Archive for the ‘Estate Planning’ Category


Mr. Devane’s gold commercial doesn’t tell you everything!

Gold_Digger_-_William_Devane

Actor William Devane is back “in character” on television ads in his most recent gold commercial. 

Here is why it is so dangerous to poor Grandma and Grandma:

First, the ad shows the US Debt clock reminding us of the current financial crisis we are in. (That part is real) Then a quick fade to rioting in the street to let us see what’s coming next. Or not. 

Next, the ad shows money being printed like there is no tomorrow. (Trust me, there is always going to be a tomorrow) Next up — we get induced by a cozy fireplace scene while Billy drops those gold pieces one by one from his hand. We hear the clanking as we get told “I even like the feel of gold”…  whatever.

It is the last part I find fault with. We are told “You can also put your gold in a retirement IRA” as the camera next shows him placing his stack of gold coins in  a wall safe and covering it back up with a fake picture front. You can’t miss the gold bars too in the safe, alluding to how safe it is storing your gold at home is! 

Are you kidding me? 

People I know bought large quantities of gold coins or bullion and were so worried after delivery that someone was going to steal it – they had to go put it in bank deposit boxes! Recently, one of those brand name banks just hit the “D” grade by Weiss Bank ratings…  What do you do next with it – bury it?

The cunning William shuts the wall safe door while stealing a popular credit card slogan as he says “What’s in your safe?”  Hopefully not much if YOU told anyone how excited you were to take delivery of physical gold at home…

The devilish side of this TV actor parts way with truth, at least regarding my two points. First, storing valuable assets at home will help you give you an ulcer quickly. Second, you can’t put your IRA into precious metals holdings and keep the metals at home. The IRS forbids it!

As Grandpa and Grandma most likely are pushing the remote control volume up to hear every word, remember that Grandpa got fooled before and now – they both may get fooled again, since they want their former lifestyle back! (Seems Grandpa lost about 1/2 of his IRA account in 2008 and Grandma forced him to put what was left in the local bank at a measly 1% a year return)

The commercial doesn’t disclose this stuff I am bringing up. And they should. No, I’m not saying that some IRA money shouldn’t be invested this way. But, I am saying that disclosure is missing in these ads no matter who is hawking gold or silver coins or bullion bars in these slick commercials!

Make no mistake — Grandma and Grandpa will never get to touch those coins if they agree to put their IRA money into a gold IRA. No clanking coin sounds. No   shiny metal coins to appreciate how they feel in the hands.

And, if bought online, they can’t verify the products hawked by these gold digger salesman are even real! They can only find true value of the merchandise when they later decide to sell.  My own father got fooled paying about $2,000 more than market value for two gold buffalo coins a few years ago. Thank goodness he didn’t sell the farm and put it all in overpriced numismatic coins that often fall down to values related to “gold content” when all hell breaks loose. Buy close to “melt” value or tell them no!

Now, perhaps you are that Grandma or Grandpa getting “bug eyed” over theseGrandpa_and_Grandma_Staying_Home_A_Lot  ads wanting you to invest in gold with your current IRA. Or the kids of parents who may be getting overly influenced by ads that bait and switch. Even the free gifts offered are that final “straw” that can make a senior break down and call the toll-free number. After calling, you can pretty well count on a transaction taking place soon after since professional phone salesman forsake Dodd-Frank U.S. law regarding “knowing your client” and shoot you a deal that sounds impossible to say no to. And urge you to “buy” today to get the deal that will be gone tomorrow.

I sold gold funds in the mid 80’s as a financial planner. I put 10-20% into these alternative type investments for clients and watched the money go nowhere for about a decade! And, another decade passed before we saw a “lift” in gold and other precious metal pricing.

Please, get another opinion if this describes you. And, if this describes your parents, call them and ask them to run it by you before they do something drastic with their remaining retirement savings accounts.

Do I have a plan for clients that makes more sense? Yes! Stay tuned and you will find out where most of the retirement money is going as it exits the doors of banks and brokerage firms still teetering on financial conditions that are just about as bankrupt as possible — if all “worthless” assets had to suddenly be accounted for in their balance sheets! 

You are about to discover credible IRA investment options not commonly known or promoted by the investment advisors. Safety is the key, while still investing for growth potential. Never forget — Mr. Devane is just a paid “ACTOR” and so are all the other Hollywood “B” actors who hawk products on television! Pay them their fee, and they will say just about anything to convince you to buy something that may be the last thing on earth you really need. Keep the salt shaker handy next time you hear a TV or radio ad that sounds too good to be true.

M.D. Anderson, President, AZCLDP, Accountant

Financial Strategies, Inc., Chandler, AZ

&

IRA Director, Realtor

RE/MAX DIAMOND, Mesa, AZ

Toll Free: 1-800-782-2806

Now that you have called Grandma & Grandpa to tell them not to “Get Fooled Again”, sit back and enjoy this Re-mastered full length Version of the song.

 

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Is Your Head in the SandO.K., I admit it. I had my head in the sand. And, as a financial advisor, I was wrong. For 36 years, dead wrong. I believed what the banking, insurance, and securities markets preached to me. What did they preach?

They told me that if you are going to invest in a Keogh plan (yea, I’ve been around a long time I know), a defined benefit or defined contribution company retirement plan, or in an IRA type retirement savings account – that your 3 choices came down to bank, insurance agent, or securities broker products only. Nobody told me a Realtor could help me fund an IRA with, you guessed it – Real Estate! That was the only list of advisors you could open an account with and I believed it just like consumers still today believe it.

Since I was not a banker,as a financial consultant I choose to put client money for the last 36 years into insurance and securities products. It never dawned on me to open my eyes up when I got my real estate license 10 years ago. There was no training on how to sell a self-directed IRA account with real estate. In fact, in my recent real estate continued education classes, nobody mentioned you could help clients buy real estate inside their current IRA plans.

But, I was misinformed. And stupid to believe the lie and embrace the conspiracy to defraud investors of the chance of a lifetime to pick up a property or two inside their own self-directed IRA account. No one found out they could be in control and not dependent on advisors who didn’t tell them the WHOLE truth. Mostly because they knew they would not get paid. (Few insurance agents and securities agents are dual licensed in real estate as I am)  So, it all changed in May 2012. I woke up, saw the light and I changed my tune. I re-programmed by websites to spread the word and started a great work with my The Key To Success - SDIRAlocal RE/MAX franchise owner here in Mesa, Arizona.

Consider firing your current IRA advisors and joining me in this revolution of sorts. Since only 3% of American Retirement Plan owners have taken advantage of buying real estate with their IRA funds, the opportunity is wide open. Recent news articles tell us that as people find out, millions transfer out of bank, insurance and securities accounts and into self-directed custodial accounts every week now. Most are buying real estate with their new found powers.

You can take control, be the boss, and answer to no one but yourself too. Self-directing your own IRA is not rocket science, just a process that is different then your current programs. By partnering with an independent company, we  check your suitability up front to see if it fit’s your investment style and philosophy. If so, professional financial advisors with decades of experience offer assistance to you all along the way.

Since you don’t know what is coming in economic and political changes, more and more people are gravitating back to real estate as the safest place to invest or even store their money in case hard economic times come. Don’t let your advisor shield you from the complete market of products you are eligible to invest in. With lower prices and a bottomed out market pretty well taking place nationwide, buying real inside with your IRA or 401k plan may be exactly what you have been looking for!

 

M.D. Anderson, IRA Director, Realtor

RE/MAX DIAMOND

Mesa, AZ

Direct Line: 480-258-3634


Roll Over BeethovenThere are old pilots and bold pilots. But, there are few old, bold pilots. The idea of finding fault with any particular profession, let alone the legal profession, may put my plane in the ground just for daring to be bold. I hope not. This article is written with hope, that things get better. I really care, and that is why I am going to tell on some advisors who should know better.

