10 Things to Consider before Selecting a Financial Advisor – By George Mentz, Esq.

1. Experience – Make sure your advisor has a      track record of success.
2. Accredited      Education (Level 2) Preferred      – Make sure your advisor has an education from a program that is      accredited.  Also, if the advisor  has a degree or diploma from a Level 2 institution that has both regional  accreditation and business accreditation, that is the best. As your advisor if he or she has successfully completed all exams of a business degree from an ACBSP or AACSB accredited program.
3. Licenses – Are they licensed with the SEC  or FINRA and do they have a record of good standing.
4. Government Professional License – Are they a lawyer or CPA.  If so, check      with the state bar association or AICPA to make sure they have a solid  record.
5. Regulatory and      Product Knowledge      – Make sure your advisor has the ability to recommend a broad array of      solutions for your wealth preservation and growth.
6. Qualifications – See if your advisor is a      member of a prestigious body such as the  CWM ® Chartered Wealth Manager Institute.  Ask if they are board certified as      an:  Accredited Financial Analyst ® or  Chartered Wealth Manger ®.   Also,      if they have a law degree and license or CPA, then they may also be  competent to provide advice on tax law and estate planning.
7. Value and      Compensation -  How will your advisor earn income from you?  Make sure they get paid for their work,      but it may be best to make sure they are not double dipping.  Some advisors will charge a fee for      advice and then also invest you in a product that also has fees.    With the ease of use of ETF Exchange  Traded Funds, make sure your advisor is providing added value.
8. Wealth Team  - Does the wealth manager have a group or      team to help you in the areas of:  Investing, Wealth Preservation, Risk and Insurance, Trusts,  Legal,  Retirement and Tax. Ask if      they have names of people they have worked with successfully.
9. Customer   Regulations – Be      sure to let your advisor know what your objectives are. Make sure they  understand your 1) suitability, 2) risk tolerance, and 3) time  horizon.  Ask the wealth      manager  to explain each of these to  you in detail.
10. Policy Statement – Make sure your wealth manager  provides you with an IPS Investment Policy Statement that outlines what  they will do for you and the limitations involved.

*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.

Standards for Professional Designations and Board Certifications in the United States

Certification Standards  Guide

Professional Designations in the United States and Internationally have a long history.  Legal cases such as the IBANEZ decision of the Supreme Court imply  that bone fide “board certifications” or “professional designation”  criteria includes:  1) Accredited Education, 2) Assessment, 3) Degree  4) Continuing Education and 5) Ethics/Professionalism 6) Experience.

Types of Certifications  and Accreditation Standards – Level II is the Highest

1. Certification      requiring Level 2 Accredited education and exams.       This is the highest form of educational requirements.  This education is generally preferred      for CPA licensure  and for      certifications from organizations such as the AAFM American Academy of      Financial Management.  Level 2 means  that both the college or university is accredited AND the business school      is also separately accredited by a government recognized body.  The ACBSP, AACSB or EQUIS are examples  of level 2 accreditation while education      from an ABA American Bar Association education would also be level 2.
2. Charters or Certification      requiring a college diploma and exams.  This is a  high standard but does not require Level 2 Accreditation Degree.  Thus, the degree may be from a good      school offshore but it may not be accredited by a recognized  organization.  Certifications in      this category focus on giving only exams as a path to achieving a “non      government recognized professional designation” or becoming chartered  with a credential as a financial analyst.
3. Credential requiring      only exam.  This standard is strong but does not  require a degree historically but rather a test only.  Examples are a project management      designation or a typical financial planner designation or credential.

• Note:  A degree, MBA, MSc, or credential based on a Level 2 education is more widely accepted globally than qualifications or degrees that do not maintain  ”Level 2″ Status.  Further, course credits are more easily transferrable with reciprocity from Level 2 business schools and institutions that are double accredited.

*Most State and Sovereign Governments worldwide prefer Level II Accreditation for the purposes of business school standards, top MBA programs, or becoming a CPA or Chartered Accountant. Further, Government recognized Bar Accredited Education is required for a legal education and  licenses.  Level 2 accreditation – the business school. In a Level 2 accreditation, the college or university and the business school are separately accredited, but the accounting program is not separately accredited. This level applies to a business school that is accredited by an organization recognized by the Council of Higher Education Accreditation (CHEA) as a specialized or professional accrediting organization, such as the AACSB or the Association of Collegiate Business Schools and Programs (ACBSP).

Here are 10 Books on success and wealth that may change your life.  While understanding taxes and finance are key knowledge areas, there are also many facets to the wisdom of wealth and WMP Wealth Management Psychology.  Here are a few books that can widen your perspective on wealth and financial planning.

