1:25

Alright, we got our man Griffin here

1:27

who is a recovering attorney, which

1:29

is always fun to say because you all are

1:31

a bunch of alcoholics. All a bunch of crazy

1:33

people. Today's a very important

1:36

conversation, not only for me, obviously

1:38

for you, but I literally believe

1:40

everyone in the United States specifically,

1:43

let alone globally should have some

1:45

sort of a state or legacy plan. However,

1:47

you want to word it. A lot of people who

1:49

know me, I've been through a lot with it, both

1:51

personally and professionally. And

1:53

I know you probably have millions of stories

1:55

as well, but today we

1:57

want to hit a, on a little bit of that, and get that

2:00

conversation moving forward. So without

2:02

further ado, why don't you tell us a little bit about yourself,

2:04

why you're recovering and then also

2:06

why you're doing what you're doing today.

2:09

Okay my name's Griffin Bridgers and

2:11

like story said, recovering estate

2:13

planning attorney and I'll explain a little bit

2:15

more about what that means. But for

2:17

a long time, I spent 14 years

2:20

in active practice still do

2:22

a little bit part time. But most

2:24

of the time, really what an

2:26

average estate planning lawyers.

2:29

Focus is on to revenue generating

2:31

activities. One is the

2:33

drafting and execution of a state planning

2:36

documents, and the other is

2:38

on the back end. If something happens to

2:40

one of your clients or somebody else, and they have the

2:42

need for assistance with administering their estate

2:44

or administering a trust, stepping

2:46

in to be able to interpret what the document

2:48

says and make sure that the

2:50

fiduciary, whether it be an executor or trustee

2:53

has the right guidance to execute. Get

2:55

assets into the right hands and pay creditors

2:57

and Uncle Sam. So

3:00

for a long time, those were the

3:02

two legs of the stool. And

3:05

a stool really needs to have a third leg. And

3:07

my struggle was that there

3:09

was no. Economic

3:11

incentive in the practice of law to

3:14

have that third leg. So

3:16

with that type of setup,

3:18

there was a lot of, inefficiency

3:21

to start with. And also

3:24

the incentives didn't align. It

3:26

forced you to have very transactional

3:28

relationships as an attorney. It was

3:30

very rare that you'd get repeat business.

3:33

And I always challenge people

3:36

that to look Daytime

3:38

or nighttime TV and look for the legal zoom

3:41

commercials. For a long time. People

3:43

said legal zoom is going to replace attorneys

3:45

It's you know, they have an easier way to do

3:47

it. You can just go online and get it done

3:49

No questions asked and

3:52

the problem is There's

3:54

a statistic that tends to float between

3:56

65 to 70 percent

3:58

of Americans not having a will,

4:01

but if you look back two

4:03

or three or four decades, that

4:06

statistic has not changed

4:08

at all, which tells us

4:10

that the access, lower

4:12

cost. Ease of doing this

4:14

through the internet and fees

4:17

being lowered through providers like legal

4:19

zoom hasn't moved the needle. And

4:22

if you look at the average legal zoom commercial,

4:24

not to point them out or give them free advertising

4:27

only because they're the most visible and one of

4:29

the first disruptors in the space,

4:32

but you'll notice they only really

4:34

advertise corporate and trademark services.

4:37

Because they've realized that

4:39

selling wills and trust directly

4:42

to the consumer is

4:44

not a scalable model. You don't

4:46

exactly get people in the door. And I

4:48

think there's a lot of misinformation

4:51

and confusion between the tech

4:53

world, the wealth management world,

4:55

and the attorney world in terms of how

4:58

the psychology And emotional

5:00

aspects of a state planning fit

5:02

into what has traditionally been a highly

5:05

transactional environment

5:07

when really it should be a highly

5:10

relationship driven environment

5:12

and part of what motivated

5:15

me to step out of that role is to find

5:17

better ways to make the incentives align

5:20

so that a state planning can become something

5:22

that one excites people

5:24

so that you can view it through the positive lens.

5:27

It's no longer something you have to do. But

5:29

something you get to do and also

5:32

to view it as a process

5:34

and not necessarily a set it and

5:36

forget it. Pass fail thing of do

5:38

you have a will? Yes. No. Do you have

5:40

a revocable trust? So

5:43

the comprehensive guidance needed

5:45

to create a comprehensive estate

5:47

plan covers a lot

5:49

more bases than just the traditional

5:51

document driven type of approach

5:53

that a lot of attorneys and

5:56

even. A lot of tech providers, I

5:58

have focused on because there's a lot of

6:00

innovators out there in the space saying,

6:02

okay, yeah, we want to make it easier

6:05

to get a will, or we want to increase

6:07

that percent of Americans who have a will,

6:09

but perhaps you're solving for the wrong

6:11

problem. It's if you go to

6:13

a personal trainer and

6:16

they say, okay, the only

6:18

metric of success is that you have to

6:20

go run a marathon. Anything short

6:22

of that you fail at. And

6:25

nobody's going to be there to cheer you

6:27

on until you die. In that

6:29

case, how many people are going to actually do

6:32

that then? And the way that's how

6:34

estate planning is set up right now. And

6:36

nobody's really stopped to ask why

6:38

in the average mind of the consumer,

6:41

do they view getting

6:43

a will Or an estate plan is

6:46

a marathon level, monumental

6:48

task that is hard to tackle.

6:50

And if that's the case, instead of trying to

6:52

solve for that and get more people to run a marathon,

6:55

can we not make incremental steps in

6:57

the process that create a

6:59

more meaningful outcome?

7:02

And create momentum for people to participate

7:04

in estate planning itself.

7:07

It all comes down to this journey

7:09

of life, right? It is a

7:11

journey estate planning, financial planning

7:14

which are very intertwined. They're a lifelong

7:16

journey. This isn't something you can set and forget.

