dodgeball-imageI normally always write about business related subjects on this financial services “business” blog. But today, I want to turn to a subject much more related to real life and how it affects us both personally and business wise. No, I’m not going to talk about the Anderson family cat that cries (it’s hilarious) in the middle of the night when it becomes lonesome. Nor will I give specific “internet tips” on the fix I found and performed on my wife’s BMW when the steering wheel suddenly locked up while running — just last week. (a 3/8th drill bit and precise drilling unlocked it) Those types of subjects are all good content for personal blogs and maybe someday, I will realize the need to expose my personal life to the entire population of the world…

Today, I am going to talk about Dodge Ball. Dodge Ball in junior high school taught me everything I ever needed to know about life. Playing it was not optional in my junior high school. It was like being at Custer’s last stand. Except, it was also like the “Groundhog Day” movie – it was replayed every week! Same gym class, same P.E. classmates, same red ball, same result. The sides would be chosen by the P.E. teacher and you only could hope that Jeff Swanson was on your side. I know they mixed it up for us. Sometimes it was one side versus the other. Other times, it was one on one, last “boy” standing. (Yes, I am too old to have been integrated with the girls P.E. class’s as they do today)

So, here is what I learned very early in life, from A to Z:

Adrenaline Rush: I think the first time I got one was when I saw the dodge ball coming in slow motion directly into my face. SPLAT! There was an adrenaline rush but it was too late. My old plastic gull winged glasses would go flying off and slide into the path of other scared children who often stepped on them before I cold retrieve them.

Begging: Sometimes, you would be in the gun sights of an opponent and like a deer in the headlights, you knew you were about to get hit. This is where I first learned how to beg for mercy.

Covering Up: You had to cover up when time allowed and prepare to get hit. You knew it was coming, but sometimes, you had the grace of the red rubber ball Gods to be able toDodge8 protect yourself from the blow. Covering up always seemed to help just a little with the pain that always follows getting walloped with a fast thrown dodge ball.

Diversion: Learning how to divert your wild legs pumping like a crazy person as you ran around the court trying to avoid a hit. I learned serpentine moves that most likely could still help me today, should some attacker try to hit me with a paint ball blast, or worse, a real gun.

Empathy: You always had the same kids and you learned how to feel sorry for them. But sympathy alone wasn’t the only lesson I learned. I sometimes would try to help them get away and tried to help them stay in the game longer. But sometimes, by helping, I would get hit because my attention was taken off of where the ball was.

Friends that Turn On You: When we played last man (boy) standing, yes, even your friends had to turn on you to win. They would normally leave you alone until the end, just as I would, but eventually, I learned what it was like to have your friends turn on you. The betrayal was mandated by the school leaders and P.E. teacher, so I never took it as a serious infraction.

Guarding: I’m talking about another kids’ body here! I learned I could shield from the wrath of the red ball by positioning behind slower kids that you knew would get blasted because they just couldn’t move very fast. People do the same thing when speeding on a long trip down the freeway. You get behind a car speeding hoping if any radar goes off, the guy ahead of you will get the ticket instead of you.

Hiding: An old grade school court didn’t have any place to hide. Just walls. But, lighting was varied at times when the window light would darken when clouds blocked the sunlight. I wasn’t the one hiding usually, but plenty of kids would try this approach to try and stay in the game longer. Of course, like guarding, they would hide behind each other too to shield the direct hits of the ball as long as possible.

Intimidation: I learned this technique (not really a good thing) while being forced to play Dodge Ball. There was a lot of taunting during a game and some daring as well. A ball holder would intimidate you to take off and run and then see if he could hit you. As I became a pretty good player, yes, I too would taunt and intimidate classmates. I’m not proud of being a little too cocky at times during those games…

Jiggling: Jiggling, juggling, whatever you call it, means you will be observing your physical body do things that will amaze you. You could take off south but still have parts heading north during the transition. Spastic kids really didn’t do well trying to jiggle. They would hit the floor, not from the ball, but from trying to move too fast and not having proper co-ordination to handle the moves they attempted.

