Happy New Year!
As we start a new chapter in our lives, I am grateful for our families, friends and this great country that we live in.

The Chapter's resolution for this New Year is to re-confirm our commitment to you - our member. We hope that the Chapter and National are meeting your needs and we welcome your feedback. The Chapter will continue to recruit and retain our members but the Chapter Board can't do it alone. We need your help!  As you will see in this newsletter, there are many ways you can help.

This coming year promises to be an education-packed year.  We are planning to have a Section meeting every month. The Section meetings are small one hour, hands-on meetings with an expert in a particular field. We will also have two DVD programs, one in February and the other in May, 2006. The DVD programs are two-hour programs that delve into a particular subject matter.

Also mark your calendar for Wednesday, March 22nd when Al Roker will be entertaining us at the Annual Financial Professionals Dinner. You will receive your invitation soon.

Finally, since we are blessed with so many good things in our lives, we can always give back to the community. The Chapter will again help with Habitat for Humanity. It will only take only a couple of hours of your time to provide useful and practical information to families who are determined to own a home of their own. If you are interested, there are more details in the Habitat article below.

Thank you for being a member!

If you need to renew your membership you can call the Society at 800- 392-6900 and they will process your membership renewal immediately or go online at www.financialpro.org.  We look forward to your participation in the Chapter in the coming year!

Greater Philadelphia Chapter - SFSP is teaming up with Habitat for Humanity again to provide pro bono financial counseling to families that are working toward home ownership. We participated in this program last year and it was a tremendous success and a positive experience for everyone that was involved. 

The Habitat families are required to perform 350 hours of work to invest in their own home. As part of this "sweat equity" program, 16 families in the Philadelphia area will be attending these financial seminars. The focus is basic financial planning to help these families improve their lives. This is a first home for many of them, and they will be confronting many exciting and challenging choices that will enable them to see their dream of a better tomorrow come true.

Topics are expected to include:

-- Homeownership
-- Managing your financial resources and establishing a budget
-- Managing credit card & other debts
-- Cash reserve funds
-- Government benefits and health insurance issues
-- Basic insurance, legal, college and retirement planning

We are hosting four two-hour seminars on Saturdays from 9:30 to 11:30 AM at Habitat's headquarters located at 1829 North 19th St. in Philadelphia. Each seminar will focus on a specific topic, and the Society will prepare presentation materials to help with each session. 

The four dates are as follows:

Saturday January 28th 
Saturday February 11th
Saturday February 25th
Saturday March 11th

We are asking for two advisors for each session. As an organization we are full of financial wisdom, so let’s give back to the community! If you can donate your time and knowledge for one of these dates, please contact Paul Velho for more information or to sign up at 610-538-1842 or paul.velho@hartfordlife.com.  Both the Society and these families will appreciate your time and commitment!

As we approach the end of another busy year, our thoughts typically focus on resolutions for the coming year. 
As you make those New Year’s Resolutions, why not get involved with your Chapter!

Volunteerism provides an excellent opportunity to “feel good” about your commitment to our industry, while “giving back” to others.  Our Chapter has the following immediate needs, based on your expertise and time availability.  Check off an area where you can help and contact our Chapter Office at (610) 642-1685 or send an email to Chapter Membership Chair Tony Smith at tsmith@financialpro.org.  Remember, it’s better to give than to receive!

Specific Membership Tasks Where YOU Can Help

* Serve as a “Meeter and Greeter” at Chapter Events like Professionals Day, View From The Top, Annual Institute Meeting, Joint CPA Meeting, and DVD Programs.  (Estimated time commitment:  30 minutes per event).

* Contact by phone five Free Trial Membership Users as a follow up to their experience, once a quarter (Estimated Time Commitment:  3 minutes per call; 15 minutes for 5 calls).

* Contact by phone or e-mail five Inactive Members to share new member benefit information, every six months (Estimated Time Commitment:  3 minutes per call; 15 minutes for 5 calls).

* Serve on a sub-committee to help attract other credentialed professionals to our Chapter.  (Estimated Time Commitment:  one or two 15 minute conference calls; possible speaking opportunity wherever the credentialed professionals are located).

* Conduct follow up Chapter event surveys to determine effectiveness of Chapter programs.  (Estimated Time Commitment:  3 minutes per call; 15 minutes for 5 calls).

* Approach local colleges and universities to describe opportunities within the financial services industry.  Could involve doing a career day, speaking at a meeting, or consulting with academic advisors and/or students. (Estimated Time Commitment:  varies based on the opportunity).

* Speak at local financial service agencies and companies located in Greater Philadelphia about the value of belonging to a professional organization. (Estimated Time Commitment:  varies based on the opportunity).