7:19

Our industry loves these giant, like the one

7:21

they used to, those giant Portfolios. And

7:23

they would create a giant financial plan that answered

7:25

everything and throw it at you and you're good to go. And

7:27

then two weeks later, something changes and the whole

7:30

plan's gone is state planning to

7:32

me and financial planning one

7:34

need to run hand in hand, but I have that same philosophy

7:36

of this thing is

7:39

a lifelong thing. Let's bite a little bit at

7:42

a time and create this

7:44

bigger thing, this complexity it

7:46

isn't something you can just hire one of us and

7:49

get it done. Not to mention the most

7:51

important thing you had said in that. The whole conversation

7:53

was it's relationship based.

7:56

It is not transactional. And

7:59

that's usually the issue. Now we're seeing

8:01

a lot more on the wealth management side of people

8:03

don't care about investments. They don't care really

8:06

about the hard set plan. They

8:08

want someone there for

8:10

when things go good or bad,

8:12

that they have their back and they can tell them, Hey,

8:14

you're good to go. This is what we're doing, but we're

8:16

good to go. And that's really what they want to

8:18

see from the estate planning side too. Yep.

8:22

So agreed. Agreed. So let's

8:24

we've discussed that we, obviously

8:26

it's not a money issue but it is

8:28

more of a relationship mindset

8:31

issue. What

8:33

is your solution to that? How do you

8:35

solve in your opinion this

8:37

issue?

8:39

I think it's redefining the term

8:41

estate planning because traditionally

8:44

that term has been equated

8:46

from a marketing and transactional perspective

8:48

with the question of whether or not you have a will

8:50

or trust. Again, it's that pass fail type

8:53

of analysis, ignoring that there's

8:55

a lot that leads up to it. So really

8:57

what we as a profession, you're really

8:59

aligned need is to

9:02

agree on A process

9:04

that creates meaningful progress

9:06

towards that goal, which may fall

9:09

about two thirds through the process of

9:11

getting a will or trust. Because as

9:13

anybody who's operated in this space knows,

9:16

just getting the documents and signing them is

9:18

only part of the battle. There's a lot that leads

9:20

up to that. And there's a lot that follows

9:23

that too, in terms of funding the estate

9:25

plan. So really the bigger question

9:27

right now is what leads up to that. Yeah,

9:29

you may not be able to get more than

9:32

65 or 70 percent of Americans

9:34

to not have a will anymore and

9:36

meaningfully bring down that that metric.

9:39

But there's a lot of other things

9:41

that go into estate planning. For instance

9:43

I always like to tackle the scare tactic

9:46

marketing. The common trope

9:48

is that if you don't have a will, the

9:50

state creates one for you. There's

9:52

a set of what's called intestacy laws

9:55

in every state that dictates a

9:57

preset depending on your family

9:59

situation and blend who gets

10:01

what in what dollar amount or what percent.

10:04

And it usually looks at are you married, do

10:06

you have any kids, are the kids of

10:08

your current marriage, or are they stepkids

10:10

to your new spouse, and are

10:12

they minors or not. There's all these little

10:14

permutations and we don't need to get into those

10:16

because they vary state to state. But

10:19

I think especially for financial planners,

10:21

they're in the privileged position to know the

10:24

information that the attorney is not

10:26

going to know. And one of those items of

10:28

information that a lot of people are surprised

10:30

to find out is that it may be that

10:32

you have several wills in place already.

10:35

So what do I mean by that? Traditionally,

10:37

a will or a revocable trust

10:40

is designed to be a backstop. It

10:42

catches all of your assets and makes sure

10:44

they go either specifically

10:46

or in percent as a whole to

10:48

whoever you name. But, when

10:50

we look at things on an asset by asset

10:53

basis, there can be asset

10:55

specific wills that come into play.

10:58

For example, If you have a residence,

11:00

maybe you're married, you might co own that

11:03

with your spouse. And depending

11:05

on the form of title, a lot of times

11:07

the default is that you own

11:09

it as what's called joint tenants with right

11:11

of survivorship. And that's a fancy

11:13

way of saying that if you're a married

11:15

couple and you co own a residence and something

11:17

happens to one of you, The other becomes

11:19

the 100 percent owner automatically

11:22

by operation of law. No questions asked.

11:25

That overrides the term of a, an estate

11:27

plan that you create. So titling

11:29

supersedes what you put into your

11:31

actual documents and also all almost

11:34

becomes a will in and of itself. There

11:36

might also be other assets out there like

11:38

life insurance and retirement accounts,

11:40

annuities, other tax deferred types of

11:42

accounts where a beneficiary attaches

11:45

to it. If you name an individual

11:48

as a beneficiary on one of those accounts,

11:50

then that asset is going to automatically go

11:52

to that individual or even a group of

11:54

individuals you name as primary or

11:57

contingent beneficiaries. Again,

11:59

that becomes its own Asset

12:01

specific will, and again, it

12:04

overrides the terms of any estate planning

12:06

documents you might put into place

12:08

unless somehow your estate

12:11

becomes the beneficiary or a revocable

12:13

trust does, which is usually

12:16

a, an outcome that has to be intentional

12:19

and that you don't necessarily fall into by

12:21

accident in 100 percent

12:23

of cases. And I've even seen

12:25

increasingly on The taxable

12:28

account side that if you have a cash account

12:30

or an investment account or something like that again,

12:33

you have that joint tenancy override. We

12:35

talked about with residences if you're married,

12:37

but even if you're not married, I've seen

12:39

a number of custodians out there

12:41

not to pick on them, but they are incentivized.

12:45

To say, okay, if you're calling into Fidelity

12:47

or Schwab, the, they want

12:50

you to attach a beneficiary to

12:52

your account. Why so that

12:54

they don't have to deal with the probate process.