Killer Instinct:  Yes, you learned the killer instinct. When the ball was in your hand and the target was directly in sight, the desire to shoot the ball as hard and as fast as you can at your target came over you. And, after a few direct hits, you started to enjoy the feeling of taking out a classmate. Sick! Sick! Sick!

Lamenting:  Yes, my cries of sorrow and grief started each time a dodge ball hit my face and bent or broke my glasses! Lamenting took place in the boy’s bathroom trying fix or tape those old gull wing glasses so they would stay on my face the rest of the day. Then, when I went home with taped up glasses, the parents lamented too because they knew a trip to the eye doctor and another bill was imminent.

Misery: I suppose there is misery in a blow or shot that kills you. Playing Dodge Ball, nobody died that I know of while playing the game in my home town junior high school. But, the direct hit to your face (and a few other body parts) felt like death for a few minutes and the word M I S E R Y was fully understood during those minutes of declining pain before you eventually became well enough to regain your composure and act like your normal bratty junior high self in front of your classmates. For the direct face shots, you could also easily pick out others that got the face shot as they walked down the halls with a big red blotch on their faces!

Navigation: Forget GPS guidance, those white Converse All Star tennis shoes were my guidance system!

Offense: Having a ball in your hands was a wonderful thing. You knew that you had power and were in charge, but you still had to be defensive the way we played, since another classmate enjoying that same feeling of power when you are in defense – could easily whack you with his ball while you are temporarily enjoying your power moment. Sadly, some kids never got to go on offense as they were too busy running around like spastic disabled kids.

Pity: At first, I learned pity for myself only. Recovering from the physical blow was equally related from having to recover from the embarrassment of being a pretty good school athlete but never being able to win a game of Dodge Ball when we went one on one. Jeff Swanson, the star athlete and one of my best friends during my school years took those honors. But, by the time I hit 9th grade, I pitied the kids who couldn’t defend or ever get the ball. Some were the smartest kids in class, but their bodies just didn’t do so well on that Dodge Ball court. I am sure they hated it worse than I… (and refused to let their kids buy any red balls ever since)

Questioning: When you are running around in defense, trying to save your life in a Dodge Ball game, you don’t have time to think much or question. But, after a couple years of forced “war” by the school system, I started to question a lot of activities we were forced to do in junior high. I questioned having to eat all your lunch, especially when it came out of great big cans and tasted like World War II rations. I questioned having to wrestle, a sport I was no good at and didn’t like at all. I questioned having to climb the thick rope up to the top of the gym roof, being scared of heights like I was from being forced to climb up the outside of a farm silo at home. I questioned the big pipes with unraveled insulation because we would hit them with our hands as we ran in and out of the boy’s gym. (not knowing the wrapping and slap exposed us to asbestos) I do believe the start of my inquisitive mind began the first time I had to play Dodge Ball.  And, that quality has served me well as an adult businessman.

Running: As a sprinter, I ran a fast 220 yard and quarter mile, making the first team in track in junior high and high school. (and getting some medals to prove it) But, it started in Dodge Ball during P.E.  In my business practice, I often will tell someone to “run” figuratively in my financial consulting. Run from shoddy salesman,  offers too good to be true, free things that aren’t really free, etc.  But, I guess I must acknowledge the physical running in multi years of forced Dodge Ball games helped build the physical skills and muscles that later aided me as an athlete. 

Stress Management: When you are in a war, stress management is automatic. But, before and after a game of Dodge Ball, you have to manage the stress of what is coming and then, what has happened to you after a game. Questions abounded and I had to learn to manage the stress. Will I break my glasses and have to explain to the parents it wasn’t my fault?  Will Jeff Swanson turn on me at the end and take his good friend out to win? Or, can I beat him this time?  It all was quite stressful, and management of the stress came early to me, thanks to Dodge Ball.

