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Clintons Have Their Financial Ducks in a Row

Should anyone be worried – Chelsea Clinton will be just fine when her parents pass away. That’s the basic take-away from an article written by Kerri Anne Renzulli. In the article, Renzulli meticulously analyzes the care with which Hillary and Bill Clinton have put their financial lives in order, and shows it as quite an example to the rest of us. Politics aside – they certainly have their financial lives well organized.

As the article explains, the couple has investments valued at between $10 and $50.1 million, according to their disclosure forms. Their disclosures do not include the value of their homes or retirements accounts since they don’t have to be released. Herein lies the key to their estate planning. They have created a residence trust which means that the property’s value can’t be counted in their estate, or be taxed when they pass it to their heirs. As Michael Delgass, CEO of Sontag Advisory explained,

“When you create these trusts, the benefit you’re relying on is the appreciation down the road — you’re counting on it to grow into something much more valuable.”

The Clintons actually created two of these trusts in 2010. If the value of their Chappaqua, New York home continues to grow, the move could save them hundreds of thousands of dollars in taxes, according to estate planning and taxation expert Jonathan Blattmachr. Jonathan Blattmachr of Pioneer Wealth Management, who co-authored Bloomberg BNA’s tax management book on personal residence trusts explains the move.

The couple also owns another home in Washington DC that they haven’t placed in a property trust. Jonathan Blattmachr explains that they may have chosen not to do so because they don’t think that home will appreciate as much or because they intend to sell it.

The article continues to explain other areas of their lives where they have taken the financial steps to cover themselves and their heirs. The rest of us would do well to take notice and perhaps to use their example.


California Governor Brown Signs Gun Control Bills

pistol-1350484_960_720On Friday, California Governor Jerry Brown signed a collection of gun control bills that outlaw high-capacity ammunition magazines and that expand the definition of what assault weapons are prohibited. The Democrats in the legislature sought to rush through these measures before their summer break.

California is already a state with some of the toughest gun control laws in the country. As Brown said during the signing,

“My goal in signing these bills is to enhance public safety by tightening our existing laws in a responsible and focused manner, while protecting the rights of law-abiding gun owners.”

The bills that Brown signed ban bullet buttons, which allow the user to quickly change the magazine of a military-style weapon. The bills also require background checks for those purchasing ammunition.

Brown also used this time to veto some bills including one that would have meant that co-workers, educators and mental health professionals can’t request a restraining order that would forbid people who are deemed dangerous from owning guns.

Some, of course, are furious with the steps that Brown has taken, and are calling the bills “Gunpocalypse.” As Craig DeLuz, the spokesman for the Firearms Policy Coalition said,

“The California Legislature showed their true faces today. They abused the legislative process to enact their depraved anti-civil rights agenda.”

Enhancing Client Relationships

serviceGetting a client to choose your company/business is just the initial part of a successful business practice. The second – much longer part – is customer satisfaction.

Scott Roberts in a recent article in The Indiana Lawyer, explained that “focusing on lasting relationships may not always be the most profitable in the short term, but it pays off.”  Jim Donovan, Partner at Goldman Sachs and University of Virginia School of Law Adjunct Professor, noted however that one does not need an innate knowledge of how to do this per se; maintaining a successful relationship with a client is a skill that can be learned.

Donovan then goes on to list seven “things all lawyers need to know about covering clients.” These include: really listening to the client (which entails asking open-ended questions, as is the case in active listening), putting the clients first (which means being “prepared to give the client advice that is not in your interest.”).  Also “you need to work really hard to convince the client that you’re there for them all the time. If you’re not there for the client on the thing that they’ve hired you to do, someone else is going to be there, and be willing to pick up the phone at 2 or 3 in the morning if you’re not.” Ice Miller Partner Angela Krahulik echoed this sentiment in Roberts’ article when she said: “The things I have done have run the gamut from personal injury to premises liability.”

