As we know, January 1, 2010, brought the beginning of a temporary period without a current federal estate tax.  However, it also brought a year of tremendous uncertainty. Even a year ago, most people thought allowing the estate tax to be repealed – even for a year – unthinkable.

Now, there is uncertainty even as to whether there might be legislation that would reimpose an estate tax retroactive to the first of the year. There are increasingly strong arguments that doing so would be unconstitutional. Taxpayers have a right to be able to plan their affairs based on current law.

It is increasingly unlikely that Congress will act to change the law retroactively for this year because of the constitutional uncertainty. However, it is also unlikely that Congress will act in this area – even prospectively – because of the upcoming mid-term Congressional elections. It is likely that we’ll be stuck with the uncertainty of the current situation at least into November.

Meanwhile, there is a great deal of uncertainty regarding taxpayers who have already died in 2010. Those decedents get additional basis to allocate for their executors to allocate. But, it’s not clear how that allocation is to be done. Will there be a special return, like a Form 706-BA (for basis allocation). What will be the due date of that return? Conversely, will the basis allocation occur on the decedent’s final income tax return? It’s just not clear as yet. Let’s hope that the IRS will issue guidance with regard to decedents dying in 2010 in the near future.

The best advice for now regarding those who have died in 2010 is to do as little as possible in order to preserve the maximum number of options once the Service finally issues guidance. However, the clock is ticking. Come on IRS…..Give us some guidance!

Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys
Phone: (858) 453-2128
www.aaepa.com

I received the following transcript of the sentencing remarks by the Federal District Judge in the Richard Reid case. Every now and then as lawyers, we get to see our system of justice explained in plain, powerful and eloquent language. Here in a real case we come to grips with what it means to be a nation of laws administered by fearless judges.

Ruling by Judge William Young, U.S. District Court

Prior to sentencing, the Judge asked the defendant if he had anything to say. His response: After admitting his guilt to the court for the record, Reid also admitted his “allegiance to Osama bin Laden, to Islam, and to the religion of Allah,” defiantly stating, “I think I will not apologize for my actions,” and told the court, “I am at war with your country.”

Judge Young then delivered the statement quoted below:

January 30, 2009, United States vs. Reid.

Judge Young: “Mr. Richard C. Reid, hearken now to the sentence the Court imposes upon you.

On counts 1, 5 and 6, the Court sentences you to life in prison in the custody of the United States Attorney General. On counts 2, 3, 4 and 7, the Court sentences you to 20 years in prison on each count; the sentence on each count to run consecutively. (That’s 80 years.)

On count 8, the Court sentences you to the mandatory 30 years again, to be served consecutively to the 80 years just imposed. The Court imposes upon you, for each of the eight counts, a fine of $250,000; that’s an aggregate fine of $2 million. The Court accepts the government’s recommendation with respect to restitution and orders restitution in the amount of $298.17 to Andre Bousquet and $5,784 to American Airlines.

The Court imposes upon you an $800 special assessment. The Court imposes upon you five years supervised release simply because the law requires it. But the life sentences are real life sentences, so I need go no further.

This is the sentence that is provided for by our statutes. It is a fair and just sentence. It is a righteous sentence.

Now, let me explain this to you. We are not afraid of you or any of your terrorist co-conspirators, Mr. Reid. We are Americans. We have been through the fire before. There is too much war talk here and I say that to everyone with the utmost respect. Here in this court, we deal with individuals as individuals and care for individuals as individuals. As human beings, we reach out for justice.

You are not an enemy combatant. You are a terrorist. You are not a soldier in any war. You are a terrorist. To give you that reference, to call you a soldier, gives you far too much stature. Whether the officers of government do it or your attorney does it, or if you think you are a soldier, you are not–you are a terrorist. And we do not negotiate with terrorists. We do not meet with terrorists. We do not sign documents with terrorists. We hunt them down one by one and bring them to justice.

