Estate Planning, Probate & Elder Law Attorneys

» Trusts, Corporate Fiduciaries, and the Bailout

This is a pretty interesting Wall Street Journal article about the ramifications of the bailout and Great Depression 2.0 for individuals with trust accounts at affected institutions. I’m less interested in how trust assets are being or should be invested in this market (very carefully? no freaking duh) than I am in the issue of what happens if your corporate trustee folds, or is bought out.

Let me be candid – I don’t know why anyone would have an entity like Merrill Lynch as their corporate trustee in the first place. You may have a nice relationship with your broker, but your account is inevitably foisted off on someone else. In my experience, that "someone else" is going to be a recent college grad who doesn't know anything about anything regarding the administration of trusts.

One happy consequence of this financial turmoil might be a return to smaller banks, which – surprise surprise! – have people who know you and provide actual customer service. I can stand in line or go through the drive-thru to make a business deposit at Chase, and it takes me 20 frustrating, alienating minutes. Or I can go see my man Emil at Community Bank Oak Park River Forest, and make my deposit in 2 fast, friendly minutes. Do you really think it’s going to be any different if you use Chase as your corporate trustee?

On a similar note, I recently became aware (thanks to Todd Schneider) of this post by Juan C. Antunez from last year. The case involves a $1 million malpractice verdict against the firm of Gunster Yoakley. The court said:

The substance of these accusations was that Gunster Yoakley wrongfully procured J.P. Morgan's appointment as corporate fiduciary and caused the estate administration to be more expensive.

I discussed conflicts of interest and referrals here. It really is a tricky business. Let me give an example: I have a good relationship with a broker at Edward Jones. In fact, after being impressed with him and his company while working on matters for some mutual clients, I switched all of my investments to him. He's been my broker for about 10 years now. He refers me some business. What if a client comes to me and says, "Do you recommend a corporate trustee? And, if so, which one?" Can I recommend Edward Jones? What must I tell my client?

» 2008 Year-End Gifting Made Easy

One of my most well-received posts was this one, on "year-end gifting made easy."

Evidently the Federal Taxes Weekly Alert has calculated that the gift tax annual exclusion will go from $12,000 (right now) to $13,000 in 2009. Based on this, it seems like time for an update:

Next year the annual gift tax exclusion will increase from $12,000 to $13,000. The gift tax exclusion is the amount that you can give to as many people as you wish, per year, without paying gift tax or even needing to file a gift tax return.

If you are in a situation where you'd like to make gifts, the end of the year (and the start of the next year) is a good time to do it. Three quick, easy scenarios:

1. You and your spouse have three grown children. (Each child is married and has one child of his or her own.) You and your spouse each give $12,000 to each child on December 31, 2008 and $13,000 to each child on January 1, 2009. You have just given away $150,000 without having to pay gift tax or even file a return.

2. Same facts as in 1., but you also make the same gifts to each child's spouse. That's another $150,000 that you've given away without having to pay gift tax or even file a return.

3. Same facts as in 2., but you also make the same gifts to your three grandchildren. That's another $150,000 that you've given away without having to pay gift tax or even file a return.

» Consumer confidence up despite credit woes

» Jobless claims at seven-year high

»  National Financial Starves On A Rich Diet
The financial products provider's shares plummeted 24.1% on warning of slipping sales and higher costs just two months into Q3.