War Stories
IRS AUDITS: Recently an IRS Office Auditor tried to play 'hard ball' with Bill and disallow all of a client's out of pocket charitable volunteer expenses, which were significant in amount. Bill, drawing on his decades of 'street-smart' IRS audit experience and having a client with strong 'paper' documentation, Bill was able to orchestrate a small refund for his client. More than anything else, it took a kind demeanor and calm patience on the part of Bill and his client, who admitted that he couldn't have been as calm as Bill during this 'inquisition.'
END OF LIFE DECISIONS - What about my cat? Who will take care her when I am gone?
Bill arrived at Jane’s bedside at the hospital and she told Bill that she was too sick to go home; but, not sick enough to stay in the hospital. Her doctor said that she had less than 6 months to live and that she needed to move into a hospice.
She knew that Bill was trained some 10 years earlier as an Ombudsman to represent patients in assisted living and hospice facilities, so he knew exactly what to do and had her placed within a day or so. After all, it took a little time for her sons to move her favorite bed from her home to the hospice home.
Jane’s only major concern was her cat; but, a second after-thought was her Quarterly Federal IRS Payment. Nothing else.
Bill prepared a check payable to the U.S. Treasury for her to sign; That was easy enough.
But the cat?
After talking to her Estate Planning Attorney, Bill suggested to Jane that she create a Companion Animal Trust that would pay the cat’s caregiver a fixed amount each month until the cat died. She loved the idea. How much? How long will she live? Jane offered 10 years, so Bill had her attorney create the Companion Animal Trust; but, first there was to be a Family Council. During the Family Council it was suggested that the cat might live 15 years (ours lived 23 years), so we had the attorney set aside 15 years at $ 500 fixed amount per month. When the cat did die, the remainder would be distributed to Jane’s original beneficiaries.
Who was to be the caregiver? Once the set monthly amount was digested, a family member who had taken care of the cat when Jane would take a trip, decided to become the cat’s permanent caregiver. End result: The cat stayed in the family.
And, Jane?
Well, knowing that everything was now in order, and missing her beloved husband, she passed quietly to the other side within a week or two to be with the love of her life.
EXECUTORS OFFLOADING TO BILL:
More often than not an Executor is named because of the trusted relationship with the deceased; and, not because of their education, training, or experience in the administration and closing of an estate and the related trusts.
And, to complicate matters for loved ones are the emotions involved every time the Executor sees the name of the deceased. Bill calls it: Emotional Paralysis.
Not too long ago, a child of one of Bill’s long time friends and clients, assuring himself that he, the son, could do it, and feeling the personal responsibility handed to him by his father, ;out-sourced to Bill to close up his father’s estate for him so that it would get done in a timely manner and he wouldn’t have to deal with the understandable trauma of dealing with all of the paperwork.
Bill essentially told him: I will do everything; I just can’t sign your name.
As an added touch, Bill drafted the Obituary, was able to get a copy of his father’s thesis from his college, and, visited with 2 long-time friends to audio recorded their memories of his father, and mother, who had died a year earlier. The college stories that were shared were priceless!
EXECUTORS, STEP COUSINS, AND IN-LAWS:
Step-grandson was named Executor/Successor Trustee by his step-grandmother because her own family did not make themselves available to look after their own mother. Because her step-grandson made weekly visits (100 miles out of his way) over a two year time to make certain that his step-grandmother was properly cared for, when her friend resigned as her Executor/Successor Trustee, she naturally named her step-grandson as her go-to person; namely her Successor Trustee and Executor of her Estate.
You see, his grandmother had died many years earlier, his grandfather remarried, creating a blended family, then grandfather died, and now his step-grandmother, who had lost the use of her legs, had no one to turn to other than her step-grandson. Because of step-grandma’s special needs, her own family made themselves scarce.
But, as soon as her mother died, and an inheritance was in the wind, her daughter became very vocal - even hiring an expensive attorney, leaving the executor/step-grandson in a very difficult situation, especially since he had no experience or training to fulfill his responsibility as an Executor/Successor Trustee. He was a mechanical engineer by trade, keeping all of the mechanical needs of a large building functioning.
His mother told him to call me and I immediately stepped in, and for a flat fee, coached him through his duties. We wrapped up the estate and distributed the money as quickly as could ever be imagined.
Although the daughter had hired an expensive attorney, as soon as that attorney knew that Bill, a CPA, was coaching the Executor, and a well known estate planning attorney was coaching him on the legal portion, that expensive attorney and daughter were both quickly quieted.
He later referred to me (and the attorney that I had him hire) as his Dream Team.
Oh, several year's later Bill was able to retrieve over $1,200 in 'lost assets' for the estate.
CREATING CASH FLOW:
Bill has shown a Senior Client how she could increase her after tax cash flow, utilizing her existing resources.
THE HYBRID:
A widow inherited some serious money from a neighbor. Bill showed her how she could create additional cash flow if she needed it; yet still be able to send that money to her children when she passed. And, if she doesn't use the 'cash flow portion,' the money inherited by her children is almost double the amount she started with.
PROTECTING THE RELATIONSHIP BETWEEN THE STEPMOTHER AND HER STEPCHILDREN:
A widower remarried and was creating a second family in the first family's childhood home. The stepchildren expected to inherit some part of the value of their childhood home. Bill created a solution that allowed the stepchildren to get money while the stepmother and their father's second set of children would receive the home, free and clear of her stepchildren. The connection and bonding between the stepmother and the stepchildren made this solution especially rewarding to Bill.
ESTATE PLANNING ATTORNEY IGNORED THE INCOME TAX CONSEQUENCES OF HIS ACTIONS:
Bill's concern was that half of the Estate was going to people while the other half was going to IRS recognized charities. (IRAs and Tax-Deferred Annuities are income taxable to whoever takes a distribution.) Despite Bill's presentation, the Estate Planning Attorney had taxable assets (IRAs and income tax deferred Annuities) going to people; yet, had they gone to IRS recognized charities, they would escape income taxation.
Fortunately, Bill's client fired the expensive estate planning attorney and hired a much less expensive estate planning attorney who quickly grasped the problem; and, the solution.
THE ANATOMY OF THE FINAL WEALTH DISTRIBUTION PROCESS:
Executor/Successor Trustees are often named because of their trusted relationship with the Deceased, not because of their training or experience.
That is when the smart Executor/Successor Trustee hires Bill to do the mind-boggling paperwork, insulating the Executor/Successor Trustee from the beneficiaries, the in-laws, even their opportunistic attorneys to get the Estate closed and distributed to the beneficiaries as quickly as possible.
Which is what most people want, unless there is an opportunistic attorney that wants to create mayhem and discord to build his hourly fee by delaying closure.
To encourage open communication and quick closure, Bill’s compensation is often a flat fee. Hourly rates seem to discourage communication between the client and the professional; and, sometimes discourages the professional from closing the case as quickly as possible.
Bill likes to get things done and move quickly on to the next project.