So war talk is way out of line in this court. You are a big fellow. But you are not that big. You’re no warrior. I’ve known warriors. You are a terrorist. A species of criminal that is guilty of multiple attempted murders. In a very real sense, State Trooper Santiago had it right when you first were taken off that plane and into custody and you wondered where the press and the TV crews were, and he said, ‘You’re no big deal.’

You are no big deal.

What your able counsel and what the equally able United States attorneys have grappled with and what I have, as honestly as I know, tried to grapple with, is why you did something so horrific. What was it that led you here to this courtroom today?

I have listened respectfully to what you have to say. And I ask you to search your heart and ask yourself what sort of unfathomable hate led you to do what you are guilty and admit you are guilty of doing? And, I have an answer for you. It may not satisfy you, but as I search this entire record, it comes as close to understanding as I know.

It seems to me you hate the one thing that to us, is most precious. You hate our freedom. Our individual freedom. Our individual freedom to live as we choose, to come and go as we choose, to believe or not believe as we individually choose. Here, in this society, the very wind carries freedom. It carries it everywhere from sea to shining sea. It is because we prize individual freedom so much that you are here in this beautiful courtroom, so that everyone can see, truly see, that justice is administered fairly, individually, and discretely. It is for freedom’s sake that your lawyers are striving so vigorously on your behalf, have filed appeals, will go on in their representation of you before other judges.

We Americans are all about freedom. Because we all know that the way we treat you, Mr. Reid, is the measure of our own liberties. Make no mistake though. It is yet true that we will bear any burden; pay any price, to preserve our freedoms. Look around this courtroom. Mark it well. The world is not going to long remember what you or I say here. The day after tomorrow, it will be forgotten, but this, however, will long endure.

Here in this courtroom and courtrooms all across America, the American people will gather to see that justice, individual justice, justice, not war, individual justice is in fact being done. The very President of the United States, through his officers, will have to come into courtrooms and lay out evidence on which specific matters can be judged and juries of citizens will gather to sit and judge that evidence democratically, to mold and shape and refine our sense of justice.

See that flag, Mr. Reid? That’s the flag of the United States of America. That flag will fly there long after this is all forgotten. That flag stands for freedom. And it always will.

Mr. Custody Officer. Stand him down.”

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
Phone: (858) 453-2128
www.aaepa.com

Operating Systems

Different doctrines foment fanaticism, and since the dawn of modern computing there has always been a heated debate between Windows users and the misguided. There will be no siding with either faction, Apple or the more sensible alternative, but we’ll only explore Microsoft’s brainchild in this context.

The operating system can be said to be the interpreter between how the machine calculates and the user thinks.

Over the years windows has evolved into its most modern incarnation, Windows 7. Ideally, that’s the operating system you should have on your computer. Windows 98 (and anything before) is dead. Windows ME was what’s commonly referred to as cerebral flatulence, and any machine associated with it should be shot on sight. Windows XP was and is a very good system, after a few service packs, but it is becoming increasingly obsolete as Microsoft has halted its support. Vista, the OS that has had to be crammed down everyone’s throat, is one of the main reasons for a computer’s poor performance, as it is over-bloated and quite taxing on the system resources. And we are back to Win7.

Home, Business or Ultimate? For working purposes, you should invest into purchasing anything but Home.

You probably heard of 32-bit versus 64-bit flavors of the same OS. Very basically, 32-bit will only allow your computer to utilize up to 3GB of memory, while 64-bit will take advantage of any amount of RAM installed.

Based on the above considerations, a happy computer should be running Win7 64-bit.

Stay tuned for 3 more parts to this topic! About your CPU, RAM and finally the Hard Drive!

Estate planning attorneys routinely look for ways to help their clients with little risk. There is a strategy which can be used to pass significant value to the next generation without the use of any lifetime applicable exclusion. 

The strategy is the Grantor Retained Annuity Trust or “GRAT.” With a GRAT, the grantor retains the right to annuity payments during the term of the trust. Whatever is left over at the end of the term goes to the remainder beneficiaries such as the grantor’s descendants. It is possible to set the annuity payments to the grantor sufficiently high so that the gift to the remainder beneficiaries is actuarially valued at zero. This “zeroed-out” GRAT is a no lose proposition.