* Serve as a mentor to individuals within the financial services industry.  (Estimated Time Commitment:  varies based on the opportunity).

* Serve as a topical expert during a Chapter educational offering.  (Estimated Time Commitment:  varies based on the opportunity; likely only once a year).

* Call first year Chapter members as a follow up to their experience.  (Estimated Time Commitment:  3 minutes per call; 15 minutes for 5 calls).

With increasing frequency, estate planners and advisors are exposed to families with children or other family members with disabilities or special needs.  One planning technique that provides assistance is the formation of a Special Needs Trust.  The following is a brief overview on the use of Special Needs Trusts (SNT’s) as a useful estate planning tool.  These trusts are designed to hold assets for the benefit of the disabled individual(s).  They permit the use of financial resources to assist the disabled individual.  The disabled party may currently or in the future be eligible to receive governmental assistance (i.e., Medical Assistance and/or SSI benefits).  These benefits are in addition to the benefits included in the Mental Health and Mental Retardation Act of 1966.

SNT’s that are for the benefit of a minor and stem from litigation such as a medical malpractice or other personal injury matter are typically established with approval by the Courts.  However, if the disabled individual is not a minor and perhaps not incapacitated, the trust can be established by a parent, grandparent, legal guardian of the person or the Court.  However, in all situations where a SNT is contemplated, the Department of Public Welfare (DPW) must be contacted and a copy of the proposed trust submitted for their review.  DPW personnel review the trusts to confirm that the document complies with all requirements and insures the priority of repayment to Public Assistance at the death of the individual. 

These trusts come in various types: 

1. Common Law Discretionary Trust.  These trusts are funded not by the disabled individual, but by a third party such as a parent, grandparent, etc.  These trusts are often referred to as Lang Trusts and some practitioners may refer to it as a Supplemental Needs Trust.  These trusts may be established under various estate planning documents and do not need to be approved by DPW. 

2. Payback Trust. Payback Trusts are irrevocable, established for the benefit of a named beneficiary alone who is under age 65, established by the individual’s own money, such as in a recovery, and must provide that the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total Medical Assistance paid on behalf of the individual under a State plan. 

3. Pooled Trusts. Pooled Trusts are trusts which must be established with a non-profit agency acting as trustee handling all the administration.  At the death of the beneficiary, there is no need to repay Medical Assistance from the State that was paid to the individual during his or her lifetime; however, the assets in the trust must remain with the pooled fund upon the individual’s death.  Therefore, to the extent there are funds remaining, in excess of any governmental lien, they will not return to the individual’s estate or family. 

For anyone providing financial/estate planning for a disabled family member or other individual requiring special needs such as a severe medical disability, these trusts offer significant benefits over a guardianship account, especially when it comes to investments.  By placing such individuals’ funds into a SNT, the beneficiary will be eligible for governmental assistance at all levels and the trust assets are available to supplement, but not supplant those governmental programs.  In addition, this type of trust, whether established separately for the individual or under an estate planning document of a family member, permits the family to take steps to supplement this individual’s quality of life without imposing significant financial pressures on other members of the family such as the disabled individual’s siblings.  In the context of a recovery stemming from litigation, this individual’s assets can be placed in a trust, rather than a guardianship account, so that the person remains eligible for benefits.  A guardianship account is for the benefit of that individual with fewer protections than a special needs trust and, therefore, does not immediately permit the individual to be eligible and/or continue to receive benefits. 

In situations where the statutes did not permit the establishment of a special needs trust for litigation proceeds, guardianships were created and it may be appropriate, especially when the disabled individual has reached the age of majority, to petition the Court to ask that these accounts be converted from guardianship accounts to special needs trusts.  This is not an overly complicated or unusual procedure and will permit the family greater flexibility in their estate planning so that when the parents are no longer alive, this trust will continue for the benefit of the disabled individual, permit them to continue to be eligible for benefits, supplement the person’s life and qualify of life and reduce the financial pressures that might otherwise be placed on the individual’s siblings.  Furthermore, in these situations, the family may wish to not include the disabled individual in their estate planning documents which will further inure to the benefit of the other children.

When advising families and individuals with disabilities and special needs, the use of proper documents and the structuring of assets should be addressed so that clients are collectively aware of the options, benefits and perhaps additional flexibility afforded by the proper use of special needs trusts. 

