Home in Idaho
Over six months have passed quickly by since my release from the Federal Bureau of Prisons jurisdiction. Being home in Idaho means so much, and Mary Ann and I are so appreciative of all the caring love and support we have received from family, clients of my former law firm and other friends, both in Idaho and California.
The wonderful 2006-2007 holiday season is over, with many memories of good cheer, snow and the other beauty of the winter in Idaho. Mary Ann and I recently enjoyed a vacation in Hawaii, on Maui which is one of our favorite places. The freedom to be together and to travel is great!
Consulting Moving Forward
In my December 15, 2006 newsletter, I referred to my Consulting Mission Statement, and also outlined the various areas of service I can provide to clients. My role as a non-lawyer consultant, I believe, is an important one. Having my experience of over four decades as a tax and estate planning lawyer and the focus on integrated Family Wealth Planning – including personal as well as tax, business and investment issues – can be helpful to families dealing with wealth preservation, management succession, and the uncertainties of the future.
Thus far, I have been fortunate to have a number of consulting matters allowing me to apply my experience, interest and expertise to specific issues and planning concerns. In fact, I have spent time both in the San Francisco/San Jose Bay area and the Los Angeles area on consulting assignments – also providing opportunities to meet with family and friends. I am available for more consulting work and look forward to hearing from some of those who receive this newsletter, including professional advisors.
Estate Tax Still With Us!
With the shift in control of Congress last November, the continuing tragedy of the Iraq war and other international conflicts, it is pretty clear that the Federal Estate Tax will remain of concern to some families, those with significant levels of wealth. Further, while the IRS estate and gift tax audit staff has been cut in half or more, we can be sure that those Service personnel left will focus on larger estates, valuation and entity (such as the family limited partnership or “FLP”) structures, making more important than even that clients and their advisors pay close attention to planning common sense, integrity and follow-up. Further, the recent rewrite and expansion of Circular 230, the IRS rules governing tax professionals practice before the Service, has increased substantially the cost of written tax advice and made more difficult proper communication of tax alternatives to clients in a way that is understandable. So again the “team approach” is so important to achieve success, more than ever before.
Holistic, Integrated Estate Planning
Following is a Spring, 2007 – the flowers are springing up in Idaho! – brief memo and listing of article resources on truly advising clients on a holistic, integrated approach to Estate Planning(“Family Wealth Planning”). I hope my readers look up some of these sources, a number of articles that taken together show a definite trend in wealth planning. That trend is to look at core needs and goals of clients as a matter of first priority, so that the actual plan can utilize properly entities, techniques and programs designed to meet such core needs and goals. One of the areas of my interest is to be a resource for families seeking to consider this type of approach to Family Wealth Planning.
For many decades, estate and tax planning professionals concentrated on income and transfer tax (gift, estate and GST taxes) avoidance in developing estate plans for their clients. With the rise in well-publicized intra-family disputes, the substantial reduction in estate tax liabilities for most families resulting from legislation, and the broadening of the role of the estate planner, now it appears clear the estate planning professional needs to look carefully at the family’s personal needs and goals. Estate plans should be not only tax effective, but also holistic in nature. Management control and succession and dynasty (multi-generational) planning has become more important.
Following is a selection of recent articles on the broader role of tax and estate planning professionals in meeting their clients’ needs relating to Family Wealth Planning:
(1) “The Advisor’s Role in Helping Wealthy Families Meet Their Core Needs: A Developmental Model for Advisors and Consultants”, Hunt and Messinger, CCH Journal of Practical Estate Planning, April-May, 2006, and June-July, 2006(2-part article).
(2) “Business Succession Planning – Changing the Ground Rules”, Naples, ABA Probate & Property, March/April, 2006.
(3) “Business Succession Planning That Meets the Owner’s Needs”, Markstein, Estate Planning, July, 2006.
(4) “Move Beyond Traditional Business Succession Planning: Establish a Holistic, Fee-Based Practice”, Bareither and Reischl, CCH Journal of Practical Estate Planning, June-July, 2005.
(5) “Family Business Governance, Transition, Transformation and Succession: Gaining a Competitive Advantage”, Lang and Timko, CCH Journal of Practical Estate Planning, August-September, 2005.
(6) “Wealth Planning Is More than Money Planning”, Douglas, CCH Journal of Practical Estate Planning, December, 2005-January, 2006.
(7) “Money and Meaning”, Lansky, CCH Journal of Practical Estate Planning, August-September, 2005.
(8) “Advisors Should Provide the Best, Not Just ‘Better Than’ Advice”, Skar, CCH Journal of Practical Estate Planning, August-September, 2005.
(9) “Never Can Say Goodbye”, Leibell and Daniels, Trusts & Estates, October, 2005.
Consideration of the people included within any given or developed definition of a “family” involves for professionals at the outset a “conflict of interest” issue – namely, who is the client, or who are the clients where multiple parties are represented. Further, the development of a true understanding of family goals, assets and both actual and potential liabilities, requires diligence and analysis on the part of professionals advising the family. And, to insure that family members make prudent decisions, alternatives, risk factors and planning requirements must be properly communicated to the client(s) – preferably in written form. Yet, in the tax advice area, professionals now are faced with the detailed requirements, coverage and pitfalls of revised IRS Circular 230 with respect to written tax advice. Professionals should not let Circular 230 prevent them from carrying out fully their duty of insuring that the client(s) have a clear understanding of options and alternatives upon which to base their decisions.
As a non-lawyer consultant, following over 40 years of estate planning experience as an attorney, Owen Fiore can act as a resource to clients and their professional advisors in Family Wealth Planning design, documentation, implementation and operation.
Owen Fiore