 

1. Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth by T. Harv Eker which is a “Good book for those who want to develop abundance. Practical Steps”
2. 50 Self-Help Classics: 50 Inspirational Books to Transform Your Life from Timeless Sages to Contemporary Gurus by Tom Butler-Bowdon -  “Nice summary of best self help authors with tidbits from each author”
3. Think and Grow Rich by Napoleon Hill -  “Super Book – Best of Self Help”
4. Spiritual Wealth Management : The Abundance Bible & Prosperity Manifesto by George S Mentz JD MBA CWM “The wealth secrets to success.”
5. The Seven Spiritual Laws of Success: A Pocketbook Guide to Fulfilling Your Dreams (One Hour of Wisdom) by Deepak Chopra “Classic books on the primary laws to success with a Eastern twist.”
6. Wishes Fulfilled: Mastering the Art of Manifesting  – Dr. Wayne W. Dyer Dr.
7. The Dynamic Laws of Prosperity – Catherine Ponder
8. The Courage to be Rich: Creating a Life of Material and Spiritual Abundance by Suze Orman “Suze speaks to us all with your down to earth wealth training.”
9. The Way to Wealth by Brian Tracy Brian Tracy speaks the language of prosperity, success, and effective living. He is a superstar and will help you grow.”
10. The Lies About Money by Ric Edelman  – “Ric has been around a long time.  Great speaker and writer on Financial Planning”

 

Lawyer  and Counselor  George Mentz, JD, MBA, CILS, CWM  is a world recognized wealth management commentator and award winning professor who has authored several revolutionary books. Prof. Mentz, an international attorney, has been a keynote speaker globally in Asia, Arabia, USA, Mexico, Switzerland, and in the West Indies. Mentz can be contacted for speaking engagements at www.gmentz.com or www.managementconsultant.us  *No counseling, tax investment or legal advice provided herein.  Please consult with a licensed professional in your jurisdiction before making any important career, financial or legal decision. Mentz is the founder of the American Academy of Financial Management and the Management Academy which has provided professional development education to thousands of people worldwide.  Mentz is the author of SWM Spiritual Wealth Management which is included in the list above.  All rights reserved by George Mentz, Esq.

CWM   Chartered Wealth Manager ™  – America’s  First Graduate Wealth Management Certification and Charter.   

CWM ®  Chartered Certified Wealth Manager ® – An AAFM ® Owned and Issued Certification awarded from the USA United States of America.  Why Global Standards are Important.

The CWM  ® Chartered Certified Wealth Manager  ®  professional certification  awarded from the AAFM ®  American Academy of Financial Management  ® is the first graduate wealth management Charter & Board certification in the world – as featured in the FINRA, NASD,  Investopedia, Forbes,  China Daily, Financial Times, Black Enterprise, Wall Street Journal,  and Money Manager[1][2] that was created and founded by the AAFM American Academy of Financial Management [3][4]. The internationally trademarked CWM ® Chartered Certified Wealth Manager AAFM ®  Certification [5] and credential is only available for wealth managers with an accredited masters degree, law degree, CPA, PhD or specialized executive training from an ABA accredited law school [6] or other approved program in Asia, Europe, India, Latin America or Africa. In 2004, Robert Frank of the Wall Street Journal published an expose of the top Wealth Management educational programs and certifications including the AAFM, Wharton School of Business and New York University.

The CWM Certified ( Chartered Wealth Manager ) [7] designation and post-graduate qualification is exclusively issued and conferred by the USA Board of Standards American Academy of Financial Management  ® over the last decade (AAFM) [8][9] The CWM wealth management certification & designation is similar to financial planning certification but is a graduate certification and professional development program in high net worth consulting which has always required a government recognized education and degree.[10] The CWM  Chartered Certified Wealth Manager ® Law School Curriculum and syllabus has been accepted for use with ABA Accredited Law School Programs.[11] Wealth Management is a profession and career that many bankers and investment professionals are entering.[12] Like any accredited law school graduate courses, the AAFM CWM certification courses[13] will count toward a post graduate degree such as a LLM or JSM, will count for continuing education for CPA and Law Licensing, and may count towards the CPA exam eligibility.

The CWM Chartered Wealth Manager Board Certification [14] from AAFM USA requires knowledge in 12 key areas:[15] and is referenced in the Global Designation Directory and on the FINRA US Government Regulatory Website [16][17]  The primary required skill sets of a CWM would include: 1. Estate Planning and Trusts 2. Asset Management 3. Portfolio Management 4. International Taxation 5. Retirement Law 6. Economics 7. Investments 8. Money and Banking 9. High Net Worth Consulting 10. Relationship Management, Compliance, and Ethics 11. Business Entities & Organizations 12. Risk Management and Insurance

Educational institutes and training organizations must petition to the AAFM www.AAFM.us to become an accredited provider of the CWM Chartered Wealth Manager program.

Governmental Citations &  Book References

1. ^ ” Wall Street Journal – Is Your Wealth Manager Certifiable? features AAFM CWM Wealth Management Certification “
2. ^ “CWM Featured in The Money Manager
3. ^ AAFM Investopedia Dictionary Article
4. ^ “Investopedia CWM Article”
5. ^ “AAFM US Government Trademark Reference”
6. ^ “Post Graduate CWM Law School Certification Program”
7. ^ “RIA Compliance Solution book”
8. ^ AAFM CWM in Investopedia Dictionary
9. ^ “US Government Trademark Reference for CWM “
10. ^ “The ElderLaw Portfolio Series, Volume 1‎ – Page 25-16Harry S. Margolis”
11. ^ ABA Accredited TJSL LLM Graduate Program in Finance and Taxation offering CWM from AAFM
12. ^ “AAFM CWM in the Book Career opportunities in banking, finance, and insurance By Thomas P. Fitch Pg. 251″
13. ^ “AAFM Law School Certification”
14. ^ “Demystifying Wall Street”
15. ^ “AAFM US Board and Certifying Requirements”
16. ^ “Directory of Global Professional Accounting and Business Certifications By Lal Balkaran”
17. ^ “FINRA Governmental Regulatory Website Formerly NASD”

