I am “just” astonished. And appalled. And deeply distressed.

As I went to create this post, I noticed I have a post category called “family relationships.” I don’t have one called “advisor relationships.” But I’m thinking maybe I ought to create one!

The revelation, yesterday, has completely consumed me.

I spent most of yesterday afternoon, and several more hours this morning, drafting a letter to J____, our legacy planner.

Problem is: he’s on vacation.

Or maybe that’s not a problem. He returns next week, Monday. He’ll have the letter when he returns.

Meanwhile, I can get this issue off my mind and get on to other business I need to attend to!

So here’s what I wrote:

From: John Holzmann
Sent: Tuesday, April 15, 2008 10:57 AM
To: J_____
Cc: [J_____'s assistant; still in the office this week]; L_____ [our CPA]; B____ [our attorney]; Sarita; [our firm's general manager]; [our four kids, who have all been involved in the legacy planning process]
Subject: Building or Destroying Trust

J____:

The reason for this letter is to let you know that it feels to Sarita and me as if you have betrayed our trust. We want to keep working with you, but we are feeling that our relationship with you has been strained.

******

You wrote, in your email informing us of the outcome of your meeting with B____ and L____ on March 24th:

Our meeting this morning with L____ and B____ went as we expected. They had a couple of good thoughts and comments that we discussed and I added a couple of sentences to the Master Stewardship Plan text to reflect those comments. They are both fully supportive of the proposed plan.

Subsequent to that statement, of course, you made several verbal comments along similar lines.

And then L____ and I met yesterday to review and sign Sarita’s and my tax returns.

During that meeting, your 501(c)(3) proposal came up. L____ and I talked about our respective views on the subject. L____ mentioned that B____ raised the subject of feeling the need to acquire a Private Letter Ruling in the matter. You dismissed the concern. L____ said he came back, however, and told you . . . let me quote him directly: “I specifically told J____, ‘Get me on the record: I will not sign off on your proposal without a Private Letter Ruling. . . . ”

He further told me that, in response to his and B____’s demand for a Private Letter Ruling, you told them that you had discussed the matter with an attorney [i.e., implicitly, I take it, C____], and that the attorney had advised you to avoid acquiring such a document: “Don’t get on the IRS’ radar”–something like that. But now I have talked further (since yesterday) with both B____ and L____ and, as far as they are concerned, your advice is playing dice with the IRS. Those are huge risks, it appears, you’re urging us to take. –But you never mentioned them to us in your presentation.

J____: Based on the obvious depth of conversation you had with L____ and B____, it seems to me pretty hard to imagine that you somehow misunderstood their objections as indicating support for your proposal, much less “full support.” Indeed, I am astonished that you never mentioned B____ and L____’s specific counsel and concerns–especially after I raised, in my follow-through letters last Wednesday, some of the very concerns that motivated their objections.

It was Sarita’s and my understanding that you were running your proposal by our current counsel not merely for the sake of formality, but for our protection.

I wouldn’t mind if you had told us L____ and B____’s real position(s) and then expressed your counter perspectives. But to discover that you forced me to have to follow through on my own and find some of the very same concerns that, without notice from you, motivated B____ and L____ to object to your proposal during your meeting with them; and, to find that, when I brought up concerns about UBTI on the basis of my own research, you never even mentioned that B____ and L____ had raised similar concerns, but, instead, permitted me to think and say (as I did in my 6:02 a.m. email on Thursday April 10) that L____ and B____ must be ignorant about the issues I was raising concerning the proposed move to 501(c)(3) status; and, finally, for you to act as if L____’s concerns are of no account: I find that behavior on your part rather unconscionable!

Sarita and I appreciate your desire to help us achieve what we desire. But we think you can do that without either misrepresenting–or failing to present–the concerns of our other counselors!

Considering how you handled L____ and B____’s counsel following your meeting with them, J____, I seriously question whether it is true–as you implied in your conversation with L____ and B____–that you spoke about the unique aspects of our case with C____. I also question whether it is true that C____ specifically advised you to avoid acquiring a Private Letter Ruling.

As a result, therefore, you will see that I have written a letter to C____ in which I ask to discuss openly with her the matter of acquiring a Private Letter Ruling and to clarify, so she can appropriately respond to, the specific issues that L____ wants–and now Sarita and I want–answered concerning the acquisition of a PLR.

In conclusion: We would like to continue to work with you, J____. But you need to know that serious questions have now arisen in our minds following this–what appears to us to be–a significant breach of trust.

Thank you.

Whew!

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