Should you tell jokes during your marketing seminars? This can be a risky venture. You want to be LIKED and TRUSTED by your seminar attendees so they will take the leap and schedule a first meeting.
If your jokes aren’t funny you risk being liked. If your jokes are deemed offensive, you definitely won’t be liked. You might ask, “How hard can it be to come up with some funny jokes about retirement planning, living trusts, or wills and joint tenancy?”
“I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.” — Steve Martin
I spoke today about telling jokes with a member of one of my local networking groups. Irv sells Aflac insurance policies and once took a stand-up comedy course in Southern California. He said that you need to write 100 jokes to get 10 worth trying out. Out of the 10 jokes you might get 1 which would be worth repeating. That’s one in a hundred.
Irv told me that comedians usually tell 3 jokes per minute. So a 5-minute comedy routine would include 15 jokes from 1500 jokes written up! Now you know why comedians like Jay Leno and David Letterman have a team of joke writers to come up with enough funny jokes for each night’s monologue.
Irv told me in the old days, a vaudeville comedian could come up with 20 funny jokes. These jokes would work for decades as the vaudeville troupe traveled from town to town. Not any more in these days of YouTube and Facebook. Funny comedy routines go viral and are everywhere.
Thankfully, your seminars won’t be recorded and your audiences will be different every time. You won’t need fresh jokes for every seminar. Find ones which work and use them over and over again.
I know one estate planning attorney who has told the same jokes for more than 20 years! He tells every audience that he has “never seen a hearse pulling a U-Haul trailer” and he gets laughs every time. He tells it more like a story anyways so audience doesn’t really need to “get it” and laugh on cue. No one gets offended. No one gets embarrassed. And he gets attendees to like him and sign up for a first meeting.
My general recommendation is to tell stories not jokes. Don’t poke fun at anyone but yourself. And never tire of telling the same stories over and over. Your goal is to get new clients and not get a job as a stand-up comic. A funny joke which bores you is way better than a fresh one-liner which offends someone in your audience. And that’s no laughing matter!
Summer approaches and Congress has yet to pass any estate tax legislation. Will they extend 2009 45% tax rate and $3.5 million exemption? Will they try to make it retroactive? Can they pass legislation after the Summer recess when the November election approaches? Or wait for the lame duck Congress to pass something after the election?
Does anyone know what Congress can or will do? Certainly not financial advisors and families with substantial assets. As this New York Times article points out, the resulting confusion has kept advisors busy this year. And wealthy families are taking advantage of the current law. I am not speaking of the Texas Billionaire who just escaped paying any estate tax!
June 11, 2010
Confusion Over the Dormant Estate Tax Keeps Advisers Busy
By PAUL SULLIVAN
THE disappearance of the federal estate tax this year has created confusion and frustration among the wealthy, even among those who stand to benefit from it. And this has sent them in droves to amend documents that they may have to change again next year.
Steven H. Goodman, an accountant and financial planner in Melville, N.Y., says he has not had a meeting recently without clients asking him what they need to do this year and for 2011, when the tax is set to return at a higher rate than when it expired. Yet for all the business this has brought his firm, the SHG Financial Group, Mr. Goodman says he is not happy. “It’s a pain in the neck,” he said. “Even though I do this for a living, no one likes to do this.”
This part of the story points one reason why the estate tax has been called the “optional tax” for a long time.
Those who work with the extremely rich say they, too, have been exceedingly busy, but for a different reason. The wealthiest are looking to take advantage of a short-term trust that allows people to pass money to heirs tax-free — what’s known as a grantor retained annuity trust — out of fear that the federal government could change the terms of these trusts. Cheryl E. Hader, a partner in the individual clients group at Kramer Levin Naftalis & Frankel, said she set up 30 of these trusts last month, up from six in a normal month. Daniel L. Kesten, a partner in the private client group at Davis & Gilbert, a law firm in New York, said he was working nights and weekends last month setting up the same type of trusts.
How this boon to tax advisers happened is yet another chapter in the partisan gridlock common to Washington these days. At the end of 2009, Max Baucus, the Montana Democrat who is chairman of the Senate Finance Committee, tried to extend for three months the existing estate tax laws, put in place in 2001. But when that motion failed, the estate tax expired for the first time since 1916.
What this has meant is that the heirs of wealthy people who die this year will owe no taxes. An extreme case, as detailed in an article in The New York Times on Tuesday, is that of Dan L. Duncan, who died two months ago with an estimated wealth of $9 billion. His heirs will inherit his estate without paying the 45 percent tax that was in effect in 2009, billions that would have gone to the Treasury.
