Monthly Archives: August 2020

THE WORLD AROUND US

The world seems a bit upside down.  We wear masks to venture out in public, kids are staying out of school, workers are logging in from home, and people who have little experience driving pickup trucks are buying 27-foot towable trailers for vacation.  And don’t even talk about sports.  Baseball was always a slow game.  Taking the fans out of the stands, and therefore the fan cams, removed one of the biggest distractions from the fact that four hours of your life evaporated during the game.

Winners and Losers

Many office workers have been logging in from their living rooms for the past few months.  As this looks to become the norm for some time to come, The Time’s Noam Scheiber considers the profound changes that may endure, beyond all those Zoom meetings.

Good for some, but not for all.  Greater flexibility helps high-skilled workers pitch themselves more widely, instead of being limited to a specific area.  This could be a boon for those who live away from major metropolitan areas.  At the same time, a more remote, transactional relationship with employers may promote companies’ use of contractors—which can be more lucrative but less stable for the people accepting such work.  And when workers are spread out, they may have a harder time sharing information and organizing for better pay or working conditions.

The biggest changes are cultural.  We’ve covered how small talk at the office can have a huge effect on morale, but many companies are also learning that informal, person-to-person interactions are also crucial to the flow of mission-critical information  Businesses that successfully ran largely remote work forces before the pandemic tend to exhaustively document their processes and knowledge.  That enables employees to join projects and get up to speed on their own time, without having to consult colleagues first.  This reflects “sound management that companies with physical offices didn’t adopt simply because they could afford to be sloppy.

What could go wrong?  These 47 things, for starters.  A report out today by a London-based financial industry body makes for bracing reading about the risks of long-term remote working.  Although it’s meant for traders, who were mostly forbidden from working at home before the pandemic, the 47-item “risk register” (laid out in a spreadsheet, naturally) is useful reading for anyone worried about the sudden shift to widespread remote working.  A few of the risks it raises:

  • “Improper behavior may not be identified until much later”
  • “Risk to confidentiality and client privacy if family members or housemates work for competitors”
  • “Individuals feel compelled or coerced to return to offices to gain visibility or for career progression”
  • “Risk of staff disengaging from the culture of the firm leading to reduction in shared values and increased propensity to work around existing controls”
  • “Without the natural rhythm and with no opportunity for decompression from work as no commute time, staff are often working much longer shifts and so more prone to errors and to suffering mental health issues”

What do you think?  What’s the biggest risk from remote working?  The biggest benefit?  Let us know.  Include your name and location and we may include your response in a future newsletter.

Away from COVID-19, we have nightly protests in several major cities that regularly morph into violent confrontations.  At one time in the distant past, just after Memorial Day, the protests were centered on George Floyd’s murder while in police custody and police conduct.  Now protestors appear to be focused on federal buildings, which is ironic because policing, the heart of the matter, is by law a local responsibility.

But these things will play out.

We will develop a therapeutic, and then a vaccine, to deal with COVID-19, which will allow us to shed those dreaded masks and go back to some sort of normal life, albeit with differences.  Office space won’t command such a high price, and inner-city landlords will suffer, as more people move out of town.  But most of us will be thrilled to see many aspects of life return we hope by the start of the college football season.

I don’t know how the protests will end, but they won’t go on forever.  If the protestors in Portland wanted less engagement with federal offices protecting federal property, they could simply stop protesting around those sites and go back to berating their local police, but that doesn’t appear to be the goal.

Peak population is coming, and it will likely arrive much faster than many people realize.

When Japan began losing population around 2010 because they were having fewer births than deaths, the world sort of shrugged.  European nations have been aging for some time, but they’re still growing, however slowly.  The U.S. adds people every year because of migration and because recent arrivals are having kids.  And, of course, the population of India is on the rise.  A new study in the Lancet shows that the world population will grow from 7.6 billion people in 2017 to 9.73 billion in 2064…and then decline…by choice.  By the end of the century, the world population is expected to fall by just under one billion people to 8.79 billion, a 9.6% reduction by choice.  To put that in perspective, roughly 3% of the world population perished in World War II.

Because of increased access to contraception and education among women, the researchers believe that by 2050, 150 countries will have total fertility rates (TFR, the number of children per woman of child-bearing age) below the replacement rate of 2.1.  Global TFR will fall to just 1.66 by 2100.

The group expects the U.S. population to grow from 324 million in 2017 to 363 million in 2062 before falling back.

