Proper Preparation Lessens Stress

By Kristy Phillips

Last Friday when Lee and I came to work the secretary told us she had bad news for us. She had tried to print our newsletter and the printer would only print the graphics, no text. She called the printer expert who dutifully came and told her that there was nothing wrong with the printer, but it was probably the network. He suggested that she turn off the server and start it again so it could reset. Instead of resetting the printer, it took the whole network down. Lee immediately called our son who is a computer expert. He was just boarding a plane to LA for a computer conference. He was sorry he could not help us, until the next Tuesday. All work at the office came to a halt. We had deadlines to meet. It wasn’t a happy place.

We remembered Jeremy. He was a college student who we came to know two years ago. We called him up and he had us up and running by Monday. He told us that even though our motherboard was fried, because we had the right equipment and backups it was an easy task. This whole experience made me think again how important the right preparation is. The preparation needs to be made with consultation or direction from an expert. We had duplicate systems running in the office because an expert set us up and we took his advice and ran weekly backups.

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Two weeks ago, I went to visit my parents. Dad had surgery pending, and I wanted to let him know I cared. Dad was excited to take me downstairs and show me his estate planning before we visited. I knew his will and trusts were in shape because I drew them. Nevertheless, Dad needed to show me where to find everything because I’m the trustee. Dad has settled two estates, and he knows how hard it is to find all the bank accounts and securities. He has seen family fights over how personal property is dispersed.

Dad is determined not to let this happen in our family. His personal letter (distributing his personal property) is already made and is stored in a file. He has all the accounts he owns listed on his schedules. He disclosed to me where he kept his bank safety deposit box key. Dad has always been in the forefront of technology, so of course he handed me a list of each of his computer and account passwords. That is great thinking! Have you thought to give your trustees your electronic passwords? In the electronic world you can’t access a thing without passwords. If you haven’t thought of this, you should start now to maintain an accessible list of all of your passwords for your trustees.

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Bernie Madoff’s wife Ruth is still living a life of luxury even though Bernie has been sent to jail for 150 years. While she will probably not spend time in a cell, there is a good chance she will lose more of her assets. Her troubles come from a “commingling” problem that was triggered when Bernie’s company BLMIS transferred money to her and other companies and accounts she owned without an appropriate paper trail or reason. There are a whole series of asset protection lessons to take away from the Bernie Madoff disaster. One big one is that you have to have a reason and a paper trail when you transfer money in a corporation.

In the complaint, filed on July 29, Mrs. Madoff was accused of having a no “good faith basis” to believe she was entitled to the money taken out of the firm, BLMIS. Three days before Mr. Madoff confessed to the fraud, $11 million was transferred from the firm’s business account at JPMorgan Chase to DWD Associates, a real estate partnership partly owned by Mrs. Madoff, according to the complaint. There were also other payments to partnerships Mrs. Madoff had partial ownership in. Mrs. Madoff also received more than $3 million from the business over the last six years to pay personal expenses charged to her American Express card. Mr. Picard, the attorney for the petitioners, also discovered $2 million in payments to a business Mrs. Madoff had invested in, called PetCare RX.

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