November 03, 2005
ISSN 15465640
A free monthly e-zine with articles and tips from Family Business Experts who understand family values and business systems.
November 3, 2005 Issue #046 Family Business Experts
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In This Issue...
1. Our Managing Director Announces - 2. Business first family...Family first business Providing for a Child with a Disability... excerpts from our interview with the authors 3. Legacy through Leadership LP20. Encouraging Best Decision-making 4. Around the Family Business Experts web sites
1. Our Managing Director Announces - Our family business consulting work often brings us into contact with families that have a child with a disability. Looking for good and complete information about the legal and tax problems that our clients encounter... ...led us to a wonderful discovery. Two attorneys - Mark Russell and Arnie Grant - have now produced the 5th edition of a great book that is complete and easy-to-read. Planning For The Future - Providing A Meaningful Life For A Child With A Disability We also learned about a particular trust that is a key estate planning tool for families who have a child with a disability - the We tracked them down in the Chicago area for an interview that we think you will enjoy and find enlightening. Mark and Arnie didn't just happen to find this area of law - they were born and married into it to solve family circumstances... Providing for A Child With A Disability. The family business / business family section contains an excerpt from that interview that we are sure you'll enjoy. We continue with the Leadership Practices series, since these practices are the foundation for the processes that must be in place in order to achieve success. Reminder: We've developed a couple of quick diagnostic assessments to help you. They are both fr*ee [at least for a while] and we try to deliver 48 hour turnaround of our analysis. Try them! The Holonomic Top Down Assessment asks you about a combination of the 12 Main Enabling Processes that an effective organization has to have operating in order to achieve the 6 Desired Organizational Characteristics of effective organizations. Where your assessment indicates one or more of these are not working in your organization, we'll feed back suggestions as to the underlying Leadership Practices that might not be working. Diagnosing from the other direction - Bottom-Up - we ask you to identify which of 29 Leadership Practices aren't present or working. From that, we point you to Enabling Processes and thus Desired Characteristics that probably aren't functioning.
Whether to contribute, challenge (or hopefully even praise) our newsletter, I encourage you to contact me directly Don, or our editor David. Enjoy, and here's wishing you, your family, your clients... much success and a relaxing and memorable Memorial Day!
Don Schwerzler, Managing Director
Family Business Experts
2. Business first family...Family first business:
Providing for a child with a disability - excerpts from our interview with the authorsFBE : How did you get into this field as attorneys, helping parents who have a son or a daughter with a disability? MARK: I was really born into this field. My oldest brother was born with a mild intellectual disability and a bipolar disorder. Professionally, I actually got into this field when I was in law school around 1980. My father had just retired and he wanted to “give back” to the community. So, as a volunteer, he co-founded a charitable organization that was trying to answer the question about how can parents plan for the future security of a person with a disability. I became an early Board member and that was the beginning of my career. ARNIE: I had a brother-in-law with a disability. He had a trust and was receiving government benefits. The state tried to seize the property in the trust claiming that he didn't need government benefits since he had the trust. Now government benefits provide very little, just the bare necessities of life, so losing the trust would have left him in a sorry state. I started getting into the law, and learned that had the trust been properly drawn, we would have avoided this problem. FBE : What do you mean - had the trust been properly drawn? ARNIE: His parents should have left the inheritance in a special needs trust for his benefit. MARK: We talk about this a great deal in the book. Think of a special needs trust as a gift to the child - a kind of indirect gift. The money goes to a 3rd party, the trustee, who from a property law standpoint owns and controls the money, but according to the terms of the trust document, the trustee must use the money for the benefit of the beneficiary. Now a lot of Government benefit programs deny benefits to a person with a disability if the person has too many assets. The key with a special needs trust is it doesn't count as a resource of the beneficiary’s so the beneficiary can qualify for benefits, and given the cost of providing for the needs of a person with a disability, this is generally critical. ARNIE: But it’s very important that the trust is properly drawn. The problem historically has been, many estate planning attorneys, especially in earlier years, knew very little about the eligibility requirements of government benefits. So, attorneys would draft trusts for people with disabilities the same way they'd draft trusts for people who weren't getting government benefits. Often, the trust document would read something to the effect that the principal and income of the trust shall be distributed for the beneficiary’s “health,” “support,” “maintenance,” and “education.” Attorneys call these words “ascertainable standards.” The problem was that many states went to court to seize the money in these trusts. And about half the time, depending the exact terms of the trust and the specific state laws, the states won. You have to look real closely at the state and federal laws to make sure the trust is written so that it doesn't count as a resource of the person with the disability. MARK: On the other hand, we see some trusts where the attorneys are so focused on government benefits, that the trusts are really too restrictive – and don't need to be. The trustee doesn't have the power to spend the money for the types of things the beneficiary may need. In the book, we spend much of one chapter discussing the issue of providing as much flexibility in the trust document as possible. After all, the child with a disability may live 10, 20 or even 40 years after the parents die – so flexibility in the trust document is crucial. ARNIE: State law also plays a part. There are a handful of states where the trust has to be written very restrictively. You always have to look at the laws of the state where the child receives benefits.
There's a lot more! Read the whole interview...
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3. Legacy through Leadership
There are 29 Leadership Practices [LP] that are really the foundation upon which 12 holonomic or enabling processes[HP] are built, and which, in turn, produce 6 desired organizational characteristics [DOC]. We'll look at each in this section.
LP20. Encouraging Best Decision-makingEncouraging best decision-making fosters decision-making compatible with the interests of the organization. It ensures that management uses best decision-making to lead and direct the organization. It educates and trains Associates about the principles driving the organization. This important process asks and enables Associates to take responsibility for making best decisions and participation in the process is supported by the organizational rewards systems. Take our fr*ee assessment on the 29 Leadership Practices...
4. Around the Family Business Experts web sites
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