Archive for December, 2009

Gates Foundation to Help Hillsborough County Schools

Monday, December 21st, 2009

Joel Stephens of Thomas Financial was kind enough to share this story with me about Hillsborough County School District, which I reproduce on this blog:

 

Hillsborough County School District (HCSD) has been awarded $100 Million dollars from the Bill and Melinda Gates Foundation. This is the largest private gift ever made to a single K-12 district. The Gates Foundation ultimately selected four districts across the country (Tampa, Pittsburgh, Memphis and Los Angeles) to award a significant educational grant.

 

 

The initiative is titled “Intensive Partnerships to Empower Effective Teachers.” This seven-year effort, which will ultimately have $200 Million invested in Hillsborough County, will focus on improving student achievement by ensuring each student has high quality teachers. Other than parents, a teacher has the single most influential impact on a student’s success within our education system, and this initiative is laser focused on changing the way teachers are mentored, evaluated, paid, etc. Hillsborough County is a large district (8th largest in the country) which will be an incubator to develop processes which can then be replicated in school districts across the country.

 

 

The Bill and Melinda Gates Foundation and their team of professionals are not just “throwing money” at a broad need. They have been very specific in this, as well as other initiatives, such as curing Malaria and AIDS, and have done an enormous amount of due diligence to determine what makes the highest impact before they award a grant. In addition, part of the requirement is that their team of professionals stays intricately involved. For instance, in this initiative with the HCSD, a leader from the Gates Foundation is actually moving to Tampa for the next seven years, and other professionals from the Foundation will be visiting at a minimum of every month along the way.

 

 

Thank you Gates Foundation for helping to improve our Community!

 

Starting a New Business

Thursday, December 17th, 2009

We have noticed that business activities, that is, buying and selling businesses, seem to be on the rise.  This month, we have been engaged to help several clients purchase small businesses.  These range from an auto repair shop to an accounting firm.  I hope that this is a sign of good things for the economy!

With that in mind, sellers are usually interested in selling effective January 1, 2010 in an effort to delay or defer the recognization of tax.  As a result, here’s a little bit of advice that could apply to anyone thinking about starting a business this year – make the formation effective January 1, 2010.  Why? 

Well it may should like I am being cheap, if you form your business this year (and there are only 2 + weeks left in the year), you will need to pay the formation fee with the State of Florida at this time, and come January 1, you will need to pay an Annual Report fee of $150.  But, if you make your formation effective as of the first of the year, then you won’t have to pay the 2010 Annual Report fee. 

Hey, if you really want to spend the money, then may I suggest that you consider making a gift to your favorite charity instead.

Insurance Trust review

Monday, December 14th, 2009

Each year at this time, I receive premium notices for life insurance for one of my clients who asked me to serve as his trustee for his insurance trust (ILIT).  It is certainly an honor to be selected as trustee, but with that honor comes  a very significant responsibility of doing my homework to make sure that the only asset of the trust, the life insurance, remains viable. 

This reminds me to remind all of you who are also trustees of ILITs to consider the following, which is taken from a post that I did earlier this year:

Irrevocable life insurance trusts (“ILITs”) are popular estate planning tools used to shelter life insurance proceeds from estate taxes. While the insured is alive, generally the only asset owned by an ILIT is a life insurance policy.  However, trustees of an ILIT have a duty to make sure that the policy is a prudent investment and may be liable to the beneficiaries if it is not.

So, a trustee of an ILIT should ask the following questions (at least annually):

  • What is the insurance company’s present financial strength? Life insurance companies are rated for financial strength and stability by ratings services such as Moody’s A.M. Best and Standard & Poors.
  • Is the policy performing as illustrated? Policy illustrations make certain assumptions for rates of return and the like. If the initial illustrations used interest rates that were not attained, then the policy could require additional premium payments beyond those anticipated to avoid lapsing.
  • Is the policy satisfying current needs? Policies purchased years ago usually satisfied then current needs. Changes in the tax law and circumstances of the trust grantor and beneficiaries may warrant revisiting the type and amount of insurance coverage to address current needs.
  • Can a more competitive policy be purchased? With longer life expectancies and lower mortality costs, a new life insurance policy, despite the fact that the insured may be years older, could result in a significant premium reduction without sacrificing the death benefit.

It looks like I will be busy answering these questions so that my client’s family won’t have to worry about his insurance when the time comes for me to collect it on their behalf!