What’s New With Your Living Trust?

Written by Jeffrey Broobin

Some time ago, Congress made certain changes torepparttar estate taxes. As a result ofrepparttar 119229 changes, effective January, 2004,repparttar 119230 tax free amount increased to $1,500,000. (Back in 1997 it was $600,000.) This allows a married couple to leave a minimum of $3,000,000 tax free.

Your Living Trust does not need to be changed to incorporate these changes.

However, there are other developments which might be appropriate to consider.

1) You might want to consider a Dynasty Living Trust. The advantage of usingrepparttar 119231 generation skipping tax exemption is greater duringrepparttar 119232 grantor’s lifetime. Once property is transferred to a dynasty Living Trust, all appreciation and accumulated income generated byrepparttar 119233 property untilrepparttar 119234 grantor’s death will be exempt from estate tax as long as it remains inrepparttar 119235 Living Trust. Basically, this is a grown-up Minor's Living Trust.

2) Another more recent development is worth considering. Since after one spouse dies,repparttar 119236 Survivor has full control ofrepparttar 119237 Surviving Spouse's Living Trust, includingrepparttar 119238 right to changerepparttar 119239 beneficiary (throughrepparttar 119240 General Power of Appointment), it is important to insure thatrepparttar 119241 children fromrepparttar 119242 first marriage inherit their deserved portion.

This is what could happen. You die. Your Living Trust divides into two or three shares. Your wife, who has control ofrepparttar 119243 Living Trust, spends your half ofrepparttar 119244 estate, remarries, and leaves her half torepparttar 119245 new spouse (not your intention). You may discuss this now with your spouse and decide thatrepparttar 119246 assets you have acquired during your lifetime together belong to both of you. While you still want your spouse to be happy and maybe even remarry, you want your joint assets to be inherited by your children, notrepparttar 119247 new spouse.

It is possible withrepparttar 119248 standard A - B - C Living Trust held by most married couples, which allowsrepparttar 119249 Survivor's half (the A Living Trust) to be changed, to incorporate an instruction thatrepparttar 119250 A Living Trust (the Survivor’s half) will be locked. With this feature,repparttar 119251 surviving spouse may spend everything, but whatever is not spent must be left to your family rather thanrepparttar 119252 new spouse.

3) Because time has passed since your Living Trust was first written, formerly young children are not so young anymore, andrepparttar 119253 successors you selected to make your decisions may no longer be appropriate because they are too old. Please review these designations listed in your Living Trust and Powers of Attorney (financial and Health Care). Furthermore,repparttar 119254 inheritance age threshold designated for minor children atrepparttar 119255 time you made your Living Trust may no longer be appropriate. Atrepparttar 119256 time, you were guessing about what these minors would be like, say, when they became 25 years old. Maybe you now think it is necessary to adjust that age restriction.

4) Be certain thatrepparttar 119257 people you appointed still have their copies of your Health Care Power of Attorney. They should have a copy handy because in an emergency they may need to make medical decisions quickly.

Balancing Your Legal Scorecard - Part 2

Written by Richard Hall

Balancing Your Legal Scorecard

A Performance Management Tool For The Legal Department

The Balanced Scorecard Perspectives

The four perspectives ofrepparttar Scorecard provide a balance between short term and long-term objectives, between desired outcomes and drivers for those outcomes and between objective and subjective performance measures.

Many measurement frameworks advocate a balanced range of measures. The Balanced Scorecard is prescriptive about this range, and about how one perspective definesrepparttar 119228 drivers forrepparttar 119229 next.

Financial Perspective: The Balanced Scorecard encourages legal departments to identify their specific financial objectives as relates torepparttar 119230 financial objectives ofrepparttar 119231 entire organization. Thus,repparttar 119232 legal department embracesrepparttar 119233 organizations financial strategy. As such,repparttar 119234 financial objectives serve asrepparttar 119235 focus forrepparttar 119236 legal department’s objectives and measures ofrepparttar 119237 other three perspectives.

Every measure should be part of a cause-and-effect relationship that culminates in improving long-term sustainable financial performance. The Balanced Scorecard is an illustration ofrepparttar 119238 strategy, starting withrepparttar 119239 long-term financial objectives ofrepparttar 119240 organization and then linking them to other initiatives such asrepparttar 119241 operational processes ofrepparttar 119242 legal department and its investment in employees, systems and outside resources that combine to producerepparttar 119243 desired economic performance.

