That Could Be Me!

silhouette-man-yellling-into-a-phoneIn October 2009, when Nicolas Cage sued his accountant, Sam Levin, for $20 million, I suspect that every CPA had the same chilling thought: That could be me!

Cage is what accounting and wealth management professionals call a “nightmare client.” As Scott Martin writes in this article for The Trust Advisor, America’s leading wealth management e-newsletter:

Few would argue that Nic Cage is an ideal client. He had the Hollywood millions to look like a marquee addition to any book, but there’s no evidence that he had the discipline to actually follow professional advice.

Levin swore repeatedly that he told the star to stop spending on everything from rare comic books to entire Caribbean islands or else he’d end up deep in debt when the roles stopped coming in.

By 2006, Cage was getting tired of working back-to-back B movies and the cash did indeed stop flowing quite so fast.

Coincidentally, that’s when Cage’s unpaid IRS bills spiraled out of control. Shortly after that, he slapped Levin with a $20 million lawsuit for not only failing to pay the taxes but pushing him on a “speculative and risky” real estate buying binge.

The fight dragged on for years but at the end of the day, Levin got the claims dismissed but had to relinquish $129,000 in unpaid tax prep fees. And because he did nothing wrong as far as the court was concerned, he gets to relaunch his career.

Allow me to offer three words that can protect accountants like Sam Levin from unfair accusations from unreasonable clients: Archival Property Solutions.

If Levin had required Cage to document and catalog all his non-financial assets and store the resulting digital catalog securely online, this dispute may have been prevented from the get-go. In such a case, the client could then be held accountable for not disclosing certain assets.

An advisor knows about cash in the bank. He or she may not know if the client bought a $2 million comic book or a $50 million Picasso. Money loses its identity when it gets converted to tangible goods. An Archival Property Solutions online catalog could have enabled remote collaboration between Cage and Levin, resulting in a more cooperative, transparent and effective process.

What’s more, Cage could have enjoyed viewing and scrolling through his entire portfolio of assets alone or with friends and family members in distant locations via computer, tablet or phone at any time. This portfolio could include photo images, digital copies of purchase receipts, current appraisals, and descriptions of condition, location, provenance, and other details of each and every item.

Instead, Cage was able to drag Levin’s name through the mud and temporarily derail his career. Thankfully, Levin has restored his reputation and recently joined one of the highest-profile accounting firms on the West Coast.

There is a clear moral to this tale: If you work with high-net-worth clients, protect yourself from unjust accusations by insisting that all assets that influence your accounting or wealth management decisions be documented and cataloged by Archival Property Solutions.

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About Archival Property Solutions, LLC

Archival Property Solutions documents and catalogs the tangible assets of high-net-worth owners for their personal viewing pleasure and support of crucial Family Office and wealth management activities. Clients who have substantial and complex holdings in multiple locations can now keep their catalog of non-financial assets stored securely for private, confidential access via computer, tablet or phone. When maintained with current information, this confidential digital catalog can keep owners and their trusted advisors better informed, enabling them to stay current with professional service objectives and to plan for, protect against, cope with and recover from life’s unexpected events.

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