But it is possible that next year will bring cases of the other extreme, when the amount exempt from the federal estate tax falls to $1 million, its 2001 level, from $3.5 million in 2009, and the rate rises to 55 percent, from 45 percent.
“Dan Duncan dies and pays nothing, but the guy who dies with his house worth $2 million next year and his estate is going to pay $550,000,” said Lance S. Hall, president of FMV Opinions, a firm that values estates. “Is that fair?”
While there were rumblings at the beginning of the year that Congress might reinstate the estate tax and make it retroactive to Jan. 1, it has made no progress on the issue. And the death of someone as wealthy as Mr. Duncan makes a retroactive tax unlikely.
“Now we’re way beyond that consideration,” Mr. Kesten said. “This single family could outspend the I.R.S. in litigating this.”
If you have ultra wealthy clients you should schedule meetings to find out if this is the year to gift money to heirs.
So what will happen? If Congress does not reinstate the estate tax this year, 2010 could be a bonanza for the nation’s richest. The short-term grantor retained annuity trust, whose possible end is separate from the fate of the estate tax, is one option. But other families are simply taking advantage of the lowest gift tax rate since 1933, 35 percent, to pass millions to their heirs.
The real problem comes for the merely rich — individuals worth more than $1 million and less than $3.5 million and couples with net worths of $2 million to $7 million who previously did not have to worry about the estate tax. If Congress fails to act again this year, the estate tax laws next year will revert to their levels before 2001, and that could snare a host of people who set up the estate plans on the assumption that there would be no tax when they died.
What’s the likelihood of Congress doing nothing? Based on the past six months of inaction on the estate tax, January 1 arrive with an estate tax rate of 55% on the first million in assets. Imagine what that will do to the popularity of living trusts?
“If Congress does nothing, there would be a sevenfold increase in the number of estates subject to the tax than if the exemption stayed at $3.5 million,” said John Dadakis, partner at the Holland & Knight law firm.
As the law stands, the heirs of a single person who dies next year with more than $1 million would be subject to a 55 percent tax. (For couples, it is $2 million.) Heirs of that same person, with a $3.5 million estate, would have paid nothing in 2009 but could pay as much as $1.375 million in 2011, depending on the level of planning. And while this wealth may seem high in many parts of the country, it has professionals on the coasts grumbling.
“In the Northeast, where people own their own homes and have owned them for decades and have money in their retirements, there tend to be a lot of millionaires,” Mr. Kesten said. “It would sweep a whole chunk of the upper-middle class into what used to be a fairly elite group.”
The only upside to the return to the 2001 level is clarity. Having no estate tax this year is saving wealthier people a lot of money, but at the cost of an added layer of complexity for both them and for many people who would not have had to worry about the estate tax.
That’s because the assets of people who died under the old estate tax regime were valued at the date of their death for tax purposes. Any capital gains on, for example, stocks purchased decades earlier — which would have been subject to tax if sold — were erased. That is no longer the case, and figuring out what is owed requires determining the original purchase price — however long ago that was.
Without an estate tax this year, the Internal Revenue Code grants an artificial step-up in basis, as it is called, of $1.3 million to be used at the executor’s discretion and $3 million on assets passed to a spouse. The only glitch is the Internal Revenue Service has yet to issue documents to record how this exemption has been applied.
Looks like the IRS is playing catch up on the estate tax laws as well.
“The absurdity of it all is there is not even an I.R.S. form yet to do this,” Ms. Hader said. “My client who died on Jan. 2. Even if we wanted to comply with the law as it exists now, we can’t.”
“We are aware of the increasing need for direction from the I.R.S. on this issue,” the agency said in a statement. “We will be working closely with the Treasury Department to provide answers as quickly as possible, and, if necessary, to develop a new form.”
While the tax would not be due until April 15, 2011, the problem comes when heirs need to sell something. If they received a long-held position of stock, they might want to sell part of it to diversify their holdings or raise cash. But they would incur a 15 percent capital gains tax on the appreciated amount.It is trickier for property. John Nuckolls, national director of the private client tax services practice at the accounting firm BDO, said a friend in Iowa inherited a farm from his mother that he wanted to sell. With a basis near zero, it was worth more than the $1.3 million that the I.R.S. step-up in basis would exempt but less than the $3.5 million exemption in 2009. If he sells it this year, he will incur capital gains tax.