Another essential element is to become your clients’ “strategic adviser” (which means “advis[ing] the client on matters outside of the matter they’ve been hired to work on.” Roberts emphasized this point too when he spoke of the success of the 80-year legal partnership relationship between Ice Miller LLP and Indianapolis Motor Speedway. As Krahulik said: “I can remember only two arguments I’ve actually had for that client — one over ownership of a car at the museum and one over a complicated contract issue. It’s knowing the business and where the transition or change is and being helpful in that process.”

So once a client has signed up for your services, immediately start focusing on how to maintain a satisfactory relationship that can last many decades.

Uber and Daimler Meet Up

Yesterday, Daimler Chief Executive Dieter Zetsche and Uber Chief Executive Travis Kalanick met on stage at Axel Springer NOAH. It was a two-day conference in Berlin that included venture capitalists and technology companies.

As Uber’s Kalanick said, “Cars are not going away soon and companies like Uber are not going to be making them.”

Zetsche said, “We are competitors, of course. There might be many areas where we are competitors in the future,” but then he added that they are also friends.

Uber’s private market valuation has recently soared for a number of reasons. They just announced a $3.5 billion investment by a Saudi Arabian sovereign wealth fund and they have partnered with automaker Toyota Motor Corp.

When asked if the two would like to create a partnership with Daimler considering a stake in Uber, they explained that this is not in the plans.

Uber just entered its 467th city in Accra, Ghana. When asked about profitability and going public, Kalanick said, “We are going to IPO as late as possible.”

Mocking Trump in Silicon Valley

It’s no surprise that Silicon Valley wouldn’t necessarily be on Donald Trump’s side. And that was proven, yet again, this week when Trump, in a Reuters interview, said that start-ups in technology that haven’t yet been profitable are part of a bubble in the tech industry. As Trump said, “I’m talking about companies that have never made any money, that have a bad concept and that are valued at billions of dollars, so here we go again.”

Certainly, tech watchers have been warning about this for quite a while – so Trump’s “news” wasn’t really news to them. Many took to Twitter to make fun of the presidential hopeful. As Marc Andreessen, a general partner at the prominent venture capital firm Andreessen Horowitz, mockingly said, “FINALLY someone calls it out.”

As Trump said in the interview, “You have a stock market that is very strange. You look at some of these tech stocks that are so, so weak as a concept and a company, and they’re selling for so much money. And I would have said can that ever happen again? I think that could happen again.”

Vivek Wadhwa, an entrepreneur and Stanford University fellow, told Reuters, “So far he has been saying dumb things but they seem to be getting dumber and dumber.

New Female Hires in Executive Roles

women-executiveThere have been some tremendous strides over the years in the move toward hiring women for top executive positions.  Gone are the days when being a woman was a disability in the rise to the top of the corporate ladder.  However, it seems that there is still a long way to go and some studies are actually attesting to quite the opposite trend, indicating that the growth of women in leadership roles is happening at a much slower rate.

Still on the positive side of things, we do see these new hires.  Natalie Ravitz – a former Chief of Staff at News Corp for Rupert Murdoch – was just appointed Senior VP of Communications at the NFL. Ravitz will be bringing “more political experience to the league office,” aiding the NFL in its PR challenges.

In addition, Erin Riley was recently hired by TBWA\Chiat\Day to be President of the firm’s LA office.  She comes from a prestigious role at Old Navy, where she was VP of Marketing and Brand Engagement, and, before that, VP of Global Marketing at Cole Haan.  Despite the fact that Riley therefore shows immense experience in the field and is thus extremely suited to the role, the firm itself has a goal of increasing the number of women in key roles by 20 percent before 2020.  As part of that endeavor, the Take the Lead project was released on International Women’s Day in March.  This project was a culmination of quotes from women which were read by over 100 male employees “in an effort to directly address the unique challenges female professionals face in the advertising industry.”

So there is movement – at least in some firms – toward an increased female presence in top roles in business.  There is still much work to be done, since just last year, CNNMoney analysis reported that “only 14.2% of the top five leadership positions at the companies in the S&P 500 are held by women.”  From 500 top US companies, only 24 are led by women.  Let’s just hope therefore, that Ravitz and Riley became the exception, not the rule.