In zeroing out the GRAT, it is assumed that the GRAT will earn a rate of return equal to the rate under I.R.C. § 7520. For example, if you contributed $100,000 to a GRAT when the 7520 rate was 3%, the annuity payment to the grantor would need to be $103,000. Everything left after the $103,000 payment would remain for the remainder beneficiaries. This strategy is heads you win, tails you don’t lose. If the strategy is effective, you may have removed substantial wealth from the taxable estate at no transfer tax cost. If the strategy is not effective, you have not wasted any applicable exclusion. 

The shortest approved term of a GRAT has been two years. Short-term GRATs can take advantage of the volatility of the underlying asset. During a two-year period in which the asset appreciates faster than the 7520 rate, the GRAT would be successful. During a two-year period in which the asset declines, all of the funds would end up back in the grantor’s hands: no harm, no foul. 

In the near future this strategy may be too good to be true. There are administration proposals to close this “loophole” by requiring: 1) A minimum remainder interest of 10% of the value of the GRAT and 2) A minimum term of 10 years. These proposals would reduce but not eliminate the benefit of the GRAT. 

It is expected that any legislation would grandfather existing GRATs. So, prudent estate planning attorneys are setting up trusts now to take advantage of this strategy to the benefit of their clients. Act fast—before Congress does!

Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys
Direct Line: (858) 300-4739�
www.aaepa.com

Sunday is a short day at our Summits and we ended at noon in Boston. See what we covered and let us know what you think of our Summit experience! 

Practice Building Consultant Susan Russel with Members Phil Keenan and Tom Edwards during a morning break.

Sunday Member Sessions: Sunday finished with a session on the Client Information Form (CIF) for CounselPro 6.0. Steve Hartnett finished with a well received session on the ROTH IRA. Even though Natalie Choate talked about this topic, Steve clarified everything, drove home the key points and made sure you left as an expert in this area!  Great job by both Dennis Sandoval and Steve Hartnett to keep Members on the cutting edge of the latest legal strategies, reinforcing their positions as your “senior law partners!” 

Software or CounselPro Training Breakout Sessions: Two days of Donna Hooper wowing the crowd.  That’s right, the evaluations reflect stunning sessions which are recorded. Donna’s technical training combined with her prior document drafting paralegal experience puts her in your shoes so she knows what you need. Take the time to train your staff on CounselPro and you’ll get a huge boost in productivity. Kudos to the balance of the team on site (Randy Harwick and Jeff Davis) and Lisa Weidler back home holding down the fort!     

MARK YOUR CALENDARS FOR THE FALL SUMMIT
October 7 – 11, 2010
Catamaran Hotel – San Diego 

If you know that you want to stay at the hotel before or after the event, check with erin@aaepa.com right away with your specific dates and she will try to get an Academy rate for you on dates outside of our room block. If you missed this Summit, it has been at least 365 days since you were surrounded by the most successful, knowledgeable, and like-minded estate planning business entrepreneurs in the country. This is not something to take lightly. More ideas and inspiration are exchanged at each Summit that produce vast amounts of revenue than any place else you can go. 

ONE LAST THOUGHT: Many of the things we talk about are easy to do but they are just as easy NOT to do! Remember this, and make sure you keep the agreements you make with yourself; keep your agreements with others and, most importantly, be accountable. In case you forget, the Academy itself is designed to hold you accountable for the dreams you have for your firm and career. Take advantage of this benefit of Academy membership and watch your productivity rise, implementation of programs quicken and result in the measurable success of your law firm.

ROBERT ARMSTRONG & SANFORD M. FISCH

Saturday at an Academy event- not your typical Saturday of taking it easy! 

Member Larry Parman with Jennifer Price, Director, Member Services. Larry Parman is one of the coaches for the Peak Performers Program. He’s gearing up to mentor the next class of Peak Performers starting this July.