12:56

There's a set of laws out there that makes it

12:58

easier for a bank or financial institution

13:01

to deal with an account if they can just send it

13:03

to a new recipient and not have to

13:05

deal with executors or other people like

13:08

that. So on the financial side,

13:10

Okay. A lot of custodians are really pushing

13:12

the idea of adding a beneficiary.

13:15

Guess what? When you do that becomes

13:17

a new asset specific will, and

13:20

that is a state planning in and of

13:22

itself. And a lot of custodians

13:24

are often pushing that. Guess what? Without guidance

13:26

of an attorney. I sometimes throw

13:28

up on the LinkedIn that I have some fidelity

13:31

accounts, not to pick on them, but it's only because

13:33

I got the specific email from them a couple of years

13:35

ago, like prompting me to add a beneficiary

13:38

to my taxable accounts. And I was like What's

13:40

the context of that? How many people have

13:42

gotten that email and then said, Oh yeah,

13:44

I need to add my wife or my kids or something

13:47

like that. Not knowing if they've gone through

13:49

the estate planning process by doing

13:51

that, they've now overridden their documents.

13:53

So with that being

13:55

said, it's all these little assets,

13:57

specific wills that come into play.

14:00

And you need somebody who can view those comprehensively

14:03

and tie them all together. That

14:05

is something that usually comes on the back end

14:07

of creating a state planning documents when we look

14:09

at funding, but it's also something I need,

14:12

I think needs to come on the front end

14:14

too, so that you

14:16

can keep all the pieces in

14:18

line and know what has to happen

14:21

before you even go into the

14:23

approach of getting documents in place

14:25

and knowing what has to happen on the back

14:27

end. That's just kind of one small

14:29

example in. broader

14:32

scope of estate planning that we

14:34

need to rethink in terms of looking

14:36

at it on an asset by asset basis

14:39

instead of just taking this traditional

14:42

backstop approach.

14:44

Absolutely. And the changing from estate

14:46

planning and I say legacy planning because that's

14:48

truly what it is. At black mammoth,

14:51

our modern family office, we take

14:53

into account all of those assets and the

14:55

plan itself also takes

14:57

into plan. What that legacy is going

14:59

to be after. And a lot of

15:01

financial planners and advisors only

15:03

care about the person during their living times

15:05

and usually all the way up until retirement.

15:08

And then it gets a little wishy washy of

15:10

who's helping, distribute income. And

15:13

that's where I see it from our side. The

15:15

bigger issue is because it's

15:17

going and all we're caring about up until retirement.

15:20

And then it's by the wayside where this

15:22

legacy planning comes into play after

15:25

their death. What they want to achieve

15:27

what they want to leave it And if you're doing

15:30

all your planning correctly on the front side

15:32

While you're living while you're healthy while you're

15:34

young and setting everything up over

15:37

time Then it's a way easier

15:39

transition for not only when

15:41

you retire and how you distribute your income But

15:43

two for the legacy planning

15:45

side and no those conversations

15:48

are easy No, they're and yes, they're complex,

15:51

but it's over the course of time

15:53

and it's dependent on You Who you are

15:55

and what you want to accomplish. Not,

15:58

Hey, I just need to get this done to

16:00

protect, what are we all saying our assets

16:02

in something you brought up that had

16:04

come up a few years ago here in the state of

16:06

Iowa was

16:08

that advisors really

16:11

just insurance people were pushing

16:13

beneficiary designations as well, right? Getting

16:15

all the beneficiaries set up, et cetera. Someone

16:18

didn't change the document

16:20

correctly towards someone's estate

16:22

plan. As they were told to do

16:25

so and that person had passed and they got sued

16:27

for it. And that's where all

16:29

of a sudden our industry here locally,

16:31

everyone got afraid of doing beneficiaries

16:33

and all of that. And for me,

16:36

I went the other way and I

16:38

knocked down and said, we need to understand

16:40

why this happened, what happened and

16:43

understand what the cause and effect could

16:45

be, which led me into estate planning,

16:47

which is where I got my minor in

16:49

law. For that specific reason.

16:52

And so that's where I want our industry to recognize.

16:54

It is our duty to understand.

16:57

It is our duty to help because we're

16:59

the ones in there every

17:01

day dealing with their financial plan, which

17:03

equates to their legacy plan every day as

17:05

well. You need to

17:07

get educated. You need to work with Griffin.

17:10

You need to do all of these things

17:12

because that is the benefit of having. A

17:15

financial planner for a client

17:17

agreed. And I like that you brought up legacy

17:19

planning because money has meaning.

17:22

And I think part of the the psychological

17:24

emotional element of this too, is

17:26

that a lot of people have fear about

17:29

approaching this because there's

17:31

this belief that you have to get it perfect.