I can’t just say I am dismayed with a few lawyers. It doesn’t stop there. Some CPA’s, registered reps, RIA’s, insurance agents, bankers and Certified Financial Planners — are also in my sights this time. This blog entry may indeed “Roll Over Beethoven” and ”Tell Tchaikovsky the news” as the song lyrics go.

Enjoy the song as you read!!!

 

You see, in 1998, I entered a new emerging consulting arena for “Inherited IRA’s” that didn’t exist prior to that time. Fewer people had large IRA accounts since the “norm” before was that most employees had company sponsored pension plans with survivor benefits. Yes, people did have IRA’s since 1974, but contribution limits were extremely small and so were the accounts for the most part. But, the extreme success that individual 401-k plans had with employers and employees alike, fueled a huge increase of money piling into the stock market. Mandatory withdrawal tax law for those reaching 70 1/2 in age were put into effect in the 1980’s and have only been suspended once by Congress in tax year 2009. These “RMD’s” allow accounts to grow even when mandatory payments commence.

In case you didn’t realize it, the stock market is much like a fire in your fireplace. Supply and demand is what I am talking about. With unrestricted airflow and plenty of wood, a fire will blaze. So it goes with the stock market. When peopleFAT_CAT_2 are piling in “new” money in equity type investments, there is a natural tendency to see a nice “lift’ in the long term charts. Some investors become “fat cats”, but most forget the fire eventually will die down again.

And when that same money pulls back or is taken out of the equity markets, the opposite is true of course. Sadly, many get in too late, just as the fire peaks and then starts to die down. Then, they often get scared and pull out before more money (new wood) is again put back into the market. Timing is everything, especially now.

The Inherited IRA consulting I have done for for thirteen years has made me kind of an expert on the subject. My website, www.InheritedIRAHell.com is very popular in search engines. This is because my firm gives away timely and important information with no obligation.

Thousands come each year to read the Inherited IRA web content, which is always kept up to date with law changes. Many contact me each month and some hire me to assist them in trying to stay out of this “Inherited IRA Hell” the site is named after.

And, that isn’t an easy task even with my help and expertise on board. Sometimes (actually most of the time), I still have to deal with less than spectacular advisors on the other end. Though lawyers, CPA’s, investment advisors and insurance agents now come to my site to resource and learn the basics of Inherited IRA advisory, (as well as many executors, trustees and heirs), the norm in America is still at or near “incompetency” on all fronts. When it comes to getting solid Inherited IRA facts that you can take to  the bank, the old carpenters’ tip measure twice and saw once” was never more true.

The problem isn’t that most of these advisors are Cracked_Brain_from_IRA_Talka quart low in brains. Not at all. Some very intelligent advisors and clients of mine over the years have proven it all comes down to  desire. The desire to learn and the ability to understand the more complicated tax and legal issues surrounding inherited type funds to most people is like watching paint dry. Popular IRA advisor Ed Slott, CPA has penned it this way — “the most difficult area of the tax code”. He is right! That is why even the lawyers and accountants shy away from this field of practice.

Some heirs and advisors have the ability to resource on my site and other great sources available to them. They can make good decisions because they can grasp the concepts, rules, and instructions necessary to keep the funds from immediately becoming taxed. (That is the hell we reference on the site) But, most financial advisors consistently get a low score and most heirs need professional guidance and help. THE BIGGEST PROBLEM IS THAT THE HEIRS LOOK TO THE ADVISORS OF THE DECEASED LOVED ONE – AND THEY AREN’T QUALIFIED!

My team of advisors is ready for any case, big or small, in trust, or out. And the circumstances never duplicate in an estate IRA situation case. Therefore, all known factors must be reviewed so that good decisions can be made by the surviving parties that contact me. (Usually the estate manager or administrator) Yet, after all these years, I find the education in this area of practice is not a whole lot better than when just a few of us pioneered the area of practice from scratch, way back in 1998.

Ed Slott, CPA does a fantastic job of writing books, giving free tweets, providing online resource, as well as sponsoring seminars and training classes for professional financial advisors. He is an expert IRA advisor! But, he can’t reach everyone. In fact, he can only put a dent in the problem that attorney Natalie Choate in New York (she is our master Inherited IRA expert in the country hands down), has stated is an emerging area for malpractice for lawyers to look into.

Dumb_as_JethroOne problem though on that. Many of the estate plans I have a chance to peruse after the death, show gross negligence, high malpractice and most commonly – failure to understand why leaving IRA money to the client’s living trust is in many cases, a bad idea. Sadly, some estate advisors are just plain stupid, like Jethro! I guess Ms. Choate desires the good lawyers sue the bad lawyers in IRA cases so she won’t have to work so hard. After writing and updating the Bible on IRA’s, we count on her expertise in paperback form, on EVERY case we review.

What I am saying is that Natalie is right about the malpractice she notes in her Estate_Planurebook, because I see it too. Every week on every case I work on, something is messed up. Someone who couldn’t spell the words – “Estate Planner” is to blame.

After death, post mortem advisory looks a lot different when the rose colored glasses come off. After the death, seldom does the plan for Inherited IRA funds work out like it was planned prior to the death. Gross negligence, gross malpractice, fraud, coercion, tax mistakes, cover ups – all are common on the files I have worked on over the years. And, it seems like it is getting worse, not better. Estate planners with 1/2 brains would correctly describe my current files on my desk! 

Let me prove my point by discussing in general, a few examples from actual clients, giving permission to publish details without of course, revealing personal information:

A. AMERICA’S WORST LAWYER?

The Personal Representative & Successor Trustee, our client’s sister, and her chosen Estate & Trust Attorney & Trust Administrator and Estate/Trust CPA (BFF of Estate/Trust Attorney who also made the referral) refused to provide direct notice, refused to provide direct communication, refused to disclose estate and trust assets, and refused inspection of all trust properties, trusts books of records, and trust accounts.

This was contrary to the Trust agreement and statutes but was done because they did not want my client to know what was there. It was necessary for her to hire a very expensive southern lawyer, just to try to obtain communication with the sister in charge and her chosen estate lawyer. His best work for the most part, was in printing his billings…

huhBut, the estate lawyer the sister hired has been found to be, more or less, A LAWYER FROM HELL! (Referred to as L.F.H. hereafter) She first assisted my client’s mother in updating her living trust early in the year of death. At that time, no one knew that a medical condition would take her life late that same year. Sadly, the original professional trust prepared by a name brand law firm in the Midwest was replaced. The trustmaker got a thin, poorly written 10 page “jobbie” instead. Of course, it claimed the trustmaker was now a resident of the southern state where she lived part of the year in her boyfriend’s condo.

The client’s mother resided the rest of the time in her boyfriend’s Midwest home, the same Midwest town where instructions were left for burial. The client’s mother did own a rental condo property titled to her trust in the southern state. That didn’t stop the L.F.H. from listing the property as a probate asset on the Probate Inventory filed in the court of this southern state!

The female CPA who had been doing the income taxes prior to the death was also using the free state tax approach for the client and a drivers license was also issued there, giving reasonable proof the trustmaker had the outer appearance as a real resident, at least for IRS purposes. Perhaps the southern state was her resident state irrespective of the fact the IRS is fully aware of winter visitors doing the exact same thing to avoid state tax on some or all of their retirement income. (And the home state tax agencies as well) The problem the client and I discovered after the death was that the consecutive months rule wasn’t really met for residency testing per the state statutes.  Oh well, no one’s perfect.

But, the test for her residence state in the Midwest was also ignored for probate reasons, irrespective that most of the decedent’s large money accounts were opened there and the statements went to the Midwest home address, not the southern state residence that was being claimed by the CPA for IRS tax purposes.

