Word - The international association for attorneys for family-held

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Word - The international association for attorneys for family-held ...

    Attorneys for Family-Held Enterprises (afhe)

    2009 Spring Conference

    Charleston, South Carolina



Title Addiction’s Effect on Family Businesses and Trust Beneficiaries

    Speakers John A. Warnick, JD, is a senior partner in the Denver office of Holme,

    Roberts & Owen, LLP. He chairs the Firm’s Private Client Services practice

    group and is a fellow of the American College of Trusts and Estates


    William F. Messinger, JD, LADC is the founder and President of Aureus,

    Inc. His firm specializes in advising family business owners, and trustees

    facing addiction in family employees and beneficiaries. Main Topic(s) Succession, Governance Planning, and Family Systems Issues when a

    family member is dependent on alcohol and/or drugs.

    ? 1. Integrated Solutions to Addiction in Family Enterprises: Subtopics New Ways to Conceptualize and Address a Statistically Probable


    ? 2. Governance Documents:

    For Trust and Estate Planning and Family Businesses

    ? 3. Impact on Family Business and Beneficiaries:

    Signs and Symptoms, Effects on Advisors and Mangers, and

    Defensive Mentality (Protect and Conserve)

    ? 4. Addiction Education:

    Criteria for Addiction, Treatment, and Family Systems Approach

    ? Attendees will learn how to build the capacity of wealthy families to Program respond to the power of addiction in ways that both help the addict and Summary promote successful recovery for the family system (including

    businesses, trusts and shared resources).

    ? The speakers will present a Case Study of a family business in

    transition in order to promote audience discussion of the dynamics of

    addiction within family enterprises and to highlight curriculum


    Connection to John is an AFHE member. He serves as a resource and a connecting point

    Attorneys for corporate fiduciaries and private trust companies, spending over twenty

    Advising Family percent of his professional life facilitating family retreats and providing what

    Business he describes as “Beneficiary Preparation”.

    Bill is an AFHE member and is a licensed alcohol and drug counselor, as

    well as a lawyer. Bill’s interests include collaborating with advisors on ways

    to successfully address addiction in a family member and improve over all

    family health and well-being.

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Title The Use of Variable Life Insurance (Including Domestic Private

    Placement Variable) in Estate Planning: Not Your Father’s (or

    Mother’s) Life Insurance Policy Speakers Larry Brody, Esq., Partner and Leader of the Private Client Service Group

    at Bryan Cave, LLP, St. Louis, Missouri

    Mike Cohn, CLU, ChFC, Managing Director at CFG Business Solutions,

    LLC, Phoenix, Arizona

    Main Topic(s) Variable Life (VUL) and Private Placement Life Insurance (PPLI) products

    can be successful planning tools (even in today’s environment) when

    properly designed, funded, and monitored. Common misunderstandings

    about VUL and PPLI, non-gift funding (and exit) strategies, fiduciary issues,

    volatility management, and cases studies will be covered. Subtopics Domestic Private Placement Life Insurance (PPLI) provides greater

    flexibility in investment options and lower costs. Clients can stay “on shore”

    and take advantage of PPLI opportunities including IRS safe harbors for

    investment advisors who create insurance dedicated funds.

    ? Industry Overview Program

    ? Variable Universal Life (VUL) Characteristics Summary

    ? VUL Planning Applications

    ? Policy Charges: What Happens in the “Black Box?”

    ? Managing Investment Risk in Variable Life

    ? Private Placement Life Insurance (PPLI)

    ? Premium Financing Techniques

    ? Private Split-Dollar Arrangements Connection to The impact of life insurance company downgrades and solvency issues are

    Attorneys critical for the family business advisor to understand. Capital and surplus

    Advising Family requirements are increasing, causing general account products to be re-

    Business priced (higher). VUL and PPLI may seem like a contrarian option for

    conservative clients and advisors but may be the best solution when

    properly understood.

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    Valuation Update Title

    Speakers Alex W. Howard, CFA, ASA, Howard Frazier Barker Elliott, Inc.