1 Comment

Filed under Blog

TIME TO BUY THE BITCOIN BREAKOUT

A blog by Rodney Johnson

“Bitcoin and other digital currencies shot to the moon in 2017.  At our conference in October of that year, I verbally threw cold water on cryptocurrencies, noting they were difficult to use in everyday transactions, difficult to secure, and if successful would threaten central banks.  One of our guest speakers suggested that many crypto critics had never purchased a digita coin, so they weren’t qualified to tear it down.

“I recognize a childish taunt when I hear one.  A wise man learns from the experience of others.

“So, of course, I bought some.

“I purchased Ether and Dash in December 2017, just as coin values were making a blow-off top.  Bitcoin and others essentially doubled in late December and January, and then fell back to earth by February.  I didn’t just sit around.  I traded the position a bit, took some profits, then moved some into Bitcoin, which kept falling just like the others.

“After several trades and exchanges, I totally cashed out and calculated my returns.  On a few thousand dollars, I made about $50.  I was thrilled that I’d not lost any money, because it was all an exercise to gain experience in the field.

“And it proved my points.

“The coin values swung wildly, seemingly not connected to anything.  When I wanted to trade, I had to go through an at least two-step verification, which was time consuming, and I never considered using the coins to buy goods or services.  In short, I treated them the same as everyone else, like online gambling chips, hoping I wouldn’t be the greater fool.

“Today is no different, at least from the standpoint of coin traders.

“After spending some time in the $4,000 range after the ugly drop in 2018, Bitcoin gained a little ground in late 2019 and is up around 50% this year, sitting just north of $11,000.  If you’re an online gambler who got in before the jump over the past month, that’s great, but it doesn’t make Bitcoin a currency.

“It’s possible that people are gravitating to the digital dollars because they’re worried about the value of traditional, state-issued money as central banks print gobs of cash and governments go deep into debt.  Perhaps people bought Bitcoin this year ahead of the “halvening” in May, when the algorithm controlling Bitcoin creation essentially reduced new coin issuance by half.  Or maybe we’re seeing all the new day traders, the professionals working from home, chase the latest momentum investment.

“Whatever the reason for the jump in price, I’ve not seen any evidence that more people are suddenly using Bitcoin to buy stuff, and that’s a problem.

“For all the hoopla surrounding cryptocurrencies, if they don’t serve as a storehouse of value and medium of exchange, they aren’t money.  It’s hard to call something that swings more than 50% in a matter of months a storehouse of value, and it consumers don’t readily use it to purchase goods and services, then it’s not a medium of exchange.

“And then there’s the official response.

“Central banks and governments cannot allow Bitcoin and other cryptocurrencies disconnected from official banking systems to flourish.  If citizens moved away from traditional banks, governments would lose control over monetary policy including interest rates and money creation, as well as capital controls.  They wouldn’t like that.

“So far, few people use digital currencies for anything more than speculation, but government officials have taken notice and several are experimenting with central bank digital currencies (CBDCs).  These currencies exist as units in a database with unique identifiers but still count as part of the monetary system.  They don’t travel through banks, so they can be accessed and exchanged easily across borders.  Governments control them, which means they can trace them, tax them, and even change their value at will, which would seem to negate many of the positives championed by cryptocurrency supporters.

“All of this leaves us where we started. Cryptocurrency fans are at odds with official banking systems, few people use them for everyday transactions, they’re difficult to use at a store and hard to secure, but the wild gyrations make them catnip for day traders and speculators.

“Buying them today requires believing a greater fool exists.  That person might be out there, but at least in this arena, it won’t be me.”

1 Comment

Filed under Blog

THE REGULATORY BILL OF RIGHTS

It didn’t get a lot of media coverage, given the constant craziness these days.  But believe me, the new executive order from President Trump that contains these new guidelines is a very big deal indeed.  With this new requirement, the president has ordered that all agencies treat Americans fairly.

If it’s properly put into effect by federal agencies per the president’s order, this improved approach would lift a tremendous weight off American landowners, businesspeople, and consumers.

How could anyone possibly disagree with these new guidelines?  Why weren’t such rules always in place to protect citizens’ rights?

As you’ll see, the Regulatory Bill of Rights aims to ensure the basic due process rights of Americans must be respected by regulatory agencies and bureaucrats.

No more should property owners and businesspeople be considered guilty until proven innocent.  No more should government be able to concoct charges without sharing the evidence with the accused.  No more should bureaucrats be able to surprise, bully, and harass citizens who never intended to break the law to begin with.

