A forum for Hawaii's
business community to discuss
current events and issues
A forum for Hawaii's
business community to discuss
current events and issues
Estate plan, not scam | War could hit stocks
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BRYANT FUKUTOMI / BFUKUTOMI@STARBULLETIN.COM Estate planning is an important part of life. In fact, it is central to who we are as people. In planning for our future, we must analyze who we are, what our goals are and whom we wish to help in this world. It makes us aware of our own mortality, but also of the impact we can make in the world. A qualified estate planning attorney can help you with this important and intimate process, accomplishing your goals in the best, most tax efficient manner.
By Judith Sterling and Michelle Tucker
However, there are unscrupulous people who prey on the elderly in the guise of providing estate planning. Early this year, the California attorney general issued a warning about "living trust mill con artists who fraudulently sell trusts and annuities to senior citizens. ... Seniors pay substantial sums of money to sales agents for living trust mills. But through fraud and deceit, the sales agents damage seniors' estate plans, and the security of their investments and life savings." According to the attorney general, "in their solicitations, sales agents often pose as expert financial or estate planners." They will often call themselves a "senior estate planner" or "trust advisor" or "paralegal." Sometimes these representatives will even purport to be attorneys, though they are not licensed to practice law.
This problem is not confined to California. The New York State Office for the Aging also has warned about such unscrupulous companies and suggests people always ask for credentials. The office also warns against "self-help kits" because "most seniors do not have the knowledge nor are they given the guidance to properly execute the forms or fund the trust. In the end, these consumers are left thousands of dollars poorer and with no effective estate plan. Even worse, the absence of an effective estate plan may not become apparent until after the victims of the scam have died, when the harm has become irreparable."
In Hawaii, no licensed attorney should be associated with a "trust mill." It is a breach of state ethics rules for any attorney to be associated with anyone who makes cold calls. That is, if you are called by someone who wants to come to your home to meet with you to do estate planning and you do not know that person or have a previous relationship with that person or that person's employer, any Hawaii attorney working with that person or that person's employer and participating in your estate planning, could lose his or her license to practice law. So either there is no Hawaii attorney associated with the "trust mill" or you will be working with an unethical attorney.
According to the National Consumer Law Center, some of these companies use names that "sound a lot like the names of legitimate nonprofit organizations." The center also warns about self-help kits because they are not tailored to individual needs. Some of these companies try to get financial information to sell annuities or other financial products that may be completely inappropriate to the individual's needs. The center states that "consumer education and legal assistance are critical" to understanding estate planning options.
Do not end up a victim of one of these scams. A qualified estate planning attorney can help you arrive at a plan that is tailored to your individual circumstances and goals.
Judith Sterling and Michelle Tucker are certified public accountants and partners in the Honolulu law firm of Sterling & Tucker. Reach them via www.sterlingandtucker.com or by calling 531-5391.
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Getting to war was a big hurdle for investors. Their next challenge is getting through it. The success of war
won’t eliminate all
the uncertainties in
the stock marketBy Rachel Beck
The start of war doesn't wipe away all the potentially stock-sinking uncertainty from Wall Street. Plenty of market-rattling unknowns still abound, most having to do with the potential fallout of war on American consumers and businesses -- and the global economy.
That could mean a bumpy a ride for investors at least for the immediate future as they try to sort out what lies ahead.
"The uncertainty that's still out there is less like a veil and more like a curtain," said Tim O'Neill, chief economist at BMO Financial Group in Toronto.
Investors hate uncertainty, and that has been abundantly clear in recent months by their reaction to the threat of war. With tensions mounting over Iraq and no resolution seemingly near, stocks slumped through much of the winter amid worries over what was to come.
And then this past week, a rally set in once it seemed war was upon us. Investors cheered the clarity, triggering Wall Street's longest winning streak in nearly three years.
But while investors have focused so much on the unknowns linked to the prospects of war, few considered the uncertainties that could emerge once war actually began.
"From our point of view, while the markets have priced in the probability of war, they still expect the fighting to be short and successful," said Burt Hilton, head of U.S. equity derivatives at Citigroup Private Bank. "Investors haven't yet discounted the negative scenario for the conduct of the war itself."
Just consider what we don't know about the basic mechanics of war. How much will it cost? How long will it last? Who pays for rebuilding Iraq?
Nor do we know what economic effect, if any, this war will have. While most economists say the war itself won't damage the economy, it could exacerbate many of the problems already weighing on the sluggish economy.
In the buildup to war, consumer confidence plunged and retail sales began to slow. Corporate executives further reduced their spending, which has been weak through most of the economic downturn over the last three years.
Now with war here, questions loom over how war -- especially a prolonged battle -- will affect the psyche of businesses and consumers.
Oil prices also play a crucial role in the economic outlook, in part because they factor into how much consumers pay for such things as gas and what businesses spend to fuel their operations.
Leading up to the war, there was a dramatic run-up in prices, with crude prices surging to highs not seen since the Gulf War 12 years ago.
They then dropped when war seemed likely, but started to rise again within the first hours of war on Bush administration reports that Iraqi leader Saddam Hussein might have started torching his oil fields. That adds to worries over other tactics Saddam will use to disrupt other Persian Gulf supplies.
Then there is the diplomatic issue. The United States' aggressive pro-war stance has strained its relationships with many European allies, including Germany and France. That could factor into how our exports fare and whether foreigners will invest money here.
All the uncertainty is enough to baffle Federal Reserve policy-makers, who decided this week to leave interest rates unchanged at a 41-year low until they get a better idea of the implications of war.
Wall Street economists and strategists, too, say that although the much-awaited war is here, great uncertainty still looms.
"We ... hope investors understand that reduced expectations and negative momentum in the economy may not be reversed instantly if the war is resolved quickly," said Steven Wieting, senior U.S. economist at Salomon Smith Barney.
The wait for war is over. The reality of war now begins.
Rachel Beck is the national business columnist for The Associated Press. Write to her at rbeck@ap.org
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