manufacturing business does this. A little harder for us in the professional practices world. But really, really vital.
Thinking through what you want to have happen at every phase of a professional engagement gives you the best chance to think about and plan for getting the result that you want. It allows you to think about what to do, where and how to do it and why? It provides a decided edge for those who take the time to create a real business process over those who haphazard their way through client meetings and wonder why their results are sporadic.
There’s another opportunity to join this group with a new program starting May 7th in Orlando. Call 407-593-2386. It will change the way you see your business. For the better.
Randy Fox
March 10th, 2008
Can you tell that we’re in a no man’s land in the planning community? No one, and I mean no one, feels any sense of certainty about the future of the estate tax. There are whisperings and proposals about allowing next year’s exemption increase to $3.5M and making that the “permanent” solution. Will this really happen? Who knows? After all, we’re in the middle of a presidential race and whoever the new president turns out to be, he (or she) is certainly going to want to make a stand on this issue.
With all of that background noise, it’s no wonder that clients, even very wealthy clients, are reluctant to make any decisions that obligate them to big financial commitments for long periods of time. Especially when it comes to purchasing life insurance.
One of the approaches we’ve been taking lately to help overcome this reluctance is to structure the life insurance differently than the usual annual premium payment format. Instead, we’ve been utilizing a large first year premium (about one and a half times the normalized annual premium) and then we suspend premiums for ten years. When premiums resume, they’re higher, of course. However, we’re able to accomplish any number of favorable outcomes by utilizing this structure.
First of all, we’re able to relieve the client of the annual Crummey notice and administrative hassles. More importantly, though, we’re able to take a “wait and see” posture that will allow the client ten years until they have to make a decision about whether or not they should keep the policy in place. The law might change six times in that period. Who knows? Their financial circumstances or their health could change. A myriad of events may occur that will impact their decision. The point is, we’re able to give them breathing room but still helping them solve what we know to be a problem. Oh, and the economics of the transaction almost always prove that it’s better use of the clients’ money to keep it invested the way they always have.
There are countless other ways that this flexibility helps us do our planning at InKnowVision. But, ultimately, it’s always about doing what is best for the client. And this structure truly accomplishes that.
Randy Fox
February 26th, 2008
It never fails to trouble me when I read an article about a very wealthy family (in this case $55 million) where a senior generation member has died and there is a huge mess and fighting siblings and lots of lawyers involved. It’s even more troubling when the senior member was a successful and well known attorney and should have known better. Nonetheless, here is the family of famous litigator James Beasley, Sr. torn apart and suing each other over his estate. Complicating things are two sets of kids from different marriages with differing agendas, James, Jr. dad’s law partner and executor, front and center in the fight and outraged older sisters from first mom feeling cheated and angry.
I never met James Beasley, Sr., though I have heard of him. But as a guess, I think this is not what he would have wanted for his family. The same thoroughness with which he prepared for trial, the same zealousness with which he pursued victory was clearly lacking in how he planned for all of the wealth he accumulated in those many court room victories.
I don’t know who helped the Beasley’s create the estate plan that is now tearing the family apart and I’m not in a position to pass judgment on their capabilities as estate planners. But I have to think that somebody missed something somewhere and that this mess could have prevented. The right questions weren’t asked or the answerer wasn’t challenged to think more deeply about the consequences. I don’t know since I wasn’t involved.
There are a lot of lawyers who are going to make a lot of money arguing about this family’s mess. It seems shameful that this has to happen when there are so many professionals who would have been ready and willing to make certain that this wouldn’t happen. Couldn’t happen.
February 22nd, 2008
New cool friends: Wealth Advisor Institute. People a lot like us.
February 1st, 2008
No, the Bears didn’t actually win enough games to qualify. And, no, they’re not really wearing those green and gold uniforms available to the north of here. And, no, the Super Bowl will still be played in a warm and sunny climate.
But, since our Institute (in Chicago) will be held on Super Bowl weekend (we’ll have you home in time for kickoff, promise), we are going to be Super Bowl conscious. We will be Super Bowl themed, you will be Super Bowl teamed and it will be the most fun a bunch of attorneys and financial advisors can ever have discussing estate and wealth transfer planning while guzzling beer and eating brats. Where else could this happen but Chicago? Who else could make this happen but InKnowVision?
Hint: brush up on your estate planning but brush up on your Super Bowl trivia, too.
January 17th, 2008
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