These declarations were included in the president’s recent executive order urging federal agencies to avoid new regulations that could hinder economic recovery following the coronavirus pandemic.

Restoring respect for basic due process and fair treatment for Americans accused of regulatory violations is long overdue.

They’ve never heard about the abuses suffered by Mike and Chantell Sackett.  In 2007, the Sacketts began building a home in Priest Lake, Idaho.  Only to have the EPA step in to stop them, claiming their lot was a federally protected wetland.  When Mike and Chantell protested, bureaucrats refused to provide evidence and attempted to deny the Sacketts their day in court.

Years of federal foot-dragging ensued, culminating in a PLF-led case at the U.S. Supreme Court in 2012.  The court ruled unanimously that Mike and Chantell had a right to their day in court to challenge the EPA’s claims.  But despite this victory, the Sacketts still faced more than $150 million in fines!

Only after 12 years of litigation did the EPA finally back down.  Yet would you believe it’s still not clear if Mike and Chantell can build on their property?  We’re still in court to try and make that clear.

They’ve never heard about Navy veteran Joe Robertson from Montana.  After he dug a few ponds on his remote property to provide water in case of a fire, he allegedly ran afoul of the Clean Water Act.  Joe was convicted and forced to spend 18 months in federal prison and pay $130,000 in restitution!

The U.S. Supreme Court overturned Joe’s conviction last year, but sadly, Joe had passed away prior to the high court’s ruling.  All this over a couple of ponds!  What an unbelievable miscarriage of justice.

If the Regulatory Bill of Rights had been in force earlier, people like Mike and Chantell Sackett and Joe Robertson could have avoided so much pain and suffering.

By insisting that federal agencies respect due process, you and I will put a stop to bureaucratic “kangaroo courts” that make a mockery of justice!

The problem isn’t that bureaucrats occasionally cross lines in pursuit of clear villains and dastardly polluters.  Instead, they’ve stacked the process against ordinary people, even in mundane cases.

You’ll be glad to know our approach is paying off.  To name one encouraging example, we represented Quent and Linda Cordair of Napa County, California.  The Cordairs own a commercial art gallery where they sell pieces from local artists.

The shutdown hit them hard, as it did so many other small businessowners.  Even though the Cordairs were perfectly capable of following the social distancing rules mandated by government, state officials forced them to stay closed even as big-box retail stores remained open.

When California began its reopening process, their gallery was considered a museum rather than a retail establishment, and so was forced to wait even longer to reopen.  But Quent and Linda didn’t take that laying down.

They sent letters to California’s governor and their country leaders, describing the unfairness of the situation and urging them to treat the gallery like other retail stores.  The county didn’t respond.

But when Pacific Legal Foundation (PLF) attorneys got involved and sent the county notice of our impending lawsuit on behalf of Quent and Linda, that got their attention!  The county quickly folded and agreed to treat retail art galleries as retail stores and allow them to reopen.

Now the Cordairs are back in business, safely serving their artists and customers once again.  Their victory was a relief.  But how sad that their case had to go so far.

As Linda put it, “We should be able to pursue our passion, earn a living, and serve our customers without having to threaten legal action.”

The Regulatory Bill of Rights

From President Donald J. Trump’s Executive Order of May 20, 2020
Section 6: Fairness in Administrative Enforcement and Adjudication.

The heads of all agencies shall consider the principles of fairness in administrative enforcement and adjudication listed below, and revise their procedures and practices in light of them, consistent with applicable law and as they deem appropriate in the context of particular statutory and regulatory programs and the policy considerations identified in section 1 of this order.

  • The Government should bear the burden of proving an alleged violation of law; the subject of enforcement should not bear the burden of proving compliance.
  • Administrative enforcement should be prompt and fair.
  • Administrative adjudicators should be independent of enforcement staff.
  • Consistent with any executive branch confidentiality interests, the Government should provide favorable relevant evidence in possession of the agency to the subject of an administrative enforcement action.
  • All rules of evidence and procedure should be public, clear, and effective.
  • Penalties should be proportionate, transparent, and imposed in adherence to consistent standards and only as authorized by law.
  • Administrative enforcement should be free of improper Government coercion.
  • Liability should be imposed only for violations of statutes or duly issued regulations, after notice and an opportunity to respond.
  • Administrative enforcement should be free of unfair surprise.
  • Agencies must be accountable for their administrative enforcement decisions.