AAFM American Academy of Financial Management  ® and CWM ® External links

• AAFM US Board of Standards
• Global Professional Certifying Board
• USA Accredited Law School Program Online for the AAFM CWM
• China www.AAFMChina.org
• Arabia www.AAFMGCC.com
• India www.AAFMIndia.com
• Latin America www.AAFMLA.com
• Singapore www.AAFMAsia.com

Over 800 Accredited Graduate Programs which qualifies you to apply for CWM Certification ™ .  You must have 3 years of wealth management experience on top of having the graduate degree or courses.

1. Masters in Finance, Wealth Management, Tax or Economics from an ACBSP Accredited Double Business School.
2. Masters in Finance, Wealth Management, Tax/Accounting or Economics from an AACSB Accredited Double Business School.
3. Masters with focus on Finance, Wealth Management, Tax or Economics from an ABA Accredited Law School.
4. Masters in Finance, Wealth Management, Tax or Economics from an EFMD EQUIS Accredited Double Business School.
5. Masters Degree in Finance from CUFE Beijing Business School
6. MBA or MSC from Shanghai Graduate Program in Finance
7. Masters in Wealth Management from the Swiss Banking School
8. JSM or LLM from the Diamond Law School Wealth Management Program

Financial literacy and education is becoming central to investors and the general public alike. The CFPB Consumer Financial Protection Bureau and other global organizations are looking for answers about how to raise the bar with financial education. Responding to the call for consultation or proposals from the CFPB, the AAFM American Academy of Financial Management ® and their General Counsel George Mentz, JD, MBA have sent a letter regaring the highest standards of accredited program exams and government recognized business schools in the United States and worldwide as a direct path to meeting assessment and education requirements for certification.

George Mentz, international counsel and chairman of the certification standards of AAFM has stated that, ” “A board certification earned by successfully completing accredited program exams and courses provides assurance that the advisor has mastered college degree level business skills and knowledge.” Double accredited business schools and accredited law schools represent approximately the top 10 percent in quality of degree and graduate programs worldwide.

The AAFM American Academy of Financial Management ® and Counselor Mentz sent a letter and comments to the CFPB showing the importance of accredited financial and legal education that leads to board certifications. In it, AAFM and Mentz clarify that the bulk of credentialing programs meet no third-party standard, do not require an accredited degree recognized by the government, and have zero regulatory or accreditation oversight. This is why the AAFM® and Professor Mentz started a crusade over a decade ago to promote certification requirements of: US Government recognized Accredited Business School and Law School Programs and Exams.

Mentz, is a teaching professor at the TJSL accredited law school graduate program. After a student completes the qualifying law school courses and exams at the accredited institution, the candidate can then petition for certification if they have met the professional requirements of degree, ethics, assessment, experience, and continuing education. As an example, the AAFM began to promote the CWM Chartered Certified Wealth Manager ® Program in the 1990s, and this designation may be achieved by successfully completing the CWM education and assessment program online from an accredited law program. See: www.llmprogram.org

In sum, the accredited education leaders at over 1000 institutions worldwide would see absolutely no reason to outsource exams or education when government recognized or accredited programs have met the test of time and quality for over 100 years.

Question for Comments: https://www.federalregister.gov/articles/2012/08/02/2012-18830/request-for-information-on-effective-financial-education
See: http://llmprogram.tjsl.edu *www.LLMProgram.org
See: http://www.AAFM.us * http://www.FinancialAnalyst.org
See: http://www.ACBSP.org

• See: FINRA Chartered Wealth Manager
  See: FINRA Monitored Designations http://s.wsj.net/public/resources/documents/st_CREDIT1015_20101015.html
• See CWM Chartered Wealth Manager http://www.aafm.us/

Valuation discounts are increasingly challenged by the IRS. Gone are the days when assets could be dropped into a family limited partnership with some transfer restrictions and forgotten about until a valuation discount was needed to reduce a gift or estate tax bill.  A recent U.S. District Court case, Fisher v. U.S., reminds us that times have changed.  Often, placing assets in a business entity is no longer enough to justify a valuation discount—the entity must be run like a business to justify the discount.   Read the analysis by our experts Robert Bloink and William Byrnes located at AdvisorFX Journal Valuation Discounts: Only for a Bona Fide Business

For some good news about valuation discounts, see our article in AdvisorFX Advisor’s Journal on the Jensen case.

From a tax perspective see Tax Facts Q 613. How is a closely held business interest valued for federal estate tax purposes?

After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.

Why is this Topic Important to Wealth Managers? Discusses how international planning can impact clients’ tax position domestically.  Provides discussion on a number of common international tax concepts as they relate to U.S. taxpayers.