    Bill Cranshaw, Management Planning, Inc. Main Topic(s) Review of Tax Court Valuation cases

    Review of Recent Settlements with IRS

    Current Valuation Developments

    ? Case Summary Program

    Summary ? Analysis of the cases from a professional valuation perspective

    ? Detail on recent IRS settlements

    ? New tools to determine or validate discounts Connection to Alex and Bill are both principals in valuation firms that work with family Attorneys owned businesses. Alex is an AFHE member, and Bill is a member of

    Advising Family AFHE’s Board of Directors.


    Title With the Continuous Collapse of Financial Markets, Should the

    Trusted Advisor Become Trustee? Speakers Patricia Annino Esq. Chairperson of the Estate Planning Group of Boston

    Law Firm Prince, Lobel, Glovsky, &Tye LLP

    George Burns Esq. Partner Bernstein Shur, Portland, Maine " Mediator

    and Arbitrator "

    Thomas D. Davidow Ed.D Founder Thomas D. Davidow & Assoc., Family

    Business Consultant

    Main Topic(s) This will be an interactive session moderated by Patricia Annino asking

    questions of the two panelists about inherent advantages and risks of the

    trusted advisor becoming a trustee. The discussion will then be opened to

    the larger group.

    Connection to Family business attorneys and other close advisors are sometimes asked to

    Attorneys serve as trustee or co-trustee of trusts for the benefit of the owners’ family

    Advising Family members. The family may benefit from leveraging off an existing close Business connection, but risks for the advisor are significant.

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FRIDAY, APRIL 24, 2009

Title Preparing the Company for Sale: Steps Business Owners Can Take To

    Maximize Value

    Speakers Jim Dwyer, President, MPI Securities, Inc. Main Topic(s) Addresses steps business owners can take to maximize shareholder value

    as they build their businesses and prepare for the possible sale of their


    ? The timing decision Program

    ? Investing in the business Summary

    ? The management team

    ? Accounting systems

    ? Build a team of professional advisors

    ? The difference between what you want and what it’s worth

    ? Pre-transaction estate tax planning

    ? Preparing for due diligence

    ? Leverage your advisors

    ? Using an investment bank to develop and manage the shareholder

    liquidity event

    Title Governance Solutions In Two Family Business Cases Speakers Jack Moore, Former Director, Benjamin Moore Paints and Advisor to

    National Association of Corporate Directors’ Family Business Initiative

    Ritter Arnold, President, Ritter Agribusiness

    Kevin Wall, Director, Wall Family Enterprises Main Topic(s) Governance illustrations involving use of a trust, family council and thnd generation and 2 generation business. independent boards for a 4

    ? Jack Moore will open with remarks on governance issues relevant to Program the two business cases. Summary

    ? Ritter Arnold will tell the story of how his centennial family business is

    transitioning to governance by a professional board, made possible

    through formation of a family council. Ritter brings the perspective of a th4 generation executive in the family business.

    ? Kevin Wall will describe his family’s governance solution which

    consists of a trust that holds all shares of the family business and an

    independent board of directors, chaired by his entrepreneurial father.

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    Title Economics and Best Practices of Law Focused on Business Owners Speakers Chuck Santangelo, Senior Consultant, Hildebrandt International Main Topic(s) A presentation focused on dealing with clients and colleagues relating to

    business owners.

    Subtopics ? Current economy and its impact on the legal profession

    ? Business owners

    - Evolution of T&E practice

    - Private wealth management

    - Business owners’ concerns and challenges

    - Attorney concerns and challenges

    ? Best practices of top practice groups

    - Key successes

    - Business planning

    ? Presentation and discussion of opportunities and challenges facing Program those who serve business owners in turbulent times as the practice of Summary law itself changes.

    Connection to Chuck Santangelo has worked for 40 years advising lawyers as an in-house Attorneys COO and as a consultant to the legal profession.

