Quote for the Day: Lincoln has Something to Say about Today

From Lincoln’s Address before the Young Men’s Lyceum of Springfield, Illinois, a speech well worth reading in full:

At what point shall we expect the approach of danger? By what means shall we fortify against it? Shall we expect some transatlantic military giant to step the ocean and crush us at a blow? Never! All the armies of Europe, Asia, and Africa combined, with all the treasure of the earth (our own excepted) in their military chest, with a Bonaparte for a commander, could not by force take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.

At what point, then, is the approach of danger to be expected? I answer, If it ever reach us it must spring up amongst us; it cannot come from abroad. If destruction be our lot we must ourselves be its author and finisher. As a nation of freemen we must live through all time, or die by suicide.

 

24 Blogs to Read Beside Mine

I just stumbled upon this list of 24 [supposedly] Must-Read Blogs for Entrepreneurs I can’t vouch for them because I haven’t read them all, but many of the names behind the blogs are  recognizable: Mark Cuban, Penelope Trunk, Scott Adams, Guy Kawasaki, and others, so go take a look. If you’re thinking of or are in the middle of starting a business, you should be reading a lot about how to make things work.

Two that I’m going to be reading from now on are Duct Tape Marketing and Seth Godin’s blog (that’s Seth in the photo to the left). I need to become a better marketer of my own business, and  well, Seth Godin’s a genius.

Caregivers, Does this Describe You?

Northwestern Mutual recently published a survey of caregivers, those who take care of the infirm and aged. Among other things, this is what they found, according to Financial Advisor magazine:

Caregivers comprise a massive population segment, with 40 percent of the survey’s 1,003 respondents saying they were caregivers. Another 20 percent expect to step into that role.

While only 25 percent of future caregivers thought of financial support as a key attribute of caregiving, 64 percent of current caregivers ended up providing some level of financial support to their charges. Expenses related to giving care comprised nearly one-third of their budgets, according to the current caregivers.

Most future caregivers, 70 percent, expect to incur financial costs, yet only 60 percent said that they were equipped to handle the potential financial aspects of caregiving. (Emphasis supplied)

Just one more reason for people–both caregivers and those who will need it–to plan for the future. Long-term care insurance, life insurance, trust planning anyone?

Where’s There’s a Will, There’s a Will.

At the link is an interesting piece at WealthManagement.com that compares the reasons people gave in 1927 for not making a will with the reasons people give now. It’s worth a read if for no other reason than the photographs from those bygone days are great.

That said, here are the reasons people gave in 1927:

  1. A superstitious fear that making a will inevitably ushers in death faster.
  2. Mental laziness—putting off the process of working out the details of distribution and apportionment with a fair regard to what’s equitable and just.
  3. A sense of inadequacy to plan for the future.
  4. The expectation that a little later, the mind will be “better made up.”
  5. The dread of expense in paying for competent legal advice.
  6. Sheer hesitation and procrastination.

And here’s what people say today:

  1. I am too young.
  2. I don’t want to think about dying.
  3. The belief that assets will automatically pass to the proper individuals.
  4. Drafting a will is expensive.
  5. The belief that only wealthy people need wills.
  6. Not ready to make important decisions.
  7. Avoid dealing with family issues.
  8. Reluctant to discuss personal details with an attorney.
  9. Unaware of the consequences of not having a will.

There is no real good reason to not make a will–a very basic estate planning document that anyone who owns anything or who has minor children should have. And the two reasons I’ve bolded above have no merit. You can buy a do-it-yourself will online for as low as $30.00. A good attorney can draft a simple will for as little as $250.00. (Other estate planning documents–trusts, powers of attorney, and the like–are an additional cost.)

So go get that will. Tell the world who gets what when you die and who you want to be the guardian of your minor children. Just do it.

Or let your state’s law of intestacy do it all for you.

How One Family’s Legacy is an Example to Your Family

So by now, you probably know that the Larry and Gail Miller family insured that the Utah Jazz would forever be the Utah Jazz--musical Mormon jokes aside (by the way ever heard of BYU’s Synthesis?). They did so via a so-called dynasty or legacy trust, a trust intended to live on and on and on, well beyond the lifetimes of the Millers and their children and even their grandchildren.

I intend to write more on this subject, but for now think about what financial legacy would you like to leave your family, your city, your school? A well-drafted trust will allow you to do that.

 

The Sounds of Silencers

In case you haven’t noticed, Washington D.C. is a sieve on a sinking ship whose life rafts have holes in them. And I’m not talking about Donald Trump. No, it’s the ATF, also known as the Bureau of Alcohol, Tobacco, Firearms, and Explsives, aka BATFE. But they’re going with ATF, and so are we.

On January 20, 2017–the day the Donald was inaugurated–Ronald Turk, Associate Deputy Director (Chief Operating Officer), issued a white paper, titled “Options to Reduce or Modify Firearms Regulations.” Right there on the coversheet, immediately below the words White Paper is the following warning: (Not for public distribution).

For those from another planet, those words mean “Not for public distribution.”