Clearly it is important to getrepparttar 119244 ‘right’ measures. Although it is people, decisions and actions that change performance, measures setrepparttar 119245 goal, andrepparttar 119246 old adage “what gets measured gets managed” is still true today.

Leading organizations are now finding new financial measures, as well asrepparttar 119247 non-financial measures. Rather than simply consideringrepparttar 119248 obvious financial measures of revenue, profit, share value or dividend cover, consideration is being given to a recently developed measure: Economic Value Added. This expressesrepparttar 119249 amount of value added byrepparttar 119250 efforts of each department (the legal department for our purposes) inrepparttar 119251 organization and how those efforts helprepparttar 119252 overall financial objectives ofrepparttar 119253 organization.

The Organizational Perspective: One ofrepparttar 119254 key drivers for an organizations success, except in a few rare cases, is organizational efficiency and cost effectiveness. As such, how an organization performs from a bottom line point of view is clearly a top priority for management.

With that in mind, all organizations have their marquee departments,repparttar 119255 ones that deliverrepparttar 119256 maximum contribution torepparttar 119257 specific type of financial measure that matters most to them. All organizations also have their average departments andrepparttar 119258 departments that cost them lots of money, but that they just can’t operate without (many timesrepparttar 119259 legal department, which is seen as a drain onrepparttar 119260 bottom line).

To maximize financial return, it isrepparttar 119261 operational efficiency and cost effectiveness ofrepparttar 119262 ‘marquee’ department that should be addressed. Departmental measures that reflectrepparttar 119263 issues that really matter torepparttar 119264 organization need to be developed. From these,repparttar 119265 key objectives and measures for howrepparttar 119266 other departments (such as legal) should operate can be established.

In this way an even more powerful link can be established between organizational focused objectives and improved financial performance.

The Legal Department Perspective: Delivering added organizational satisfaction can be achieved throughrepparttar 119267 operational activities ofrepparttar 119268 legal department. Throughrepparttar 119269 Balanced Scorecard framework organizational focused measures can be supported by measures ofrepparttar 119270 legal management processes that are most critical in meetingrepparttar 119271 organizations expectations. The objectives and measures for this perspective thus enable a focus on maintaining and improvingrepparttar 119272 performance of those processes that deliverrepparttar 119273 objectives established as key to satisfyingrepparttar 119274 organizations financial objectives, which in turn satisfy stakeholders.

With this approach,repparttar 119275 Balanced Scorecard offers a vehicle to focus on a complete value chain of integrated business processes. It is this that represents one ofrepparttar 119276 major opportunities forrepparttar 119277 benefits thatrepparttar 119278 Balanced Scorecard can provide over traditional departmental performance measurement systems.

This top-down value-chain process can reveal entirely new areas, withinrepparttar 119279 legal department’s business processes, where an organization can gain additional advantage.

The effect can be phenomenal; a reduction in process costs of 1% when combined with an identical reduction in wastage can typically deliver an increase in profits of over 15%.

The Innovation and Learning Perspective: The adage “our people are our greatest asset” has been honored more in breach thanrepparttar 119280 observance in all too many organizations. It is an issue managers cannot afford to ignore, however. The operations ofrepparttar 119281 organization are undertaken byrepparttar 119282 people within it. The ability, flexibility and motivation of staff arerepparttar 119283 foundation of most financial results, organizational objectives and departmental activities that are measured inrepparttar 119284 other quadrants ofrepparttar 119285 scorecard.

Organizational expectations are always changing and legal departments are, as a consequence, required to make continuous improvement. This relies heavily onrepparttar 119286 department’s ability to innovate, learn and improve, which collectively delivers better results forrepparttar 119287 whole organization.

The idea that everything else eventually depends uponrepparttar 119288 staff of an organization could suggest thatrepparttar 119289 ultimate single indicator of long-term sustainable success, if there were such a thing, would berepparttar 119290 speed at whichrepparttar 119291 organization can learn to do new things successfully. Used in this way,repparttar 119292 Balanced Scorecard framework gives consideration torepparttar 119293 importance of investing forrepparttar 119294 future. Not just in traditional areas of investment such as R&D, but also inrepparttar 119295 human infrastructure ofrepparttar 119296 organization – creating a ‘learning organization’ – if ambitious long term financial success objectives are to be achieved.

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