In a previous blog, it has been briefly discussed that there may be a number of reasons a client may consider offshore planning, generally.  Today we will focus on one major component of offshore considerations, the impact of world-wide income on U.S. taxpayers. It is generally accepted that U.S. taxpayers are expected to pay income taxes on income earned from sources worldwide.[1] This concept is commonly referred to as “outbound” taxation. [2]

It is the case that many sovereign nations will also have taxes on personal and/or corporate income that an individual or corporation could become subject to, creating in effect “double taxation.”  And some foreign nations choose to have very low or no tax rate on certain types of income, or on corporations in general, thus allowing foreign income to potentially escape foreign taxation (and current U.S. taxation in the year that it is earned).

What are some rules that that Congress has attempted to avoid double taxation or subject foreign income to U.S. taxation?

Foreign Tax Credit

Under the foreign tax credit, the “United States allows its taxpayers to reduce their U.S. tax liability by some or all of the foreign income taxes paid on income earned outside the United States.” [3] The credit, created by Congress, reduces U.S. income by “foreign income taxes paid or accrued.”  “The credit is a dollar-for-dollar reduction of U.S. income tax liability.”  [4]

Controlled Foreign Corporations

As a general rule, “the income of a foreign corporation is included on the U.S. shareholder’s U.S. income tax return only when dividend income is received.” [5] Yet for certain situations when U.S. taxpayers have a shareholding in a foreign corporation, Congress has established special rules that “deem” a dividend to have been paid by the foreign corporation, regardless of whether it is actually paid or not.  These special rules are known as “anti-deferral” rules – rules that mitigate the tax advantages of taxpayers deferring U.S. tax until foreign income has been received.

In general the rules that most impact U.S. taxpayers with a shareholding in a foreign company are known as “controlled foreign corporation” rules (aka CFC rules).  A CFC exist when “any foreign corporation in which more than 50 percent of the total combined voting power of all classes of stock entitled to vote or the total value of the stock of the corporation is owned by U.S. shareholders on any day during the taxable year of the foreign corporation.” [6]

Not all income earned by a CFC will be deemed as a dividend to its U.S. taxpayers.  Congress does not want to stop U.S. taxpayers from investing or doing business overseas.  However, Congress is concerned that it is common that U.S. taxpayers will “shift the income-generating activity to a foreign entity where the income earned will not be subject to U.S. tax until repatriated.” [7] Congress considers that such business activities or investment activities could have or should have occurred in the United States, or at least should have been taxed in the United States regardless of where they occurred.

Thus, Congress has established complex rules to determine which types of income it will allow to be earned overseas without the U.S. taxpayers incurring current U.S. taxation on a deemed dividend, and correspondingly which types of income for which Congress will disallow deferral.  Income that Congress disallows deferral for is known as ‘tainted’ income.  It is this “tainted” income that is included in the gross income of its U.S. shareholders without regard to its actual distribution.

Income that is subject to current taxation from a CFC, “can be characterized as income that is easily shifted or has little or no economic connection with the CFC’s country of incorporation” [8] and may include, “foreign personal holding company income, foreign based company sales [and service] income, …as well as certain insurance income, …and certain other narrowly defined categories of income [including passive income, ‘such as interest dividends rents and royalties’[9]].” [10] Well, that’s a mouthful of legal terms that we will need to discuss in future blogticles.

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[1] 26 U.S.C § 61; See also, Taxation of Business Entities.  James E. Smith, William H. Raabe, David M. Maloney.  Chapter 13.  2007 Annual Edition, citing 26 U.S.C § 61, “Gross income for a U.S. person includes ‘all income from whatever source derived’.  ”Source“ in this context means not only type of income (e.g., wages or interest) but geographic source as well (e.g., the United States or Belgium). Westlaw.

[2] Corporations, Partnerships, Estates & Trusts.  Chapter 9.  , 2007 Annual Edition.  Westlaw.

[3] Taxation of Business Entities. Ch 13

[4] Id.

[5] Id. citing, Subpart F, §§ 951-964 of Title 26 of the United States Code.

[6] Taxation of Business Entities.

[7] Id.

[8] Id.

[9] Id.

[10] 3 Legal Compliance Checkups § 20:35 (2009).  Westlaw.

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Why is this Topic Important to Wealth Managers? Provides an introduction into the Internal Revenue Code so that tomorrow’s blogticle about specific sections of the Code may be better understood, in particular the taxation of life insurance companies.

How are the laws related to tax organized or in other words, what’s the general process in finding an answer to a tax question?

All federal laws of the United States arise out of the Constitution.  The Constitution has granted Congress certain enumerated powers, such as the power to regulate commerce among the several states.  Congress also has the power to create laws that are necessary and proper in governing based on its listed powers.  All powers not granted to the Federal government are reserved by the States through the 10^th Amendment – meaning only the States may enact laws in those areas (al least this is how it is supposed to work).

Once Congress passes a necessary and proper law to carry out its enumerated powers, that law becomes a United States Statute, or a Statute already existing is either amended or deleted.  The Statutes of the United States are called the United States “Code”.

The United States Code is divided into 50 different titles.  Title 26 is perhaps the most infamous, being the “Internal Revenue Code”.  The Internal Revenue Code, or Title 26 of the United States Code is further delineated, into Subtitles, Chapters, Subchapters, Parts, and finally Sections and Subsections.