Timing: There is a time to run and a time to stand firm. A time to throw and a time to hold back. A time to cry when hit and a time to suck it in. A time to feel sorry for spastic body classmates and a time to have no sympathy on them and their useless, pathetic bodies that could not move to avoid the wrath of the red ball.  O.K., you get the hint. Timing matters and as adults, some get it right, others don’t.

Uselessness: Man’s best laid plans can end up in failure and cause disgust. Going out early in Dodge Ball (or worse – being first to go out) can cause a lowered state of self image, and cause you to question your abilities and even your future. You can end up in a “uselessness” state if you let yourself slide down the slippery slope of self pity. Feeling sorry for yourself normally =’s uselessness. Dodge Ball taught me to pick myself up off the floor of defeat and temporary uselessness, and remember. I remembered I got another chance the very next week, to do better and try harder!

Venting: Zig Ziglar used to talk a lot about the loser’s limp. Sabatoging your success by doing things that will cause your failure. I never understood it better than while playing Dodge Ball. Some days, I just didn’t want to be victorious and let the red ball of death hit me early on in a game. But that wasn’t venting. Venting can go positive or negative, but it is necessary. Locker room venting from victorious players was laced with bragging and laughing at certain “hits” that caused a bad day for some of the players. And, sometimes those same boys were standing there naked in the showers having to listen to the verbal abuse that came after their “gladiator” experience they had to endure out in the Dodge Ball arena. But, sometimes, you would hear the defeated and hurting players venting too and it was good. When you get blasted in the face with a 800 mph red rubber ball, you can feel sorry for yourself or you can laugh it off and let it go. Proper venting helps you show up in the next class with no big mental problem, even if you are wearing the scarlet mark of the red ball for the rest of the school day. It would be undeniably displayed by all the broken blood vessels the ball caused!

Workmanship: When we played team against team, they tried to make it fair so you didn’t have an extraordinary number of lame players who couldn’t run, dodge, or throw the ball.Dodge4 So, you learned to work with your team no matter what. You protected the less fortunate when you could. You gave them the ball sometimes so they could experience the thrill of being the “Hunter” and not just the “Hunted”. Workmanship was learned while running around like a crazy person with multiple red balls flying by your body like guided missiles. It was a good lesson to learn how to stick together and block. We tried V formations, line formations, multi formations. War is something you learn fast in how to play the game!

Xanthic Skin: After a few good hits, I still remember the yellow skin bruises that always came later after getting whacked hard by that red ball!

Yelling: My vocal chords never developed to the point of being able to carry a tune. But yelling was magnified on the Dodge Ball court from my earlier lessons from certain Anderson family members who seemed to like to yell a lot. And of course, while I was doing my chores on the family farm at a very young age, there was yelling at the farm animals when they didn’t do what you wanted them to do. And sometimes, amongst siblings and parents. But, the yelling that takes place on a junior high Dodge Ball court gives you a degree in perfecting your vocal chords. Who knows, you might slide off a tall bridge in a winter storm and be stuck in your car below. Being a former Dodge Ball player just might save your life!

Zero In: All the other lessons learned playing Dodge Ball as a youngster are important for the most part, to my adult life that followed. But, when you have the ball in your hand and you learn to zero in on your target to anticipate a direct hit, while still protecting your flanks and rear from someone else perhaps zeroing in on you to take you out, you reach that point of harmony and strength, that special place, where you know this is “As good as it gets!”  And that is when you take the shot. Hit or miss, you take the shot.  Zeroing in and not delaying taking the shot in business has served me well. I don’t always hit the mark. But when I do, it is because I focused and wasn’t afraid to try.

Dodge Ball, I guess playing the game was a necessary part of learning and I thank you for what you taught me.


M.D. Anderson, AZCLDP





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


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”


There are basically three types of people. Those who make things happen, those who watch things happen, and those who don’t know what is happening. Don’t let a financial “Checkmate” take away what you work so hard to accumulate or save.

It’s Time to Avoid Financial Checkmate!

Simply, if the politicians in Washington would turn off the “stupid” sign on their foreheads for just a few days they could actually think about the right way to turn around the debt problem of the country.