Saturday Member Sessions: 

• CounselPro 6.0:  Robert Armstrong presented a big picture look at the development and structural changes to the proprietary Academy software available to members. This software operates as both the database for mail merges, client notes and reports as well as a document production system for legal documents.�
   
• Income Only Trusts for Middle Class Asset Protection: This market continues to grow, demand is high and competency a must. Our Legal team here at the Academy, Dennis Sandoval and Steve Hartnett, are well versed experts and available to help you move into this market. Do your homework, study this business, the support you may need is here.
   
• Annual Maintenance Program:  This program was introduced a couple of years ago and only a few members actually implemented it. Listen to this session and hear Sandy cover the topic with input by a Member who is getting 6 figures every January of recurring revenue. Consider this—Retention is the new acquisition. This is no longer something to consider but rather something that must be implemented. Your clients are your most important asset and this program ensures you keep them. It creates a revenue stream each year you can count on and increases the saleable value of your law firm. Enough said. This session went through the steps to implement and the actual numbers achieved by a Member firm now in the 3rd year of implementation. Over $125,000 has been collected this year!�
   
• Pet Niche Update: Robert Armstrong updated everyone on this niche and showed some great new videos that can generate interest in this underserved market. Once you have their attention, the Academy hands you a complete Legacy Wealth Planning Pet Seminar to show them. All of the materials are on the Members’ Only website, including the new brochure, report, web copy and letters discussed during this session. Be sure to listen to the recording because in addition to the marketing tools, Dennis Sandoval offered his views on the new Pet Trust documents that are available in CounselPro 6.0.
   
• An Afternoon with Natalie Choate: As one Member wrote, “How can someone make an afternoon of IRA Planning, Minimum Distribution Rules and technical topics so enjoyable?” That is the gift of the highly competent, engaging and entertaining Natalie Choate. A total homerun having Natalie as a guest speaker!�
   
• Saturday Roundtable—Social Media Set Up and Activity: We told you this is a hot topic. Some of our younger yet more internet-savvy Members took the stage and talked enthusiastically about their Social Media strategies. They had to admit they learned a few things from Robert’s session on Friday morning and were impressed by the Academy’s offer to do all of it for you.
   
• Academy Peak Performer Program: We took a 30 minute break and headed to a dinner with current Peak participants and those interested in the 2010 program starting in June. This will likely be our largest Peak class so far based upon the number who attended and commitments made that evening.  

That was a long day and members were excited by the mix of topics!  One more installment coming to finish up the Summit description!

ROBERT ARMSTRONG & SANFORD M. FISCH

 ACADEMY SPRING SUMMIT 2010 RECAP, PART 2

At every Academy Summit we begin at 1PM on Thursday with our Member meeting and a keynote address, here is the recap for Thursday and Friday: 

MAIN SUMMIT SESSIONS 

Thursday Member Session:  Our keynote speaker, Jaynie Smith, author of the phenomenal book, Creating Competitive Advantage, was outstanding. Her message and her style really got the wheels turning. It was clear from the participation, immediate comments and evaluations that this was a timely message reinforcing all that we have been doing and sharpening the focus on something we need to look at in each marketplace. “Why Us” is the question each firm needs to answer and there will be more guidance on this topic. Remember, run all your competitive advantages through the filter of “blah, blah, blah.” 

Friday Member Sessions:

• Online Domination with Search Engine Optimization (SEO) and Social Media started the morning fast with a groundbreaking session. Robert presented the details of how members can and should dominate their markets online. He offered a step-by-step model for being seen everywhere on the web and owning the top spots on the search engines for every one of your niches. For those who want this important work done for them, the Academy offered a turnkey package that included law firm blogs, Social Media sites as well as multiple SEO strategies to get you on the top of Google. Members were very excited about these cutting edge strategies and the opportunity to immediately be in the fast lane to dominating their market online. Members were so excited to get started that they literally signed up during the presentation, some even emailed or texted from their seats!�
   
• CE Course for Family Attorneys was a well received topic and experienced members had some great suggestions on improving the course offering. Those suggestions will be incorporated and this program will become another great marketing tool for this niche.
   
