A drink at the bar

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After leaving the lawyer’s office, Jack, Senior stopped back by Jerry’s Bar and nursed a bourbon and soda. He had to let all that sink in and a quiet drink was what he needed. His driver sat at the end of the bar sipping a cola and resenting the fact he couldn’t have a cold beer. At the other end of the bar was a delightful looking thirtyish looking woman drinking alone. She was not dressed like a pro, but rather like a housewife who just needed some time away from the day. Jack slid over, “Hi, I’m Jack Jenkins, can I buy you a drink.” At first she demurred, but Jack ever the salesman said, “I really don’t like to drink alone, that makes one an alcoholic, and you wouldn’t want me to be an alcoholic would you?” She smiled, “Of course not, but I’ve had my limit, is it okay if you buy me a ginger ale?” Jack smile, “no problemo, Jerry fix this fine lady up with your best ginger ale.” She giggled. Despite her modest attire, she was attractive. After much flirting and an afternoon of talking, she had to leave to go pick up her children. He promised himself, he would come the next day for a drink to see if she returned.

That evening Jack, Jr.’s phone rang. “Hi, Mr. Jenkins, this is Elmo, you Dad went to some lawyer’s office today for a long time.”

January 16, 2010

“Hey Dad, how are you doing?” Jack, Jr. asked as his father walked into the dealership. “Great, Son, but I do need to talk to you. I met with a lawyer who specializes in Estate Planning. He went over my options and we are looking into creating something known as a Charitable Lead Trust. What that does is reduce my death taxes and gives a bunch of money to the University of Alabama each year for 20 years. After 20 years, whatever is leftover is yours. I don’t understand it all, but he is sending me some projections. Then, you and I need to look at them and go over to the University of Alabama President and see how they would spend the money. We need to make this a priority. If someone is out there to kill me, we need this plan in place.”

A Plan develops

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anuary 15, 2010

“Hello, Mr. Jenkins, how are you today, did you bring with you that financial statement?”

“Yup, sure did” replied Jack Jenkins, Sr. to the estate planning lawyer, Mr. Thaddeus Dobbins.

“Before I show it to you, is everything I tell you confidential?” Jack inquired. “Of course, anything you tell me is as sacrosanct as if you told it to your priest”, the lawyer responded.

As the lawyer looked at the financial statement he made some ‘hmm’ noises. After about two minutes, he looked up at Jack, Sr. “I’ve got good news and I’ve got bad news. First the good news, if you die this year, you won’t owe any estate taxes. The bad news is that you have to die this year or you will get hammered. There is a moratorium on estate taxes this year, but next year you will owe estate taxes on everything above $1.0 Million. You do get a closely held business exclusion instead of $1.5 Million, but big deal. So, you need to look into some estate planning. Given your recent DWI arrest, insurance companies would rate you for life insurance, so a life insurance trust is not an option (and it would be expensive at your age anyway). How charitably minded are you?” Lawyer Dobbins asked. “I, of course, have some great feelings for the University of Alabama, and wouldn’t mind leaving them something.” There is something called a Charitable Lead Trust. In theory, you give a chunk of your estate for a number of years to the charity and at the end of that term it goes to your family. For example, let’s say that you give $100,000,000 of your estate to such a trust, and it paid two percent to the University of Alabama every year for 20 years. You would get a tax deduction of $32,322,300. About 1/3 tax deduction. If you gave 4% per year to the University, it would total about 54,000,000 in deductions. But this would mean that the assets need to generate at least 4% per year in income.”

“Can that include rental income?” Jack asked, sheepishly. “Of course and quite frankly given that fact that you own the land that your dealerships sit on, that might be a good plan for the land which is pretty valuable.” Dobbins replied. “Yeah, the rents are already about 4%, net” he added. “The catch is that the rents would have to equal 4% of the net fair market value of the land, each year.” Dobbins responded. “So, if the land over 20 years increases to say $200,000,000, the rents would have to double over that time frame which could cause some cash flow issues for the dealerships, but also would possibly lower their value for estate tax purposes if we made the leases read that way now”, Dobbins added smartly.