Congress has delegated the power of enforcement of these laws, which lies with the executive branch, of Title 26 to the Secretary of Treasury to create Regulations or Administrative Interpretations of the Statutes.  The regulations are not in and of themselves laws but rather, direction from the Secretary of interpretation of the laws.  The regulations have legal authority, which means they may be presented in court.  In almost all tax cases, there is some Statute, that is called into question, therefore the Court’s exclusive job is to rule on interpretation of the Statute as it applies to the situation before the court, not to overrule any statute, unless it found the law unconstitutional.  Therefore, additional law is generated by courts’ interpreting Statutes.  This is known as “case law”.

Let’s look at a simple example to illustrate the concept.  To determine how much tax an individual will pay on a certain transaction say, the receipt of life insurance payments as a beneficiary of a policy. Where do we start?  It is generally unquestioned that since the issue is about taxes we can look in Title 26 of the United States Code to find out what amounts paid to the taxpayer are taxable as income.

Moreover, Subtitle A of Title 26 is entitled “Income Taxes”, so that is a natural place to continue looking to see what taxes will be owed, if any on this payment.  Within Chapter 1 “Normal Taxes”, Subchapter A is called “Determination of Tax Liability”.  Determination of tax liability sounds on point in consideration of what we’re trying to accomplish.  In that Subchapter, Part 1 concerns “Tax on Individuals”.  Here is where we will start.  Section 1 is titled, “Tax Imposed”, and states “There is hereby imposed on the taxable income of” and lists the different filing statuses and applicable rates.

A question should then naturally arise, if there is a tax imposed, what is it imposed on?  The answer is nearby.  The wording of the statute says there will be imposition of tax on the “taxable income” of different filing statuses.  Well we might want to know then what taxable income means for federal legal purposes.  Looking in the index, or though a common search, one will find that Part I of  Subchapter B “Computation of Taxable Income”, is entitled “Definition of Gross Income, Adjusted Gross Income, Taxable Income, Ect.”.  So there it is, and if we look at the sections under Part 1 of Subchapter B, we will see Section 63’s title of “Taxable Income Defined.”

Section 63 (a) states, in part, “the term ‘taxable income’ means gross income minus the deductions allowed.”  Well it would certainly be helpful to know then what “gross income” means.  Not too far away, in the same Part, one can find in Section 61, which is entitled, “Gross income defined”.  Section 61(a) states in part, “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:

…
(3) Gains derived from dealings in property.”  Life insurance contracts are property, generally.

Notwithstanding the meaning of “all income from whatever source derived” we know if some item is “otherwise” excepted in Subtitle A, “Income Taxes”, that such item would not be included in gross income.  Further, if the item is not included in gross income, it will not be included in taxable income, and even further, if the item is not included in taxable income, the imposition of a tax on such item does not apply.

We now must look in Subtitle A to see what, if any items are excepted.  Part III of Subchapter B, is conveniently enough titled “Items Specifically Excluded From Gross Income.”  The first Section of this Part is entitled “Certain Death Benefits”.  Payments from a life insurance contract to a beneficiary is on point with this Section, so it should be read.  Section 101 states, in pertinent part, “gross income does not include amounts received (whether in a single sum or otherwise) under a life insurance contract, if such amounts are paid by reason of the death of the insured.” So if life insurance payments are not included in gross income, the life insurance payments are not taxable income, and therefore are not subject to an imposition of income tax, or in other words – no tax is due.

In this simple example, there was no need to examine the Regulations or any court cases, as our issue was straightforward.  However, most issues will involve additional questions which then the practitioner will look to further sources, i.e., regulations and case law, to determine the answer to the question presented.

For further explanatory discussion of the structure and sources of federal tax law, please see the AdvisorFX Main Library Section 50.6  Sources And Structure Of Federal Tax Law: A—Sources And Structure Of Federal Tax Law

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

Why is this Topic Important to Wealth Managers? Provides a view with respect to revocable trust concepts and estate planning. Presents identifying factors of the trust, what it’s commonly used for, as well as some of the benefits and detriments of its implementation.

This week has mainly discussed the use of trusts with characteristics of complete transfers by grantors. This edition will explore the revocable nature of trusts and how they are applicable to estate planning.

The main difference between a revocable trust and one that is not is that “the settlor reserves the right to terminate the trust and recover the trust property and any undistributed income.” [1] “The creation of a revocable living trust involves either the transfer of property to one or more trustees or the settlor’s declaration that he holds the property in trust for himself and that upon his death the property is to be held for other beneficiaries.” [2]

The revocable trust is frequently used “in estate planning, especially where a person wishes to relinquish title to property but to retain a right to reclaim it later should economic need arise.” [3] It allows for the “the swift and efficacious transfer of the grantor`s property to trust beneficiaries.”

One benefit of this arrangement is that revocable trusts avoid probate—“Upon the death of the grantor, assets that are owned by the trust, rather than by the decedent, will not be subject to the probate process.” Secondly, assets in a living trust are afforded “extra protection [because]…the trustee can be given the power to withhold distributions” along with spendthrift provisions enacted by state legislators.