17:34

At first glance, and a lot of people

17:36

are going to put it off because there's practically no way

17:38

to get it perfect. And every time you change

17:40

your mind, you're then going to have to pay an attorney

17:43

to update everything. So

17:46

I can't credit myself

17:48

with this approach. It came from another financial

17:50

advisor. I work with, but they

17:52

tend to distinguish between the die tomorrow

17:55

plan. Versus the die old plan

17:57

and legacy planning really fits

17:59

into that die old plan. But

18:01

the die tomorrow plan is something where

18:04

if you don't have something in

18:06

place right now, it helps to

18:08

at least have the stopgap estate

18:10

plan so that you at least

18:12

have made your wishes known, at

18:15

least in some form of enforceable

18:17

legal document. But that

18:19

being said. One of the issues

18:22

I came across to as a practicing

18:24

attorney is this idea of legacy

18:26

planning, and there's

18:29

this positive psychology way you can approach

18:32

it versus a negative psychology way you

18:34

can approach it. And there's been a big push

18:36

amongst higher net worth families, and

18:38

I have a feeling it's going to trickle down this

18:40

approach called wealth 3. 0 and

18:43

the I guess the zeitgeist is

18:47

that traditionally. Especially for family

18:49

businesses, we've considered the

18:51

shirt sleeves to shirt sleeves in

18:53

3 generations type of phenomenon

18:55

or 2 generations, depending on how you look at

18:57

it. And there's

19:00

a belief that somehow that is perpetuated

19:02

itself to become a self fulfilling

19:04

prophecy. And that if you're approaching

19:06

the estate planning process, I'm Assuming

19:09

that failure is inevitable and

19:12

planning to avoid that failure,

19:14

then you're pretty much going to create

19:16

that failure anyway. So

19:18

a lot of estate planners on the attorney

19:21

side approach estate planning from the perspective

19:24

of what can go wrong. But

19:26

rarely do we approach it from the perspective

19:28

of what can go right? Because you

19:30

only hear about the failures. You don't hear

19:32

about the success stories and the

19:34

failures tend to be at extreme ends of

19:36

the bell curve. And oftentimes,

19:39

you brought up an error in a beneficiary

19:41

designation, but oftentimes those errors. Errors

19:44

are really just pouring gasoline

19:46

on a fire of an issue that was

19:48

already there in terms of family dynamics

19:51

that frankly no estate plan was really

19:53

going to fix ultimately at the end

19:55

of the day. So legacy

19:58

planning sometimes requires a certain

20:00

amount of looking in the mirror and saying,

20:02

okay if you

20:04

are an objective observer, looking

20:06

at our family and the meaning I

20:08

want to leave when I'm gone. How

20:11

much of what I do during life is going to affect

20:13

that as well. And, there's

20:16

every client, has the need for an advisor,

20:18

but sometimes there's some things that,

20:20

you know, in terms of how kids are raised

20:22

and other things and family conflicts that

20:25

are really going to. Follow you across

20:27

multiple generations, and those are problems

20:29

that can't always be solved. And

20:32

there's a belief that possibly money and inheritance

20:34

can solve them, but it may not.

20:36

And part of what got me into doing what

20:38

I do now is that

20:41

I was privileged enough in my twenties

20:43

to receive a modest, gift in

20:45

it as it. An advance of inheritance

20:47

which I later came to know in tax

20:50

parlance is known as an annual exclusion

20:52

gift for gift tax purposes.

20:55

But it was something where it came

20:57

from an older generation. And for

20:59

the first time in my life, my parents

21:01

didn't control the purse strings on.

21:03

That wealth and I got to self teach

21:06

myself what it meant to manage, invest,

21:09

report for tax purposes, all that

21:11

good stuff. And those are

21:13

lessons that I wouldn't have learned

21:15

using most modern approaches to estate

21:18

planning that avoid. Ownership

21:21

of wealth and encouraged trust

21:23

ownership of wealth for the next generation.

21:26

And we're on the cusp of the wealth wave. And

21:28

there's a lot of tech money and private equity money

21:30

going into that idea that, billions of

21:32

not trillions of wealth is going to change to

21:35

the hands of gen X, Y, Z,

21:37

and alpha in the next couple of decades.

21:39

But what few people realize.

21:42

Because from my side, attorneys

21:44

have spent their time setting up estate

21:47

plans that are going to put that wealth into

21:49

trusts, usually for the lifetime

21:52

of the next generation and possibly for

21:54

multiple generations. And

21:56

everybody is used to dealing in a world

22:00

of individual ownership of wealth. Few

22:02

people have considered the effect of interacting

22:06

with trusts and what those mean and

22:08

how that affects investments and the

22:10

way you manage wealth and the way you receive

22:12

wealth and even the psychological

22:15

effects of receiving that wealth

22:17

in a trust thinking, Oh, mom and dad

22:20

didn't trust me to get individual ownership

22:22

of wealth. And that's what I've dreamed of. For years.

22:24

What got me out of the practice of law

22:27

full time was the idea that, yeah I

22:29

pretty much always had to represent one

22:31

generation of a family. And I couldn't

22:33

take that holistic view to be able to say,

22:35

Hey, These are common goals that

22:38

seem like a good idea to you, but

22:40

have they really been bought into by

22:42

the next generation? Do they care if

22:44

you save estate taxes? Do they care

22:46

if they're protected from creditors? Or is it

22:48

going to mean a lot more to them if they can have

22:51

the money with the risk that comes along with

22:53

it? And we're missing a lot of opportunities,

22:55

I think, in the coming years to create

22:57

growth by that wealth and

22:59

the management of it and the opportunities

23:02

that come with it as well.

23:03

You bring up the best point, the most important

23:06

point. No one talks about that. And

23:08

I also believe most of it's going to be put

23:11

into some sort of trusts.

23:13

And there's going to be a huge generation

23:15

that goes, I want access.

23:18

It's my money. And it's not,

23:20

it is it right. Depending on the situation. And

23:22

that is an issue because as a planner

23:25

or an advisor, Or even now

23:27

being an attorney, who did they

23:29

appoint and who was in there as trustee

23:31

that is in control of this and

23:34

how complex did this trust go? Do

23:37

they know what's in the best interest for the

23:39

beneficiaries for this money or

23:41

for whatever's going on? And that doesn't even

23:43

touch in. It's all

23:45

about emotions, right? That doesn't even

23:48

come close to understanding the

23:50

beneficiaries, emotions, what's going on in

23:52

their life and everything. It is truly

23:55

for me more of a transaction into

23:57

which I hate in our space is AUM. Everything's

23:59

about investments. That is what is going

24:01

to happen. And it's going to cause

24:04

an uproar. And with that,

24:06

I'm going to ask this question. If they're in

24:08

that situation that happens,

24:10

beneficiary is not happy, doesn't even know

24:12

who the trustee is. It could be XYZ

24:14

person who knows in

24:17

general, because we can't get into details. We don't know the plan.