1 Comment

Filed under Blog

5 STEPS TO CREATE AN ESTATE PLAN – PART II

You can’t do this all alone.  You have to assemble a team to help.

Your estate plan involves more than just you.  Here are some of the main people involved:

Your attorney – An attorney can help guide you through the process of building an appropriate plan.  Attorneys also may specialize in certain areas of estate law, such as special needs planning or elder law, so consider whether that expertise may be useful as you build your estate plan.

Your financial advisor – Your advisor can help you take inventory of your assets and work with your attorney to create a tax-efficient plan that serves your family’s financial needs.

Estate executor – This is the person you designate to manage the disposition of your estate.  They will need to, among many other tasks, file court papers, pay taxes, fulfill any financial obligations of your estate, and make sure your assets are distributed as you intended.

Guardian – In the event that you (and your spouse or children’s other parent) pass away, you need to designate a legal guardian for your minor children.  A guardian may also be necessary for an adult child with special needs, or even for an aging parent.

Power of attorney – A power of attorney (POA), also known as “attorney in fact” or “agent,” is a person you can appoint in writing to manage your financial affairs or your medical decisions while you are alive based on your instructions.  You may delegate this duty for financial and medical decisions to one person or separate people.

Trustee – A trustee carries out the instructions in the trust document, and is responsible for managing the assets and tax filings.  The trustee also makes distributions to the beneficiaries according to the terms of the trust.  In some cases, a corporate trustee may make sense, such as when there’s a more complicated trust to oversee.

  1. Consider creating a trust

There’s a common misconception that trusts are only for the very wealthy.  However, trusts can play an important role in many estate plans.  They give you more control as to how assets are distributed and allow you to keep the details of your assets out of the public eye after you die.  In addition, trusts also can:

  • Reduce the taxes owed by your estate and heirs
  • Protect your assets from creditors and lawsuits
  • Put conditions on how and when your assets are distributed

People may often use a trust in conjunction with a will, but trusts can be more expensive.  Creating an estate plan that includes a trust can cost from approximately $1,000 to more than several thousand dollars, depending on the complexity of the situation and assets involved.  The expense of building an estate plan is generally a one-time fee.  However, there may be recurring costs associated with the administration of certain kinds of trusts or with the revision of your plan over time.

There are many kinds of trusts, each with specific advantages and disadvantages.  One of the most common is a living trust, which lets you retain control of the assets you place in the trust while you’re alive, then transfers them to your beneficiaries after your death.

If you do establish a trust, you’ll need to name a trustee.  The trustee is responsible for making sure the trust does what it intends.  The trustee’s responsibilities include managing the assets, ongoing administration and tax filings for the trust, as well as making distributions to beneficiaries according to the terms of the trust.  For instance, you may want your children to use the trust funds only for higher education.  Your trustee would make distributions from the trust in accordance with the trust document.

When choosing a trustee, pick someone you trust.  Consider their age (often you want someone younger) as well as how confident you are in their decision-making ability.  A trustee may be a sibling or a close family friend, but also can be an independent corporate trustee with no ties to your family.

Read Viewpoints on Fidelity.com: Naming the right trustee

  1. Update your estate plan regularly

Creating an estate plan is a great accomplishment.  But it’s not a plan that should sit around gathering dust.  Indeed, you’ll likely need to update your plan regularly so that it continues to reflect your wishes and needs, which may change along with your family and finances.

Also consider updating your beneficiaries.  Most financial accounts, such as insurance policies, retirement savings accounts, or brokerage accounts, require you to designate a beneficiary, and these beneficiary designations typically trump any directions in a will.  The estate planning process is a good time to make sure you’ve identified beneficiaries in each of those accounts, and to consider whether those beneficiary designations mesh well with your overall estate plan.

Experts recommend reviewing your estate plan every 2 to 5 years, and updating it after major life events, including marriage and remarriage, divorce, births or adoptions, and deaths.  Changes in your financial goals; purchases or large assets such as a home; or major financial events such as a bankruptcy, retirement, or business sale, are also important milestones that justify a review of your estate plan.

Procrastinating on creating an estate plan is certainly tempting.  But having a well-conceived plan is more than worth the time and money it will take to build it.  You’ll give your loved ones the authority and guidance they need to navigate a tough situation, that way you can rest easy, knowing that if something unexpected happened you’re prepared.

Leave a comment

Filed under Blog