However, the revocable trust income is taxed to the grantor[4], “and the trust assets will be included in his gross estate upon his death.”[5] In other words, the “decedent’s gross estate includes the value of any interest in property transferred by the decedent whether in trust or otherwise, if the enjoyment of the property transferred was subject to any change at the date of the decedent’s death through the exercise by him of a power to alter, amend, revoke or terminate.” [6]

The artificial construction of the law holds that “although the grantor has relinquished title to the trust property, trust income will still be taxed to him, and the trust property will be subject to estate tax.”  [7] Even though,  “a revocable trust yields no income tax advantages during the settlor’s lifetime, significant income tax savings may be realized after his death if the trustee is given discretionary powers in the payment of income and principal.” [8]

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[1] Black’s Law Dictionary (8^th Edition 2004). Revocable Trust.  Westlaw.

[2] Bogert.  The Law Of Trusts And Trustees § 233 (2010).  Westlaw.

[3] AUS MAIN Libraries. 21 Trusts Guardianships, and Minors, A-Trust Terms –Use in Estate Plans, Subsection 8. “The Living Trust In Family Settlements”. Last Accessed 9/19/2010.

[4] Bogert § 233 citing, 26 U.S.C. § 676.

[5] Bogert § 233  citing 26 U.S.C. § 2038; Desmond, 116 Trusts & Est. 218 (1977).

[6] 34A Am. Jur. 2d Federal Taxation ¶ 143,402

[7] AUS Main Libraries Section 21.

[8] Bogert § 233

Author: George Mentz

Global  Job Tools and Technology

If you are  one of the millions of  Americans that is out of work right now, then you are probably wondering how to secure a good job or a better job in these difficult times.  Further, it is time to think outside of the box and to think BIG.    With over 7 billion people on this planet, this means that the United States of America is just one small group of consumers within a growing global marketplace

With regard to stakeholders and economics, all firms must have profits so they can pay their employees, reward the risk-taking owners and investors,  grow and innovate,  and contribute to local communities with charity.   We are a global economy, and  at this time the international demographics and consumption are changing very quickly.  As for consumers, we have 1 billion people in India, more than a billion in China, about a billion in Arabia, a huge emerging market in Africa, another  billion or so consumers in greater Asia which includes Malaysia and Indonesia, and then there are the nations of Europe and the Eastern-European nations. Similarly, there are 20 Latin nations south of the USA.

As an example of 21st century sales at a local level, I recently walked into a local used bookstore and asked the owner who their customers were.  She replied that 95% of her customers were outside of the city with many out of the country.  I was in shock and this information speaks volumes about  this global web economy.  Whether she was using EBay or other online tools to sell, her small-town antique and vintage books were available to a global marketplace which  included people who really wanted what she was selling.   Moreover, these buyers were willing to pay top dollar.

Using this tiny case study as an example, we see that utilizing the web to promote your company or resume is the number one way to secure new jobs or new business.  This is real-time global marketing that works for you 24 hours a day and seven days a week for the end user who now searches for products and services using their home computer or phone.

As individuals and businesses, how do we optimize opportunities around the world?    For starters, there are various ways to promote yourself and your brand.  Accordingly, if you are not on the Internet actively promoting your brand through websites and social media, then you have already put yourself into  a 21st century disadvantage.

Virtual Resume Marketing Basics

To begin your self-promotion, the  first way to improve your opportunities or  get a better job is to digitally customize  your highest attributes and credentials on your resume for the types of positions that you seek.  The  second method  is to take those attributes and credentials and brand them to the public using various websites, social media, email and other.  The key here is to make sure that interested searchers and parties know about your capabilities and your business excellence.  Further, you must make sure that your Internet presence portrays you in the highest light and in the highest truth.  In the end, it is helping those who are seeking professionals like you.  This takes skill, effort, and creativity.

As a note, an Internet resume is designed somewhat different than a normal resume .  This is because an Internet resume is more of a niche curriculum vitae that targets various types of work.  Typically, your specializations are the way that you will help other companies and other people increase productivity.  In this economy, they way to get paid your highest value is to convey the impression of increase to the other party.  This means that you make sure people understand your worth and why you are indispensible and cost-effective.   Often, it takes time and some writing to clarify the ways in which you can help others improve efficiency, effectiveness and their profits.  Time is money, and if you have the ability to save time for companies and executives, you also become a very important part of their profit center.

Selling your resume, expertise and your products & services to the global marketplace is the best way in which your company will continue to prosper in the future.  Let’s face it, the world has been competing for the American consumers’ dollars for many years. With that being said, this era could be your opportunity to provide excellence to as many customers as possible both in the USA and abroad.  Thus, you need not depend solely on your city, state, province, or region because there are seekers of your wares around the world.  If  you are trying to get a job, you are technically representing your own company, and  you must sell and promote your brand and your name to others who are willing to pay you for your services.  Not only should you sell yourself, your degree, education, or experience, but you must do this with digital-tactics. This means that you must use the most prolific and most searched keywords and key-phrases on your websites, social media and resume.  You do this because if people are searching for a certain product or skill, hopefully your resume and website will contain the correct “search terms” in the correct language to reel in your searcher.  Searchers include:  potential clients, HR executives, recruiters, headhunters, and dealmakers.