Massive Merger Brought to its Knees

Halliburton C. and Baker Hughes Inc. have thrown in the towel for their $28 billion merger deal after opposition from US and European antitrust regulators. The agreement would have brought together the number 2 a nd 3 oil services companies, but it worried many that it would have resulted in higher prices in the sector. As Dave Lesar, chief executive of Halliburton said, “Challenges in obtaining remaining regulatory approvals and general industry conditions that severely damaged deal economics led to the conclusion that termination is the best course of action.”

Halliburton will now have to pay Baker Hughes a $3.5 billion breakup fee by Wednesday as a result of the end of the deal.

As U.S. Attorney General Loretta Lynch said in a statement on Sunday, “The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans.”

Read more about the situation and the feelings on both sides with the full article here.


Prince Has Left Behind a Reign of Complications

Some of us lead complicated lives. And some of us leave behind complicated deaths. Prince has just done the later. According to a recent article in the Wall Street Journal, Prince did not leave behind a will with his recent untimely death.

But that is just the beginning of the issues. Estate tax attorneys have the job, at the moment, of placing a financial value on his name, image and likeness. The only similar situation with which they have to access is Michael Jackson, and his estate-tax battle will be in U.S. Tax Court this February. In Michael Jackson’s situation, for instance, the estate said his image and likeness were worth $2,105 when he died in 2009, while the IRS placed his worth at $434 million. That’s quite a difference.

As Jonathan Blattmachr, a Principal in the estate planning advisory group of Pioneer Wealth Partners, “This could be very ground-breaking.” As he explained, a victory for the IRS could mean that celebrities change how their estate plans handle their image rights.

Certainly, Michael Jackson’s case has tax planning consequences for any famous person who is famous enough to earn money beyond the grave. But, as Jonathan Blattmachr points out, there are no rules for the IRS or taxpayers to follow. He has made some interesting suggestions for these situations. He suggests exempting the value of names and likenesses from the estate tax but taxing future earning as regular income. As Jonathan Blattmachr said, “Michael Jackson will be different from Prince who will be different from Madonna. It’s horribly speculative as to what the value is.”

As the Wall Street Journal explained, the hardest issue won’t be his real estate, song royalties or unreleased recordings – but figuring out the cumulative value of his profit potential on the day he died.

Now what? Prince’s estate will have nine months to file its tax return and estimate his net worth. The IRS will have three years to challenge their predictions and numbers if they disagree with the assessment. And, of course, tax court is always an option.

SunEdison Not Looking at a Sunny Future

Solar energy giant SunEdison Inc. was growing by leaps and bounds until recently. Now, many of their projects are in danger and they are looking at bankruptcy. One of the solar plants now in jeopardy is one in central Texas. SunEdison was initially planning to self-finance the project, but will now need to make alternative funding arrangements.

While SunEdison won’t discuss its unfinished deals, company releases and news reports suggest that the company has many projects in development which range from massive power plants to smaller rooftop projects.

SunEdison was, until recently, the nation’s fastest growing renewable energy developer. They are now, however, $12 billion in debt. Their shares have fallen 98% in the last 12 months.

Learn more about the situation and what the future may bring for SunEdison.


New Appointments at Anchin Block & Anchin and Other Companies

A number of financial services companies have recently announced changes in their management. Companies such as Anchin Block & Anchin, Colliers International, Steinbridge Group and others have made recent announcements.

Anchin Block & Anchin has recently announced that they have appointed Jared Feldman to Co-Practice Leader of Anchin Private Client. This is a specialty group within the firm that works with affluent clients. He will be in charge of the Co-Practice with Udi Sadan.

Colliers International announced Harry Seherr-Thoss has rejoined their New York operations as their Executive Managing Director of Brokerage Services. They also announced that Samuel Hamlin has joined their New York operations as Associate Director in the Capital Markets & Investment Services Group.

The Steinbridge Group announced that the former Wall Street and NYCEDC executive Tawan Davis has joined their firm as their Chief Executive Officer. He will oversee their day-to-day operations.

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