Anyway, here we are two weeks and three days later, and you’re reading about the white paper on my blog. Now you’re going to get to read a few actual paragraphs from the paper. But first I should quote the following, again, from the paper:

Note: The opinions expressed within this white paper are not those of the ATF; they are merely the ideas and opinions of this writer. They are provided for internal use within ATF and DOJ and not intended to be public. They are also general thoughts that cannot be taken as exacting language regarding policy or quotable specifics. Additional specific details can be provided to further these general discussions.

The men and women of ATF are overwhelmingly a fantastic group of hard working civil servants who look to reduce violent crime and ensure public safety. The focus on combating gun violence is key. Fairly regulating the firearms and explosives industries is also important. As the firearms conversations take place over the next few months and years, this paper is offered to provide informal insight on potential productive ways to limit regulation and continue to protect our Second Amendment freedoms, while focusing on ATF’s mission to protect our nation. (Italics and bolding in the original)

As Mr. Turk makes even clearer in the paper’s Executive Summary:

ATF is the only Federal law enforcement agency with a primary mission that directly involves an Amendment to the United States Constitution. Thus, our actions and policies are appropriately subjected to intense review and scrutiny. This paper serves to provide the new Administration and the Bureau multiple options to consider and discuss regarding firearms regulations specific to ATF. These general thoughts provide potential ways to reduce or modify regulations, or suggest changes that promote commerce and defend the Second Amendment without significant negative impact on ATF’s mission to fight violent firearms crime and regulate the firearms industry. This white paper is intended to provide ideas and provoke conversation; it is not guidance or policy of any kind.

ATF’s enforcement and regulatory efforts are focused on reducing violence and increasing public safety. Positive steps to further reduce gun violence through enforcement or regulation are extremely important but are not the focus of this paper. (Emphasis supplied)

Mr. Turk proceeds to list and discuss 16 items he feels  are worth looking at with the intent of possibly making some changes to the way the ATF fulfills its mission. For purposes of this post, item or paragraph #8 is the most interesting. I’ll quote it in full here:

Silencers: Current Federal law requires ATF to regulate silencers under the NFA. This requires a Federal tax payment of $200 for transfers, ATF approval, and entry of the silencer into a national NFA database. In the past several years, opinions about silencers have changed across the United States. Their use to reduce noise at shooting ranges and applications within the sporting and hunting industry are now well recognized. At present, 42 states generally allow silencers to be used for sporting purposes. The wide acceptance of silencers and corresponding changes in state laws have created substantial demand across the country. This surge in demand has caused ATF to have a significant backlog on silencer applications. ATF’s processing time is now approximately 8 months. ATF has devoted substantial resources in attempts to reduce processing times, spending over $1 million annually in overtime and temporary duty expenses, and dedicating over 33 additional full-time and contract positions since 2011 to support NFA processing. Despite these efforts, NFA processing times are widely viewed by applicants and the industry as far too long, resulting in numerous complaints to Congress. Since silencers account for the vast majority of NFA applications, the most direct way to reduce processing times is to reduce the number of silencer applications. In light of the expanding demand and acceptance of silencers, however, that volume is unlikely to diminish unless they are removed from the NFA. While DOJ and ATF have historically not supported removal of items from the NFA, the change in public acceptance of silencers arguably indicates that the reason for their inclusion in the NFA is archaic and historical reluctance to removing them from the NFA should be reevaluated.ATF’s experience with the criminal use of silencers also supports reassessing their inclusion in the NFA. On average in the past 10 years, ATF has only recommended 44 defendants a year for prosecution on silencer-related violations; of those, only approximately 6 of the defendants had prior felony convictions. Moreover, consistent with this low number of prosecution referrals, silencers are very rarely used in criminal shootings. Given the lack of criminality associated with silencers, it is reasonable to conclude that they should not be viewed as a threat to public safety necessitating NFA classification, and should be considered for reclassification under the GCA.

If such a change were to be considered, a revision in the definition of a silencer would be important. The current definition of a silencer extends to “any combination of [silencer] parts,” as well as “any part intended only for use in” a silencer. Compared to the definition of a firearm, which specifies the frame or receiver is the key regulated part, any individual silencer part is generally regulated just as if it were a completed silencer. Revising the definition could eliminate many of the current issues encountered by silencer manufacturers and their parts suppliers. Specifically, clarifying when a part or combination of parts meets a minimum threshold requiring serialization would be useful. (Emphasis and underlining added)

Have you ever shot a gun that had a silencer (aka suppressor). I have. Once. A 22 caliber handgun. Ffffft! Ffffft! Fffffft! The sound resembled a feral kitten defending itself. Ffffft! Ffffft! And just about as harmless. Surprisingly quiet, but then, why not? A 22 caliber handgun or rifle is pretty quite with or without a silencer.