Our examination as an estate accounting/tax preparation and Inherited IRA tax consulting firm found the amended trust drafted by the L.F.H. was clueless on how to draft proper estate legal documents. Since our firm is certified by the Supreme Court of Arizona to prepare estate legal documents, with 36 years of estate legal document work either on our own, or by working with estate planning legal firms – we can tell a “stinker” from afar.

We also found out the L.F.H. was clueless on why trust funding is necessary BEFORE death. Proper funding was ignored by all estate and tax advisors prior to death as well as the sister in charge. This, even though three months prior to death, written statements by physicians declared the mother (now a patient) incapacitated mentally and physically. The sister had full powers as GPOA and Successor Trustee, but chose to ignore the need to fully fund the living trust, prior to death.

The L.F.H. stated, word for word: ” FINALLY, (CLIENT) ASKED A QUESTION IN A RECENT FAX TO ME WHICH I AM ANSWERING FOR THE BENEFIT OF ALL OF YOU HERE. IT IS NOT MY PRACTICE, NOR COMMON PRACTICE HERE, TO PREPARE A “DECLARATION OF TRUST OWNERSHIP OF PERSONAL ARTICLES” OR ANY OTHER SIMILAR DOCUMENT WHICH WOULD TRANSFER PERSONAL PROPERTY TO THE TRUST, AND IT WAS NOT DONE IN THIS CASE.”

It is a nice admission of malpractice since professional estate planners in this southern state commonly use such assignments on a regular basis. This caused probate on assets that helped run up her fees no doubt! We documented our file with numerous lawyer websites in the same state, describing the assignment of tangible items to the trust as common practice in trust estate planning. (Common nationwide as well)

Worst of all, this L.F.H. was not able to properly list the actual sibling beneficiary sisters as the trust beneficiaries. Instead, the trust beneficiaries were identified only by state default statutes to identify just who gets the money. Especially when you have almost a million dollar IRA, separate from other large estate assets and investment accounts, that is high malpractice! It cost a lot of money to perfect what was penned by me initially as the “world’s worst trust”  I had ever read. Not a legal opinion of course. But a fact! There was also no Inherited IRA management legal language, no conduit trust provision, nothing at all to make her trust eligible for such a big IRA payoff upon death.

The southern lawyer my client was forced to hire in order to communicate, came on board even though he had zero knowledge with large trust owned IRA accounts and eventually admitted it. He was mostly a grapevine between the parties, whose connections discovered after his dismissal now bring up questions of conflict about disclosure items that should have been told up front to my client.

Also, legal and tax help was brought in by me to work for the client to perfect complications of the mother having a bad IRA custodian that did not allow splitting IRA shares inside a trust which was then changed to another bad custodian by the sister for one reason. The investment advisors in charge that got the large IRA account were down south! And friends or fellow yacht club members with the L.F.H. and her CPA associate! The other sibling sisters benefited from this work my client had to pay for, basically getting a free ride for this advisory work we all did for our client, the only sister caring to do things in a professional manner. 

This female L.F.H. with direct connections to all the other “players” in the southern estate game that was played out (and is still going on as I write this), charged like a Manhattan lawyer while producing results similar to letting Hannibal Lecture give you a haircut! She sent my client a hokey looking copy of her employment agreement with the sister in charge, a whited out IRA beneficiary form copy that looked like more redacted than a pilot’s UFO sighting report — all adding up to imperfect production of documents. Only a few of requested documents ever came in.

Which brings up the question my client and I can not dismiss:

Was it all intentional, just to milk the estate for all the fee money the lawyer from Hell and her associated southern advisors could get? 

We have come to a definitive conclusion that she is not the sharpest knife in the drawer of lawyers. But, perhaps she is intelligent in knowing how to make a trust fail so that a large amount of non–trust assets were forced into probate. But, then, she listed trust assets in the initial probate inventory which only a fool would do. Or, someone milking the estate for all the pesos possible. (This southern state has a liberal policy on how a lawyer can grab a percentage of trust assets, much more liberal than my home state of Arizona)

Money Down the ToiletThis L.F.H. does just one thing very well. Billing. Well, maybe that should be changed to “charging” since my client has never seen an actual billing from her, even though 1/3 of the payments came from her inheritance money. The truth is, flat fees were agreed upon up front, (the factor % included trust assets needing little work) then “extra-ordinary” fees were of course also manufactured by the lawyers on this estate, and by the sister in charge, claiming in mediation the detailed extra-ordinary billings existed but now claiming they don’t. Can you spell highway robbery? 

Total legal and accounting fees to date on this estate paid out by all parties to date exceeds $300,000! Most of that money went down the toilet directly because the L.F.H. drafted imperfect legal documents and ignored proper trust funding. This in turn, caused probate, delays, fights, and mistakes in rapid fire. Though I too participated in the fees paid out, my work helped perfect an imperfect Inherited IRA account. It was necessary. Most of the fees were not. Truly, some of the advisors of this estate have taken their own “share” as if they were listed heirs. That is shameful, since now, they refuse to provide billings to justify the large extra-ordinary fees taken against the estate (and my client’s share). It also is against the law.

Today,the sister is still too busy to do any substantive work on her own (she claims it is short term memory loss). I wonder if she tells the adults she cares for as a doctor she can’t remember anything? The allowed fee for her full PR and Successor Trustee services weren’t discounted again in the “extra-ordinary” free for all payments that were paid out after mediation completed. This, even though a whole team of lawyers had been on staff at times doing most of the work. (in the most sloppy, careless way possible) The fact that the CPA recently granted the PR/Successor Trustee carte blanche on when she claims her second half of the pre-agreed fiduciary income payment is laughable if the IRS finds out. Especially since it was deducted on the 706 two years before! Broken statues and laws have run off these people’s back like water to date.

Between the estate lawyer and CPA handiwork, multiple amended inventories of probate assets were filed again and again and again with the Southern state’s Court and copied to the Southern State’s Department of Revenue (they still have a tax department for Corporate and Estates), because the L.F.H. listed Trust asset(s) as Probate assets on Inventories and failed to list all probate assets. To this day, even though Probate has been “closed” via ex parte communications in a Probate Judge’s Chambers attesting under oath that estate was fully administered), the estate remains not fully administered. The 2011 plan is to hold remaining estate money in accounts that pay no interest so they don’t have to file form 1041 another year. I guess any bank account can pretty well guarantee that. But, it isn’t professional, nor is it the manner in which a professional Trustee would (or could) act, since it violates the trust. The trust also remains violated because the terms dictated “distribute” upon the mother’s death. Year four is coming up next week in violation of that trust term… 

The IRS Form 706 Death Tax Return, also showed a goof of over $70,000 in death taxes overpaid! Even today, the inventory is flawed, the “corrected” death certificate is flawed, and the list of mistakes fills a couple pages. The estate is now sealed with the IRS on the 706 and the southern state county probate proceedings. Sealed unless someone wants to go back and lift the rock up that is still hiding the mistakes and misdeeds that this lawyer helped the PR and Successor Trustee perpetrate against my client.

Revenge Spotlight

Which brings up the second situation that has fueled the fire on this case. Simply stated, it is JEALOUSY & REVENGE. “We Are Going To Get You!”  was spoken from the sister in control of the purse strings — to my client, as the mother lay dying in her hospital room. 

Jurisdiction was declared down south for the revised trust, GPOA, and Last Will. That begat the introduction to the bank sponsored securities brokers who took delivery of a majority of the estate money which was “ordered” south as well, from it’s Midwestern roots. The sister allowed migration of jurisdictional control and estate money, even though she was and remains a resident Successor Trustee back in the Midwest.

