Estate Settlement is one of the most feared parts of wealth transition. It is where trust and estate planning meet their first real test- usually when a will is put in front of the probate court system. JOEL SCHOENMEYER, Head of the Family Wealth Group at a Major Regional Bank joins us to discuss the ins and outs.

I spent the first 15+ years of my career as a trusts and estates attorney. First at a few different law firms, including Sidley Austin – back when they had a T&E group. Then as a solo practitioner for more than a decade. In 2012 I made the transition to working for financial institutions, where I have held a number of roles:

I’m now in charge of the Family Wealth group at Fifth Third, which is an offering for ultra-high net worth clients and families.

Sure. First, a little terminology:

“Estate settlement” is the overall process of wrapping up a deceased person’s affairs, a job that’s usually handled by an “executor”. That settlement process can include lots of different things, but it can be broken down into a few broad topics:

“Probate” can be a part of estate settlement, and involves court supervision of the above process, to make sure that it is handled correctly. I spent some of my time as an attorney drafting Wills and Trusts. However, I spent even more time in court, dealing with probate issues (including litigation).

I will say that, throughout my career, I have met clients (or potential clients) who say, “I don’t care what happens when I die – that’s someone else’s problem.” However, most people do NOT want to cause problems for their loved ones. The death of a parent or spouse or sibling is difficult enough without having to figure out where their stuff is, or what they wanted to do with it.

There’s also the positive aspect. You have family and friends – and possibly charities – that you hope will thrive after your passing. Why wouldn’t you want to set things up so that they actually get your hard- earned money? Do you want to have that money go to the IRS or some probate litigators?

I break the issues to consider down into four interconnected categories:

One thing you will notice is that your estate plan is only one category here. A lot of people think that having a Will and/or Trust in place means that they are “done” with planning for their death. That’s just not true.

The main mistake is not paying attention to how your assets are titled. This is especially the case where people have an estate plan but then also have assets with a listed beneficiary, or assets owned jointly.

For instance, I once handled an estate where the decedent’s Will gave away her interest in a home – but the decedent already owned the home in joint tenancy with her sister! As a result, the gift under her Will was ineffective (but the situation created a lot of litigation as well as conflict). Too often people don’t have a handle on how assets will pass when they die, so they don’t have a holistic plan.

One other example: husband marries later in life, then dies with a $5 million life insurance policy. That policy was purchased before he got married, and the initial beneficiary was his mother. After the decedent got married, he should’ve updated the beneficiary to his spouse, but he never got around to it.

Another asset-related issue that I encounter: “dead” assets, which is my term for assets that really have little or no value but that are painful to get rid of. Timeshares are the quintessential dead asset, to my mind – estate settlement folks HATE them.

That’s correct. Keep in mind that debts survive your death – they don’t just disappear. If you name beneficiaries for all of your assets but then die with debts, your executor will have to figure out how to come up with the money to pay those debts – and that will probably involve a court proceeding.

Another issue – specific to wealthy individuals – involves the estate tax. That tax is due nine months after death, with very few exceptions. Now, nine months might seem like a long time, but it really isn’t. That’s especially the case if the decedent owned a lot of illiquid assets, like real estate, or private equity, or even a working business.

For instance, what if the decedent dies with an estate of $100 million and gives all of his assets to his children? The estate tax will be roughly $40 million, which is a LOT of money to raise in a short amount of time. Do you obtain a loan? Do you sell the business or real estate quickly?

Speaking generally, you need someone to take a deep dive into both your assets and your debts/expenses/taxes. Who this “someone” is depends on your personal situation. Some people pay their attorney to do this work, although that can an expensive proposition. Other people use their financial institution, or their financial planner, or even an accountant. But the important point is that you – with the assistance of an advisor – need to have eyes on all of your assets and liabilities.

I’m really talking about understanding whether your estate plan takes into account the relationships between your friends and family. It might actually worsen those relationships. This comes up a lot in the context of beneficiaries.

An obvious situation: you have two children but giveone child 2/3rds of your assets and the other child only 1/3rd. Now, you may have good reasons for doing that – or even bad reasons, which is allowed, since it’s your money. However, you are also potentially leaving a mess. What are the ways to deal with these personal relationship issues?