But that is little compared with what heirs to a moderately wealthy person may pay if Congress does not act.
You’ll be more relaxed and do a better seminar when you use a check off list for your event.
Before your event, make a list of everything you’ll need for your event. This can include items for your literature table such as brochures and business cards. You’ll have equipment like your laptop computer, your pointer, and your projector. How about an extension cord? You’ll also want things near you at the podium such as a glass of water and a pad and paper to take notes.
During your event, jot down items you wish you had so you’ll remember to bring them the next time. After the event, update your list so you’ll be a bit better prepared the next time.
You can listen to the interview by going to the Family Living Trust Seminar website.
Richard Emmons discusses the importance of “reading your audience” to know when someone doesn’t “get it” so you can explain the concept again. Anyone left behind in the presentation is much less likely to sign up for a first appointment.
For more seminar marketing ideas go to http://www.MyLivingTrustSeminar.com.
The federal “death tax” may or may not rise from the dead in 2010. However, Washington State may double its state estate tax to 38% for estates at or above $9 million. Will other states follow this year?
Washington state proposes ‘shocking’ estate tax changes
The Washington state Legislature has proposed a bill that would double the estate taxes for residents.
Currently, there is a $2 million exemption in that state, with a 10% tax that climbs up to 19% at $9 million and above. Under the proposed law, the range would jump to a 20% estate tax for more than $2 million, up to 38% at the $9 million mark.
If the latest proposal is enacted, 2011 could be a costly year for some Washington residents: Assuming that the federal estate tax, which lapsed at the end of 2009, comes back next year with a $1 million exemption at 55% as scheduled, Washington residents could be paying in excess of 75% in estate taxes, experts said.
“This is shocking and disturbing, and has very significant ramifications for the majority of our clients,” said Tom Gores, a partner in Perkins Coie LLP, a law firm with offices in Seattle and Bellevue, Wash. “We are contacting our state representatives to make sure they understand this.”
Already, a number of wealthy clients are discussing leaving the state due to the high estate taxes, and this number will only increase, said Dean Butler, an attorney at Carney Badley Spellman PS. The bill, HB 3184, was proposed Feb. 13 and has not yet been scheduled for a hearing, said Rick Person, a coordinator for the House Finance Services Committee. The legislative session ends March 11.
Small businesses already are planning to lobby against the bill. “Our greatest concern is that this bill is another threat to small businesses at a time when so many of them are still just holding on,” said Jocelyn McCabe, a spokeswoman for the Association of Washington Business, which represents 6,900 state businesses.
Experts predict that given the number of states with growing deficits, Washington won’t be alone in proposing such legislation this year.
For financial advisers, this means that it’s more important than ever to pay attention to what’s going on locally, said Gail Cohen, head of global wealth management at Fiduciary Trust Company International. “Don’t assume that just because there is no federal estate tax, there won’t be any estate tax at all,” she said.
There are currently 14 states and the District of Columbia which have state estate taxes. You can click here to see a chart of the states and the exemption amounts. Did you know that 7 states have an inheritance tax? Click here for a chart and be glad your state is not listed!
If you’re a financial advisor getting ready to retire, this post is definitely not for you. Or if you have so many long-time and new clients you can’t imagine squeezing one more client into your crowded schedule, then please ignore this message. Now let me talk to the rest of you out there!
There are lots ways to get more sales leads:
Yet these sources are unpredictable and not really repeatable. Sometimes you get leads when you’re crazy busy. And other times your appointment schedule is getting light and the telephone just won’t ring.
What you need to develop is a “sales lead machine.” You want to create a marketing program which generates a consistent and ongoing stream of prospective clients.
You need to find what works well and what works for you. This can take some testing. Or you can take an existing marketing system and adapt it to your particular practice. Let me give you a few ways I’ve helped clients create a lead machine.
One way is to create a free report and offer it in your advertising. The report can be in the form of a written report such as the “7 Most Common Retirement Planning Mistakes…and How To Avoid Them.” Better yet, you can create an “expert audio CD” which your prospects can listen to in their car. The trick is to offer a physical report so interested parties need to give you call you and provide their mailing address. Get their phone number and email to follow-up to find out if they have any questions about the report. Your report should generate questions in their minds as well as establish you as the expert to provide the answers. When you want to turn on your lead machine, just mail some postcards or run a display ad in your newspaper or a weekly paper directed at senior citizens. You’ll be able to test your ad based on the number of people who call and ask for the report.