We also had stale IRA — RMD withdrawals, claiming life insurance proceeds with an imperfect death certificate, failure to manage the IRA properly, failure to protect the securities accounts from large losses, and improper taking of bank deposit box contents owned by my client, improper art valuations and accounting. All this mal–performance and malfeasance adds up to a nightmare estate situation caused on the most part, by bad advisors and a sister who doesn’t really seem to care how much money the bad advisors cost or how many mistakes are being made. The high priced souther state CPA started this mess by referring the deceased mother and her estate administrators to just about everybody who is an advisor and also “friend” on her Facebook account page!

The death took place almost 3 years ago, yet today the estate is still not fully settled! Money is still being held hostage because my client won’t sign a forgiveness waiver that I quote, “Covers from the beginning of time to the current time”. Of course, everybody but the Butler is included in the waiver parties now wanting exemption from liability before the final cash payment can be made to my client from the estate. 

The once large estate has dwindled down because of market risk (crash of 2008), and very expensive advisory fees (still with no billings being provided to my client for ordinary or extra-ordinary fees charged against her share). Then, you have two investment advisors on the money pulled down to the southern state — both who I found just sitting on their thumbs with the sister in charge, until we had to intervene and cry foul over a year ago. (They had made no trades from inception) By that time, additional stock market losses took even more money away from the estate beneficiaries.

Add in a whopping payment to the IRS for the estate tax due because no one advised doing annual “gifting”. Even higher Form 1041 Estate/Trust federal taxes resulted simply because the CPA and lawyer failed to coordinate DNI in the same tax year on the fiduciary return, as the year of death. That kissed 20k away alone.

But, we still aren’t done! The expensive legal battles over the large IRA cost plenty, but above all, market loss cost the most because the sister never understood her right to go to cash to protect the estate from market loss was part of her job, not to maintain her deceased mother’s investment positions for months (or years) after her death.The wasted money, energy and time to get the IRA issues straightened out was huge by all parties involved.

Even to this day, the sister serving as Successor Trustee and her lawyer doesn’t seem to understand the money manager (RIA) is not the custodian of the former failed IRA account. Or that the terms of the mediation agreement my client was forced to sign under duress have not been complied with. At least one brokerage account that was supposed to have been zeroed out and closed still had money in it 8 months after the agreement was signed! Inventories and bookkeeping entries to date, remain incorrect and inaccurate.

Lastly, my observation on this case was that the estate became a “feeding trough” forlegal malpractice add the southern advisors hired by the sister in charge, far from the clients regular home. One thing is certain — the revengeful sister in charge has the mental capacity to do better than she has. She is rated “brilliant” in IQ tests. (the whole family were/are lawyers or doctors with high IQ’s) But, as a busy medical doctor she has trusted an incompetent southern lawyer and CPA to advice and do most of the work instead. Bad work. The fiduciary duty of PR &  Successor Trustee (sister), Estate CPA, Investment Advisors and Estate lawyer, as well as my client’s former southern lawyer, has all but been forsaken in this case. Only the sister, doesn’t reside in this little STEPFORD community with their tight little group most likely looking and hoping for another large estate to feed off when they get done on this one!

Thanks to Facebook and online searches, we now know just how well connected everyone is with each other in this case. Since there is no statute of limitations for fraud, the revengeful sister with America’s worst attorney (the Lawyer from Hell/L.F.H.) at her side, doing her bidding – may yet find out that using an estate to get even, is not smart. Not smart at all…

Dunce_at_Insurance_CompanyB. DUMB INSURANCE COMPANY: “We will make an exception in your case”.

This case was settled recently. The CPA client was chief financial officer for a company and was not up on the current laws and rules regarding her mother’s inherited IRA account left to her and her four siblings. Initially, our firm was hired to help review paperwork sent to her by the insurance company.

Upon examination, it was obvious the insurance company serving as custodian of the decedent’s IRA account had sent out paperwork to my client and her siblings that would immediately tax the proceeds once the death benefit was paid out! But, it was too late for three of the siblings. They had already signed and executed the paperwork sent which meant they now get the privilege of instant taxation in tax year (2011). Perhaps if they had compared and seen the projections of how long a stretch IRA will provide income to them and their heirs, they would have made different choices. The problem was, the insurance company initially didn’t offer anything but a lump sum settlement, making if 100% taxable in the year taken.

Our firm was able to save the client and one remaining sister sibling from instant taxation by requesting alternate paperwork that set up an inherited IRA account for the benefit of the daughter (our client). Some work was necessary because the initial response was “we don’t do that here”. This was quite shocking since I am a licensed agent of this insurance company, one of the best rated and lowest cost term insurance providers in the nation! But, they are not high on the list of qualified IRA custodians. Only New York life gets mentioned by Inherited IRA expert, Natalie Choate, as a valid carrier to handle your loved ones IRA.

I found it embarrassing as a licensed agent to have to fight the company in order to obtain an exception for her. When the letter from their top legal staff stated “we will make an exception in your case”, our green light was on for executing the alternate paperwork I ordered for her (her sister I think will duplicate what we did) and it was sent in. It also included copies of paperwork “porting” the funds away from this insurance company to what Natalie Choate refers to as a “more sophisticated custodian”. 

The final result is the funds were never first placed into an insurance company product as an inherited IRA account. But, were transferred by direct rollover to a brokerage firm known as the best qualified to manage an inherited type account. We could not stop the insurance company paying the death claim on the IRA, from the moves they made. Even still, the new custodian felt everything was in order, but it left that small element of doubt for both me and the client, who as a CPA, knows the truth will be revealed when the 1099-R is issued next January.

Because of that, I had her request and she received confirmation from legal staff of this insurance company, re-assurance that the original “taxable” reporting from the first set of paperwork would be replaced in their systems with a “tax free” direct rollover coding on the 1099-R. Yet, fingers are crossed since the incompetence of the claims staff was ever present while dealing with them.

Legal recourse would be available if a taxable reporting took place on this case, because solid letters in writing were obtained by the firm on “status” prior to the transfer out and away from them ever took place. (In the Inherited IRA advisory field, this is called the “handshake”) If you would like to know the name of this company, just call me at 1-800-782-2806 and I will tell you.

The Future

This blog entry will be continued as “Roll over Beethoven – Pt. 2” in the near Real_Moron_Dilemmafuture. Some recent cases will provide more titillating stories of tax and legal malpractice. They are being published here hoping people “test” their advisors BEFORE they die with 3 million dollar estates (give or take a million describes many of my cases) to see if they really are qualified as experts.

I think my practice of Inherited IRA consulting and assisting as accountant, and constant settlement of estates in and out of trust will keep ol’ Ludwig spinning for quite some time into the future. Bad advisors, creating bad plans and bad faith, creating broken promises while purporting to be experts is the reason.

I find it really sad, the clients can’t find out while still alive, the truth about those who practice below the belt as advisors. If you don’t know, just say so! Instead, they let their client die, and then expect the heirs to still want to do business with them, even after they discover all the mistakes they made. By then, it is often too late to fend off all of the damage they caused. If your current IRA financial advisor can’t readily tell you what the words – RMD* stand for, RUN!!!!!

* RMD is the common term for “Required Minimum Distributions” that must start for any inherited or beneficiary IRA, no later than the end of the year following the year of death.

I tell clients I meet for the first time, they will never know just how good I am when they die with my Arizona professional Trust Estate Plan. But, their heirs have found out my best work is performed after losing a client. SEE MY TESTIMONIALS.

My company record for Arizona trust estate clients to date, as far as I know, is no probates, lawsuits, or prolonged squabbles resulted by using my professional legal documents! After about seventy five trust estate settlements for Arizona clients, my record allows me to print this “money where my mouth is” blog entry, hoping other advisors get a little more educated about estate planning and inherited IRA’s BEFORE they perform services for their clients. I won’t be holding my breath…

M.D. Anderson, President

Financial Strategies, Inc.