24:20

What can they do about that as a beneficiary

24:23

if they don't like or understand what's

24:25

going on with that trustee and they believe they're

24:27

not doing the job that's best for

24:28

them? I'm going to caveat with nothing

24:30

that I say is intended to substitute for tax

24:32

or legal advice. So I'll get,

24:35

I'll give it the top of the bell curve. Some of

24:37

the things that probably won't be universally

24:39

applicable. What are things you can think about?

24:42

And it's funny you mentioned the my money and I need

24:44

it now. I always think of those JG Wentworth

24:46

commercials about structured settlements

24:48

and annuities and think there's going to be a cottage

24:50

industry of trust busters

24:52

in the future, not in the Teddy Roosevelt sense,

24:55

but more in the sense of, Hey, can we take a

24:57

private trust and get it into individual

24:59

ownership of the wealth? But For

25:01

a lot of modern trusts that have

25:03

at least been drafted in the last 20, 25

25:06

years, what I've seen is that usually

25:09

a beneficiary has the power

25:11

at least to remove and replace

25:13

the trustee. And in

25:16

the effort to get people to actually

25:18

get documents done, we, going

25:20

back to what I discussed earlier it's

25:22

rare that people want to think about death. And

25:25

in the rare moments where you

25:28

can capture their attention long enough, attorneys

25:30

often try to ram as much as they can through

25:33

the process to get as much done as you can

25:35

while you have the client's attention. And

25:37

usually what that means is they have to rush

25:39

the process, which is important

25:41

and not given enough of importance of who the

25:44

trustee of trust is

25:46

going to ultimately be. So usually

25:48

there's some combination of maybe we

25:51

pick a magic age, like 35 or

25:53

maybe. The beneficiary of the trust

25:55

can become trustee or a co trustee.

25:58

So one thing, one solution is

26:00

if that's the case for

26:02

a client who has their own trust set

26:04

up that way, sometimes it's a matter of waiting

26:06

it out. Sometimes you can say, okay I'll.

26:10

Deal with this trustee who I don't

26:12

want to have a relationship with knowing

26:14

that I can defer some gratification and

26:16

tell a point where I can take things over and

26:19

then manage this wealth myself. And

26:21

if it's a situation where the trustee is

26:23

just simply doing a bad job or you don't like

26:26

them, sometimes the beneficiary can

26:28

remove and replace that trustee. Usually

26:31

there'll be some bounds around that. They may have to

26:33

pick a new bank or corporate trustee

26:36

which is really somebody for hire. And

26:38

not necessarily a friend or family member

26:40

who's going to do it. And on that point, the

26:42

beneficiary is not going to be able to name their

26:44

friend who's a roommate in

26:47

college or a dorm mate

26:49

or something like that, who's going to be sympathetic

26:51

to their needs. They're usually going to have to find

26:53

somebody who's Independent or not

26:55

related or isn't going to cave

26:57

to their whims. Similarly, they may

27:00

not be able to name a spouse or a romantic

27:02

partner or something like that. And that's pretty disastrous

27:05

if you think about what the effect of that is

27:07

down downstream. I think in the future

27:09

you bring up a really good point is that for

27:12

an advisor to add value, you're

27:14

really going to have to be able to navigate first

27:16

and foremost what a beneficiary's

27:18

rights might be. Under a trust,

27:21

what are their distribution rights? And

27:23

what are their rights to control and fire

27:26

and replace that person who holds the

27:28

purse strings the trustee?

27:30

And there's going to be no

27:32

universal solution. It's really going to be

27:34

a case by case basis. And

27:36

much we talked about legal or tax advice.

27:39

Some may take a hands off approach and say,

27:41

Hey, we can't review this trust. You've got to

27:43

go to an attorney. Some may yeah. Practice

27:46

law when they shouldn't be doing

27:48

it and dive in. But yeah, here's exactly what your

27:50

trust says. X, Y and Z. You can follow this

27:52

course of action and then some will take

27:54

a more comprehensive approach of saying,

27:56

okay, here's what the trust says. You

27:58

may have these options, but to do

28:01

implement these courses of action, you're

28:03

going to have to go to an attorney and get

28:05

this done. And the question then becomes who

28:08

pays. Is that an expense you can

28:10

charge to the trust or is it something

28:12

where the beneficiary is out of pocket and

28:14

maybe they can seek reimbursement from the

28:16

trust after the fact. So lots

28:18

of things like that coming down the pike.

28:21

And I, I believe the

28:24

family office perspective is

28:26

coming into more play with that because I don't

28:28

actually, I know a lot of attorneys who are trustees

28:30

and I think it's just on paper. Really

28:33

don't know how to manage a family, right? They don't know how to manage

28:35

wealth. They'll go hire an investment advisor

28:38

or something and feel like that's it. And

28:40

again, we've, we talked about that. That means we're

28:42

missing the emotional piece. That means we're missing the planning

28:45

piece. And with these trusts

28:47

that I believe in, and we've set up a couple

28:49

on the legacy side that are set up for a

28:51

couple generations, you have to actually

28:53

do financial planning. There is a lot more that

28:55

goes into it, not just set it and forget it assets,

28:58

kick off some income to them. There

29:00

is a really good conversation

29:02

and relationship that needs to be had between that trustee

29:05

or the trustee's team and that

29:07

family member or the beneficiary, which

29:10

is where I believe we in my

29:12

industry need to step up more, we cannot

29:14

be afraid of compliance or our

29:16

custodial responsibilities. We

29:19

need to be able to take that on. And

29:21

that's what I do, right? I'm a trustee for a couple of

29:23

plants. Yes. Do I have to have surprise

29:25

audits and more costs for

29:27

compliance? Of course. But

29:29

in my eyes, I'm doing what is best

29:32

for the family for those generations

29:34

because I'm in there knee deep with them.