A silencer on my 357 magnum? That’s another sound altogether. For the uninitiated, silencers don’t really silence anything. They simply suppress sound. Yes, James Bond uses a silencer to “eliminate” the sound of his kill. Hunters and marksmen, on the other hand, use silencers/suppressors to reduce the firearm’s retort so as to protect their ears. And the suppressor just barely does that job, reducing the sound to just below the number of decibels OSHA allows in the workplace. In other words, with the possible exception of the smallest caliber firearms, suppressors still allow for a big enough bang to damage a shooter’s ears over time.

And yet the knives–no guns for these folks–are already out, wielded by people who’ve seen one too many Bond flicks and whose motto is there’s no regulation too strong and too ineffectual for the gun industry.

Good news is, it’s sounding like the ATF might be thinking of listening to more rational people. Let’s hope so. Could save you $200 on your next suppressor purchase.

Your Genetic Code: Whose Property Is It?

440px-geneticcode21-version-2-svgSomething to think about from the MIT Technology Review:

In August 2015, Samantha Schilit went to her primary care doctor to get a blood draw. A PhD candidate at Harvard specializing in human genetics, she was itching to unlock the secrets of her genes with a test called whole-genome sequencing, which provides a full readout of a person’s DNA.

Patients must give their informed consent before undergoing whole-genome sequencing or any other genetic test. But there are no laws that restrict what patients can do with their own genetic information, or that require patients’ family members to be involved in the consent process. This raises questions about who owns an individual’s genetic code, since family members share many genetic traits and may harbor the same genetic abnormalities associated with certain diseases. (Emphasis supplied)

Odd as this may sound, this is an estate planning issue worth worrying about.

IRA Rollover Gotcha Down?

We all know the rule:

Sections 402(c)(3) and 408(d)(3) provide that any amount distributed from a qualified plan or IRA will be excluded from income if it is transferred to an eligible retirement plan no later than the 60th day following the day of receipt. A similar rule applies to § 403(a) annuity plans, § 403(b) tax sheltered annuities, and § 457 eligible governmental plans. See §§ 403(a)(4)(B), 403(b)(8)(B), and 457(e)(16)(B).

No, actually, we all know that rule stated this way:

You have 60 days to get your distribution from one IRA or retirement plan to another IRA or retirement plan, or you suffer the tax consequences. The “getting to one from another” is called a rollover–typically an IRA rollover.

If you fail to complete the rollover within 60 days, the penalties can be severe, including income and excise taxes, interest, and penalties.

get-out-of-jail-freePeople do rollovers for a variety of reasons. They retire. They change jobs. They become dissatisfied with their current IRA provider. In those cases and others, there’s a need to change move your retirement money from one plan to another. And typically the move goes smoothly–without a hitch.

Except when it doesn’t. What if the rollover takes more than 60 days? Then what?

Well, the IRS recently issued a new rule, Revenue Procedure 2016-47, that recognizes certain realities: Life happens.

  • Checks get misplaced
  • Houses burn down
  • The Post Office screws up
  • The fish were biting (just kidding)

Yup. If life hits you in the face, the IRS is going to wipe the tears away and tell you to go back outside and play–that is, they’re going to waive any penalties. There is a catch–of course:

  • What hit you in the face must be among the many excuses the IRS lists in the Revenue Procedure 2016-47 AND
  • You must complete the rollover “as soon as practicable” after the intervening reason no longer exists (there’s a 30 day safe harbor, though you can take longer) AND
  • You must self certify to your new plan administrator or IRA trustee that you meet the requirements of the Revenue Procedure AND
  • The IRS previously must not have denied a waiver.

The Revenue Procedure provides a  handy self-certification letter, the wording of which you must follow almost to the T.  You can find the sample letter here, in the appendix of the actual Revenue Procedure. Enjoy the read.

Enforcing Charitable Pledges: Well, You Said You Would Give Them Money. What Did You Expect?

An interesting piece at Wealthmanagement.com about how and why charities seek to enforce charitable pledges and what theories courts use to accommodate their claims. The first two paragraphs are key:

In August, it was widely reported in the media that Duke University had filed a claim against the estate of Aubrey McClendon, the former CEO of Chesapeake Energy Corp., for payment of nearly $10 million in outstanding charitable pledges, once again raising the question of whether and to what extent charitable pledges are legally enforceable.

States typically rely on one of three theories to find that a charitable pledge is enforceable.  A pledge may be enforceable as a bilateral contract, as when a donor pledges a sum of money in exchange for the charity’s naming a building after the donor.1 A second theory treats a charitable pledge as a unilateral contract.  A donor offers to make a gift in the future that’s accepted when the charity incurs a liability in reliance on the offer.2When the charity provides no consideration for a contract, a pledge may be enforceable under the doctrine of promissory estoppel, an equitable remedy applied when a charity would suffer damages if the pledge weren’t enforced.

The rest of the piece is worth a read, especially if you’re interested in how the law is developing or in why charities should care about those developments.

I’m a Fan, of Both Nino and Kagan

Scalia was possibly the best writer on the Supreme Court–ever. Kagan, almost his political polar opposite, will likewise rank as one of its best writers. These are generous, kind thoughts and a worthy example to emulate when we speak of someone we may otherwise disagree with.

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