    Advising Family


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    Title Preserving Legacy of Values ~ Ethical Wills for Next Generations:

    Video Examples

    Speakers Iris E. Wagner, Founder & CEO, Memoirs Productions Main Topic(s) Preserving Legacies of Values~ Ethical Wills on DVD as a highly effective

    means to communicate the stories, values, beliefs and messages when

    transitioning to future generations of family, business, and philanthropy. Subtopics Donor Legacy Statements for family Foundations as a means to

    communicate philanthropic messages to next generations

    Iris Wagner will introduce the concept and show three short video clips as Program examples: Summary

    ? a Legacy of Values~ Ethical Will production th Generation family business’ Corporate Ethical Will ? a manufacturing 4th? a Donor Legacy statement of a 7 Generation family (as stewards of

    wealth and philanthropy)

    Connection to Family businesses could easily overcome the “shirtsleeves-to-shirtsleeves Attorneys in three generations” plight by communicating the mission, vision, values,

    Advising Family beliefs and lessons learned through the use of Corporate Ethical Wills an Business effective tool to honor an Elder or Founder of the firm when transitioning.

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    Title and Main “Life Insurance as a Family Business Asset in Challenging Times”


    Melvin A. Warshaw, Esq., General Counsel Speakers Financial Architects Partners

    800 Boylston St., Suite 3010 (The Prudential Tower) Boston, MA 02199

    617-259-1927 I. Trust Owned Life Insurance as an Investment Class Program a. How Super Affluent Families View TOLI Summary b. Risk/Reward Bond Like Risk/Equity Like Reward

    c. Flexible Time Horizon Short, Mid and Long-Term

    d. Optimal Gift Tax Reporting

    e. “Warehousing” Approach Compared with “All Pay”

    f. Takeaways

II. Life Insurance Carrier Safeguards What the Family Business Advisor

    Needs to Know in Today’s Turbulent Times

    a. State Regulation of Life Carriers

    b. Carrier Ratings

    c. Carriers in Distress: Legal Structure v. Real World

    d. Carrier Safeguards (Portfolios, Reserving, SAP v GAAP)

    e. “Risk Based Capital” (RBS) Ratios

    f. Still Better Than the Rest

III. No Lapse/Secondary Guarantee Life Insurance Policies: Why Are They

    Appropriate in Today’s Challenging Economic Times?

    a. Background: Evolution of Life Policies

    b. What is a No Lapse/Secondary Guarantee Life Insurance Policy?

    How Does It Compare?

    c. Advantages Over Other Types of Policies in Challenging Economic


    d. How Do the Carriers Do It?

    e. Shadow Account: Black Box of NLG Accounting

    f. “Warehousing” Approach/Optimizing IRR and NPV

    g. The Good, The Bad & The Ugly of NLG

IV. Valuation of Life Insurance Policy What if the Family Business Wishes

    to Transfer its Ownership Rights to the Insured or to an ILIT Created by

    the Insured?

    a. Reasons to Value a Policy?

    b. Differences Between Income and Gift Tax Methods in Valuing a


    c. Differences Between New and Older In-Force Policies

    d. Differences Between Types of Policies (“No Lapse Guarantee vs.

    Whole Life/Blended Whole Life) Insurer’s Account Value/Reserve

    vs. Cash Surrender Value

    e. Income Tax Impact of Life Settlement of a Policy

    f. Non-taxable Transfers of a Policy

    g. Split Dollar Situations

    h. Terminally Ill Insured

    Connection to Applies specific insurance selection and ownership solutions to family

    Attorneys businesses.

    Advising Family

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    FAMILY BUSINESSES & TRUSTEES: Title How the Two Can Co-Exist Effectively

    Speakers Larry D. Hause, JD, Shareholder and Attorney with Fredrikson & Byron,


    John P. Barone, VP Senior Wealth Planning Strategist, Wells Fargo The

    Private Bank

    Main Topic(s) How trustees can own interests in family businesses and still bring value,

    satisfy their duties, avoid liability, and be welcomed by the family.

    This is an interactive session that will explore: Program

    ? the most troubling trustee duties regarding family businesses, Summary

    ? the extent those duties can be limited in the trust instrument, and

    ? how a trustee can own an interest in a family business (even when the

    trust instrument is silent) and actually bring value and avoid liability.

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