29:37

I'm watching their children grow. I'm understanding

29:39

what's going on in their life. And if you just

29:41

hire a third party that has to come in,

29:44

they're not going to know those things. And then

29:46

it's going to turn into turmoil. Then

29:48

you're going to have beneficiaries fighting. Then you're going to have,

29:50

lawsuits. Then you're going to have people

29:53

saying, Hey, is the trustee really doing their fiduciary responsibility?

29:56

And it just gets messy. So I really see

29:58

that happening. And I, and whoever's

30:00

listening from our perspective in our

30:02

industry, question me on that. I

30:04

would love to have a conversation and I believe

30:06

and I know in my heart that's where we need

30:08

to move to. One other question I had

30:10

for you was

30:14

Trustees get paid, don't they? They do.

30:16

They're entitled to reasonable compensation,

30:19

quote unquote, in each state.

30:21

What that means is very

30:23

loose. There's no black and white guideline

30:26

and really it ends up as a bell

30:28

curve comparison to what other trustees

30:30

are doing and exactly how much the trustee

30:32

themselves is doing. So for

30:34

in your example, if you're a trustee who

30:37

farms out and delegates most of

30:39

the heavy lifting like investment management

30:42

or preparing taxes or accounting

30:44

or whatever, and really, you're just that general

30:46

contractor figurehead. How

30:48

much can you actually command in fees?

30:51

And if you end up double dipping, I see

30:53

a lot of conflicts coming down the pike

30:55

on that point as well. So

30:58

whether you charge by the hour

31:00

or a percent of AUM or assets

31:03

administered which will be really hairy when

31:05

we look at Illiquid assets like business

31:07

interests or something within a trust. And

31:10

even some states, or I know California

31:12

on the probate side, they'll let attorneys

31:14

and executors charge a percent

31:16

of the total value of the estate with

31:19

somebody who's a public official designed

31:21

appraise and determine what that net worth

31:23

number might be. It's really going to depend

31:26

on the state. And I could see a lot of forum

31:28

shopping too, between states who have

31:30

more, Favorable trust laws that

31:32

it may not simply be a change of trustee.

31:35

It may be that, Hey, there's a trustee

31:37

in South Dakota or Delaware, who's

31:39

going to be a lot more hands off

31:41

and sympathetic to our needs, or

31:43

who simply is going to charge less. So

31:46

we're going to go there and use them as opposed

31:48

to sticking with this family member or somebody

31:50

else. And in that vein,

31:52

you brought up a good point too, especially on

31:54

the AUM model is that. There's a,

31:57

and I'm going to really anger some advisors

31:59

here, especially of the older generation,

32:02

but there is this push for sticky

32:04

wealth. Frankly, I

32:06

think that's a farce because sticky

32:09

wealth is designed solely to drive

32:11

a multiple metric to. Create

32:14

an exit from your AUM

32:16

based practice at some point. And

32:18

I know I don't know everything and there's

32:20

probably people who are going to push back on that,

32:22

but I challenged the idea of sticky

32:24

wealth because nobody has really stepped back

32:27

and thought if you're an older advisor.

32:30

Or even an older attorney, are you

32:32

really going to want to work with the next generation

32:35

if your client was the

32:37

older generation and especially

32:39

are you going to want to work with them if the cheap

32:41

way you built rapport was by demonizing

32:44

the next generation of saying, Oh

32:46

yeah, we can make sure your kids don't become

32:48

trust fund babies and yeah, they didn't

32:50

work hard in college or as teenagers.

32:52

So yeah, we're going to protect them now and oftentimes

32:55

that image of kids. Is

32:57

frozen at a time when they are kids

33:00

and that image is no longer accurate when they're in

33:02

their 40s and 50s. But if you have an advisor

33:04

or trustee still serving them with

33:06

that, it absorbed. Image

33:09

of the new client from when they

33:11

were younger and had issues that they

33:13

have since overcome. How much of that

33:15

is going to bleed over into

33:17

the administration of

33:19

that wealth? And I think we can draw a parallel.

33:21

There's a lot of dynamics you have to look

33:24

at within a family between. Older

33:26

generation and newer generation wealth

33:28

creators versus wealth inheritors But

33:30

the same dynamic trickles down to advisory

33:32

firms and even law firms that

33:35

you have to mirror that What is the dynamic

33:37

between older generation and newer generation?

33:40

Because to have sticky wealth You have to have sticky

33:42

employees and right now is probably

33:44

the hardest time in history to have

33:46

sticky employees and it's going to

33:48

get worse once the wealth wave occurs

33:50

because it's going to be a lot more

33:53

of a market where it's going to be like shooting fish

33:55

in a barrel for somebody who's younger and

33:57

coming up to add value in a way

33:59

that nobody else has before.

34:02

And let's be real, those older generations

34:04

cared about the one person that

34:07

they usually worked with and usually is the male, right?

34:09

Now statistics show it's closer 50 50,

34:11

but let's be real. It was mostly them

34:13

talking about to the male. They were either

34:16

golfing buddies, going out drinking, having

34:18

dinners, et cetera. They've never built

34:20

rapport with the spouse.

34:22

They've never built rapport with the family. They

34:25

don't even know who they are emotionally or relationship

34:27

based. Yep. And that's what you're talking

34:29

about is that is going to be. a

34:31

huge issue for them if

34:33

they don't have a younger person on or

34:36

haven't started to build those relationships and

34:38

truly get to know who they are. And

34:40

those younger generational people, those beneficiaries

34:42

are going to go work with the people they know, right?