Out and In Sourcing – Local and Global

In  theory, there are two simple ways to succeed in the United States.  One  is providing local services that can NOT be outsourced on the ground,  and the other is to is to provide services globally to any customer that is willing to pay.   What is an example of a service that can be outsourced? How about:  home healthcare, electricians, fast food, coffee houses, plumbers, construction, home repair,   or even a local licensed lawyer would be an example.   Keep in mind that many professions can be outsourced. Even professions that people thought were safe are now being partially outsourced.  Examples are  partially outsourced work education, training, accounting or engineering.

Remember some professions that  were traditionally outsourced are moving back to the United States. A  lot of this has to do with technology, software, and robotics where the technology does the work in the United States and the individual worker in the United States controls or maintains the systems so it continues to perform an excellent way.  In essence, this puts thousands of people offshore out of work.  Thus, there is an ebb and flow between what can be done offshore and what can be performed effectively onshore.  To put outsourcing in reverse, many companies are now in-sourcing.  This means that a company like JetBlue or United Airlines may not fire an employee who wants to raise kids at home and the corporation may prefer to keep a 10 year veteran on staff and simply let him work from home and care for kids. Why?  This person has skills and knowledge that is hard to let go and that employee can perform customer service from home very effectively without a commute.

Reviewing Applicants for Jobs – Types of Resumes

In  my time as a hiring and screening representative for major company, I saw hundreds of superb resumes which also show a 21st century shift in appearance.  From my experience, there are two types of resumes now in the United States. The first is a resume of an individual who works for one company loyally who has one job. To be honest, many companies do not allow workers to engage in any outside activities or jobs.    However, this loyal person may be interested in obtaining a new job or work with a different company.

The second type of resume are individuals who I would call multi-preneurs, and these are individuals who typically work for themselves and provide services or products to  several companies in the United States and outside of the country as well.  These people are typically well  credentialed and have expertise in one or several areas that can help companies be productive.  These professionals prefer to work for themselves and not put all their eggs in one basket.  As independent contractors, tax law is also allowing many of them to take larger deductions for health and other office expenses.

Because the present economy is one of the nastiest challenges that we have had in the last hundred years,  there will be vast opportunity in the middle of this chaos;  however, many people may not be able to adapt quickly. Thus, the hustlers will adapt and win in this global market, and those who do not take action may stagnate for months if not years.  However, there is light at the end of the tunnel. If we can target certain jobs and continue to promote ourselves using these Internet secrets, the opportunities will be much larger and abundant.

Now back to the Virtual Resume .

There are several ways to market yourself.  The first is by sending your resume to the name and e-mail addresses of people who are looking for employees or filling certain positions. Since email boxes can be full, it is always good to add their name and your name to the subject line.  As Dale Carnegie said, the name of a person is always music to their ears.  The  second  way to create a resume account is through job networks such as Monster.com or  LinkedIn.com.   The professional network called LinkedIn.com  will actually allow you to create a public profile and resume which is a great way to include a link in your emails for others to see your resume, photo and credentials along with a method for others to connect to you.  The  third is through pure social networks like Facebook.  All of these social networks are ways to build alliances, communication, create friendships or even to  request recommendations.  The  fourth would be using your local knowledge and targeting a local company for employment. The key here is to use word-of-mouth, ask questions, join local associations,  and calling companies by phone.

Every city and town has small offices or boutique firms that may be looking for assistance in the area of customer service, relationship management, or sales or even information technology.  If you want to stay local, you may need to knock on doors until you find the company or person who needs help.  Every  company is in the business of selling, and without marketing and sales, no one will be able to learn about or see what a company has to offer.  It is this reason that companies will always be hiring because they must keep selling to new customers and managing existing relationships.

Online Resume Branding Tips

These rules also applies to your resume and your name brand. Here are some tips for every person out there looking for work.  First, have somebody review your resume who understands the type of work you’re looking for.  Then, make sure that you have this updated resume available on your website, on job search engines and in social networks. Be sure an create a special email address just for your job searches.  In this way, you protect your private account from spam.   Next, make sure you have an updated photograph of yourself that is of good quality.

Be sure that your resume includes all of the skills, degrees, credentials,  training or any other education or experience that you have.  Many people seem to omit relevant skills when they apply for jobs.   An example of that would be a language skill, global selling skill, Internet skills, or  short training course that you may have taken in areas including: compliance, ethics, service, safety, sexual harassment, or sales.  All of these short-term training courses or certificates can add great weight to your resume.

Also, we must know all we can about the companies that we want to work for.  We must further be prepared to answer questions about our strengths weaknesses and ability to provide service for the new company or team that you intend to work for. If you get an interview, you may need to sit down with several people in a department to be interviewed. Thus, the more you are prepared, the better.

Make  sure that your Internet brand and reputation is prolific on the Internet.  If you put your biographical information on all the top social networks you will probably create 2 to 3 search engine pages of links that relate to your resume and image.  These links should  bolster your best qualities. Then, begin targeting your jobs, opening job search accounts and uploading your resume.  There are several  top  job search engines such as:  Monster.com,  Yahoo Jobs, Careerbuilder.com, or Dice.com

To secure the best jobs with the best wages and benefits, we must be able to show how we are better than the rest of the applicants in myriad of ways in which can improve the capacity of the employer.  To do this, we must also find out what the employer is looking for and tailor ourselves for the position that we desire.

