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Out of similar curiosity I attended one of these seminars by Mitton about 3

years ago.  My experience was almost exactly the same as your, finding the

seminar lacking in  many respects and filled with misinformation and partial

truths.

What I found at this seminar that astonished me was that the attendees

couldn’t wait to buy these books you mention. When the speaker was

introducing the fact that they would be on sale in the back of the room,

people RUSHED to be the first in line, credit card in hand.  I sat there

with my mouth open in amazement. It was like they were giving away money.

And these were for the most part, educated people, include a psychiatrist who

I was sitting next to who was ready to buy until I talked her out of it.

Now what you have is a bunch of do-it-yourselfers. I ran into a woman who

tried to create her own RLT. After spending 60 hours (her estimate) in the

library, she prepared a 2 page document lacking in almost every area. She

failed to properly fund the trust, and did not know what a pour-over will

was. Point being, that the money could go toward real legal advice, and the

do-it-yourselfer would be in a lot better shape.

_______________________________________________________________________

SNIP…………………………

Funny you should mention this, as an event very similar to this took place

this week right here in Denver in the form of two public seminars that were

put on by an outfit out of Provo, Utah that calls itself The National

Foundation for Asset Protection and Estate Preservation.  Since the seminar

itself cost only $15 per person payable in advance ($29 at the door), I

could not resist going to one of these just to see what short of sales

tactics this particular group is using to convince the public that they

should buying their written, audio and visual materials right there at the

seminar, and without any announced period to review and reject the same and

get 100% of your money back.

The main presenter (and obvious leader) was an attorney named Jay W. Mitton,

MBA, JD, but (and this was not announced to the public in advance) he was

conveniently helped by two other speakers, a Brad Tedeschi, CLU of Tedeschi

and Associates, Inc. and the President and founder of Charitable Information

Services, who spoke on Charitable Remainder Trusts, and Shawn Higgins of

NASI who spoke on how to invest wisely in Property Tax Liens.  The entire

seminar ran for five hours total, with Mr. Mitton taking up about half of

that time and the other two speakers using up about an hour each on their

parts.

Although the seminar itself only cost $15 per person, each speaker just

happened to have a set of books and audio and video tapes available for sale

at retail prices that seemed way out of line to me for what you get.  Mr.

Mitton’s set retails for $1,695, although they were offered for sale at a

special show price of only $695 (a savings of $1,000) if you were willing to

pay for them on the spot while supplies lasted.  This sale price included a

90 days from date of sale free consultation service period that your own

attorney could use to consult with the law firm of Mitton and Burningham

with offices and attorneys licensed to practice in Utah and California (not

Colorado).

The Charitable Trust set of books and tapes retails for $997, with the

companion attorney’s kit retailing for $697, but all these materials were

being sold at the show for only $595.  This special price included a 90 days

from date of first call free consultation with the advisors at CIS (none of

whom are licensed attorneys we were openly told).

Thus, the total sales price for these two sets of materials alone same to

$1,290.  My best estimate is that, out of the roughly 1,000 people who were

in attendance at this single seminar, about half of them purchased both

kits.  That means that Mr. Mitton and company made a total gross profit of

$645,000 on that one seminar alone.  Even assuming my estimates are way off,

such that only half that number of people bought both sets, that is still a

cool $322,500 for five hours of work, or an average hourly rate of $64,500

per hour.  Not bad for one day’s work, and this was only one of the two such

seminar that these folks did in Denver last week.

I did not stick around to the end to find out what the retail and special

show prices were for the Property Tax Lien materials, but I suspect they

were in the same ranges.

It seems to me that the clear marketing advantage this group has over some

of the other marketers of this sort of stuff is that they collect most of

their cash up front and long before anything is finalized.  In addition,

they avoid the actual preparation of any documents for the people who attend

(except to the extent you might choose to retain Mr. Mitton’s firm to assist

you).

Perhaps what was most distressing about this particular seminar was not the

usual false and misleading statements about the horrors and expenses of

probate (this is not the case in Colorado, which is a UPC state) and the

alleged death tax advantages of using RLT’s (the usual misleading claim

about this subject).  It was that, by the time Mr. Mitton got through with

his portion of the presentation, he had convinced most of the people there

that if their net worth was in the $400,000 to $5,000,000 range, they likely

would need most if not all of the following:

(1) A simple pour over will (to catch anything that might be missed).

(2) A funded revocable living trust with A/B trust death tax planned

provisions.

3) A C Corporation for each of your businesses (but not one of those LLC’s

or LLP’s entities, as they are still too uncertain), the stock of which

would be owned and controlled by the parents and that would conveniently

employ and compensate your entire family.  These corporations would be

formed only under Delaware or Nevada law because corporate officers and

directors allegedly can not be sued for negligence in those states (so he

says).  They would have essentially no assets.  Rather, they would lease

those from the trusts and FLP’s that are mentioned below.

(4) A series of 2503(c) trusts and S. Corporations for your children (so

those can purchase and own the assets you will need in your business and

then lease them to your Corporation).

(5) A series of FLPs to own and control all of your significant personal

assets so as to keep you judgement proof because of the charging order

aspects of these entities and allow for valuation discounts as high as 90%

(50% valuation, 35% market, 10% minority).

(6) A Charitable Remainder Trust ultimately payable to your new Family

Foundation that also would conveniently employ and compensate your entire

family.  This would give you an entity through which you could (a) unload

all your highly apprecaited assets without paying any capital gains taxes,

(b) set up a private retirement plan free of the usual pension restrictions,

and (c) significantly increase the rate of return on your invested assets.

(7) An ILIT that would purchase insurance on your life and replace the

wealth that would be lost by your creation of the Charitable Remainder Trust.

Not only this, but they strongly suggested that Gebhardt’s budget plan will

win out in the current budget negotiations in Congress, thereby resulting in

the lowering of the exemption equivalent amount of $600,000 down to

$200,000, and then they conveniently noted that any FLP’s or CRT’s formed by

7/31/97 that used up more than $200,000 of this exemption would be

grandfathered (sounds like a pretty good scare tactic to me).

What was really scary about all of this was listening to all the derogatory

remarks the attendees made during the breaks about lawyers generally and the

apparent ignorance of their professional advisors based on what they were

being told at this seminar.  Mr. Mitton went to far as to suggest that

hardly any planning lawyers (other than himself, of course) know anything at

all about FLPs or how to use them effectively in these cases, or that RLT’s

alone are a disaster when it comes to the claims of creditors.  He went so

far as to claim that he is known the world over as the “father of asset

protection” (pretty strong claim to make if you ask me, especially in the

home town of the Engel and Rudman law firm).

I would be interested to know the thoughts of any others on this list who

have attended similar seminars in the past, and in particular if they have

any clients who have been seriously injured financially or otherwise by

following the advice and using the forms that these folks sell, especially

of they did so without the assistance of competent and locally licensed

counsel.

Joe Hodges, Denver, CO