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Fiduciary Practice Value-Added 21 st Century Services Special Needs Alliance October 19,2002

Fiduciary Practice Value-Added 21 st Century Services Special Needs Alliance October 19,2002. Charlie Robinson Florida Bar Board Certified Elder Law Attorney Clearwater, FL www.Charlie-Robinson.com. Trends in Estate Planning Practice. John Langbein, Yale 1989 Trusts and Estates

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Fiduciary Practice Value-Added 21 st Century Services Special Needs Alliance October 19,2002

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  1. Fiduciary PracticeValue-Added 21st Century Services Special Needs Alliance October 19,2002 Charlie Robinson Florida Bar Board Certified Elder Law Attorney Clearwater, FL www.Charlie-Robinson.com

  2. © 2002 Charles F. Robinson

  3. © 2002 Charles F. Robinson

  4. Trends in Estate Planning Practice John Langbein, Yale 1989 Trusts and Estates • Atrophy of traditional trust and estate practice • Probate avoidance (joint ownership, living trust, pension/IRA wealth transport • Less prominence for trust and estate practice • Predicted MDP/Ancillary services for T&E lawyers © 2002 Charles F. Robinson

  5. Effect of “Death Tax” Repeal Good news, bad news- Jonathon Blattmachr • Good news- basis issues • Bad news- Canada experience • 90% practice reduction © 2002 Charles F. Robinson

  6. Get Out of Commodity Practice “How much do you charge for a trust?” Commodities better faster cheaper Hi volume – Low overhead © 2002 Charles F. Robinson

  7. May need to learn new act © 2002 Charles F. Robinson

  8. How Do Unrepresented, Inexperienced Fiduciaries Perform? • QIT experience • Life tenant vs. remainderpersons © 2002 Charles F. Robinson

  9. ABA RPPTL Task Force 1998 On Attorneys Acting as Fiduciaries When ethical to serve • Client request • Full disclosure of possible conflicts • Attorney Fiduciary bonded/insured • Third party custodian for assets • Competent to handle fiduciary services • Sufficient back office support • No exculpatory clauses in document • In-house capability or hire investment advisor • Willing to work closely with beneficiaries © 2002 Charles F. Robinson

  10. ACTEC Guide for Fellow/Trustees December 2000 Issues to deal with © 2002 Charles F. Robinson

  11. What does it take? • Painstaking attention to detail • Dogged emphasis on the safety of the financial assets • Prudent and appropriate effort to maintain and enhance the investment value of the portfolio • Awareness and management of continuing cycles of deadlines • Adequate maintenance of communications with beneficiaries © 2002 Charles F. Robinson

  12. The Successor Trustee-Ground ZeroTests to determine when a fiduciary needs competent legal advice • Elevator rule to explain trust terms • Life beneficiary? • Calculate income? • When you may have to distribute principal for under productive? • Determine principal distribution standards? • Identify remainder beneficiaries © 2002 Charles F. Robinson

  13. Fiduciary Tests continued • Explain Principal and Income Act • Receipt principal, income or both? • Expense principal, income or both? • Brokerage statement = accounting? • Who is entitled to accounting copies? • Do you understand Prudent Investor standards? • Do you understand basis calculations and tax return requirements? © 2002 Charles F. Robinson

  14. Ideal Settings for Elder Law Attorney Fiduciaries © 2002 Charles F. Robinson

  15. Trusts Under Corporate Fiduciary Radar Screen • Where to get fiduciary services under $1,000,000 • Elective share in Florida and other augmented estate jurisdictions © 2002 Charles F. Robinson

  16. Compete for Trusts over $1,000,000 Service to replace Estate Tax Planning in our Repertoire © 2002 Charles F. Robinson

  17. Play to Strengths for SNTs & QITs • Heart of Elder Law Attorney expertise • SSI rules challenge fiduciaries • We draft these documents; we need to know how they work © 2002 Charles F. Robinson

  18. Fiduciary Services • Handled by lawyers in Boston area © 2002 Charles F. Robinson

  19. Look to technology for back office support, not more people • On-line banking (United Trust) • Accounting software © 2002 Charles F. Robinson

  20. © 2002 Charles F. Robinson

  21. United Trust Company How Can We Help Your Practice?

  22. The law firm’s back office • Founded in 1993 • Affiliated with EPW Investment Management • Over $700 million in deposits for over 300 clients

  23. Custody Services • Safekeeping services • Collecting of investment income and distribution of funds, as directed • Executing trades in your portfolio, as directed • Periodic transaction statements with list of assets reflecting cost basis and market value • Automated daily cash management

  24. United Trust On-Line • Direct on-line link • Real- time trust data processing system • Designed to provide law firms back office support © 2002 Charles F. Robinson

  25. Services • Dividend, interest and other income items are posted immediately • Disbursements are entered by the firm • Automatic check requests eliminates the need to write checks • Automated cash management • Daily reconciliation of accounts • Account values immediately without • gathering information from various sources • having to research current values or balances © 2002 Charles F. Robinson

  26. Services • Marketable securities held by appropriate securities depositories or at the Federal Reserve • Monthly statements on the account • Accountings are prepared for the beneficiaries and the court © 2002 Charles F. Robinson

  27. Advantage to YOUR office • Training and office support • Medallion stamp for documents • Daily pick up and delivery © 2002 Charles F. Robinson

  28. Additional Services • Discount brokerage services • Investment management and advisory services • Portfolio reviews • Cash needs analysis © 2002 Charles F. Robinson

  29. Fiduciary Services TRUSTS ARE US Marketing to your clients • Seminars • www • Newsletters • Personal letters © 2002 Charles F. Robinson

  30. Fiduciary College How to be a successful fiduciary Hire your attorney as trusted advisor • Make attorney the fiduciary © 2002 Charles F. Robinson

  31. Overview • Introduction • What is a Fiduciary • Why is this so important? • Investments • Fiduciary as a Prudent Investor • Accounting • Principal and Income © 2002 Charles F. Robinson

  32. Attorney Tax Advisor Investment Advisor Fiduciary © 2002 Charles F. Robinson

  33. Prudent Investor Rule © 2002 Charles F. Robinson

  34. Total Portfolio Overall Investments Risk Return Objectives Suitable to Trust Delegation of Responsibility Liability After Delegation Prudent InvestorRequirements © 2002 Charles F. Robinson

  35. Principal & Income © 2002 Charles F. Robinson

  36. Principal Capital Gains Tax Principal Portion of Debts Investment Expense 1/2 Principal 1/2 Income Attorney Fees Accounting Fees Distributions Income Ordinary Repairs Real Estate Tax Utilities © 2002 Charles F. Robinson

  37. Principal Capital Gains Sale of Principal Assets Royalties Receipts Income Cash Dividends Interest Receivable Business Profits © 2002 Charles F. Robinson

  38. Elder Law Attorneys • Have plenty of cases with need for fiduciary assistance • Opportunity to change relationship from • Transactional to • Institutional • Doing well by doing good © 2002 Charles F. Robinson

  39. © 2002 Charles F. Robinson

  40. Visit our Web Site www.Charlie-Robinson.com Or Email Comments to Elderlaw@Charlie-Robinson.com © 2002 Charles F. Robinson Presentation graphics by Wendy

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