Thank you for taking your valuable time to review my blog posting.  Because I have joined another firm, Schmidt & Schmidt, S.C., I will be posting future content to a new blog entitled, “Law Prints.”  The content and style will mirror that of Legal Locutions.  I invite you visit Law Prints right now, or later at your convenience.

Postmortem wealth transfers to IRA beneficiaries continues to present estate planning challenges.  Although perhaps not the final word on the matter, the IRS now prevents postmortem trust reformation designed to allow trustees to treat them as designated beneficiary trusts.  The relevant ruling is PLR 201021038.

The broadness of the limited power of appointment was perhaps the most critical flaw in the subject trust.  It was too broad to be able to determine the correct measuring life.  There were other flaws as well, most notably the trust’s naming of charities as potential beneficiaries.

The tax consequences of this ruling are devastating to any similarly-flawed trust:  Beneficiaries cannot stretch out required withdrawals over the lifespan of the oldest beneficiary but would presumably have to withdraw all money from the plan within just a few years.

Unless a tax court modifies this ruling – and until it does – the bar is very high indeed for those who draft trusts for the purpose of receiving postmortem IRA distributions.  In short, get it right the first time!  I would read and reread section 401(a)(9) to ensure the trust conforms to the section’s standards precisely.  Going forward, you may also wish to give grantors an opportunity to review the terms of their trusts to ensure they conform with the changing law on this subject.  A brief look every three-to-five years is appropriate, although factors like ill health or legal developments with dramatic impact may warrant more frequent reviews.

Pro se representation in divorce cases is popular.  Probably half of everyone getting divorced today will choose to represent themselves.  Money may seem like the obvious reason, because attorneys are expensive.  Then again, cost is not as important if our help is indispensible, or even greatly needed.  So what value can attorneys offer the twenty-first century pro se crowd?

It may help to examine the several factors which explain the current trend toward self-representation.  As I said, money is obviously is motivating factor, but then there’s the Internet, instant communication between friends and colleagues, the sinking repute of lawyers, and the lower birth rate.  I submit that all these factors – and there are others no doubt – combine to explain why pro se representation is increasingly popular.

A recent empirical study by Judith G McMullen and Debra Oswald corroborates my suggestions.  Their study concludes that people prefer self-representation for a variety of reasons, both financial and physiological.  Not surprisingly, those with the most to lose are most likely to seek counsel.  The study also suggests that, in general, people are adept at knowing when they need counsel.  As for the value of counsel, the study was largely inconclusive.

The wisdom of self-representation is debatable – at least in some cases – as is the definition of a “successful” divorce.  More certain is that self-representation in divorce cases will remain popular, if only because some people will never be able to pay even modest fees for legal counsel.  From a business perspective, then, the pro se trend is not necessarily lost opportunity.

On the other hand, I wonder whether, among all cases of self-representation, serious business opportunities exist.  Certainly some people choosing self-representation could afford counsel.  To the extend such people view attorneys as just another (expensive) poker in the fire, those attorneys with adaptable styles of representation may be able to win additional business.

There is some suggestion that traditional legal services actually lengthen divorce contests, and that attorneys may, at best, contribute nothing of value to non-adversarial methods of dispute resolution.  To be known as an attorney who reduces conflict while preserving what is most important to most people – getting through the divorce quickly while minimizing collateral damage – may be the go-to divorce attorney of the new century.

Driving home yesterday afternoon, I was inspired to analogize safe driving practices with prudent business development.  Specifically, I likened good business judgment to following vehicles at a safe distance.  Just as following the next car too closely can result in accidents, mimicking a perceived leader in business can produce calamitous business results.

My analogy is paradoxical.  Being “safe” in business by putting distance between yourself and another leading competitor doesn’t seem very smart.  Intuitively, shouldn’t we be a tailgater, if for no other reason than to prepare to pass our competitor?  Yes, tailgating is risky, but calculated risk is what successful business is all about.

In my view, tailgating is stupid, both on the road and off.  It’s inappropriate and unnecessary risk.  The better risk is trailing at a safe distance. Although beating your competitor at his (or her) own game becomes more difficult, differentiating yourself becomes easier.  In being different, a business can both avoid repeating competitors’ mistakes and, perhaps more importantly, gain the broader market perspective required for novel (or at least rare) insight about better paths to trod.  In street parlance, you can avoid the pile up if you’re not part of it, maybe even spotting a detour with the extra time you’ve afforded yourself.

Outsourcing has become easier with modern technologies like the Internet.  I suspect outsourcing will become even more popular as businesses seek greater efficiency and as professional services become more specialized.

If you are a business handling confidential client information, outsourcing comes with risks and responsibilities.  The risks are fairly obvious.  Sensitive information in the hands of third parties presents opportunities for identity theft, fraud, and other illegal or unseemly activities.  In many cases, you cannot closely monitor third party activities or easily hold them accountable for mishandling information or breaking confidences.

Such risks probably do not outweigh the benefits of outsourcing, but they should perhaps inspire your adhesion to policies and procedures designed to minimize them.  For example, maybe all your clients should know about and give explicit written consent to your outsourcing, even if your outsourcing seems like a commonplace, obvious, or implied part of the service being offered.  Although you may have good relations with your third-party vendors, keep in mind that the good relations are yours, not your clients’.  Even if you regularly outsource to a firm which you know and trust and which has its own professional responsibilities, your clients may have personal reasons for avoiding contact with your vendors of first choice.

You may also wish to formally evaluate the credibility of third-party vendors you hire to perform outsourced work, perhaps maintaining a list of credentials for being eligible to handle confidential information.  Explaining these concerns to your clients, and the steps you’ve taken to mitigate them, will inspire confidence in your services.