• The Financial Database Session was once again fantastic. This closed session was available to estate planning attorney who had submitted their 2009 financials for analysis. They enjoyed an unedited discussion about their own financials and also got to ask questions of a panel of members. Top owners compensation this year exceeded $1 Million.
   
• Insurance Option and Funeral Trusts: The success of funeral trusts is well established with over 50 firms offering this to clients. The best part is that clients are welcoming this topic and it helps them tremendously. Because of the positive experience with Bryan Adams, Premier Planning and NGL, we have instituted an additional service for those members who want to be Insurance Only licensed.�
   
• Success Stories: Every event this session keeps getting more valuable due to the precision and tracking information required to present at the event. Go through the recordings and materials and find out what the buzz in the hallway was about! Details on Barry Zimmer’s successful Farmer and Rancher seminars, Mike Robinson’s Lunch & Learns paying off, Jeff Molever’s success with niche marketing for Cabin Trust seminars and John Kuhn’s newspaper advertising strategies include tips you won’t want to miss.
   
• The Social Event:  What is more fun than a tour of Boston in an amphibious DUK from WW II and dinner at Durgin Park in the historic Faneuil Hall Marketplace! A fun night for all! Be sure and look through the photos we’ll be posting on our fan page and on the Members’ Only website. 

Academy Members being whisked away on the amphibious DUK vehicle at the Friday night social event.

What a great day!  Next we’ll highlight the events of our Saturday in Boston so stay tuned…

ROBERT ARMSTRONG & SANFORD M. FISCH

Here is the first installment of four blogs that highlight some of the most exciting parts of our recent Summit in Boston! 

This was no BOSTON Tea Party! In fact, this was not any type of Tea Party… no politics, no revolution, no nonsense!! 

Once again, thanks to all Members, staff and guests who attended and provided valuable feedback. A special thanks to the entire Academy staff onsite and offsite who made this Summit another success. The combined wisdom of everyone involved generates continuous improvement and results in added value for your practice. 

The Boston event started fast and never let up. One typical Member comment, “Awesome, worth the money and effort of attending the entire Summit! Thank you for bringing Jaynie Smith here.” And that was just the response after the Keynote session on Thursday in our opening session.  

Academy Guest Speaker Natalie Choate was a huge success at our recent Boston Summit. Shown here with Academy Co-Founders Robert Armstrong and Sanford Fisch.

THE BEAT GOES ON 

The Members in Boston were great! They showed up, paid attention and immediately saw how to implement exciting new ideas. For those who were unable to attend, you MUST set aside time to catch up and review the materials on the Academy website. One Member commented that he had missed a few events and now feels that his firm has been left behind. In today’s new world that happens more quickly than ever before. Don’t believe us, just look at how quickly Social Media went from a topic of little interest and applicability to a MAJOR force in generating new clients and communicating with your herd. In fact, many believe it has forever changed the game and may have a big impact on your very survival! 

Our job and our commitment has been, and will continue to be, making the Academy and our Summits the place to provide you and your firm with the cutting-edge strategies, tools, and blueprints for success in the legal industry. From our first days 17 years ago, we pioneered the concept of systems for everything in your law firm. In the years that followed, we have been the leaders in every major advancement in law firm marketing, practice management and legal education. 

And one thing to do right now is mark your calendar for the Fall Summit in San Diego from October 7—10 and a workshop on the 11th!!   

Now for the lowdown on what we did in BOSTON! 

BOOTCAMP 

Wednesday and Thursday Morning: A number of law firms came to our 8 hour Workshop to learn more about the Academy and determine if this was the time, and the Academy was the place, where they wanted to call home and take their practices and their careers to new levels.  Six law firms joined at the event and we want to welcome them to the Academy. Thanks to all the Members who shared their personal stories and insights that we’re certain helped these successful law firms in their decision to join the Academy family.  

For those interested in Academy Membership or attending our next event as our guest, let us know.  In fact, read what one new Member sent us after the event: 

“Thanks so much for your note, Ivy.  You played a huge role in my decision to attend the conference, and ultimately in our decision to join the Academy. 

