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FUTR Forum’s theme this year is First, Only, Best. This theme is borrowed from Dr. Lee of Children’s Hospital Los Angeles talk at CHLA’s Leadership Conference last June. We are the first company to develop family trusts as virtual operating companies whose organizational success is based upon development of the family human resources and capabilities to preserve, protect and steward the family’s legacy. We are the only company which views a family’s investment policy as a trans-generational allocation of assets to produce lifestyle cash flow appropriate for each generation’s risk profile . . . we believe selling to the next first generation embodies stewardship practices that encourages participation and preservation of wealth. Best is a tough term because there are many measures for reality . . . our practices are based upon the challenging fiduciary practices found at the Fi360 organization rather than the suitability standard delivered at major, national and boutique broker-dealers. For example, follow the link to our recently published quarterly performance report . . . note that the fee actually paid by the client is lower than the published fee scale. We believe the client owns his/her fee and pays it in arrears. Follow the link to our performance.

Simon Johnson: U.S. Tax Rates Must Rise 3/23/2012 9:57:05 AM
In an interview with WSJ’s Jon Hilsenrath, MIT professor Simon Johnson calls for higher income-tax rates as part of a “fiscally conservative” plan to shore up the U.S. budget in the long run. “We have lost track of the fact that deficits do in fact matter…,” he says. Cannot believe this declaration of conventional Keynesian Wisdom.

People modify their behavior to cope with and solve current cash flow circumstances. This is generally known as dynamic scoring versus the static scoring promoted by Mr. Johnson.

The solution is found in We, The People, taxing the SPENDING habits by retention of HIGHER Retention Rates of our own money . . . or if we follow Mr. Johnson’s recommendation, tax Congressional spending at higher marginal rates! Follow the link to listen to Mr. Johnson’s comments.

Life Insurance and annuities are excellent tools when placed into the context of a Family’s Succession Plan. Generally, they are “SOLD” to solve an immediate need rather than support a Family’s Legacy Plan. They may be appropriate for Buy/Sell Agreements for Closely Held Businesses, Generational Split Dollar supporting “Selling to the Next First Generation”, Annuity Trusts , Charity Wealth Replacement, Supplemental Retirement Plans and Income Replacement Term policies.

Recently, FUTR’s Director of Insurance Programs, Don Kuhn, helped a client reconcile a portfolio of Term-Life and Disability Insurance policies. He was able to introduce a solution to provide a core estate in case of untimely death; a life policy that provided “income replacement” through age 65; and created a Critical Care Program for his spouse. FUTR’s approach is to support the fulfillment of a family’s legacy or succession plan rather than sell an off-the-rack product not tailored for a client’s specific needs.

Late this afternoon, Don suggested following this link to a news article reporting Hartford’s sale of its Annuity and Life businesses. Any one holding such a policy ought to consider the following:
1. Many existing policies will be paying interest and charging on a “current basis”. The buyers of Hartford’s business can change the interest paid inside the policy unless it is guaranteed.
2. Acquiring companies often raise cost of insurance rates and/or lower interest rates to help subsidize their purchase of the company. This can change the parameters and dynamics of the policy’s illustration when issued.
3. Service levels may be reduced or outsourced . . . the policies may become orphans since your professional adviser may not be appointed by the acquiring company.

Please call or write to us to request a Second Opinion or a Review of your Hartford Annuity and Life policies. It will be an opportunity to update your family legacy and succession plans as well.

Hope this is helpful as you consider ways to improve the management of your family’s wealth.

“A Cure for Selfishness,” March 26, 1997, James Q. Wilson:

Perhaps the most powerful antidote to unfettered selfishness is property rights. If we are grazing cattle, we will conserve the land if we own it. If we are catching lobsters off the Maine coast, we can restrict over-fishing by allocating space to groups who informally “own” each space. If we want to conserve elephants, we should let people own the elephants. If we wish to water our rice in Bali, we do better if each village has ownership in a part of the water. If we want to conserve our country’s oil reserves, we do better if the reserves are owned by firms than if the government “controls” the whole deposit.

Mr. Wilson’s legacy is wisdom we can embrace and use.

The article reports Jerry Brown’s efforts to persuade the Potomac Pols to reduce regulations preventing less than $5.00 Co-Pays for California Medicaid which saves the state $300 million. This is similar to one of the complaints against King George found in the Declaration of Independence.

The Wall Street Journal quoted economist John Ramsay McCulloch in its Notable and Quotable on February 3, 2012. The issue of tax incidence is the same today as in 1845. Mr. McCulloch’s point that once the cardinal principle of exacting [taxes] from all individuals the same proportion of their income or property, there is no amount of injustice that a government may commit. As we select our candidates this year, apply this truth to each of your candidates’ vision, mission and values for the direction that he is leading.

http://professional.wsj.com/article/SB10001424052970204662204577199560879858998.html?mod=ITP_pageone_1&mg=reno-wsj

Here is a link to a Wall Street Journal Article (2012 02 03) Nonprofit’s Backers Mobilize. The astounding issue is Susan B. Komen for the Cure’s support of Planned Parenthood. With Komen’s $300 million endowment, why would they not establish centers dedicated to mamagrams, breast examinations and breast cancer education. Planned Parenthood ought to employ such a Komen agency and make it grants for that particular specialty. I have been a casual donor to Susan B. Komen for the Cure as a sponsor of friends’ intentions and appreciation for the plight of breast cancer patients. I wonder if my friends’ intent were to unwittingly support Planned Parenthood.

Steve Leimberg puts out a great letter outlining recent decisions and outcomes for succession planning. Below is an Executive Summary as an example. It addresses new rules about foreign trusts and reporting to the IRS. Take a look and let me know what your think.

“On February 23, 2011, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) amended the federal Bank Secrecy Act regulations governing the TD F 90-22.1, Report of Foreign Bank and Financial Accounts (or “FBARâ€�). These amendments adopted most of the changes that had been proposed on February 26th of last year, and they are aimed at clarifying certain definitions in the previous FBAR regulations and instructions, which were the source of much confusion and debate. The FBAR is required to report a U.S. person’s financial interest in (or signature or other authority over) financial accounts in foreign countries.

In recent years, there has been much confusion over who must file the FBAR and what constitutes a reportable foreign account. The new regulations are aimed at allaying some of this confusion.”

My goal is to be a quarterback handing off the ball to competent resources to cross the goal line. Fulfillment of Family Goals which conservatively manage and preserve family financial resources create restful nights and crossing the Rubicon.

Just got a thank you note from Troop 1475 of The Girl Scouts of America. The Troop is located nearby Solana Beach.

Developing the “next first generation” as productive citizens is so important to our manufacturing, retail, wholesale and financial sectors of our economy. It was a terrific experience to see 8-yearold youngsters think through and express the “value proposition” in their terms. Their moms supported them without doing the work of closing the sale. At the end of the day they sold their entire inventory and sent some of it to our troops deployed overseas.

Whether it be Girl Scout Cookies or Lemonade or a Fair, participate with the kids helping them have fun learning about personal responsibility, handling quirky adults and about how smiles and giggles are a good tonic for all in earshot.

Enjoy the day by helping a youngster today fulfill his goals . . . invest in his future.