Toll free: 1-800-782-2806

Screwed Up Advisors

I-see-dumb-people


Make no mistake, events in this country as well as around the world would have you believe that the American dream, (admired and copied by almost all civilized nations on earth) – is about to end.

People are hoarding high silver and gold content coins for future trade potential. Multiple U.S. minted coins bear value far exceeding their marked face amounts. Silver and Gold are being hoarded in homes around America in many forms. Along with silver coins and gold coins, jewelry containing high content precious metals or precious stones are also being hoarded now. Even bullion bars are being hidden away in “assumed to be safe” places. Americans have placed them in hollowed out table legs, or sacked and buried their treasures in secret back yard hiding spots. Others trust the bank and have placed items of value in bank deposit boxes for future use and access.

Good American ingenuity has flourished lately since some have used extra creativity and hidden their “real value” assets under floor boards, inside walls, in attics, inside lamps or other hollowed out items in their home. Some have even sewn a few precious coins into multiple pieces of their own clothing for safe keeping! Perhaps if your Uncle’s Wooden Duck decoy in his office feels a little heavy – it may be because it contains a core of solid gold coins!

Yes, as war rages on and homeowners continue to be driven from their homes, and the economy continues to deteriorate, dollar devaluation will continue on as well until a proper monetary standard is established in our country. Until then, Americans have good reason to keep hoarding and hiding whatever items of value they can find and hide for the future. They fear their paper dollars will devalue down and down – perhaps to literally no value.

US_First_1862_Legal_Tender_DollarTherefore, the issuance of the first “standard” paper currency – the U.S. $1 bill issued this year, 1862, is welcomed by all citizens and merchants. This new legal Tender Note with a portrait of Salmon P. Chase, the Treasury Secretary under our beloved President Abraham Lincoln, sets the stage for sensible banking and currency systems for the future of our great country. As our war of the states continues on, we trust God for deliverance from what some deem “The End of the World” as we know it.

******************

O.K. this blog entry was meant to trick you into thinking I was talking about modern times. I apologize for that. The lesson to learn is that history does repeat. By profiling the economic environment 139 years ago, were you fooled into thinking I was talking about now? It is all to prove a point which I stated clearly, the end of the world as we know it… has happened over and over in our country.

The first pilgrims had to feel it was the end of their world that first winter when supplies ran low, disease ran high, and starvation and survival permeated their lives on a daily basis. It wasn’t the Indians they met that caused the greatest risk. It was surviving the brave new world they came unprepared to survive. They had left the higher comforts of their English homes for what soon became a living hell hole in early America! But, they persevered to become the strongest country on earth.  

Years later, colonists had to feel the wounds of the British involvement and tax scourge put upon them by King George. Physical survival was less of a problem. But economic survival was a problem that needed a solution. The King’s tax on their tea and everything else you can imagine (sound familiar?) was not fair and highly conflicted with the principals their founding pilgrim relatives established in the new America.

As the first patriots of our land rose up to fight back for what is fair, the founders of the Declaration of Independence not only felt the end of the world was near in their attempts to fight the Brits – they knew their lives would end if they were captured or if they were defeated in their quest to free our country once and for all from British influence and rule.   

And, we must not forget that before modern medicine discoveries, disease and plagues hit our country in a way that is unspeakable and unthinkable in modern times. No TV movie can properly portray the ravages of disease our citizens have endured in the past and many have fallen from those medical plagues.

Add in violent weather death and destruction for many affected over the centuries right up to last month’s horrid tornados – and you soon realize again, even weather has caused surviving families and loved ones to feel the end of the world has come upon them.

Lastly, the economic challenges that hit this country started long before the great depression. But, that period of American history personifies the worst economic situation to date for our land. Some investors took their own lives when stock investments continued to deteriorate between 1929-1933 to a point that their holdings were wiped out. Many were so highly leveraged, they were wiped out completely in just days of lowering stock prices. (Does that sound familiar too?)

Others, trusting the banks too much, succeeded in losing their idea of “safe money” when the bank failed to open one day. And their former Safe Deposit boxes containing their assumed things of value were confiscated or lost because of the debacle. There was no government insurance to protect them.

The price of foolishness took it’s toll then for those who did not know how to avoid losing most or all of their savings or fortunes in the stock market or in their uninsured bank deposits and safety boxes. So, this leads us up to the events that have taken place the last 3 years. We continue to seeWill_Guards_Again_Block_You_From_Entering_Your_Bank deterioration of purchasing power or receive full rebound recovery from lost stock market fortunes gone from the great stock market collapse of 2008.

For many, again, the world as they knew it ended with much lower values they were counting on for retirement income. Some bond and stock holding were marked to zero value overnight. (And were name brand, blue chip companies!) 

Now, older men and women too broke to retire compete for minimum wage jobs and against  our young kids and grandkids who like to work at places such as Wal-Mart to make extra spending money!

Sadly, some don’t know the world as we knew it has cracked. The year “2008” may very well go down in history books as our new “1929” – the gateway to another great depression. It very likely is the beginning year of a row of bad years. Many bad years…

Of course this is my personal opinion, but it is formulated with a lot of provable facts. I think there are more than enough reasons to feel this way. Let me give you one of them — FDIC insurance protects your money in the bank, isn’t that right? I find this highly problematic when the President of the United States now constantly tells us on national television broadcasts that “defaults” are just a month away if we don’t do what he wants to do in raising the debt limit.

So how good is your F.D.I.C. insured bank account my friend if that happens?

For this very reason, hearing the President of our great country tell us that we can’t pay our bills and obligations anymore unless we authorize more debt — just scares me to death! We now know we can never pay back all that debt. To just extend the “high” we are still on in this country from overspending, a few more months or a few more years — is nothing less than pure insanity.

So is defaulting on our obligations. But if more debt eventually leads to default anyway, why wait?  Maybe we should get our punishment over with so we can help rebuild a better world for our children and grandchildren.

America survived it’s multi eventful “down years”, it’s historic bad past, in every way I have already described. One way or the other, those that went through the “end of the world as we know it” before us, came out stronger, smarter and more seasoned. They learned how to endure a hard economic, medical, or act of God (weather) event quite well.

They were forced to go through bad times and came out wiser. It’s true, some paid the ultimate cost and gave the ultimate sacrifice in losing their lives during numerous hard times, one example is teh attack on Pearl Harbor. 

As the song says, “some gave all.” But that same song also says, “all gave some”. What have you done lately to help turn this country around? (I pose the question for myself first and that is why this blog entry is being added) 

Fortunetly, survivors carried on for us in the past. Medicines and education formulated to lower death rates from catastrophic disease. Education and high tech gadgets now help us run to safety when damaging and destructive weather strikes.

We get warnings our forefathers didn’t have a chance to receive.  The Internet delivers email and nedws every day telling you it is time to take action to help this country survive and keep our sovereignty. I have heard the message loud and clear. Have you?

Sadly, it appears nobody in Washington learned to balance the checkbook lately, and that is why we are heading for another “end of the world” event soon. But, it too will pass if we dig down and figure out a way to survive the bad times coming.

Just who is giving you a warning that the economic times you are used to and so accustomed to in this country – are about to end? 

Well, that answer is coming fom a lot of smart and educated economic advisors telling you to protect your purchasing power and prepare for hard times coming.

Will they come? Or is this all a dream? 

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”  — Opening paragraph of A Tale of Two Cities.

Because economic storm clouds hover over us all, rich and poor, and those in-between, and now extend to a worldwide dark veil on the entire planet, I suggest you invoke history to see how the French peasantry survived the demoralization put upon them by French aristocracy. The wrath of the revolution that followed put most of those aristocrats in their place.

America is the beginning stage of an economic lesson that puts us in the principal’s office while the principal is warming up his strokes about to be parlayed unto our behinds with a very big paddle! We let the system guide our own overspending. Buying things we didn’t really need on credit was dumb, and I too learned that lesson. Yes, I too stayed indebted for years ignoring high interest rates in lieu of affordable, (mostly interest only) monthly payments. Then one day about seven years ago, I woke up and got out of debt.

The first blow is about to begin and everyone in this country will feel the full force and magnitude of bad economic times coming. We can delay the whacks waiting for us or we can stand up and take the whacks one by one until it ends.

Some of you can still take steps to avoid the pain of suffering or at least reduce it, by protecting your purchasing power with alternative monetary precious metals coinage or bullion, storing water and food and medical supplies, and coming up with multiple strategies to stay safe if our world soon becomes similar to the  mob mess we watch on CNN or Fox News.

Some have guns and perhaps the most precious metal of all – lead –for those guns to protect what they have built and their very lives, or their families. It is still legal to own and bear arms. Don’t let that change or your world will be rocked in ways you won’t believe friends!

Will our world as we now know it, soon end here in America?  I honestly don’t know the answer. I hope not. But, I also honestly feel that if we keep doing insane things to try to prop up a terminal economic system, our suffering will be even longer and harder by waiting longer for the economic system to fail. Unless drastic changes take place in limiting spending and reducing debt, it is terminal! 

And, this is why our corporate firm now sells gold and silver and other precious metals for discriminating financial consulting clients throughout the world, not just here in America. We offer professional financial advisory as agent with a top name firm we trust for product. And, we also will soon be offering again, the other “hard asset” many are snatching up now. REAL ESTATE!

Each citizen has to decide if these alternative “hard asset” investment vehicles belong in their investment portfolios. (or economic survival plans). You just won’t know until you take a closer look. The time to do that is now!

Call us toll free at 1-800-782-2806 if you would like to learn more about holding precious metals, or to place an instant or delayed order to buy.

I close by saying that I have not given up on America. As a patriot, I am for anything that can help our country get off our knees and back on our economic feet. But I also must admit until we ask God above for help on a daily basis while we are on our economic knees, healing and help from the father may not come. Our currency still says we trust in God. Don’t let them take that phrase off our buildings, money and other American icons. The day we do that, we will be in real trouble!!!   God Bless!

M.D. Anderson, AZCLDP, President

Financial Strategies, Inc. (An Arizona Based Financial Consulting Firm)

***************

NOW, I WANT TO LIGHTEN THE MOOD AND RE-ASSURE YOU THAT THERE IS LIFE AFTER THE END OF THE WORLD:

R.E.M. sings live: It’s The End of The World As We Know It (And I Feel Fine!)

 


Dont Trust the Ball HolderIn other words, the old law from 2001 still kicks in again in 2013 with a $1,000,000 estate exemption limit per spouse, and that is based on having the proper legal documents that actually properly use the double exemption of both spouse’s to exempt the first $2,000,000, starting January 1st, 2013!  Just as the one year exemption is a “play” that most likely won’t be used from the government play book any time soon. (2010 estate owners that died, now have their choice to elect “unlimited” status regarding estate tax, but restrictions on tax “basis” on appreciated assets, or $5,000,000 estate tax exemptions with better tax treatment of appreciated assets) This two-year special “deal” everyone is frothing about as a great law, will pass by too very quickly. And with all the stuff that is due to hit the fan in the next two years, most likely is on the back burner again in Washington, and the burner is on “off”.  Hopefully, all of you reading this will still be here in two years. But surviving the next two years means the party is also over for big exemption amounts. That is without a needed amendment to make the temporary provisions regarding the estate tax – permanent. And, with cuts everywhere from national down to city governments — just how willing will Congress be willing to extend big breaks to the “rich” in a few years?

The law that alters previous laws by amendment, and  in a last-minute  political “band-aid” session last December, was meant to avoid the fact that we need more to count on as estate planners trying to do the best job for our clients. Even the official authenticated entry of H.R. 4853 in the GPO: Begun and held at the City of Washington on Tuesday, the fifth of January, two thousand tenmay be the Omen to warn us – temporary law can’t be taken serious. The bill was first introduced in the House March 16th, 2010. I know it’s easy to write the wrong year early in January. But, the official registrar can’t get the year right?  

I’m not the only one that feels the way I do about our temporary estate laws. Howard M. Zaritsky, a Rapidan, Va. estate planning expert who advises other lawyers in the field, says he’s telling practitioners not to base estate plans on portability until it become permanent. I quote his quote from Forbes magazine: “Congress has shown propensity for surprising us with both bad decisions and good ones, and you just cannot plan on Congress doing the expected or the right thing.”

This time around, the sunset clause comes back and is identical to the one  we thought would hit us in 2011. The only difference is that they moved the chains two years in advance, and raised the prior exempt estate limit of $3,500,000 (that applied only to 2009 deaths) to a temporary $ 5,000,000 exempt limit for 2011 and 2012 deaths only.

If you can plan on certain death, (I’m sorry to hear that), the only positive in your situation is that your terminal medical condition will allow the majority if not all of your estate to pass to your heirs tax-free now. That is unless you have more money than Howard Hughes did. The tax rate was lowered in this temporary amended law, to a flat 35% for the assets over $ 5,000,000. In 2013, the chains revert back to the $1,000,000 yard line, a huge penalty! 

And as I have said in a prior 2010 blog entry, the risk of having your children “help” you use the temporary law (obviously only a child demented) by the deadline will also come back December, 2012. Forget about predictions of the end of the world (it won’t happen) in December 2012. If you are still here and have really greedy dastardly heirs (or that demented child aforementioned), then be careful where they take you or of being isolated too much that last month when these higher limits apply and then suddenly run out at midnight. Seriously! One must wonder with these sudden “drops” in taxable estate assets programmed into the estate tax laws — is Stephen King secretly consulting with Congress?

Now, if you are married, the same marital exemption applies to your spouse in the amount of $5,000,000. That gives up to 10 million exempt assets if you can check out of life’s hotel, together before the midnight deadline I have already quoted.(I hope you understand I am not serious on this point) 

 The second most important portion of the 2010 law, at first glance, would appear to be a great new law provision. But, it won’t be around long enough, without further legislation, to help most families. Unlike any past estate tax law in this country, it gives a new “portability” feature we never had before.

Starting this year and through 2012, any unused portion of your $ 5,000,000 valued estate exemption on the first death you don’t use, will now carry forward to your spouse who dies last, as long as he or she also dies by December 31st, 11:59:59 PM. In other words, the odds are against you — to orchestrate joint deaths in such a tight time sequence, to ever trust these new provisions will be of much help for you. (Joint accidental deaths would be most likely)

You could compare it to the spousal rollover rules that apply to IRA accounts between married couples. The taxation of the funds is delayed until the second death if “rolled over” into the surviving spouses’ name at death – but never is the tax eliminated.

Though the portability clause is forward thinking, nothing guarantees in the current law you will ever get to use it even if something happened to you in the next two years. Your spouse too has to use it or lose it!  And, if your lawyer tells you to count on it, please give me a call as I have some ocean front property here in Arizona I would like to sell too!  Any financial advisor telling you to ditch your bypass trust setup needs to be recorded and documented for later use, just in case I am right. (Lucy pulls the football) 

Also, if your trusted legal advisor also is “sure” the portability clause in this patched up new law will be around as long as you are, kindly ask for a signed and notarized statement with proof of bond or errors and omissions insurance in force, as no one can make that guarantee!

The bottom line: Do you see Lucy pretty well itching to pull the football on you when you really do die?  I am afraid Lucy is the government and do you really trust Congress to do everything in the future, in your best interests? 

Thank goodness, the new law did permanently fix a problem with last years’ stepped up tax basis valuation rules. New provisions now reverse the damage from last year’s alternative capital asset valuation law that would have failed to allow full stepped up basis on appreciated capital assets over certain limits.  (when the federal estate tax was on a one year hiatus and a one year alternative law applied to taxation of appreciated capital estate assets)  So, there was some good from the previous bad law, that did came out of last month’s session. 

I am sure CPA’s and other estate accountants will enjoy all the fees the alternative capital appreciation tax laws caused in trying to properly value estate assets for future deaths of surviving spouses, when they lost their spouse last year. Some heir’s were facing eventual capital gains taxation on any assets over $1,300,000, until the change was made.

Also, assuming I convince some to keep their estate splitting strategies (kind of automatic in community property states), and also keep the bypass trusts in force, the improper use of A/B or A/B/C funding is a constant problem with the wrong formulas and wording.  

I have noticed this year after year, from the many wills and trusts I have read through when clients hire my certified legal document services. Trust and will provisions can quickly became out of date with lame solutions coming out of Washington lately. And, if you can’t guarantee your use of these short two-year provisions, (meaning your death/s are not imminent), then you better review and find out what your legal documents really say. 

The use of wording such as “the maximum current exempt assets”  that will pass federal estate tax-free, in your current estate plan documents could render your original plan to split the estate at the first death (if married), useless. No bypass funding will take place if you don’t write a concise funding formula, if one of you passes away in the next two years. Then, you could expose the kids or heirs to the tax rates and low limits that applied a decade ago! 

Lucy could slip that ball out on you at the last minute, when you kick the bucket (football) and you could fall down hard with a screwed up estate plan mess, and a big tax bill! Anything valued then over $1,000,000 and a starting 41% tax rate will give your kids a great appreciation of wishing they had written an estate plan that though complicated, covered the contingencies so many legal advisors gloss over. (failed trusts are great income generation vehicles for law firms)

As soon as January 1, 2013, there could be hell to pay for not listening to the experts now calling for “caution” in over-reliance on these new provisions. It takes cerebral work, to get it right for the future. (which is now less than two years away I must remind you of).  A custom convertible trust option should be created that allows any estate to properly be funded with as many tax saving or deferral sub-trusts (that is those A or A/B or A/B/C letters you may now have in your current trust), so that the law at the time of your death is applied and the solution necessary then to avoid or pay the lowest estate tax then, is properly applied and used.

It is not work for simple trust writers or simple thinkers. But, it is obtainable if you find a smart lawyer or estate document service with extreme knowledge and experience in these matters. With intelligent thinking and design, your outdated trust provisions can be fixed and corrected to allow the best chance to win the estate planning game.

Lastly, there are some opportunities in the new law, such as the ability to use your lifetime credits (gift and estate) to just give away a major portion of your estate direct to your kids or your other heirs. In other words, if you have $5,000,000 each, just liquidate and write out checks over the next two years to your beneficiaries. This way, you can be completely entertained in watching them spend your hard-earned money while you are still alive!

Seriously, bypass trusts protect heirs from themselves, bad marriages, lawsuits, and that Uncle you have and don’t trust… I think his name is SamNow is the time to look at the playbook again, and dig out your documents for a review. If you need some help here in Arizona, please give me a call, or send me an e-mail, if you want the proper wording in your amended (or new) revocable living trust. 

Lucy (Washington) still holds the estate tax football that will be used for your final game in life. Be aware and plan accordingly, for a sudden “pull” of the ball, at the last minute. It’s almost a sure fact! Smart moves can be made now, to anticipate Lucy and any future “bad” law coming next. The whistle is blowing….Let’s Play ball!

M.D. Anderson, AZCLDP 

Read More About It: Planning For A Disappearing Estate Tax Break by Deborah L. Jacobs / Forbes. com

Now, enjoy Lucy tricking Charlie Brown one more time…


Lets Dance Crazy

CLICK ON PICTURE FOR THE D.C. DANCE REVIEW!

I know, the house cleaning already started with the last election. But, I’m talking term limits, not just new blood. You get them both going in this country and recruit some kind of Julian Assange type guy (but without the illegal part) to track progress online, daily, of each of our new elected politicians while kicking the rears of the old guys (the permanents) at the same time. Then you have something that makes more sense.

I personally would love to have the job of hollering “don’t let the door hit your you know what” as they are forced out under term limit law we need so desperately. I’m talking a little more rotation here like the way it was when George Washington was still around as our first Pres. Take a couple years off of farming the farm, do your duty, then LEAVE! Sure, we may see more Slurpee’s and a few guys wearing those stocking caps, or even a youngster letting his pants “hang” a little low by bringing the average age down to a 20’s to 60’s range versus the 50’s to 90’s range we have now. Different generations have different cultural backgrounds some will have to adjust to. But, it would be better I am sure of it.

Instead, I’ve watched some come in when I was young, and now that I am middle aged, they are still there! I really don’t want to watch C-Span with all those wheel chairs and breathing devices for the senior political muggy mucks who decided long ago that once elected, they would die in office. Please, resign and check into a nursing home or go back to the farm… or back home if you can still remember where that is, BEFORE it is time to “buy the farm”. Just the savings alone on the free health care our elected officials get would be mind numbing if we could cover them at young or middle age, not as old geezers hanging on by a thread up until their last breath (still in office).

Leave them in there just long enough to sustain “ideas” into “action” and then kick them out. We have plenty of inventive, creative, forward thinking citizens to step in and carry on the torch of any good program started. And, to get rid of programs that are not fair, or were born out of favoritism or bribes to pay back a certain group or person who helped someone get elected. Which brings up the money. Set the same ground rules for the political seasons of pre-election advertising. Let it fit the budget of just about anyone, not just those who already have millions in the bank. That is not fair because only the “rich” get elected. And because they stay in office for decades, they just get richer with special interest group payoffs, endorsements, speaking engagements and so on.

Could term limits cause questionable law, temporary fixes, cancellation of programs that work, or just plain general chaos?

Well, probably not any worse then the “crazy” we NOW HAVE!  And there is one more reason to throw the permanent politicians out of office. They quit listening to us. They ignore the “pulse” of the country. We the people are not being properly heard anymore. Why don’t you send your “old” politician a new set of hearing aid batteries. Maybe they will get the hint if thousands do that.

M.D. Anderson


Who Is Dropping Your Estate BallHave you ever watched a world series baseball playoff game, or the final world series game, and observe two outfielders miss a fly ball? Well, it happens all season long but when it happens in a world series game, there is additional consternation amongst the players and us, the audience. As an active estate advisor, I too, observe other estate or financial advisors drop the ball. Often!

The lawyer who drafted the estate plan thought the banker, insurance agent or securities broker would take care of the beneficiary elections for the client. And of course, the banker, insurance agent or securities broker thought the lawyer would review and make any changes, if needed. And so, the work doesn’t get performed properly, if at all! A recent survey in a financial magazine I serve on the advisory board with, stated up to 90% of families suffer from a beneficiary mistake. And, those mistakes can cost a fortune!

Having three or four separate financial advisors licensed or trained to help clients elect proper estate beneficiary elections on beneficial type asset/estate products is really quite normal. Yet, it is rare for them to talk or get together on your behalf to be sure each has helped you, the client, to properly elect the proper elections when you die.

But more rare, and sadly — are the lawyers who ignore the beneficiary reviews and leave it up to the other financial advisors. Now, this could be for one reason. Lawyers aren’t usually licensed for insurance based and payable upon death bank or securities type products or accounts that name a beneficiary. Additionally, lawyers don’t always tell you how you can leave your home or another property in a few states, including my home state of Arizona, just by filling out a simple one or two page “Beneficiary Deed”.  As an Arizona Realtor, I must admit most of my piers in the real estate business are not going to be much help if you ask for one here. So, they are used rarely by the lower income (asset base) clients who need them the most!

In baseball, the player who has the most confidence in his position on the field is supposed to holler out they have the ball. Yes, it is a future tense sudden audible expression that might be “I’ve got it!” or “It’s mine!” or something similar to show control and intent. But in the typical estate plan conference conducted by a typical lawyer who may advertise themselves as an “estate expert”, — no such audible calls can be heard when it comes down to grabbing the ball before it falls to the ground in failure. A professional beneficiary review being absent, leaves the ball on the ground indefinitely. Often, the mistake is discovered only when it is too late to correct it.

A simple little “Discussion Points for Your Other Advisors” sheet would be all that’s needed. Or, a nice little checklist of follow-up procedures for the other money advisors to use after the client’s estate plan legal documents are signed would do just fine. It’s true, a lawyer doing a living trust may print a funding sheet for others to follow. Yet, the followup doesn’t exist for the most part. No one calls out for the ball even in the living trust field of legal practice. The client is expected to leave the law firm and figure it out on there own, even though a big slice of cash was expended for “professional estate” advice.

For the lawyers who promote a “round robin” review by the other advisors after the new estate legal documents are signed, trouble still lies ahead in many cases. They do their job, but yet legal malpractice can still sneak in if they don’t “inspect” what they “expect” from them. You, the client, can easily get a mixed review. A bank employee may convince you that a P.O.D. account is better than the trust on your CD accounts. So, the trust with ink barely dry, gets forsaken at the bank sometimes because the bank advisor happens to be pushing payable upon death accounts. (probably because the bank legal team told them to always be sure it isn’t tied up on probate if the client dies) 

Note: That works in some cases, but the professionally prepared and expensive trust wasn’t prepared just so another bad financial advisor can “fund” assets with the cheaper (and less protective) alternative of using payable upon death elections to avoid probate.

Also, things don’t always work out so well when you stop at the insurance agent’s office either.  Minors are often named as first or second beneficiaries, trusts are ignored as first or second beneficiary, and IRA money is left to a trust as primary beneficiary. And no secondary names are listed, thus erasing any post death chance to disclaim the funds away from the trust so they go to your kids*. Also improper use of “per stirpes” vs. “per capita” by insurance agents often shows the lack of diligence or understanding of basic legal beneficiary terms.

* There is a time to leave a large IRA to your trust. But, first of all, it is a special conduit trust designed for that one single purpose under IRS code and private letter rulings. More times than not, large IRA funds are left to a trust in “malpractice”, by mistake when no real reason exists to do so. The average family trust with no provisions to hold these funds can cost thousands of dollars in legal or accounting fees after your death to try to “qualify” the funds and keep them from immediate taxation. All of this can be avoided if a professional firm assists you in filling out all beneficiary forms properly and according to the legal documents and estate plan. Our firm offers professional beneficiary consulting if you feel a review is now in order.

After visiting the bank and the insurance agent(s), the final stop off is at the broker’s office. Some will get it all right. Most will not. Be careful if your broker or assistant tries to talk you out of all that paperwork to re-register your brokerage account in lieu of just pulling out a beneficiary form (payable upon death form) and asking you to sign that instead. Or, if a new trust was created by your lawyer or professional certified legal document preparer, they will register the account correctly in trust, but use the wrong trust date, such as the last amendment instead of the original trust date.

Very importantly, brokers (and assistants) can often list the trust as the primary beneficiary of the qualified funds (IRA) accounts. They do so, not fully understanding that professional lawyers practicing high end inherited IRA estate planning would never elect a large IRA to go directly into the family trust. Especially if a bypass trust wasn’t even created for receipt of the funds! Not getting it right, or understanding that few trusts can handle a large IRA, means “trouble in River City” down the road. Sadly, the trouble surfaces AFTER the client dies and can no longer complain. A recent case I consulted on, proves the legal expense of improper beneficary reviews (or lack of) can cost plenty after the client is gone. Good money going to waste all because someone didn’t follow through and do their job.

So, the question comes back – What would be a better way? Well, the answer in my firm was realized in 1991. It’s so simple, yet few law firms or certified document preparer firms do it. It’s called a detailed inventory of ALL assets. It has to be done at death. Why not start early? One by one, you should list all real estate owned. And all of your bank accounts with account numbers. Vehicle ID numbers secured for automobiles, boats, trailers, motorcycles or motorhomes also makes it harder to ignore a high value item that could trigger probate.

Also, a complete qualified plan (IRA’s) inventory is a huge area of malpractice if not done by someone. If you, the client, does a detailed inventory, no one can blame you for  dropping that ball!  Everything of any real value belongs in your pre-death inventory. But when it comes to beneficial assets, dont’ forget the life insurance policies that have a death benefit (all do, unless you live to 100 – then you may just have a cash value)

No inventory would be complete without a listing of debts or liabilities too. This can help settle an estate during the estate settlement process, especially if money was borrowed to a child or grandchild and expected to be repaid.  Along with the inventory of assets and liabilities, the designated owner is important too in your inventory. When a living trust legal document is prepared, a separate “Schedule A” is printed to list assets that should be placed in trust. Or, in the case of beneficial assets, a listing of whether the trust shall serve as primary, secondary, or tertiary beneficiary. Or not at all as I have already discussed. 

Since few trusts I review contain the actual asset listing I am talking about, the malpracice continues. The Schedule “A” every lawyer gives out with a atrust is often blank. They expected you, the client, to fill it out. And, you the client, thought “everything was done”. Legal Malpractice?  You be the judge. Meanwhile, do your own inventory just to be careful. And, do it BEFORE you go see your lawyer/Certified Legal Document advisor just in case they still don’t realize how important beneficiary reviews really are. Many families have MORE money in life insurance death benefits and IRA death benefits than they do in other assets, especially with home values falling way down the past few years. Ignoring them is a big mistake by all parties concerned.

Even if your estate advisor is doing a lower cost Last Will & Testament (perhaps to save money up front) with a few other documents such as Power of Attorney instruments, the inventory is still necessary. Because, on it YOU list your beneficial type assets such as life insurance, IRA’s, and any business arrangements that have a beneficiary election in the contract. Give them all the information about you and your estate, and mistakes will be curtailed or eliminated later.

My premise, in closing, is this: Complete estate planning can not be performed if a full inventory is not present. Just like mandatory probate requirements demand your heirs create one, estate advisors should get the hint sooner than later. The work is necessary and the inventory is the missing link to successful crossover work with your other financial advisors. A final appointment with your lawyer or estate advisor (such as with a certified document preparer like our AZCLDP corporate firm) to review ALL of your assets must be performed to consider any modern estate plan “finished”.A final check-up to be sure things are correct. Even if your estate plan is completed (or so you think), take a look to see if you got an inventory. If not, we can assist you if you like to put one together to go back and discuss with your current financial team of advisors.

In closing, just because you trust your banker, your insurance agent, or your broker — to do everything in your best interest, it doesn’t mean they will get it right. And, if you are the lawyer performing the estate plan, or review, the banker, the insurance agent, or the broker, don’t expose yourself to errors & omissions thinking someone else will help the client. With your client’s permission, ask to discuss each high value asset to be sure it is titled correctly or the beneficary form is in accordance with the legal advisors estate plan.  A small cost for such joint review now is nothing compared to the legal costs I have observed lately in way too many client cases ending up with baseballs all over the out field!

Just write that inventory down or print it up and circulate it to your trusted financial advisors so the estate plan can be all it can be. Just like the cancer drive brown envelopes we used to circulate and make donations in, start one with your own asset list and shoot it over to your lawyer first. (or certified document preparer) Ask for it back in 30 days after the first date of circulation. You the client, will have to be the final judge on what is right and wrong in those beneficiary elections. But, by giving your financial advisors complete “vision”, any current mistakes can be discovered BEFORE you die, not after you are gone. And, that would be a good thing.

Now, enjoy Jackson Browne’s “Lawyers in Love”