34:45

And the ones that care. And ultimately it's

34:47

going to come down to, can

34:49

they talk, can I talk to them? Do I like to have fun with them?

34:52

Very much the same as it's always

34:54

been, right? If I have a relationship with

34:56

you, there's nothing wrong with that. Just I've

34:58

seen the older generation in my industry, not

35:00

care as much about the kids,

35:03

about what they want about their lives.

35:06

And I believe this newer generation

35:08

of planners, we are focused on top

35:10

to bottom, like grandpa, grandma, all the way

35:12

down because it's a family thing.

35:14

It's not just I care about this one person, which

35:17

is where sticky wealth comes into play,

35:19

which is where financial planning more

35:22

comes into play. Then I'm just taking

35:24

care of your assets. I

35:26

asked that question about the fees because

35:28

you see a lot of these estate plans when they get pushed

35:31

through. Guess who the executive

35:33

trustee is some family member,

35:36

right? And I know and I've

35:38

seen it a lot. Families love

35:40

to fight and they love to argue.

35:43

And guess what? It's going to be when

35:46

Mom and dad appointed X, Y, Z person.

35:48

And they also, by the way, get

35:51

paid to do the

35:53

job. And now you have

35:55

this whole thing. You're getting paid to distribute our wealth.

35:58

It's not fair. It should be part of your wealth.

36:00

There's so much argument that goes into it. So

36:02

I'm a firm believer that there should be a third

36:04

party who is executive or a trustee,

36:07

a team of people that don't matter, but it should not ever

36:09

be family members. What's your

36:11

take on

36:12

that? Yeah. And I think the

36:14

weight of a state planning is looked at. Do

36:16

you even need an executor beat to

36:18

begin with? If you can focus everything

36:20

on a revocable trust and smooth

36:23

the administration of the estate, that's

36:25

usually going to be a better outcome. Now

36:28

I'm. My theme is balance,

36:30

and for a long time, there's been a lot of marketing

36:33

that's pushed revocable trust

36:35

and probate avoidance, and

36:37

that marketing has ignored the fact

36:40

that probate can actually be good. It

36:42

helps to settle debts. It helps

36:44

to finalize taxes and

36:46

everything else and to make sure that whoever receives

36:49

wealth receives it free and clear

36:51

of any people who could come beating down

36:53

their door in the future to pay a debt that

36:55

was unaddressed and wasn't settled

36:57

in the probate process itself.

37:00

On that note, when it comes

37:02

to compensation, I think it helps to know

37:04

when you are choosing a family member

37:06

friend, compensation is

37:08

optional. You don't have to take

37:10

it in most states. And

37:13

if you're already inheriting from the estate.

37:16

You're receiving it free of income tax

37:18

in most cases, but if you take

37:20

compensation, now you're converting some

37:22

of that and turning it into taxable income

37:24

for yourself. Now, that being said, having

37:26

been on the other side and dealing with family disputes,

37:29

we have weaponized The power

37:32

to take compensation before to say,

37:34

okay, if you're not going to play ball, guess

37:36

what brother who's getting

37:38

pushed back from everybody else is going to claim

37:40

compensation is going to lower your total

37:43

share and is going to make

37:45

sure that has priority because.

37:47

The priority of settling out claims

37:49

against the estate or a trust tends to

37:52

prioritize compensation to

37:54

that executor or trustee. So

37:57

there's lots of gamesmanship that can happen

37:59

there. And like I said, I think

38:01

that's, it's always going to relate back to

38:03

the family dynamics. Like you said,

38:06

how did the generations get along? And I think.

38:08

I think it's a painful area that a lot of people

38:10

don't want to tread into. But as an advisor,

38:13

you almost have an obligation, I'd say now

38:15

to get to know the family and kind of know

38:17

what the overall landscape might

38:19

be. And I know when, what

38:21

I say, it may seem like I have

38:23

an ax to grind against the older generation,

38:26

and that's not always my my my

38:28

intent. But what I'm trying

38:30

to do is create a balanced voice because

38:32

for the longest time, the voices have been, Either

38:35

representing the older generation or trying

38:37

to take a holistic approach to represent

38:39

everybody, which is a very

38:41

difficult task. But I think the younger

38:44

generation who's going to receive the wealth needs

38:46

a voice and needs to have a say in how

38:48

that wealth is received. And right now,

38:50

that is not the case in most situations

38:53

that happens. In fact, it's usually

38:55

viewed the opposite that, hey, it's a privilege

38:57

that they receive wealth to begin with. So

38:59

frankly, they shouldn't have a voice in

39:02

what that looks like down the road.

39:04

Do you see there being an issue

39:06

or a case against an advisor or planner

39:09

who really was focused on that older generation?

39:11

And when these things come to light that the

39:13

beneficiaries being raised and knowing

39:15

what's going on can come back at them

39:17

for either steering their

39:20

parents in the wrong way, or knowing

39:22

the somewhat from the parents

39:24

and they've alluded to them doing

39:26

something else. Do you see

39:29

where some of that liability and responsibility

39:31

falls? There

39:34

could be. And I don't, I can't speak

39:36

as much to the advisor world as

39:38

I can to the attorney world. And

39:40

you brought up that case in Iowa earlier

39:42

about the botched beneficiary designation.

39:45

We had a similar case here in Colorado

39:48

where I'm at probably about five or six

39:50

years ago where a law firm

39:52

got sued for malpractice by the beneficiaries.