Author Information: George M. Riter, Esquire with the firm of Timoney Knox, LLP can be reached at Telephone: 215-540-2632; griter@timoneyknox.com

13th Annual Financial Professionals Dinner
Wednesday, March 22, 2006
Cocktails, Registration & Sponsor Forum - 5:30 PM;  
Dinner and Speaker - 6:30 PM; Dessert Party & Sponsor Forum - 8:30 to 9:30 PM
Location: Presidential Caterers, 2910 DeKalb Pike, East Norriton, PA 19401 

As weatherman and a host of NBC's The Today Show, Al Roker greets more than 30 million viewers each week as America prepares for work. A ten-time Emmy Award winner, Al conducts celebrity interviews, cooking segments, technology updates, and a continuing series for Today called "Today's Dad," featuring parenting tips for fathers. Host of the Macy's Thanksgiving Day Parade, The Rose Bowl Parade, and the Christmas Tree Lighting at Rockefeller Center, Al has also presided over his own talk show on CNBC, Al Roker, and hosted MSNBC's information quiz show, Remember This?, which earned Al a 1997 Daytime Emmy Award nomination for Outstanding Game Show Host.

A best-selling author with acclaimed books to his credit, Al's first book, Don't Make Me Stop This Car: Adventures in Fatherhood spent weeks atop the New York Times bestseller list. His second book, Al Roker's Big Bad Book of Barbecue was a summer blockbuster and New York Times bestseller. His third book, Al Roker's Hassle-Free Holiday Cookbook, was released in 2003.

In addition to his network duties, Roker has carved out a successful career as an entrepreneur. Now in its fifth year, Al Roker Productions, Inc. is Al's thriving multimedia company set up to produce "all things Al." The company is involved in the development and production of network, cable, home video, and public television projects. Two of the most successful projects include the critically acclaimed special on PBS about severe weather, Savage Skies, and a highly rated travel series called Going Places. Other projects include Roker on the Road for Food Network and a series of specials, including Al Roker's World Championship Barbecue, Al Roker's Midwest Fest, Al Roker's Dining on the Strip, and Al Roker's Around the World in New York City. Al Roker Productions has also partnered with Lifetime, Court TV, and Fine Living.

Plan now to join us on March 22nd for the Annual Financial Professionals Event of the Year!  Sponsorships are available - limited number of opportunities! 

If you're interested in helping out with this event, contact Jeff Podraza, Professionals Dinner committee chair, at jeff.podraza@us.ing.com.

Great Depression Shaped Future Generations including our New Fed Chairman, Mr. Bernanke

The Great Depression occurred from 1929 to 1933 (U.S. economic output plunged almost 30% and unemployment was 25% and several thousand banks failed) and was a cataclysmic event in our country’s history.  In the early 1980’s, Mr. Bernanke began his career studying the Great Depression.  He figured that if one wanted to study geology one should study earthquakes.  So in terms of earth shattering events in the United States and world economics,  he believed the causes of the Great Depression needed to be understood.  This editor finds comfort in this, as the reigns of Mr. Greenspan will be turned over to Mr. Bernanke for his leadership and fine-tuning the economy.  He is a Great Depression buff as apposed to a Civil War buff.  This is good.

His fascination, interest and academic pursuit in the Great Depression formed his opinions that the Federal Reserve led the country into the Great Depression and compounded the problems with their actions. 

In graduate school at MIT, he read the book “The Monetary History of the United States” written by the genius duo Milton Friedman and Anna Schwartz. This book  changed the prevailing view of economists that the supply of money affected the price level but not the real level of activity. The main premises contends that the Great Depression had been caused not by tax laws, not by the stock market crash, but by the catastrophically wrong decisions of the Federal Reserve Board from 1929 to 1933. The Fed at that time was solely focused on fears of inflation even as the economy was collapsing. In response, they drastically shrank the money supply and choked the growth of the economy. Mr. Bernanke was hooked on this theory and so was my “Money and Banking” economics textbook and professor from my college days.

Today’s economy scarcely resembles that of the 1930s. Our growth is strong, unemployment is 5% and the housing market is robust. The Fed has raised interest rates to prevent the inflation that occurred in the 1970s, with high oil prices and loose supply of money. 

Those close to Mr. Bernanke believe that he will not only target low inflation but also publicly place the desired rate the Fed wants to achieve (1% -2% excluding food and energy prices that come on food and energy as those are key drivers).  He believes that this will keep inflation in check by setting the public’s price expectations.

As financial service advisors and product providers we recognize that lessons of the past will prove beneficial in not repeating the mistakes of the past. Our new Fed Chairman will clearly not repeat those mistakes that led this country into the Great Depression.      

To contact KeyFacts Editor Robert M. Flood,  III, CLU, ChFC, MSFS of Westport Worldwide - telephone (610) 941-2775 or rflood@westportworldwide.com.