Q: Your last column included a Q & A about attorney billing. I was wondering what, if any, was the most unusual "fee" you ever accepted.
A: My early loyal client base that helped me get started was farm and ranch folks in Weld, Washington, and Yuma counties. So I accepted my share of hay bales, sacks of potatoes, horse shoes, chickens, eggs, and even piglets.
But I also turned down a year's supply of manure (insert your own lawyer related witticisms), a shed full of hula hoops "in original wrappings" (declined for obvious reasons), a broken down grain combine (talk about a hunk of junk), and bull riding lessons (pride made me say no since the offer came from someone who saw me "ride" the week before).
There were other items in both categories but it would be fun for someone to write a story about what others in a service profession have accepted or turned down.
But remember any such "revenue" received by anyone has to be declared and included in gross income for income tax purposes, including, among other things, the value of merchandise won from games or at game shows, barter exchanges for the value of goods or services received, net gambling income, and fringe benefits at work (unless excluded by the Internal Revenue Code, regs, or tax court rulings). Otherwise, if these kinds of receipts can not be labeled gifts and come to light, the IRS tends to be unhappy.
Q: I am about to retire with a large deferred retirement account. What are my options?
A: There are a number of options available depending on the nature of the assets which make up the fund. But in general terms there are only two choices: leave the deferred account with the company (if the plan so permits) or roll it over into an IRA (Individual Retirement Account). A third choice is one that is not desirable – take the funds out and pay taxes and any applicable penalties.
Rolling the funds into your "living trust" will not work and there are no provisions that would permit you to take the assets out and then put them back into a qualified account at some future point (such as is permitted in a real estate exchange). The deferred taxes plus penalties would almost certainly be imposed.
Q: What is a durable power of attorney?
A: A power of attorney is a document that authorizes another (an agent) to act for you (the principal) under the terms and conditions contained in the document. A durable power of attorney is a variation of a general or common- law power of attorney. In the absence of termination conditions that are inserted into the document, a general power of attorney would end if someone died, revoked it, or became incapacitated. But since an incapacitated person is in no position to take care of his or her affairs, incapacity is normally just the time when someone needs the assistance of an agent using a power. Thus, a durable power of attorney will end if someone dies or revokes it, but survives incapacity. Hence the name "durable."
Note that a power can be durable even if that word does not appear, as long as there is language inside the document stating that incapacity does not revoke it. It is amazing how often advisors, including attorneys, make this mistake.