Bar chat

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January 5, 2010.

“Hey, Jerry how are you doing?” Jack, Senior exclaimed. “I’m doing great you sorry SOB. How’s Junior doing?” Jerry replied. “Pretty good I guess, he got his wick wet with some babe, he met here the other night”. “Well we aims to please around here”, answered Jerry. “Give me a bourbon and soda, hell I’ve got a driver.” Big Jack smile. They talked for awhile. “Jerry, I had someone try and cut my brakes the other night, New Year’s night while I was in New Orleans. I hate to ask, but I want to be sure that Junior was here on New Year’s night during the Houston – Notre Dame game.” “New Year’s night, you said?” Jerry asked. “Yup”. “Well, that’s a problem, I wasn’t here New Year’s night. New Year’s eve sucked all the energy out of me, so I stayed home that night and I had a new manager on duty that I just hired last week who probably wouldn’t know Junior, but I’ll ask”, Jerry replied. “Thanks, man, he probably was here, but this just has me a bit scared. Some SOB wanted me dead.”

A cut what?

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January 2, 2010.

Jack, Sr., hopped into his turbo charged Muscle. He headed north toward Minton. He was moving along at about 65 miles per hour. He decided to exit and drain the lizard. When he put on the blinker to turn right, his foot automatically started to touch the brake pedal which immediately hit the floor, no brakes. “Oh, shit”, he thought. He took his foot off the accelerator and let his car drift and slowly pulled onto the Emergency lane. How was he going to explain this to the cop. Then he noticed his satellite vehicle emergency device. He hit the red button and a nice lady came on. “How can I help you” she asked. “I need a tow truck out here, my brakes failed”, Senior replied. “Anyone hurt?” she politely asked. “No, just need a tow”. “We’ll send one in five minutes to your location which is showing on our computers.”

Hank Melbourne and his tow truck arrived shortly thereafter and towed Senior to the dealership in town. The mechanic looked at the car and saw the problem. “Someone sure messed with your vehicle”, he said sardonically. “What do you mean?” Jack asked fearfully. “Pretty amateur job, they punctured it with like a pen knife”, the mechanic replied. “When do you think it happened. You say you left New Orleans, it probably happened there. Some punk kid probably wanting to get a thrill.” “Could it have happened before I left for New Orleans from Montgomery?” Jack asked. “Nah, too far” the mechanic answered.

Later that day, a pleasant voice said over the phone “Jack Jenkins Motors, may I help you?” Jack liked that young woman who answered the phone at the dealership. He’d have to give her a raise, he thought to himself. “This is Big Jack, is Junior in?” “No, sir, he said he was up late last night watching football and would be sleeping in late today.” “Thanks, darlin’,” Senior replied. Jack, Sr. dialed “Junior’s home phone, it rang a couple of times and a sleepy sounding Jack, Jr. answered the phone. “Hullo”. “Junior, this is your dad, I damn near got killed this morning on the Interstate”. “What?”, Junior asked. “I damn near got killed heading home from New Orleans”, Jack, Sr. repeated. “Hhow?” Junior asked. “Brakes failed on the Interstate and I was able to roll oft the road. But had there been an emergency, I’d have been toast.” “Are you getting them fixed?” Junior asked. “Yeah, I’m at the garage right now. Someone punctured the line with a pen knife. Son, what were you doing last night?” “Dad, do you think I’d do something that chicken sh… to cut your brake line? If you need to know, I went to Jerry’s Bar to watch the game with some friends, met a hot looking chick in a Houston jersey who was quite drunk and quite willing and went her place. And yes I had my raincoats with me. I left her place at about 4 a.m. and got home around 5 a.m. and I’m pretty tired right now”, Junior responded in an obviously irritated tone. “Sorry, son, this just shook me up.” “I understand Dad, once you get your car fixed, let me know when to meet you at Hardee’s, and I’ll be there.”