Many times, we may need to hone our skills and credentials toward the position that we desire.   This may require reading, learning, achieving licenses, diplomas, professional designations,  or more.  With the fast changing technology, many of us are required to know how to use various software, platforms, or technological methodologies.  With that being said, you may need to have 3 or 4 types of resumes where one specific resume is for sales and the other is for management and so forth.

Jobs and Economic Going Forward

In sum, we all must make the best of ourselves as individuals and invariably it benefits the employer, the organization, and even the community.  We must be willing to promote ourselves with integrity and honesty, but also aggressively.  By doing so, we can find great full time or even part time work.  In this fast-paced economy, we must be nimble and this agility includes communication by phone, email, web, and face-to-face.  Even if we are entrepreneurs or self-employed, we are still working for our clients and customers.

Well this troubling economy improve? Of course it will, and there are millions of jobs available online right now around the world.  This economic situation reminds me of the years when American manufacturing  and mechanics retooled for the “information technology era” that began over 25 years ago.   It may take several years for the world to transcend the global financial crisis but cycles always come and go.    I believe that we are in a process of retooling again, but we must all be mindful of the importance of learning new strategies and tools to serve and contribute on a global scale even more effectively.

By: George Mentz

Recently, researchers at the Bureau of Labor Statistics linked unemployment duration for persons jobless in one month with their labor force status in the following month. In this manner, estimates of unemployment duration were created for the unemployed who became employed in the subsequent month, as well as for the unemployed who quit looking for work and left the labor force.

By the end of 2010, the median number of weeks jobseekers had been unemployed in the month prior to finding work was a little more than 10 weeks.

In contrast, prior to the start of the recent recession in 2007, the median was 5 weeks. Unemployment duration also increased among those who eventually quit looking and left the labor force. Unemployed individuals were jobless for about 20 weeks in 2010 before giving up their job search and leaving the labor force. Whereas in 2007, those who were not successful in their job search had been unemployed for about 8.5 weeks before leaving the labor force.

The recent recession has had a profound effect on the length of successful job search. From 1994 through 2008, roughly half of all unemployed jobseekers found jobs within 5 weeks.

In 2007, for example, 49 percent of those who were unemployed in the prior month and employed in the subsequent month had been jobless for less than 5 weeks. During the same year, less than 3 percent of the unemployed who found work had been jobless for more than 52 weeks. In stark contrast, 11 percent of transitions from unemployment to employment exceeded a year in 2010, and only 34 percent lasted less than 5 weeks.

The information on unemployment duration also provides evidence that the likelihood of becoming employed decreases the longer one is unemployed. For example, the chance that a person who had been unemployed for less than 5 weeks would become employed in a subsequent month was about 30 percent in 2010. For those unemployed 27 weeks or more, that chance in a subsequent month was only 10 percent.

In summary, the length of time it took for the jobless to be successful in their job search increased sharply during the recent recession and in its aftermath. The median number of weeks unemployed doubled—from 5 to 10 weeks—and a far greater share of successful jobseekers spent in excess of a year in their search for employment. At the same time, the median duration for unemployed persons who were unsuccessful in their job search and left the labor force also rose dramatically. Moreover, once unemployed, the likelihood that one would be successful in one’s job search decreased as the time unemployed increases.

This article presents discussion and analysis relating to estimates of the length of time someone is unemployed before finding a job or before giving up searching for work. These measures were derived from the Current Population Survey (CPS) labor force status flow data, which capture the extent to which the unemployed find jobs, leave the labor force, or stay unemployed from one month to the next.

George Mentz, JD, MBA, CWM   -  is an international lawyer, editor, author and contributor in the areas of management consulting, personal finance, securities law, and wealth management.  Prof. Mentz continues to consult  with the US Government and United Nations on issues related to careers and education. Dr. Mentz is the first person in the US to obtain quad credentialing as a lawyer, Double Accredited MBA, Juris Doctorate Degree, financial consultant certification, and qualified financial planner.  Mentz and his educational & professional development firms have worked with thousands of executives and industry workers  in over 150 countries. www.FinancialAnalyst.org Mentz as a professor has personally taught over 200 business, ethics, wealth management,  and law courses at various accredited institutions, and he is the founder of the Mentz Consumer Protection, Class Action,  and Securities Law Firm www.securitieslawyers.us Mentz has served on the advisory boards of the: The African Economists Association, The Royal Society of Fellows, The Arab Academy of Banking & Finance, The China Wealth Council, The World E-Commerce Forum, The GFF Global Finance Forum in Switzerland, and the Indian Academy of Financial Management.    Mentz has been a pioneer in promoting accredited program courses, exams and standards as a government recognized path to professional development. . www.georgementz.com Formally with a International Wall Street Firm, Mentz has passed NASD FINRA Exams and held licenses as an  Investment Advisor.  Mentz also consults on major securities class action litigation and consumer fraud cases and has provided insights as an expert in Arbitration. . Mentz is a award winning professor and author and is the  winner of a meritorious gold medal  for charitable service.   Mentz has been seen on TV, Radio, and International Press along with being a keynote speaker for national and international seminars or conferences.