The 10 Biggest Trust Advisor Stories of 2012

In a year defined by political angst and high-profile planning disasters, a bona fide happy ending wins the trophy as the headline that resonated most deeply with our readers.

Over the last 12 months, the Trust Advisor has evolved from a niche-oriented weekly email letter into a full-fledged wealth management industry news source.

Thank you for your attention and for all the feedback over the last year. We have a lot planned for you in 2013. I think you’re going to like it. If not, let us know!

Once again, you showed us that you’re hungry for advanced multi-generational financial planning stories, especially if they have a celebrity twist. And given the election year and looming financial cliff, any coverage from Washington was extremely popular.

However, picking the iconic stories of 2012 was tougher than usual simply because we grew so much over the course of the year.

We published four times as much content as we did last year and our subscriber list grew enormously.

Because of that, simply adding up the raw readership numbers would weigh the list unfairly toward stories we’ve published over the last few months – there are just that many more of you now than there were back in February.

So what I’ve done here is figure out what proportion of our subscribers at the time were reading a particular story when it came out.

That way, if you’re new around here, you can get a better sense of the breadth of what we cover. And if you’ve been reading all along, you can review a few old favorites.

1. Lights, Camera, Death: Larry Hagman Did It All the Right Way
Although the Dallas villain lived relatively simply by Hollywood standards, bad advice and years of heavy drinking took their toll on his fortune. At the end, it looks like his lawyers made it possible for him to do the right thing.

Larry Hagman left a relatively modest fortune behind by primetime soap opera standards, but that didn’t stop his legal team from using off-the-shelf vehicles to give his bequests added punch.

And that makes the final disposition of his assets a lot more immediately relevant to advisors who deal with mere millionaires and not ultra-rarefied oil tycoons. (Full Story)

2. Whitney Houston Leaves Behind a Legacy of Music and Estate Riddled With Confusion
Whitney Houston’s management had barely squelched rumors that the 48-year-old diva and recovering cocaine addict had run out of cash before they had to confirm reports that she was dead. If Houston’s lawyers were smart, they ironed out her estate plan a decade ago, the gurus tell me.

Back in 2001, she had just signed the biggest record deal in history — six albums, $100 million in guaranteed royalties — and the signs of her drug use were getting harder to hide. (Full Story)

3. Obama Win Dashes Wall Street Hopes But Proves Market Math
Four more years for the Democrats confirms the triumph of cold calculations over personal sentiment. Industry spokesmen say it’s time advisors and lawmakers alike get back to work.

Whether you’re disappointed or elated by the ballot results, the outcome was ultimately bittersweet for advisors of all political persuasions.

On the one hand, the return of Barack Obama means Wall Street still has to cope with a regulation-friendly White House. But regulatory dread is not exactly a new thing for advisors. This is the status quo, not the end of the world. (Full Story)

4. Why Is Hartford Buying Back $5 Billion of Annuity Contracts They Worked So Hard to Sell?
Incentives for contract holders willing to surrender their lifetime income benefits look generous, but the math is in the insurance giant’s favor.

The Hartford is the latest annuity carrier to offer the customers it fought hard to capture incentives to take their money and go home.

It turns out years of volatile markets and the lowest interest rates in history have turned these once-lucrative contracts into more liability than they’re worth. (Full Story)

5. Tom Cruise Opts for Fast End to Messy Divorce with Katie Holmes to Protect Brand and Future Earnings
While Katie Holmes and Tom Cruise raised plenty of eyebrows during their five-year marriage, their divorce is practically a model for advisors who want to shield their clients’ feelings while protecting their wealth.

It only took 11 days for the lawyers to reach a settlement, saving both stars the expense, trauma and risk of career blowback of an extended or messy public custody fight.

And thanks to the smart decision to file in New York instead of Hollywood, Katie’s people managed to keep the details of how she’ll raise Suri almost entirely out of the public eye. (Full Story)

6. Does Hartford’s Annuities Exit Signal the End for Others?
Annuities now account for the bulk of the Hartford Financial Services Group’s earnings, so the wealth management industry was stunned when the company unceremoniously pulled the plug on future sales and started winding down the business.

Hartford, of course, isn’t alone. Big names like ING, Sun Life and John Hancock have peppered the headlines over the last few months with similar announcements.

With all these names dropping out of the annuity business, advisors may be wondering what will be left on their retirement income shelf this time next year. (Full Story)

7. What To Do When a Client Dies
Advisors who manage money have an 8 out of 10 chance of getting fired if they do the wrong things when a client dies. Here’s a checklist of the do’s and don’ts to save your relationship with the heirs when the time comes.

Lee Johnson was a wealthy man worth over $5 million, much of it in real estate with no mortgages and a large brokerage account at Merrill Lynch with over $2 million in securities.

He did not believe in wills or trusts and as a result spent no money on estate planning. He did however enjoy golfing and occasionally getting together socially with his broker to chat about politics and the economy, but Mrs. Johnson was never a part of the festivities. (Full Story)

8. Romney Likely Paid “No” Tax on Big Bain Payouts
When Harry Reid started saying he’d heard Republican presidential candidate Mitt Romney went a decade without paying a cent in federal tax, smart money chalked it up to political hardball.

After all, the Bain Capital baron has engaged in plenty of creative accounting over the years.

Interlocking trusts, charitable foundations, carried interest, limited partnerships, hedge funds, offshore accounts: Romney’s returns show that he’s got all the high-net-worth vehicles in play. (Full Story)

9. Expatriate Facebook Founder’s “Take the Money and Run” Pre-IPO Scheme is Legal, Experts Say
Eduardo Saverin will probably generate more tax revenue taking his billions to Singapore than he would’ve paid if he’d stayed. Should Mark Zuckerberg be forced to leave too?

Moral outcry is one thing, but high-powered attorneys tell me the now-infamous Facebook co-founder was well within his rights giving up his U.S. passport late last year.

“What he did was perfectly legal,” says Gideon Rothschild, offshore trust planning guru at New York firm Moses & Singer. (Full Story)

10. Why Are Family Members Disinherited?
What does it take to get written out of the family will? Is it betrayal, gambling, cheating, a lack of affection, or what? Our report this week delves into this thorny issue and finds some answers.

Nasim Afshar, 60, an attractive Persian woman, met her husband, British-born Nigel Ruddy, in Germany and was married to him for over 15 years. No one could say their marriage was in trouble.

But Nigel’s will effectively disinherited his wife. Why? (Full Story)

Honorable Mention:

Alternative Investments Still Need Traditional Reporting

Adopt Your Girlfriend as Your Daughter Asset Protection Plan Shocks Planning Community

Is Investing in Legalized Marijuana the New Alternative Asset Class?

Catch the Warning Signs of Clients Ready to Leave

Disney Deal Gives George Lucas a Billion-Dollar Tax Break

Mistresses and Broken Marriages Cost Arnold, Tiger and Kobe Millions: Wealth-Wise Tips for Spouses Thinking About Straying from the Nest

Why Did LPL Financial Acquire Fortigent?

Steve Jobs Doll Dead on Arrival After Showdown with Family and Estate Managers

Will Someone in Our Industry Please Tell Kim Kardashian how Private Placements Are Supposed To Work?

Apple’s $2 Billion Tax Dodge Gets Tax-Free States Worried

Scott Martin, senior editor, The Trust Advisor


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