My favorite “sales lead machine” is to help advisors put on living trust seminars. Yes, getting your first seminar involves a lot of work including getting your newspaper ads designed and past compliance, choosing a restaurant, and establishing a relationship with an estate planning attorney. Yet the key advantage of buying a sales lead machine is that you avoid all the trial and error of designing ads and creating the tools to make it a system. Yesterday, one advisor held his first 2 seminars and had 14 attendees in the mid-day seminar and another 16 in the evening. Future seminars build on prior seminars because the ads establish the advisor as an estate planning expert. Plus his presentation skills will improve as he commits the presentation to memory and weaves in more of his own war stories.
Let’s break down his sales lead machine and see how it turns leads into clients:
Now this advisor has scheduled seminars monthly so he’ll generate a steady stream of new clients during the year. Advisor/CPA’s who focus on taxes during the tax season would schedule seminars after April 15th.
Other clients hold elaborate client appreciation dinners in December. Clients get wined and dined and educated by a noted speaker. Of course, they are encouraged to invite a neighboring couple. Get this formula down and you’ll have a very busy January and February!
“Random acts of kindness” might make this world a better place. However, “random acts of marketing” usually waste money and don’t generate consistent leads. For that you need a sales lead machine.
Let’s remember what Milton Friedman said about tax cuts, “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” Is this always true? Not when Congress eliminates the federal estate tax while limiting the step up in basis. Some families will be helped and many others will be hurt.
Read this Wall Street Journal article and learn who is hurt by this change. It could be some of your best clients.
Why No Estate Tax Could Be a Killer
By Laura Saunders, The Wall Street Journal, 2/13/2010
Congress shocked everyone by letting the estate tax lapse on Jan. 1.
Now, here is the real stunner: For many, the lapse actually will raise taxes.
Under last year’s law, estates up to $3.5 million, or $7 million for married couples, were exempt from federal tax. This year that law has been replaced by a fiendishly complex levy raising taxes on the assets of those with little as $1.3 million. It will affect the heirs of at least 50,000 U.S. taxpayers who die this year, whereas the old law affected only about 15,000 estates a year, according to the Tax Policy Center.
“The new system is far worse for many people who have assets between $1.3 million and $3.5 million,” says veteran estate lawyer Ronald Aucutt, of McGuire Woods.
This little-understood facet of the current law was enacted as part of a deal brokered in 2001 with the expectation Congress would never let the estate tax actually expire. It isn’t clear when, or even if, a badly polarized Congress will take up the estate tax this year.
If lawmakers do bring back the estate tax, that would bring another set of problems. Reinstatement of the tax retroactive to Jan. 1, which many advocate, will bring legal challenges from wealthy estates that could take years to resolve. But if some version of the old system isn’t reinstated, heirs of smaller estates will suffer.
To see what is at stake, consider how differently this year’s and last year’s regimes treat the same asset held by two fictional widows: Ms. Bentley has total assets of $20 million, while Ms. Subaru’s total is $2 million. Each owns a $110,000 block of the same stock bought for $10,000 years ago. This simplified example uses a block of stock, but its logic applies to all appreciated assets, including houses and land.
Under current law Ms. Bentley and her heirs prosper. If she dies this year and the stock is sold, her heirs will owe only a $15,000 capital-gains tax, whereas last year the same move would have incurred nearly $50,000 in estate tax. By contrast, Ms. Subaru’s heirs would have owed nothing last year because the estate was below the $3.5 million exemption. This year they would owe the same $15,000 capital-gains tax Ms. Bentley’s heirs do.
The reason: Under the old estate tax, assets could be written up to their full value at the death of the owner, and neither widow had to pay capital-gains tax on the $100,000 increase in the stock last year. But current law fully taxes gains while imposing no tax on estates. Quite simply, the demise of the 45% estate tax helps Ms. Bentley and her heirs more than the 15% tax on appreciation hurts them. For Ms. Subaru, the reverse is true.
Winners and Losers
Beth Shapiro Kaufman, an attorney with Caplin & Drysdale, made estimates showing who is better off under last year’s versus this year’s system. She found that heirs of estates with assets totaling between $1.3 and $4.3 million would often have been better off last year, while those with bigger estates will do better this year.
Current law does give some relief to heirs of smaller estates. All estates receive at least $1.3 million of exemption from the tax on appreciation. The executor can “cherry-pick” assets after death and assign the exemption to maximize its value.