39:55

In a blended marriage scenario because

39:58

what the law firm failed to advise on is

40:00

the fact that some property was titled

40:02

in joint tenancy And went to

40:04

step mom and didn't go

40:06

to the kids and they got disinherited

40:09

And what the court held here in colorado,

40:11

which is the broad case for most

40:13

states Is that the attorney

40:15

and maybe the advisor? Owes no

40:17

duties to the next generation

40:20

who's receiving wealth. They only owe

40:22

duties to the older generation

40:24

who they're representing, and they don't

40:26

have a duty to second guess or question

40:29

what that older generation's motives

40:31

or intent might be. B. Even in

40:33

California, they're a little more favorable

40:36

to that balanced view of having

40:38

duties to multiple generations. But

40:40

even then, there are bounds

40:42

where they say, okay, it's not your job

40:44

to effectively take

40:46

on a representation of everybody

40:49

because it's virtually impossible to represent

40:51

all of those competing interests. I

40:54

think if you're an advisor, you're still somewhat

40:56

protected there that you're not

40:58

forced to take on more than is reasonable

41:01

in terms of who you advise

41:04

and what the trickle down effects

41:06

might be. But to your point,

41:09

being right is different from

41:11

Is a beneficiary going to actually sue

41:14

you and you have to go through the process of paying

41:16

an attorney to prove that you're right at the end of the day.

41:18

So with that being said that's

41:21

where family dynamics come back into play

41:23

where selecting clients wisely

41:26

in seeing these conflicts come

41:28

down the pike and saying, Hey, short

41:31

term profit may not be.

41:34

A benefit when I can see problem

41:36

kids down the road coming back to sue

41:38

me you may have to step back in

41:41

those types of scenarios. And that's really a discernment

41:43

issue that, none of us can give

41:45

you the right bounds around. It's really

41:47

just following your gut and knowing. But

41:49

for now A lot of

41:52

advisors just don't have that direct

41:54

liability to the next generation,

41:57

unless the next generation formally

41:59

signs on as a client.

42:03

All right. As we wrap this up, I have one last question

42:05

I want. I'm sure a lot of people are asking,

42:08

I get asked this all the time or. I

42:10

should see, I see this commented all the time. And

42:12

that being, I don't really

42:14

have any money. I don't really have anything.

42:17

Should I really get a will

42:20

or a trust? Should I really have a legacy

42:22

plan if I only have 5,

42:24

000 to my name? What do you say to

42:26

those types of questions and

42:28

comments? This is where we get back

42:30

into that whole issue of

42:32

things being so document based

42:34

and document driven, and I'm going

42:36

to go a little bit against the mold here to

42:38

say that when we talk about that

42:41

die tomorrow versus die old

42:43

plan that you may never even outgrow

42:45

the die tomorrow plan, but without

42:47

even doing documents, there are ways

42:50

that you Looking at an asset by asset

42:52

type of outcome to create an estate

42:54

plan without ever executing

42:56

a will or a trust. You can get

42:59

assets into the right hands of

43:01

the next generation or even charitable

43:03

recipients by using beneficiary

43:06

designations, joint titling, and other methods.

43:09

So it may be that

43:11

For somebody in that situation, they

43:13

could at least as a starter plan,

43:16

have that document agnostic

43:19

type of outcome. And

43:21

the problem is that when the

43:23

economic incentives of estate planning

43:25

are tied to the creation of documents,

43:28

nobody's going to tell them that. So the

43:30

big question is who can

43:32

have that economic incentive to get

43:34

them there without getting sued on

43:36

the back end of things indeed go wrong.

43:39

And I think really my push

43:41

is that the world of attorneys and

43:44

advisors can be more holistic

43:46

in the advice that they can give

43:48

and the incentives that attach to that

43:51

somebody in that situation would

43:53

Could pay somebody to meet them where they

43:55

are and say, okay, here's how

43:57

we can get here as a temporary step.

43:59

Here's the road map of where your estate plan

44:02

could go at different phases of your life.

44:04

If you want to get to this next step, this

44:06

might involve documents. But for now, we can just

44:08

do this simple approach that is going to get you

44:10

at least 90 percent of the way there to

44:13

minimize headaches. And a lot of states have

44:15

And we talked about probate kind of probate exceptions,

44:18

where, if your net worth after taking into

44:20

account all those little other outside

44:22

the estate plan transfers, if your net

44:24

worth is under a certain amount, it may be as simple

44:26

as doing an affidavit or sending assets

44:28

directly to somebody else sometimes.

44:31

You can only do that if you don't have a will

44:33

which is another issue. But really

44:35

it's just a knowledge of if

44:38

you're an advisor in a certain state, knowing

44:41

what the landscape is. And obviously

44:43

your official party line has to be,

44:46

this is not intended to be legal or tax

44:48

advice, but there's a difference

44:50

between knowing the law and saying, Hey, here's

44:52

generally what the law says versus

44:55

this is what the law says. Here's where you're at

44:57

and here's what you need to do. And

44:59

that's a fine line. You have to tow,

45:01

but I think to have better outcomes,

45:04

we're going to have more people tow that line

45:06

instead of washing their hands and saying, Hey, you

45:08

need to go to somebody else. I'm not willing

45:10

to take on that liability.

45:12

You nailed it. Let's keep it simple, right?

45:15

Let's go ahead and use our asset beneficiaries

45:17

to help us do it right now. Let's

45:19

take the next step and get documents and at least

45:21

put it in just in case situation. And

45:24

give us time to develop this legacy plan

45:26

over time. Do those three things. You

45:28

can do them relatively cheap. Come talk to

45:30

us. We're ready and available for it. Griffin, or

45:33

just start it on your own, but I

45:35

appreciate your time. This is going to be a great

45:37

episode. I already know it. We're going to get you back in.

45:39

Cause I know there's going to be a bunch of questions. And

45:41

everyone loves talking to attorneys. I definitely

45:44

appreciate it. I look forward

45:45

to the next time. Sounds good. Thank you,

45:47

Stoy. Thank you everybody.

46:02

The proceeding program was sponsored by Black

46:04

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46:27

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46:33

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46:35

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46:37

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46:40

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46:42

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46:44

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46:46

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46:53

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