What really convinced me that joining was the right choice was the fact that so many staff members — as well as attorney members — have made long-term commitments to the Academy, continuously contributing their time, energy and resources to the cause year after year. 

What keeps everyone coming back?  I suspect that I will learn more and more about that as I build my practice. I fully expect that as I peel back the layers of different programs and resources, more and more advantages will be revealed. Indeed, the spirit of sharing and collegiality that pervaded the Summit can only be the result of a long history of mutual advantage, growth and service. 

Thanks for inviting us to be a part of it all!!” 

New Member– Brooklyn, NY 

Check back to hear more about what we did on Thursday and Friday!

ROBERT ARMSTRONG & SANFORD M. FISCH

Attorneys are always asking about the one thing they must do in their law firm to make it successful. The answer to that question is not necessarily easy but I think I have come up with one thing. Now understand, doing this one thing alone will not make you a success but I do think it is essential to do it each day and forever as you build you law firm business. So without any more beating around the bush- here it is. 

Pay attention.

Hope you did not miss it, that’s right, pay attention. To what? To everything. Pay attention to everything in your law firm. From how your building looks, to the hallways, to the reception area, to the way your phone is answered, how do you get clients, what type of marketing do you do, what is your plan for the year, all the way to how you deliver legal services to those who keep your doors opened. Pay attention to employees and notice what they are paying attention to. Is it your business or is it something else? Pay attention to the big things and the little things. This one thing will lead to many things.

You see, most lawyers do not pay attention. In fact, now more than ever it is hard to pay attention to what is happening around us because there are more distractions than ever before. In addition, it is easier than ever to access these distractions. You all are aware of how easy it is or should I say how hard it is to stay away from the internet and email or texting or tweeting or … whatever comes next.

For lawyers it is particularly hard to pay attention to the business because of the built in pressure of the legal practice itself. Meeting client demands, staying on top of the law in your area or areas of expertise, managing technology, managing finances, managing employees. Most just try to keep afloat as compared to planning ahead, building a business and controlling it rather than the other way around.

But in order to succeed you must pay attention to every aspect of this law firm business otherwise it will run you, most likely into the ground! For great a reference on paying attention to all the little things see the book “Broken Widows Broken Business,” by Levine. For an examination of the law practice see the “E-Myth Attorney — Why Most Legal Practices Don’t Work and What To Do About It,” Gerber, Armstrong and Fisch.

Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

It is a common misconception that computers are evolving and getting increasingly faster. In reality, modern systems are akin to a Ferrari with an RV trailer stuck to the rear fender. And bicycle tires. And the engineering equivalent of Alzheimer.

While from a merely mechanical point of view incredible progress is indeed constantly being made, real-world applications of the technology are haphazard and mired in incomprehension.

For one thing, modern computers are weighed down by modern operating systems. Once upon a time, the OS could be installed from a single floppy disk, 1.44MB of data. Nowadays we are in the order of several Gigabytes, that is, thousands of times heavier code.

Moreover, in a trend common within the misinformed (see the escalation of Megapixel turgidity among digital camera manufacturers), special buzzwords are promoted through advertising to snare unwary buyers in a net of bombastic mine-is-bigger-than-yours excesses. Hence the disorganized race to “higher clock speeds” (goody, if my clock runs faster, the working day will be over sooner); more RAM, for a wool new experience in computing; a bigger and meaner HD, to satisfy the inner biker within us.

In its most basic form, the performance of a computer can be said to depend on 4 factors:

1. Operating system, henceforth referred to as OS
2. Processor speed. This is the CPU, or Central Processing Unit, speed (frequency), and is measured in Gigahertz or GHz
3. Amount of memory. RAM, Random Access Memory, size should be measured in GB (Gigabytes)
4. Hard Drive (HD) size, speed and content. Once again the size should be measured in GB and the speed in RPM (Revolutions Per Minute)

In reality there are a myriad of other considerations, but they are outside the scope of this particular blog, so we’ll just proceed with a simplistic view of the aforementioned subjects.

Stay tuned for more detailed blogs in this series covering OS, CPU, RAM and Hard Drive!