But the law is full of traps and demands detailed record keeping. Experts are telling those affected to avoid irrevocable actions, like distributing or selling assets, while the situation remains unresolved.
Some hope that Congress will wind up doing what it did when a similar tax regime was tried in the late 1970s. It was repealed after an uproar, but the estates of those who died while the law was in flux got to choose which system to use.
Such an approach could avoid some ugly family situations. Last December, some wealthy people were kept alive until the estate tax lapsed in January. “But if the tax comes back,” says Mr. Aucutt, “Relatives might be tempted to pull the plug.”
How can Congress solve this problem? I like the solution proposed in the article: let families choose between estate tax systems.
You better keep your clients up to date on what’s happening with the estate tax. Don’t wait for the annual review. And don’t let one of your competitors tell them about it first. You might lose a client.
On the other hand, you’d be doing your competitors’ clients a favor if YOU let them know what’s going on. One way would be to put on free public seminars on estate planning. Establish yourself as your city’s expert on estate planning. Take a look at my estate seminar system and you could be giving your first seminar in 30 days!
In a recent post, I warned advisors to be ready with answers to difficult questions. Here’s another one.
“If I follow your investment advice, will my retirement income keep up with inflation?”
In the past year, the Federal Reserve Bank has doubled the money supply. Will this cause higher retail prices? Imagine playing a game of Monopoly and starting the game with $3000 instead of the $1500 called out in the rules since the 1930’s. If you had twice the money, wouldn’t that make it easier to bid on Boardwalk and Park Place? Prices would rise because you’d have more money to spend.
When the Federal Reserve Bank pumps up the money supply, it causes prices to rise and bubbles to form. Bursting bubbles hurt owners of bubble-inflated assets such as tech stocks, mortgage backed securities, and real estate. Rising prices hurts families and especially hurts retirees.
Watch this short video to see how rising prices would affect a 92 year old who retired in 1973 at age 55.
Do you normally see the glass as half empty or half full? I’ve always been a “half-full” kind of guy even when the glass is maybe 1/8 full. I just don’t see the 7/8 empty and just charge ahead undaunted!
It doesn’t take a Wall Street Analyst to see the past decade was a downer for most Americans. The joke about the 401k becoming a 201k is sad/funny just because it’s true for so many people. Of course, the joke should be modified a bit because with 2009 stock market bounce many people now have 301k’s!
Why is this an opportunity for independent financial advisors?
Because many folks tried a “do-it-yourself” approach to retirement planning and investments and came up short over the past 10 years. Their goal of retirement got pushed out so they know they need to do better and soon. Your task? Let them know independent, objective and well-informed advice can help them reach their financial goals.
So read this article from The Daily Reckoning knowing that plenty of folks in your city need your help to reach their financial goals. Your job is to attract their attention, let them know what makes you different and how that can help them, and then get to work helping them.
By Ian Mathias
01/04/10 Baltimore, Maryland – Before we dive into 2010, let’s close the books on the last 10 years — that decade of reckoning. We noted before Christmas that, as we forecast long ago, the major stock indexes were a bust for the decade. But check this out… Were the last 10 years a wash for the whole economy?
So what’s the term for 10 years of no growth in jobs, the slowest GDP growth in 70 years and a 4% fall in inflation-adjusted net worth? Dormancy? Depression? Whatever it is… ouch.
“Historically, downturns have been enormously creative times technologically,” notes Patrick Cox, our tech analyst. “Our current economic mess will be no exception. Economic pressures are forcing reassessments and hard, creative choices. The result will be an explosion of breakthrough technologies. Nobel laureate economist Gary Becker is just one of those studying business cycles who predicts that the recovery from our current mess will be unparalleled and spectacular…
“In the early 1400s, German goldsmith Johannes Gutenberg invented the movable-type printing press. This invention did far more than facilitate book production and increase the availability of knowledge. It started an information technology (IT) revolution that continues to accelerate even today.
“In Gutenberg’s era, his advances in lithography not only increased access to the world’s greatest thinkers. They also put practical business and technical knowledge in the hands of commoners. This seemingly insignificant invention smashed monopolies of thought and political power. The result was exponential growth in science, technology and democratic ideals. The Renaissance and the Enlightenment followed, on up to our present era.
“We’ve already seen a series of printed circuit lithography technologies revolutionize the electronics industry. Every electronic device you own — from your television to your mobile phone — contains a lithographically printed circuit board of one form or another. Like many of the transformational technologies of the last century, it was invented during the Great Depression. The timing was not a fluke.”