You need to be pretty clear-eyed about whether your kids get along, or whether your spouse gets along with your kids from a prior marriage. Don’t close your eyes to reality. Don’t assume that your family will have good relationships after you are gone. (You being alive may be the only thing forcing them to be civil to one another.)

You should be thinking not only of family members as beneficiaries, but also about who is in charge of handling your estate (and any trusts created as a result of your death).

It’s vitally important to NOT create situations where people who don’t get along have to work together.

This applies to co-executors or co-trustees. or in a situation where one of them is “handling” the other person’s finances.

Pro tip: If you have a son and daughter who don’t get along, do NOT name your daughter as trustee of the trust for your son’s benefit. They are both going to be miserable!

I think this goes for all categories. Transparency solves a lot of these issues, although it may involve some uncomfortable conversations. But I really believe that telling people what your plan is, and explaining the rationale BEHIND your plan, is key. To go back to what I was just saying about leaving differing amounts to your beneficiaries: maybe this makes sense.

For instance, maybe one of your children helped to grow the family business and the other one never contributed. In that case, you should articulate this reason why the child who helped gets more than the child who didn’t. Similarly, if one child is very wealthy but another is struggling but working hard you might want leave more to the struggling child. Please, make sure you explain why!

Usually we aren’t talking about obvious errors, like a Will or Trust that gives away 105% of your assets. I often encounter situations where the estate planner tries to translate your wishes into legal language that doesn’t work when applied in the real world. Here’s a situation I encountered a couple of years ago: Dad (a widower) has a son and a daughter. His Will gives daughter a right to buy his home within 30 days of his death. Now, I found this provision while dad was still living, and had to ask:

I would say there are two of them.

Estate Settlement in a Cryogenic Scenario

Whom should you name as executor?

This week, “Wealth Actually” meets “THE SOUL OF WEALTH” as I speak with DR. DANIEL CROSBY, Ph.D. about his new book.

-Behavioral Finance
-Issues with the “research”
-Building consensus around money decisions
-How our brains trick us into faulty wealth processes
-Teaching people to stretch the time horizon of their planning

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets.

As a leading voice on the impact of behavioral finance, “The Soul of Wealth” isn’t Daniel’s only writing.

Dr. Crosby’s first book, Personal Benchmark: Integrating Behavioral Finance and Investment Management, was a New York Times bestseller.

His second book, The Laws of Wealth, was named the best investment book of 2017 by the Axiom Business Book Awards and has been translated into Japanese, Chinese, Vietnamese and German.

His latest work, The Behavioral Investor, is an in-depth look at how sociology, psychology and neurology all impact investment decision-making. 

Finally, Daniel publishes the highly respected Standard Deviations podcast- where you can find his personal thoughts on financial psychology and interviews with experts in the wealth management and psychology fields.

Daniel’s book presents 50 short essays which explore what wealth really is and provides practical suggestions for how to change your thinking and your actions in small, powerful ways, for a wealthier life.

@DANIELCROSBY TWITTER

STANDARD DEVIATIONS PODCAST

Behavioral Scientist, Brian Portnoy on the 100th Episode of “Wealth Actually”

Author and investment expert, JARED DILLIAN, joins the podcast for the second time to discuss his new collection of short stories, NIGHT MOVES. We talk about his talent for moving across formats and between fiction and non fiction. We go into the need for story-telling and the importance of holding an audience. Finally, we look for crossovers in his writing from his personal history, his move to South Carolina and his experiences in the Coast Guard and Lehman Brothers.

From his military experience and investment experience to his DJ’ing prowess and obvious for multi-faceted talent for writing, Jared is a creator and a Renaissance Man- and a terrific, no nonsense person to speak with about the ins and outs of publishing.

How to move between the daily pressure of writing a newsletter to the longer form content in non-fiction?

Then, how do you move to the character development and world-building involved with fiction?

Sex, desperation, wistfullness

Writing in a women’s voice (how do you get into that headspace?)

What does research consist of for short stories?

Genre Favorites?

Do you start knowing where you want to end up?

What does the format of a writing day look like?  Ie do the newsletters get in the way or help with other projects?

Do you get stuck?  (Is there where it’s convenient to have the newsletters)

DJ’ing composing – what are the similarities in that process?

Any crossover to investing?

Jared on “Wealth Actually” talking about his previous book, “NO WORRIES”

“How to Retire” (by Christine Benz) deals with a concept full of fear, emotion, math and uncertainty: retirement.

Even the wealthiest, who have a margin of safety, run into issues of purpose, time management and legacy.

Layer onto that the risks of longevity, dementia, divorce, managing cash and investments in inflationary times, and navigating the byzantine health and elder care systems.

No wonder “retirement” is a scary topic.

Christine Benz’ new book “How to Retire” is here to help get our arms around this topic.

With 20 interviews with experts in the field, Christine has written a terrific reference for retirees to get their arms around this stage in life.

Her book covers the numbers, the emotion and the structure for people entering the golden years.

CHRISTINE BENZ is director of personal finance and retirement planning for Morningstar and senior columnist for Morningstar.com. In that role, she focuses on retirement and portfolio planning for individual investors. She also co-hosts a podcast for Morningstar, “The Long View”, which features in-depth interviews with thought leaders in investing and personal finance.

The Numbers (Funding Retirement and Resilient Investing)

The Transition to Retirement (AKA “The Countdown”)

With a plan in mind, what is the role a Dry Run with Retirement?

The Buy-In: Getting consensus from spouses and family on what life will look like

The First 2 years: The Importance of a Detailed Calendar

How Are You Going to Use the Time?

Having entered the role of caregiving, retirement may be more of a “job” than you think

“End of Life”: When Should you Give up the Keys and Long Term Care with CAROLYN MCCLANAHAN

Estate Planning (with past “Wealth Actually” guest JENNY ROZELLE)

With all of this frre time, how do spouses adjust to spending so much time together?

Sports media is decentralizing. However, “Sports Podcasts” are exploding in audience growth. Stephen A. Smith, Pat McAffe and Barstool Sports are household names. Legacy names, like ESPN, are figuring out how to hold on to their audiences and find new ways to expand them. Out of this high profile world, there are many lessons to learn in managing one’s own career and how to harness the possibilities of media for your own businesses.

BRAM WEINSTEIN (the “Voice of the Washington Commanders”) is the founder of Ampire Media and can be heard weekdays from 3-6 PM EST on “The Bram Weinstein Show” on ESPN 630 DC. As part of his 24 year (and counting) on air career, he spent 7 years at ESPN mainly as an anchor of “Sportscenter” and has appeared on a  variety of programs including “Like it or Not” on Fox 5 in Washington DC, “The Bram Weinstein Show” on The Team 980, as well as analyst roles on NBC Sports Washington. 

When not performing, Bram produces for and consults with various content providers in traditional and new media for his firm AMPIRE MEDIA.

We also get to nerd out a little on the Washington Commanders and their improbable fast start this year!

How did you get into broadcasting?

Take us through the route with the career to get back to DC.

What does a life in sports media look like?

The arc of a broadcaster’s career and the need to develop equity.

AMPIRE MEDIA– Going from talent, to production, to ownership.

Aggregating other voices.

Where did the idea for the media company come from?

Specific experience or advice that informed the project?

Where do you see the path to profit coming from?

How do you manage the time?

What are your ultimate ambitions for Ampire?

What have been the challenges so far?

Lawyer in me asks how you stay in the good graces of everyone, contract and IP-wise?

Has the attitude of the Sports Media Companies changed about “talents’ other activities??

Finally, I’m duty bound to ask some #Commanders questions.

Having been a fan back in the glory days, what is your favorite memory or favorite player?

There is so much new with the Commanders in the last two years: Owner, GM, Coach, QB, a lot of the roster!

What does this season looks like with this “crazy good” start . . . and Jayden Daniels?

How do listeners find and support you.

https://www.ampiremedia.com/

AMPIRE on Youtube:

MEDIA DISRUPTION and VENTURE CAPITAL

The pace, scale and sophistication of RIA marketing has accelerated into hyperspace in the last 10 years.

There are new business models in wealth management and, thus, new voices and sources of trust.

The speed of content creation and publishing is increasing- especially with newer artificial intelligence tools.

Social media has made the scope and reach of marketing efforts enormous — and required firms to be data scientists as much as financial advisers.

Finally, where once the firm drove the branding in the RIA space, there appears to be a move back to the star system – where recognizable names create the light that attracts clients.

Enter RICHARD HEFT, President of EXT MARKETING – His firm focuses on marketing for RIA’s, asset managers, and other financial institutions.

The development and execution of marketing strategies are accelerating well past the leadership of the typical RIA. They have to prove to the market that their inorganic growth efforts are real and sustainable in a crowded (and often bland and undifferentiated) space. Richard tells us what he is seeing in the RIA Marketing space.

Richard Heft

EXT Marketing

Differences

Regulation

Other cultural issues

Boats, Piers, Forests

Couples at the Beach

New demographics, new ideas

What does marketing success look like from the agency perspective?

Is there a difference in the clients’ perspective?

How do you bridge that gap and make sure there is agreement on metrics?

After putting strategy, into action, what is the importance of data integrity and maintenance?

Having established a visibility strategy, how does one convert eyeballs to dollars?

How do we get around the “consulting class” fluff?

The new sophistication of the referrer and the consumer / client.

B2B vs B2COI

B2B vs B2C?

Artificial Intelligence and other tools

Social Media (How an UHNW adviser uses podcasts)

Will there be a move away from referrals to “legitimate” digital lead generation?

Where does traditional media fit in?

How have our Presidents’ money stories affected their lives and trajectories before, during, and after their terms? Have the Presidents’ finances affected policy? What stories do they teach the rest of us?

As we head into election season, MEGAN GORMAN has released a terrific book on US Presidents and their personal finances. She is a tax attorney and wealth manager – takes readers on a rollicking ride, full of history and personal finance lessons, to understand the intimate money stories of our most famous presidents in her highly anticipated new book, ALL THE PRESIDENTS’ MONEY: How the Men who Governed America Governed Their Money

Megan has spent her career advising some of the wealthy. She parlayed her interest in history and politics with her career expertise to analyze our Presidents relationship with money. The stories of our Presidents’ personal finances not only give insight into their leadership style, but they teach lessons for the rest of us as well.

Since I was six, I’ve always been obsessed with learning about the presidents. There’s an archetype that I was drawn to: a man from an ordinary background that through hard work and luck makes his way to the top. We have many presidential examples in our history: Lincoln, Eisenhower, Grant, Johnson, Truman, Ford, Reagan, and on. Could this same story happen now?  Maybe, but it’s not as easy as it was before.

I usually started by reading a book on the president and looking for little items – education, jobs, homes – and then ferreting out primary source documents. But the most useful items are the letters.  Letters were where a lot of financial discussions occurred, from Jefferson and his financial challenges to Harry Truman lamenting to his future wife about whether he will ever find financial success. The presidential libraries and museums’ archives were also unbelievable. 

A lot of bad financial decision making occurs when emotion controls the situation. For example, President George Washington asked James Monroe to go to France. Monroe agreed even though he had a substantial plantation at home that needed significant management. Monroe got to France and realized that to succeed, he needs gravitas. In 1790s France, that means having the right home to entertain in. So he went out and bought a house for the US with his own money – doesn’t ask permission and doesn’t think about the obligations back home. His salary doesn’t cover half of what he is spending. When Monroe’s appointment is over, he sells the house at a loss. Money is emotion – and managing it is very hard for all of us.

We talk a lot about financial literacy and having strong financial skills. But the truth is you could be the greatest budgeter in the world, but if you have no money coming in, it’s a moot point.  Budgeting, risk tolerance, connecting with your future self – all of those things are the framework of finance – but you need your shot at wealth building, to put it in Hamilton parlance. You need to have the ability to make a living.  If you have that, and you use financial literacy, you can build financial resilience. Sounds easy, but in the current stage we are in the US, it’s gotten a lot harder.

I completely agree with them. Debt isn’t something you want to have. It needs to be seen as a tool to get you to the next level with a focus on paying it off. Jerry Ford is always an interesting person when it comes to this. In her Oral Histories at the presidential library, his daughter Susan discusses how she would try to convince her dad that having a mortgage wasn’t that bad a thing – after all you got a tax deduction for it. Ford wouldn’t hear of it. He just abhorred debt. Working with wealthy individuals, most of them enjoy the day their mortgages are paid off.  It’s a feeling of safety and security.

One of the things I’ve learned through working with very successful people is that often the skills or personality traits that allow them to be successful can at times be a negative. Jefferson is like that. He’s a magical thinker. On one hand, he can draft huge philosophical ideas and make them understandable. Yet when we look at his financial ledgers, he’s avoidant and unable to be practical.  Being good with money requires being grounded and having the ability to say no.  He’s just unwilling to do it – even when it is too late and is about to lose everything.

What can we learn from Jefferson? The need to connect with your future self. What does your financial like look like 10-20-30 years from now? Are you living debt free? Are you able to travel and live comfortably in retirement? How much money do you want to have saved?  When you have these visualizations, then you can start to put the discipline around your finances in terms of savings and budgeting. 

A big one! Who you marry has a huge impact on your financial success in life. A lot of our most successful presidents married up financially, starting with Washington. Building strong finances is a team sport. If partners aren’t aligned, they might be working against each other. Warren Harding wasn’t a great president, but he was a great businessman. He and his wife Florence owned a newspaper. Florence ran the paper’s finances. Harding was better at editorial and advertising. Their skills were complementary, and as they built up the paper, they built up their wealth. If he had married a less financially savvy wife, he may not have been as successful.

In All The Presidents’ Money, the key to effective communication about money in relationships is to make it a constant topic of conversation in a constructive manner. Whenever you read a letter between the Adams, they address each other “My Dearest Friend” – a rather romantic and loving way to start a letter. The tone allows the conversation to be friendly and constructive – rather than critical and dismissive – even when it’s about money.

What made Grant great was a challenge when it came to managing money. He’s a little too trusting and takes people at their word. He’s like Bill Clinton in that sense. If anything, Grant should tap into the skills of another General President. Eisenhower was very good at looking at a situation and assessing risk. He learned from playing poker. Risk assessment allows you to consider different outcomes. The key is to ask a lot of questions. What happens if things go wrong? Is there a contingency plan?  How to you protect your investment? 

More on stewarding a FAMILY BUSINESS

Maybe, but Americans need to be more strategic about education costs. When you look at Barack Obama, he wracked up a lot of the debt attending Harvard Law. He had a full ride to Northwestern.  But Obama wanted to be president and he knew Harvard was a good way to go. Same thing with Bill Clinton – he had high aspirations, so taking loans to go to Yale Law was strategic.

But the cost of education has gotten so high that what’s really important is getting a degree at the lowest cost possible. Unless you have the finances to pay all cash for college, it is important to think about career path and if strategies like two years of community college followed by a transfer to college will result in less debt.

They all worried about money – a lot!  There are letters from different presidents over the course of their life where they question if they are doing the right thing with money. Harry Truman wrote his future wife in 1917 after losing a lot of money in the oil business, “I seem to have a grand and admirable ability for calling tails when heads come up. My luck should surely change. Sometime I should win.”

Then you have LBJ writing a friend about worrying about money – yet in the next breath he’s talking about buying an expensive suit. Clothing budget actually factors heavily. Martin Van Buren grew up poor but he adopted a fancy dress as a way to climb socio-economically. Coolidge was also always dressed to the nines which sticks out because he was so frugal.

In many ways, their money struggles humanize them.  I found that many of the presidents I didn’t like politically, I enjoyed personally.  That was one of the best parts, being nonpolitical.

George Washington was unbelievable with money. He’s very ambitious and not afraid to do the hard work to earn it. But he’s also a great budgeter. He had to be. Upon his father’s death, everything went to his brother Lawrence. There wasn’t money for George to go to college. But he’s a clever guy – he learned surveying from his neighbor and used the money to buy land. He’s also incredibly attractive and married a wealthy widow. Once he marries Martha Custis, he has not only his land, but her dowry land as well.

However, there is one area where Washington fails financially – and that is in terms of values and morals.  Due to his use of slave labor, we have to really put an asterisk against his name. But when he dies, his estate is so large and complex, they actually publish a book on it. It takes 50 years for his estate to play out.

President Biden needs to slow down and defer to professional advice. He’s just a little messy and unsophisticated in his money. I’ll give you a present-day example. He made a loan to his siblings with some of the money he got from his book deal. This is very normal – we call them below market loans and we do them all the time with high-net-worth families. But what got him tripped up with Congress is that he didn’t follow the process correctly. He needed to have a demand note, an interest rate, a payment schedule, and he needed to report the interest. He didn’t do all of this – so it’s sloppy. Not illegal, just sloppy. He needs a strong finance person to help run his life.

President Trump is good with money, but at times – and I’m putting this mildly – he’s too aggressive.  He would be more respected if he were more transparent about his finances. Most people won’t really understand his finances anyway. He’s in real estate. It’s a specialized part of the code.

With the Supreme Court’s recent ruling in the Loper Bright Case, courts no longer have to defer to agency interpretations of ambiguous laws. This is a massive change in the way administrative law is practiced at the federal level. The Loper Bright Case touches almost every area regulated by the Untied States government.

Professor WILLIAM BUZBEE will help us understand the implications of the Loper Bright Case and what the world might look like going forward.

William W. Buzbee holds the inaugural Edward and Carole Walter Professor chair and is a Professor of Law at Georgetown University Law Center. He also serves as the Faculty Director of Georgetown Law’s Environmental Law & Policy Program. In his teaching and scholarship, he specializes in environmental law, legislation and regulation, and administrative law. Recent publications focus on climate regulation, deregulation and law governing agency policy change, and federalism. He also offers seminars on advanced environmental, regulatory, and constitutional law subjects, with his most recent seminar focused on “The Art of Regulatory War.”

Martin Shenkman on the applicability of the Loper Case on tax and wealth matters.

Artificial intelligence is a charged term- one that has been around, but has taken on new meaning in the last couple of years. As the first crossovers of AI and HUMAN RESOURCES emerge, many issues are coming out. People are both excited and afraid of its implications.

However, the news isn’t all scary and the world is not becoming Skynet yet!

SUSAN YOUNGBLOOD is an expert on the intersection of AI and Human Resources.

Equipped with broad executive experience and board expertise, she is the ideal person to help us get our arms around the AI/HR intersection at the employee, manager, executive and board level. I spoke with her on the conundrum that decision-makers face as technology and people collide.

SUSAN is a technology CHRO who has launched, acquired, and transformed companies at Fortune 50 and FTSE 100 companies such as IBM, BNY Mellon (BK), and London Stock Exchange Group (LSEG.L) as well as a tech startup,

As a leader in the HR field, Susan enabled high growth and faster time to market by navigating teams through the human capital agenda at critical inflection points:

Having dealt with company strategic issues, Susan has also managed global crises and assisted companies in mitigating extensive risks.

SUSAN YOUNGBLOOD LINKEDIN

Susan serves on the Board of Directors for Cornell University’s ILR school, is on
the Advisory Council for SUNY College of Optometry, and she is an angel investor. She
holds a bachelor’s degree in psychology from Vassar College and a Master of
Industrial and Labor Relations (MILR) degree from Cornell University, where she
was also the assistant coach of the women’s tennis team.

“Empowered Entitlement” isn’t a buzzword yet in the lexicon of next-generation wealth education tools. But it well could be.

In an environment where productivity and drive is difficult to identify and develop, CHRISTIAN BROYHILL is using her psychology background and unique viewpoint to advise wealthy multi-generational families.

Christian’s willingness to lean into the inheritor’s financial reality (and trauma) distinguishes her from many in the “next-gen” field.

THE 4TH GENERATION STORY

NEXT GEN JOURNEYS

CHRISTIAN BROYHILL ON LINKEDIN

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