They could first think about killing the health care bill before this mammoth train wreck hits grand central station. And all the other stupid spending bills passed lately that pretty well guarantee the country will go broke.

Just like a reset of your computer where you actually roll back the programs and commands in your startup files so you can find a “good” start up software routine that works prior to the virus or malware that hit the computer (if you’re lucky), what’s wrong with a roll back?

I won’t say how many years we have to go back to, but isn’t it pretty clear that just a few weeks ago, the country was on a spending spree like a drunken sailor who just got paid and was put on leave? And now, suddenly after the little incident off the coast of California, we have a very sober President who just froze federal wages and actually seems genuinely interested in a solution?

O.K., I don’t expect you to understand that the government most likely lied about what that trail was coming out of the coastal waters in November, but there are plenty of high qualified military people telling us on the internet it wasn’t an airplane. The biggest bet is it was a warning shot, a Chinese missile (from analysis of the trail) fired from a sub, all at the same time our leader was over there schmoozing the Chinese President – to calm him down about our countries spending. The satire skits on Saturday night Live, may be more realistic then you might think.

What’s at stake? Everything!

If we default on our obligations, if even the Chinese no longer want to buy our bonds, the “full faith and credit” of the United States government is at stake. And that means your FDIC insurance may, for the first time in history, become at least — a partial problem to collect on. Perhaps temporarily, but if a run on a major bank takes place as is predicted from Wikileaks “leaks” of what is coming, it might be wise to find out which banks are in the most trouble. Of course, the usual suspects can not be ignored from past troubles…

So, by now, you must be wondering – What does this political rant have to do with the title? The answer again, is everything!

The people that make things happen are trying to bring this country back. They are the movers and the shakers opening up new stores, employing new workers, and trusting their own wisdom and business sense that the best days are still ahead — not lost behind in a dream memory sequence that will never return. Yes, they are the ones with the most faith in capital markets and structures, especially as we see the other side of the coin fail miserably in Europe and elsewhere. They are the ones still balancing their checkbooks and teaching their children to do the same. They are still teaching their offspring that hard work and faith will pay off and lying around expecting handouts for free is a more of a curse, not a benefit or a blessing.

So then, we have the middle type of people. There are many more citizens in the middle and they are just fine and thankful for being right where they are. They feel secure for the most part, because they watch others “move and shake” while they passively and carefully continue to play it safe. They are not overly aggressive, but by no means, are they lazy. They just don’t take risks very often. “Watching” is their expertise. They have great second hand experience. Therefore, “doing” and “making things happen” with these folks – is a rare event for the most part.

Lastly, we come to the bottom of the list of three types of people. And economically, the majority resides in this group. They are the poorest. Not their choice, but because of circumstances, bad decisions, heritage, or just bad luck. Most reside in this group against their will. But, they are too busy surviving in life to know how to move up the ladder. These folks can’t make things happen like the first group, because if they could, they would move up! And, because “life” consumes their time and energy fully, they don’t have time or the ability to even “watch” what is happening for the most part. Survival is paramount. Knowledge and information doesn’t have much use to them.

And this is where the average blogger would expect the question – Which are you? Well, you can ask that question of yourself if you want. You can, but that isn’t my point. You see, we all run up and down the grid of three types of people. At times, we don’t care about being active so we go passive. And sometimes, we let ourselves fall down into that last comfortable position to where we don’t really know what is happening… and we don’t really care. Yet, once there, we find a trapdoor locked and can no longer find the key to get out!

Maybe this blog article is your wake up call. It is time to rise up and be all you can be, if you can move. Can you read and study and learn to move up? Libraries are still free are they not? Can you run for office? Who says you can’t? Are you fulfilling your life plan or goals? If not, why not? Did some person or circumstance beat you down? If so, who won? You or them?

It’s time we all shoot our best shot. Rise up and balance our checkbooks. Get out of debt. Create opportunity for ourselves and others. Be all we can be. And let’s not forget that others could use a hand to pull them up too. Let’s give our time and our money to help others. And lend a hand. In return, it is universally known that the “return” will be more than what you expended.

