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Urgent Notice to All NAFEP Members

Major Change In Living Trust and Life Estate Trust Ordering Procedures
In NAFEP’s ongoing efforts to improve its products and services, And protect its members, NAFEP and its affiliated partner, American Estate & Trust, LC (a licensed and regulated Nevada trust company), is undertaking a major change to the ordering process and legal responsibility for the creation of the Premier I Living Trust and Premier II Life Estate Trust products.

Over the past several years NAFEP expended a substantial amount of time and money researching asset protection techniques and unauthorized practice of law (UPL). From this research we determined that by creating trusts in Nevada, based upon Nevada law and domiciling, and with a Nevada trust company acting as a trustee or successor trustee, we accomplish two important goals: (1) The ultimate in asset protection for Premier II clients, and (2) removal of UPL risks for NAFEP and its members in the field.

This, then, is an announcement of the impending changes to this effect.

SUMMARY OF THE CHANGES:

About American Estate & Trust, LC (AE-Trust):
AE-Trust is a completely separate company from NAFEP, but is a strongly affiliated partner for the future of much of the estate planning which formerly was handled by NAFEP alone. AE-Trust is a licensed trust company in Las Vegas, Nevada, meeting that state’s capital reserves, integrity and competency requirements. The company is regulated and monitored by the Nevada Financial Institutions Division, the state’s banking regulators. The company was founded and is headed by NAFEP’s former president, Mike Janko, CEA®. The company’s Vice President and corporate counsel is William (Bill) Pearcy, Attorney at Law, J.D., CEA®.

Under state and federal tax law AE-Trust can legally act as trustee for private trusts and as a fiduciary in many other client relationships, including that of custodian for IRAs and holding 1031 exchange funds in escrow. AE-Trust is presently acting in those areas.

For more about AE-Trust, go to: www.TrusteeAmerica.com

WHY THE CHANGE AFTER ALL THESE YEARS:

Improved Asset Protection: Nevada domiciling of the Premier II provides a significant asset protection benefit. The trust is subject to Nevada laws which are far more conducive to asset protection. Nevada, by state law, provides what is quite likely the best and most impenetrable asset protection in the nation for trusts like the PII. This yields a much better result for clients and makes it much easier to establish with clients and their attorneys that asset protection is a solid legal reality.

For this protection to be granted by Nevada law, an independent Nevada trustee, such as American Estate & Trust (hereafter "AE-Trust"), must be appointed as either trustee or co-trustee, and the trust must be domiciled in Nevada.

Removal of UPL Risks: When AE-Trust as a legally recognized trust company acts as a trustee, co-trustee or successor trustee, it has a direct interest in the preparation of the trust documents. This is further reinforced by domiciling the trust in Nevada. In other words, AE-Trust has as much legal interest in the specifics of the document as the client has. This provides a substantial argument in favor of allowing the trust company to prepare trust documents. And in Nevada, the preparation of the trust documents is completely legal for both the trust company and its attorney in any case.

Additionally, an attorney located in the client's state in all likelihood cannot prepare a Nevada domiciled trust. It could easily be deemed UPL for that attorney in his/her home state for creating a Nevada trust. Only a Nevada based attorney and/or trust company can do this and be legally engaged in the practice of law.

Taken all together, this means AE-Trust is not practicing law at all in the client’s state, and is operating legally in Nevada. The end result is: no UPL.

 

What specifically is changing(?):

  1. Both the Premier I Living Trust and the Premier II Trust will hereafter be Nevada domiciled and rely on Nevada law, at least initially. If the client wants to change the domicile to their home state, they can easily do this after they receive the trust. In fact, each PI and PII will be furnished with a change of domicile document which the client can easily implement at any time.

  2. The item or model number for the Premier II from AE-Trust will change to: Premier II-NV Trust. The Premier II will no longer be termed a "life estate trust". The reason is too long to explain here, and will be covered in the webinar and other materials.

  3. At least initially, AE-Trust will act as a successor trustee on all Premier I Living Trusts, AE-Trust will act as sole trustee on all Primary Trusts (PII) and in most cases as co-trustee for all Holding Trusts (PII). The multiple corporate trustees which NAFEP furnished as trustee and/or co-trustee of Holding Trusts will continue to be available, but now thru AE-Trust.

  4. Please note that on PI Living Trusts, on which AE-Trust will be a successor Trustee, the clients can have AE-Trust removed or terminated after the delivery of the Trust. In fact, each PII will be furnished with a replacement of trustee document which the client can easily implement at any time.

  5. Neither NAFEP nor AE-Trust will provide the: Pour over will because that is another potential UPL problem, and this one cannot be solved by the new procedures. But the company will provide a simple, form fill-able, MS. Word template for the client to complete and print out this document for themselves.

  6. All order applications will be in the name of AE-Trust and will be a contract between the client and the trust company. Note that the PII-NV application is substantially different from the old NAFEP version. The only way to provide a client with the improved PII-NV is with the new application, which you shortly will be required to use anyway. Read it over carefully before approaching a client.

  7. On all PII-NV orders, the clients will be required to pay the first year's trustee fees up-front. Under the outgoing NAFEP system the clients received the first year's trustee fees at no charge. See the order pricing page of the new PII-NV application for full details (page 12, footnote 6).

  8. The new PI and PII applications can be obtained either from NAFEP or from the AE-Trust web site at this address: www.TrusteeAmerica.com.

  9. Clients will make their checks or credit card payments for the whole trust order and trustee fees payable to: American Estate & Trust.

  10. All order applications will be sent from the field to AE-Trust by fax, mail or courier. AE-Trust will in turn hire and pay NAFEP as its sub-contractor to prepare the documents for AE-Trust. Under this arrangement NAFEP will not be working for the client, its service will be for and in behalf of AE-Trust. However, you will be able to contact NAFEP directly for status information and order changes. You will also be able to contact NAFEP for training and consulting, same as you do now.

  11. Any commissions earned in the field will be paid by NAFEP, not by AE-Trust.

  12. NAFEP will not be listed or mentioned in any part of a finished trust package. AE-Trust's logo will be printed on the trust binder and the company's name will appear everywhere else that NAFEP's logo and name formerly appeared, including being listed as publisher of the set up and operating guides.

Effective date:
These changes start taking place immediately. Any orders that are currently in process will be completed as they were submitted, unless you and/or the client wish to obtain the Nevada version of the Premier II-NV Trust. To obtain the PII-NV requires the new application. There are major changes to this application and neither NAFEP nor AE-Trust will provide a PII-NV on the old NAFEP application.

Orders for which you are well into the process of completing an application can be finished with the old application, provided that you get it in to NAFEP within the next few days. But in all cases, PII clients would be served better by switching them to the new PII-NV trust before their order is completed, and we will all be better served by switching PI clients to the new PI process. Within the next few days all PI and PII orders must begin to use the new process and applications, and they will be filled with the new Nevada trust versions.

NAFEP and AE-Trust are very excited about the improvements to the trust offerings and new business model. We firmly believe this will significantly improve your clients' estate planning and asset protection as well as implement the most bullet proof UPL protection. And, as you can see from the AE-Trust web site, the NAFEP family of companies can now provide self directed IRA custodial and many other tax and retirement planning services.

For more information:

NAFEP
PH: (801) 266-9900
FX: (801) 266-1019
info@nafep.com

AE & Trust
PH: 866-654-6111
FX: (702) 562-7122
info@trusteeamerica.com
www.TrusteeAmerica.com

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