Every day my in box fills with information from many sources. Some is from mainstream media, trade journals, special reports and various reviews and findings from the legal and wealth advisory community. Often, while reading an article or report, many people come to mind that I think might also share an interest in the information.
For example, earlier this year I read through a Special Survey Report published by WealthCounsel and Trusts & Estates magazine. I read it again this week. Even though the survey was directed to estate planning attorneys about emerging industry trends within our profession, there were some items that were of interest to me because they addressed those of us who are moving in 2011 from the “Baby Boomer” and “Generation Jones” generations to being “Golden Boomers”.
As we counsel clients during the preparation of their estate plans, one concern is usually very evident – parents are worried that their children will squander the funds and assets that they worked very hard to accumulate. This concern can be addressed in many ways, but usually, parents request specific provisions in their estate planning documents that control an heir’s access to distributions based upon age, accomplishments, and certain life choices. Therefore, the assets are distributed largely because a specific milestone has been reached. The thoughtful nature of the distribution planning, however, leaves a primary problem unaddressed – preparing the heirs for wealth transition from one generation to the next.
Studies conducted by various institutes demonstrate that many estate plans that have been completed and then updated carefully and competently throughout the years, successfully address the issues relevant to the parents’ wishes. The attention to detail, however, cannot necessarily fill the gap of the heirs’ lack of direction and instruction that results in chaotic estate administration, family disharmony, and relationships that remain broken forever.
More and more checking account owners are using their debit cards or online bill paying methods. With these rising trends, checkbooks are left unaccounted for, for periods of time. Check fraud can occur in one of many ways, such as (1) the victim writes a check but it is intercepted by a third party who fraudulently alters the check, (2) a third party creates an entirely new fraudulent check from the information on the real check, or (3) checks are stolen from the victim and the third party writes fraudulent checks, forging the victim’s signature. For purposes of this article, the victim is a customer of the bank that charges the payor’s (the victim’s) account.
An important defense
Safeguarding your checkbook is an important defense if the financial institution insists upon you, as the victim, being responsible for the fraudulent charges. The Michigan Uniform Commercial Code makes the bank strictly liable to make the victim whole but an exception typically applies. If the victim’s failure to exercise ordinary care “substantially contributes to an alteration of an instrument or to the making of a forged signature on an instrument,” and the bank paid the instrument in good faith, the victim will have difficulty succeeding on a claim against the bank. If the bank also “substantially contributes to the loss,” the loss is apportioned between the bank and the victim. Each party has the burden to show that the other party failed in its exercise of ordinary care.
Planning for the succession of ownership and operation of the family business for next generations presents many tax and non-tax challenges for the family business owner. Oftentimes, keeping the family business in the family involves having to choose between implementing strategies to accomplish tax benefits at the expense of implementing other strategies that may provide a greater likelihood the business will continue to prosper and be managed properly in the future.
Substantial yet limited opportunity
Well, as is addressed in the article below, Congress presented family business owners an unprecedented planning opportunity by enacting the legislation extending the Bush era tax cuts and expanding the estate and gift tax credits at the end of last year. While the opportunity is substantial, it’s limited and likely to undergo changes and possible repeal at the end of a short 2 year window with the current law set to expire at the end of next year, 2012.
Budget Proposal Includes Anticipated Proposals to Change Both Tax and Spending Policies
Michigan Governor Rick Snyder called the consideration of his proposed Executive Budget a “defining moment” for the state this week as the Executive Budget was submitted to state legislators for the 2011-2012 fiscal year. Snyder commented on his budget as an opportunity to “stop living in the past and start looking to the future.”