As the holiday season comes upon us, this also not ignore or forget about the one who holds the world in his hand and is concerned about each of us and who also directs us to help our fellow man. (and women and children) Do you have something you don’t need? Why not have a special garage sale this month and mark the price down to “free”? When word gets around, you most likely will have a clean garage quickly!

Or maybe you reach out and agree to donate your time or money to a new event or program that needs your help. Whether for a day or a whole year, make one new commitment for the New Year to do something completely new for another person or organization that could use your help.

A year from now, if we all reach out to be “better” individually, it could make a difference for the trouble the country is now in financially. And, it may catch on. Let’s not wait for another 9/11 event to be nice to each other. If the citizens can do more and be more in the New Year, maybe Congress can get the memo too. Being better is a good thing and the reward could be in a way you won’t imagine. Volunteer time or money and don’t expect a thing back. But, if rewards in any way or fashion come back to you, don’t be surprised either!

Lastly, the checkmate. If we don’t get smarter, more agressive, nicer, better…. we face Checkmate and it isn’t going to be pretty. Just tune in to TV news in Europe to see America’s future. Before the year ends, let’s make some moves to protect ourselves from financial ruin. If you need some help to do that, just ask for it.

Happy Hanukkah & Merry Christmas!

Enjoy a Video…

Central Iowa TornadoI wrote this article a month ago after working on some estate planning legal documents for my retired parents, my Iowa farm family.  It seems like history is about to repeat as the political “football” they put in the air about 10 years ago a.k.a. the “sunset clause” is set to drop on unsuspecting farm and business families.

The scare of “death tax” is returning if the politicians don’t divert the path by year end. It is a good example to start off this new blog about how to stay smart in a dumb world.

LINK: Read More About It

And, here is a reminder of just how damaging an Iowa tornado can be:

Superman living in Chandler, Arizona?

O.K., I’m not really Superman. But, there are enough clients here in Arizona, as well as around the country who do business with me (many clients have never personally met me), who might think I have some kind of special talent they find lacking with their “former” financial advisor(s).

Practicing in four distinct finanical occupations helps me remain sharp and smart. And reading daily and all those continued education classes takes about 25% of my time each day!  But, that is why I may be your NEXT financial advisor/consultant. My expertise and experience level is hard to find locally.

There is a saying in Arizona. Dead men tell no tales. So, being a long term Arizona business owner and financial consultant, it’s time to start blogging! Yes, it’s time to start telling some “tales” about how to remain smart in what lately has become, a very dumb world. I don’t think I need to prove my premise. Countries are going broke.

And in the U.S., all the guardians of your money — the banks and brokerage houses – endorsed some greasy little mortgage investments put together to purchase by equally greazy little people who’s main goal was to separate good dollars for bad investments by selling these mortgage investments to a bunch of dumb people who thought poor people could afford big houses with big mortgage payments.

And that’s why the entire world is going broke? It’s downright shameful! But, if you are survivor (bruised as we all are lately financially), and want to try to make the best of living and being smart on money in an ever increasing dumb world, you came to the right blog spot.

Will I try to sell you something? Probably. Better you do business with someone you can still trust then get snookered by some fly by night firm or person pretending to be a guro but in fact, being just another greazy, sleazy person who wants to steal your money or provide you with inferior and substandard products or services.

So, welcome to a new breath of fresh air for the financial community. There is hope. And not everyone out there is a dope. This financial blog will help you separate the real advisors from the fakers. (that are often only takers as well)

Don’t be shy — tell me what you think. If I don’t like it, I will just delete it. It is my blog and I am looking for people who share my vision. Rise out of the ashes. Be a PHOENIX! Experience greatness with your financial decisions.

Getting knocked down leaves much more room to get back up. In other words, never give up. Not until you are dead. I can’t help you then. Well, actually I can if you live in Arizona. You can hire me to do your estate planning legal documents!

Regardless, welcome! And come back often and bring some friends with you too!

Now, it’s time to enjoy the Superman Theme: