Wealth Actually

Quan is the author of his memoir “SPARROW AND THE RAZOR WIRE”

His is an amazing story of redemption, the importance of second chances and the power of entrepreneurship.

https://www.amazon.com/Sparrow-Razor-Wire-Finding-Sentence-ebook/dp/B08F34LBXL

Quan spent twenty-two years in and out of correctional institutions, including a life sentence for murder.

He was paroled 2015 and created his first company six months later. The following year, he received the Peace Fellowship Award for his work with the Alternatives to Violence Project.

He is the post-release program manager for Defy Ventures, a nonprofit helping those with a criminal past transform their lives through the journey of entrepreneurship. (I first met Quan when participating in an entrepreneurship program with DEFY VENTURES at Kern Valley State Prison).

We’ll be talking about:

Quan's Story

His Vietnamese background and his early path to gangs and run-ins with the law The Role of Taking ResponsibilityThe Horrors of PrisonGetting Out and the Transition to "Civilian Life"Rebuilding everythingHis company and his work with Defy Ventures . . .Writing his bookThe problems with the criminal justice systemThe path to a better life through entrepreneurism

And what’s next for Quan . . . . (A movie deal I hope!)

Meeting Quan changed my worldview (More about my visit to KERN VALLEY STATE PRISON here). I hope you learn something from Quan's experience and reconsider the role of the criminal justice system in our society.

More About Quan

Quan on PBS NewsHour

https://www.youtube.com/watch?v=CNuSFwR5wzw

His uplifting story on Google Talks:

https://www.youtube.com/watch?v=WkhlbGrYTAo

How Do We Stay In Touch?

Website: www.quanxhuynh.com

Twitter: @quanxhuynh

Facbook: QUANXHUYNH

Linkedin: QUANXHUYNH

IG: @quanxhuynh

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

New York City residents have the highest State and City tax burden in the country (it's over 15% at the top level, recently overtaking California). It's no surprise that New Yorkers are constantly strategizing around their tax burden and potential moves to other states- especially for high earners or those looking to sell a business.

But a lot of New Yorkers suffer from 'advice by cocktail party" and many misconceptions float around as people assume that being out of NY for more than 183 days is "enough". Getting out of New York's tax grip is a lot more complicated than that.So we’re going to one of the top experts in the field, MARK KLEIN of HODGSON RUSS.Mark is Partner and Chairman of the Firm and concentrates his practice in New York State and New York City tax matters. He has more than 35 years of experience with federal, multistate, state and local taxation –He may be best known for his public speaking on tax topics. Mark splits his time between the Firm's New York City and Buffalo offices.For New Yorkers listening, you are going to learn a lot on how to arrange your affairs when for state tax purposes. We're also going to talk a little bit about the "Convenience Rule" which is impacting a lot of New Yorkers who have "relocated" due to Covid.What do New Yorkers face?-Income and Capital Gains Tax that is the highest in the nation (Over 15%)-Estate TaxWhat are the typical options when reducing the tax bill? What do you have to show?When moving to a non-tax state, what does a client have to think about?

What about the new normal with COVID? What if I'm not working in NYC anymore?

Mark and his team at HODGSON neatly sums up the issues here:

https://www.hodgsonruss.com/what-to-expect-in-a-new-york-residency-audit.html

WHAT TO EXPECT IN A RESIDENCY AUDIT

A New York State residency audit is one of the most difficult, intrusive, and document-intensive of all personal income tax audits. And the New York Tax Department has one of the most sophisticated and aggressive residency-audit programs in the country. This handbook follows a question-and-answer format that should tell you everything—ok, almost everything—you need to know about what happens in these audits. You’ll have to call us if you want to know everything!

WHAT IS A RESIDENCY AUDIT?

A residency audit is designed to determine whether you correctly filed as a nonresident or part-year resident of New York. Because New York residents are subject to tax on their worldwide income while nonresidents are subject to tax only on that portion of their income attributable to (“sourced to”) New York, the difference in tax liability can be significant, particularly if you have substantial investment income.

If there is a possibility that you were also a New York City resident, the difference in potential tax can be even more significant since New York City residents also pay tax on their worldwide income while New York City nonresidents pay no tax to the City at all, even if they work there.

The audit will generally cover three areas. First, the auditors will focus on the first residency test, called the “domicile” test. Second, the auditors will look to the alternative residency test, called “statutory residency.” And finally, even if you are able to establish nonresidency, the audit will also examine whether you properly “allocated” your sourced income to New York on your tax return.

We usually don’t see the New York auditors examining other underlying components of a tax return—such as the income and deductions reported. But in more recent years, as auditors have become better trained (and more aggressive), there has been more of a shift in focus to the ENTIRE tax return, so you should be ready for such questions as well.

HOW LIKELY IS IT THAT I WILL BE AUDITED?

Very likely. If you are a high-income taxpayer claiming a move into or out of New York, it’s a near certainty you will be audited. The Tax Department is sophisticated and aggressive. Consider some of the numbers:

The tax department has ten district offices located across the State (and in Chicago).There are more than 300 auditors who focus on theseOver the past five years, the Tax Department has conducted over 15,000 of theseThese audits have generated over $1 billion in revenue over this time

In short, there are a billion reasons why the New York Tax Department watches these issues carefully. If you claim a move from New York, expect to get audited.

HOW IS RESIDENCY DETERMINED?

There are TWO residency tests.

The auditor will first attempt to establish whether you are domiciled in New York. That’s the first test.

The second test is more black and white. Under the second test— called “statutory residency”—a taxpayer who is domiciled in another state can still be taxed as a resident if they maintain a permanent place of abode in New York and spend more than 183 days in New York during the year.

If you meet either of these tests, you are a resident. So we have to be mindful of both issues.

HOW IS DOMICILE DETERMINED?

A domicile audit usually is concerned with change: Did the taxpayer move into or out of New York during the audit period? We are often looking to tie that change to a change in lifestyle or some life-changing event, like a marriage, retirement, new job, and so forth. And despite what many taxpayers and practitioners believe, the inquiry is not really focused on where the taxpayer is registered to vote, maintains a driver’s license, or registers his cars. It is a much more subjective inquiry, based on long-standing common-law principles that are often difficult to apply. The general standard from the case law is that “the test of intent with respect to a purported new domicile [depends on] whether the place of habitation is the permanent home of a person, with the range of sentiment, feeling and permanent association with it.”

Critically, the party asserting a change of domicile has the burden to prove, by clear and convincing evidence, that the taxpayer abandoned his or her historic domicile and moved to the new location with the intent to remain there permanently. Don’t take the burden of proof concept lightly. “Clear and convincing” evidence is not defined, but we’re sure it means better than 51/49. If a taxpayer has the burden of proof in a domicile audit and the case is a close one, a tie will go the New York Tax Department. Of course, if the Department is asserting a change-of-domicile into New York, the burden goes the other way, and the Department must prove, by clear and convincing evidence, that the taxpayer intended to change his domicile to New York.

Overall, though, the domicile inquiry has to do with a taxpayer’s feelings and intentions, which can be difficult to quantify. The nonresident audit guidelines that the Department has put together are of great value in assisting auditors (and practitioners) in working through the issues that come up during a residency audit.

Under the guidelines, the auditor is instructed to analyze the taxpayer’s lifestyle, using five “primary” factors to determine where the taxpayer’s domicile—his or her one, true home—is actually located. An assessment of these “five factors,” and a series of less significant “other” factors as necessary, is used by the Tax Department as an objective means to a subjective end: on balance, the place where the factors most heavily favor is likely the taxpayer’s domicile.

THE FIVE FACTORS

HOME

The home factor reviews the use and maintenance of the taxpayer’s New York residence as compared with the nature and use patterns of the non-New York residence. In other words, does the taxpayer behave as though the non-New York residence is her “home”? That is particularly crucial when a New York residence is acquired by a taxpayer whose domicile is in another state or when a residence in New York is retained after a move to another state. So questions about timing, and which residence was owned or occupied first, are often important. But other questions often arise. Is one residence owned but the other a rental? What is the value and sizeof each residence? What actions did the taxpayer take to remove herself from the old community? Has she established roots in the new community? Where does the family spend holidays and special occasions? Those are the questions practitioners have to ask -- because we know the auditor will.

ACTIVE BUSINESS INVOLVEMENT

This factor considers the pattern of employment and the compensation derived from that employment. It will also examine the taxpayer’s active business involvement other than employment. Ongoing participation in decision-making and frequent communication with a business, even after official retirement, can be viewed as the most significant evidence of one’s domicile. For this factor, we would be looking to determine where the taxpayer actually worked on a day-to-day basis as well as the location of his primary office. If the taxpayer is a partner or shareholder in a New York business, the level of participation in the day-to-day management of the business can be looked at as well.

Often, of course, the taxpayer is retired, so this is a nonfactor in some cases. Sometimes a taxpayer moves from New York City out to Westchester County, Long Island, or another City suburb. The taxpayer will continue to work in New York City after the move, only as a commuter, and not a resident. Auditors are instructed to be reasonable in this situation, and not inflate the value of this factor vis-à-vis a taxpayer’s otherwise strong non-New York City connections.

TIME

Time is often the most important factor in a domicile case. Generally, an individual is going to spend the majority of time at his “home.” So the residency audit is naturally focused on this question,...

GRIFFIN BRIDGERS wears two hats – estate planning attorney, and content creator.  He is a partner with the law firm of HUTCHINS & ASSOCIATES in Denver, Colorado, and also is piloting a fledgling media venture centered around bespoke tax and estate planning education in the digital age.  

IN THIS EPISODE:

Quick tour of the changing estate planning landscape and the legislative shifts.Why GRIFFIN has started his media companyTrends in the business models of the wealth management industryA couple new developments in outside (private equity ownership) of LAW FIRMS and ACCOUNTING FIRMS that bear monitoring. This could have wide ranging "aggregator effects" similar to what we have seen in the RIA space. Will these be good for the industry?

LEGISLATIVE FLUX

Chaos and disorder with legislative flux right now . . .What are you seeing?

Crystal Balls often don't help . . .

INSIDE BASEBALL IN THE WEALTH MANAGEMENT INDUSTRY

Service ModelsWhat are the models that are out there that you like?What "should" services include?Is there an optimum model?What is the value proposition?  Does it change?The Importance of Transparency ("Truth in Speaking")Appropriate Fees- how "at risk" is the 1% AUM fee?

CONTENT CREATION AND ESTATE PLANNING

Let’s get into the media side of things . . . you have a terrific Youtube channel that sets out various concepts in estate planning-

How does that help your practice?What slot were you trying to fill? Somewhere between Estate Planning 101 and Hypertechnical?Is there a Michael Kitces of estate planning?Media- what has worked for you? Effective amounts of time?What problems did you try to solve?Youtube- how did you stumble onto this s your platform of choice?Substack How do you think about the platforms?What are your plans on this front?

For Griffin’s YouTube channel:

https://www.youtube.com/channel/UCRaGK2J72zXDvLLcy2aPl-w/videos

https://www.youtube.com/watch?v=UBEHBK1ebmY

FUTURE TRENDS- LAW FIRM AND ACCOUNTING FIRM AGGREGATION?

Non Practitioner Ownership-Law firms AZ, UT, FLPrivate Equity's Push into Accounting firms - ex. EISNER AMPERconflictsturmoil with departing partnersPrivate Equity timetables for ownership and investmentscustomizationpersonalizationwho "owns" the clients

HOW DO WE STAY IN TOUCH?

For GRIFFIN's NEWSLETTER:

https://griffinbridgers.substack.com

For GRIFFIN's LAW FIRM website:

www.hutchinslaw.com

For GRIFFINS LINKEDIN:

https://www.linkedin.com/in/griffin-bridgers-a4a26a15

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

In this episode, MATTHEW MCCLINTOCK joins us. Matthew is a high end estate planning attorney and is a Principal at EVERGREEN LEGACY PLANNING which is based in Colorado. He has built his practice at the cutting edge of Cryptocurrency and Estate Planning, a field that is evolving by the day.

This is Matthew's second appearance and he's on again for a good reason. We last recorded Oct. 2nd 2020. Bitcoin was around $10,000 . . . it's now valued in the $48,000 range (having spiked over 60K!). Many other cryptocurrencies and digital assets like Non-Fungible Tokens (NFT's) have seen similar value increases.

We're going to find out:

What if anything is different around legacy planning in the crypto world?What is involved with estate planning in the white hot NFT space? How does one properly staff the roles in crypto estate planning structures?

Matthew is an amazing resource and is one of the top experts in the field of estate planning and digital assets. Since this is his second appearance, we skipped the usual introduction and went straight into it.

Finding experts and prepared vendors to administer trusts with digital assets

Staffing Trust Functions

Communicating Responsibility at the intersection of Digital Assets and Analog Trust Law

Estate Planning for Digital Assets: What's changed, if anything?

Low interest ratesVolatility of PricesCurrent legislation?Potential New Deadlines?Use of Traditional Tools like GRATS, IDGTS and CRUTS amongst othersTaxation IssuesExchange issues / security issues401K / IRA plans - Peter Thiel?Best practices- use of entities?Prudent Investor issues?

NFT’s (Non-Fungible Tokens)

What is in an NFT?

Fungible vs Non Fungible

What do you actually own when you buy an NFT?

The Actual File (and where is it held?)The "Certificate of Authenticity" on the BlockchainThe Copyright to the Work??? (Very Uncertain)

What re the main types of assets sold in NFT form (so far?)

Digital file / collectiblesConventional art tokenizedGaming characters/terrain - rent or sell  

The Bitcoin Standard and what bitcoin did

Crypto-asset "succession" planning

A Quick Note on Regulation

Major Players in Sen. Cynthia Loomis WY & Erik Voorhees, Founder of Shapeshift

Balance of intelligent Reg and chilling effectLogical points of regulation: On and Off Ramps, TaxationWho realistically is responsible for KYC in the dark pools? Which Agency gets this "plum" assignment?

OUTRO

EVERGREEN LEGACY PLANNING

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

The LGBTQ+ community has always been an important part of American fabric.

But it's only in last two decades that society, the law and the financial services industry have started to catch up to the community's unique planning needs.  To help us put context around these features and the evolution of the law, I spoke with estate planning attorney, Brian Balduzzi

Brian is a lawyer in Philadelphia at the international law firm FAEGRE DRINKER.  Among many other activities, Brian serves as the Vice President of the Cornell Pride Alumni Association, where he holds his MBA.

I'm thrilled to have him on to discuss this important topic.

BACKGROUND

We start off talking about Brian's background and a little bit about his practice. Then we dive into some specifics.

LGBTQ+ TRENDS

- Demographic Shift - more need, more complexity

- Court decisions in review - Windsor/Obergefell planning and post-planning, and (perhaps) re-planning

- Planning Needs: Concepts around DINK (Double Income No Kids) lifestyles, urban lifestyles, chosen family, estranged from biological family, dignity under the law/hospitals/banks

SPECIFICS

- Documents: Extra durable, trust planning (privacy, avoid/minimize probate), ILITs (insurance to cover unexpected costs or taxes?), Power of Appointments, no contest clauses, guardians

- Holistic Advisor: gender-neutral terms, no assumptions re: marriage, family tree dynamics, privacy/confidentiality/outing

- Some Must Review/Updates for all LGBTQ+ families: Pre-2015 planning, beneficiary designations, decisions to marry/adopt, prenups, separation/divorce planning

OUTRO

You can find Brian here:

BRIAN BALDUZZI LINKEDIN

For many wealthy families, concentrated liquid investment positions present special types of issues. More often than not, a diversification plan for a position that has been built up over decades, is relegated to a 5 minute discussion.  And it shouldn’t.  

From low-cost basis issues, income requirements, family executive involvement and even other factors like emotional attachment, the decision to buy and sell liquid positions can be more complicated than it looks.  

To help us understand the best practices in the area and some of the tools at a family’s disposal, were going to talk to STEPHEN DAVENPORT CFA from DECATUR CAPITAL MANAGEMENT in Atlanta, Georgia.  

Based in Atlanta, Steve is the Director of Alternative Investments for Decatur and advises clients on a wide array of issues including concentrated position management.

Steve received a BS degree in Industrial Engineering at Columbia University, a BS degree in Math/Computer Science at Providence College, and a MS degree in Finance from Boston College.

STEVE'S BACKGROUND

Engineering and quantitative skills applied to finance

Lots of questions around “risk vs return” turned into “emotion vs. reason”

Kahneman and Taversky – Risk avoiders instead of return enhancers

2000 a time of excitement and wealth creation in Boston/Silicon Valley

2005 Moved to ATL and worked w Wilmington Trust on DuPont heirs

2015 Moved to STI and worked on Coke heirs

2020 Moved to Decatur to help RIAs/family offices & institutions to manage risk

STEVE’S APPROACH TO INVESTING – PERFORMANCE, GOALS, EMOTIONAL COMPONENTS

Aligning clients to all goals and not just financial (work in chip space or health care so…)

Incorporating all factors including emotion in the investment process

ESG is about values and aligning your resources with things you believe in

MSCI/TruValue measure companies and companies write CSR

Like accounting standards, no global measures UNPRI for three years

Indexing – Good, bad and UGLY, so inclusive to be “complete”

1: People want more so they can stay invested in tough times (sell at bottom – 1.5%)

2: Lengthen horizon and

3: Lower fees are three legs to the stool of investment success

Investing in ideas/companies who you agree with, ESG may hold the key to better returns

Holding on may be more important than what you hold

CONCENTRATED POSITIONS-

(Blackrock buying Spiderworks, there is a limit to ETFs . . . )

1 – Customize more holistic solution

2 - Use tools of options market to enhance the transition

3 – Always adjust as the playing field changes

ETFs are a one solution fits all solution but client risk and return parameters are unique 

BRK- example - FINDING INCOME in the OPTIONS (W/ NO DIVIDEND STREAMS)

Recently created wealth by IPO - UBER

Familial wealth, sitting versus actively managing Coke – not selling is value added?

Complex situations require a sophisticated approach! Took a while to acquire so disposition….

INVESTING THEMES TO DEFEND AGAINST (OR TAKE ADVANTAGE OF) . . .

Inflation – Fact or Fiction?

Present across the spectrum of risk: Crypto, NFT, SPAC, Meme, IPO, Real Estate, FANG 

Fiscal and monetary coming together like never before

Is it Temporary or is a CB (central bank- not just US) Put option forever?

TAX AND POLICY CHANGES

Target the top 1% …., Cap gains from 23% to 35-40%, planning for lifetime step up, dividends at OI rates

Ambitious plans need funding, never let a good crisis go to waste, $4 trillion and counting on COVID

Stimulus to get economy through 2022 election and beyond

Market reacts environment and creates solutions

Option overlays will be the beta adjuster

"Diversification sometimes fails when you need it most . . ." Research paper

Universal for the masses, Black Swans becoming more common so should solutions for them!

 â€œWealth effect” really not focused on Main Street and Fed knows this is increasing inequality

 â€œTrickle down” not backed by research so changed the name to protect the idea

With Fed in markets, there is very little that can be thought of as “normal market operations”

Best time to buy an umbrella is before it starts raining

OUTRO: STEVE'S CONTACT INFORMATION

Steve Davenport, CFA

https://www.decaturcapital.com/stephen-davenport/

Divorce in the Ultra-High Net Worth Space is a little bit different.  Gates, Bezos, Kardashian . . . You don't have to look too far into the headlines to see how important this space has become for wealth families. While the emotional pain is the same, the stakes are higher and the process can be more complicated.  OLIVIA SUMMERHILL joins us to help us think through the issues.

In her practice, Olivia has seen the devastating effects of divorce on stay-at-home mothers in ultra-high-net-worth families. She is the founder of SUMMERHILL WEALTH MANAGEMENT and helps to protect their lifestyle when they are going through a high-stakes divorce. Having developed her financial career at JP Morgan, Olivia broke out on her own and started her own firm focusing on the space. Olivia's practices focuses on affluent women.  She is one of few financial professionals to hold Certified Financial Planner, Certified Divorce Financial Analyst, Certified Divorce Specialist, and Behavioral Financial Advising credentials.

I spoke with Olivia on the ins-and-outs of team-building around a divorce, her unique business model focusing on UNHW women and her advice for people going through the process.

Describe your background-

-How did you get to that point to making the leap to starting your own practice?

-Any specific challenges?

-You focus on a few specific niches- larger situations and women coming out of divorce. How did you come to specialize in that area?

-How do you define UNHW? ($50mm)

Engaging With The Client: Information Asymmetry-

-How do you get past the initial client's shock?

-How do you get clients through that education process?

Teamwork with the Advisors

-Divorce is complicated and involves many different experts besides the divorce lawyer- what does a good team look like?  (Legal, Tax, Investment, Estate, Psych, Administrative/scheduling)

-How do you integrate with the team / issue spot / decide who the quarterback is?

-Any examples where that has worked well (and where it hasn’t?)

What does your process look like?

-How do you know when to step in or step away from the emotional and psychological repair that needs to happen- when do you call in the experts?  Do you get involved in the child custody issues?

-A big challenge is understanding cash flow needs and dividing illiquid wealth – how do you help clients think through that – how does that work with a divorce lawyer’s strategy?  Pre/Post nuptial planning?

-If going through the internal questioning, what should someone thinking about a divorce be thinking about?  What information should they be thinking of collecting?  What happens when you don’t think in these “business” terms?

Practice Notes

-You have a unique (and cool / aligned) business model- you consult but don’t manage money- help us think through that.  How do you get paid for your value (I will be listening intently to this- I struggle with it myself)!!!

-What do you do to “get out there” given your business model?

-Is there anything idiosyncratic about doing business the Pacific Northwest? Do you clients come from all over?

Staying in Touch

-How do we keep track of you?

OLIVIA'S LINKEDIN PROFILE: https://www.linkedin.com/in/oliviasummerhill/

OLIVIA'S PODCAST: https://podcasts.apple.com/us/podcast/divorce-for-wealthy-women/id1546130936?i=1000503911523

OLIVIA'S IG: https://www.instagram.com/summerhillwealth/?hl=en

"Shirtsleeves to shirtsleeves in three generations" is as old as commerce itself. Family enterprises rarely make it beyond three generations for many reasons. Today, we hear the story of the Grossman family from BEN GROSSMAN who co-operates the family business with his brother, David. They are fighting that "Shirtsleeves" phenomenon with an interesting set of tools and intention. In this podcast, we listen to their story of building the family business, managing transition and creating the conditions for success in future generations.GROSSMAN MARKETING GROUP was founded as the Massachusetts Envelope Company back in 1910. Ben Grossman and his brother, David, are the 4th generation of family leadership 111 years later. The company has evolved into a full-service traditional and digital marketing firm.Ben Grossman went to Princeton University. After college, Ben worked as a strategy consultant to Fortune 500 clients, as well as started and sold a sportswear and marketing firm. He went on to receive an MBA from Columbia Business School before taking the reins of the business with his brother.

Ben's Background

The Business “Then”: The Nature of Grossman Marketing Group-

-What does GMG do?

-A Brief History and who are the players?

-What was important to your father and other family members?

-How were you and your brother “developed” and integrated in the business?

The Next Generation-  The Business “Now”

-What processes do you and your brother use to run and evolve the business?

**“Start Stop, Continue” Review

-How does a marketing company survive and thrive in this day and age?

-How was your succession process different from other businesses that you see?

-What did succession look like for you father?

-Establishing credibility and not taking success for granted

-What hasn’t worked?  What are the frictions?  Anything you would have done differently?

-Outside Boards?

The Business “Next”

How are you thinking about ownership and operational succession?

What do you think your kids’ involvement will look like?  Will it be with the firm?

How do you think about the impact to other constituencies? (I.e. community, employees, customers, vendors)

GMG's Strategy for the future

"The Letter" - Examples of Communication within and outside the family.

This is a treasure trove for families looking for good examples of value communication. They articulate an ethos that has served the family for four generations (plus!).

Link to Ben's great grandfather’s dollar-a-year check from the US Government: https://uploads-ssl.webflow.com/6037c57f7424b4ea01ef8e45/60515ae13f381f3f1ef1ca37_Dollar%20a%20year%20man%20check.jpgLetter the Grossman Marketing Group sent out when Ben's great-grandfather left to serve FDR and when Ben's grandfather left to serve in the Army: https://uploads-ssl.webflow.com/6037c57f7424b4ea01ef8e45/60515a91e1e851084c30e394_1941%20Letter.pdfLetter Ben and David sent out when their father left the company to serve as Treasurer of Massachusetts 70 years after our great grandfather left for public service: https://uploads-ssl.webflow.com/6037c57f7424b4ea01ef8e45/60515a913f381fee04f1c956_2011%20Letter.pdf

How do we keep in touch with Ben?

Ben's Blog: BEN GROSSMAN'S BLOG

GMG's acquisitions page summary here: GMG ACQUISITION SUMMARY

Grossman Marketing Group: WWW.GROSSMANMARKETING.COM

Personal website: WWW.BENGROSSMAN.INFO

LinkedIn: BEN GROSSMAN

Twitter: @BIGROSSMAN

With interest in alternative asset classes at an all-time high, the focus of family offices and other investors has been to investigate more "liquid assets." We're not talking about cash or oil . . . the spirits world has produced scores of profit stories at the asset class and business level. Bourbon is a niche that has been on fire recently. With a low interest rate environment, private capital's huge appetite for "uncorrelated" asset classes, and a theme that is a haven for entrepreneurs in Kentucky and beyond, this is a good time to investigate the bourbon space. It is more than just Jim Beam, Maker's Mark and Wild Turkey. (FYI- Jack Daniel's is technically a Tennessee Whiskey and not a bourbon). To get our arms around the subject, I spoke with MARK GARBIN and centered the discussion around bourbon.

MARK is an investment management executive focusing on fiduciary duties issues in investment vehicles for public and private funds.  He is a CFA charter holder and professional risk manager.  More importantly, he is an expert on bourbon and whiskey both from a quality and taste perspective and as an asset class. He is the author of many books including his new book “Whiskey Glory” – about the rise of the Dewars famous lineup.

We take a deep dive into bourbon as an asset class- actually owning the liquid inputs and deriving yield from them- to investing in a bourbon company. Finally, we get into some of the fun stuff around the great tasting bourbons and terrific whiskey bar experiences that Mark knows well. This podcast is so chock full of information that I'm having a transcript done (which will be coming soon). in the meantime, the outline is below. Enjoy!

A little background on Mark

How did you get involved in Bourbon?

Becoming a sommelier and writing about "Whiskey and Romance" in NYC

https://www.amazon.com/Whisky-Romance-Manhattan-Neighborhood-Restaurants-ebook/dp/B07565P833/

Different classifications and ways to learn about the bourbon subject – rex videos

Bourbon as an asset class

Why is Maccallan 18yr whiskey at $350 vs the 25yr $3500

How does a barrel program work?

Expected returns?

Fixed Income attributes (and risks)? How do warrants factor into a barrel program?

Bourbon as a Business

What makes for a good whiskey company and brand?

A brief discussion of the antiquated 3 tier system (manufacturing, marketing, 3rd party distribution) reduces profit for the producer- and why a direct link to consumers is vital now.

The legal and distribution landscape is changing.

Digitialization of marketing (and the rise of direct distribution)

Experience of Bourbon at Source- great bourbon at the experience level-

Good to visit, bad to distribute- lots of “limited release”

The rise of goodwill, the mailing list and the repeat buyer

Brand is vital and important to the exit strategy

The Bourbon Experience

Favorite Places

Favorite tastes

How do we stay in touch? 

MARK GARBIN

Twitter: @CoherentCapital

Where do we find the book?

https://www.amazon.com/Whisky-Glory-Tasters-Stories-Compendium-ebook/dp/B096PMS7FG/

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

With the Biden proposals comes the potential for tax increases at the income, capital gains and estate tax level. Life insurance is becoming interesting again to a lot of families looking to expand on their functions of income replacement, business succession and tax planning. Using trusts and other structures to amplify their effectiveness is shifting back into focus. The ongoing maintenance of these structures is usually underestimated and the resulting liability could be a nasty surprise for many families. To help understand the emerging tax environment and the best practices around life insurance and the under-appreciated task (and risk) of administering life insurance trusts, I spoke to ANDREAS STUERMANN.

Born and raised in Bremen, Germany, Andreas moved to California in 1987. He began his financial services career with John Hancock in the San Francisco Bay Area as their technical resource in sophisticated life insurance and benefit transactions. In 1998, he joined Winged Keel in New York City for which he managed design, implementation, and administration services of substantial life insurance, non-qualified benefit, and wealth transfer programs.  In 2003, he founded Stuermann Consulting, Inc., an independent insurance and benefit advisory firm.

Background

What is the function of life insurance?

Replace income, Fund Business Succession, Income Capital Gains, Estate taxes, Insurance as an Investment? Asset Protection? Executive compensation?

What is the benefit of having insurance owned in a trust?  

Proceeds pay outside of the insured's estate, asset protection, structure around distributions, liquidity at major life transition, others . . .

Many individuals are tasked with acting as trustees of these trusts- why might that be a bad idea? 

Are Individuals qualified to understand the legal requirements of a trustee and the vagaries of the insurance industry?

Making sure all Crummey letters are sent and the trust complies with all other formalities-

Making sure all timely premium payments are made-

Making sure the policy continues to make sense for the trusts' beneficiaries and is performing-

What is the best practice for reviewing insurance policies?  

Confirm who actually owns the policies and whom the beneficiaries are- you'd be surprised at the mistakes!

Where does the policy stand? Is it funded? Are there any loans against it?

Are there useful in-force projections to analyze the policy? Has it been stress tested?

How is the performance of the Insurance Company? Any issues with capitalization to be considered?

How often should policies be reviewed? Every year? Every few years?

How does the trustee make sure the approach around insurance is handled in a consultative manner (as opposed to being designed to generate another sale?)

How does one stay in touch?

STUERMANN CONSULTING

ANDREAS STUERMANN on LINKEDIN

https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/