As summer is starting to wane (before it ever really got going!), I took the time to try to look around the corners of wealth management for clients with BILL SWEET. We discussed today’s estate planning environment and the many challenges and opportunities that currently exist and why it’s important to get going on that process now.

Bill is the CFO of RITHOLTZ WEALTH MANAGEMENT. Founded by Josh Brown and Barry Ritholtz, RWM has burst onto the wealth scene with a media savvy and marketing push that is different than most in the wealth management space. Bill manages the finances of RWM and is the resident expert on taxes for the firm’s clients. Bill was also a Captain in the U.S. Army where he presided over $12mm pieces of rolling thunder as a Tank Commander!

Links to Veterans Groups at the bottom for those with further interest. Our veterans are an amazing resource of talent in this country.

Bill and I went into a wide-ranging discussion of the benefits of getting one’s estate planning done now and what might change in the near future.

In the age of COVID-19, there has been a renewed focus on Health Care Directives. The communicability and finality of the disease have opened up all sorts of fears and uncertainty for many people- especially among the elderly. To that end, I am excited to present the conversation I had with TIFFANY MCKENZIE. She is a partner in the Private Client Group at Bryan Cave in Atlanta. We talked about planning in the COVID-19 environment with extra attention on the often-overlooked health care directives.

TIFFANY MCKENZIE BIO

TIFFANY ON “HEALTH DIRECTIVES”

CHAMBERS COMMENTS

Judy Pearson is the Founder and CEO of Nomadx.

Nomadx helps fiduciaries, officers, directors, trust companies and law firms identify the risks in their practices and insure them against liability. She has over 37 years of experience with Chubb, AIG and was a pioneer in the development of directors and officers liability coverage for AON.   We’re going to be focussing on the liability issues facing fiduciaries, including individuals, law firms, corporate trustees and private trust companies.

We’ve presented a lot of scary scenarios!

For current trustees and future trustees what is a good first step they should take in analyzing their situation?

How do we keep track of you and Nomadx?

WEBSITE: NOMADX

LINKEDIN: JUDITH PEARSON

In this episode of “Wealth, Actually”, we get to dive into the comic-book industry with Gevian Dargan. Gevian is about to launch his comic imprint, Animated Concepts, which is focusing on getting some of the great comic stories from people of color that are out there, but not getting the attention they deserve. The industry itself is going through significant upheaval as the economics of developing IP come under considerable question and distribution systems face significant challenges with digital competitors and a new view of what makes a cool (and monetizable) story.

Gevian and I tackle this subject as well as the magic of growing up with the excitement of going to your “local”, discovering characters and forming tastes. It’s this formative development that we wonder aloud that might be missing and may make it difficult to develop the next Marvel, DC, Harry Potter or other franchise.

Here’s Gevian on the “Thinking Critical” podcast talking about reaching new black comic readers. (This is a terrific interview BTW)

Here’s the outline of our fun conversation (we recorded for over an hour, spoke for two and probably could have gone on all day):

A quick aside: many of you know of my love of comic books and the myth-making engine of that industry. My pal, Jim Harberson, and I (written under a pseudonym) dipped our toe in the water of the industry with our book, Stay Alive. We wrote our first (the horror/comedy, Stay Alive) and published it through the UK-based, Markosia Enterprises. It was a great experience to work with the multitalented and super-nice Stephen Baskerville. His art is amazing. The industry itself is tough. It’s opaque and the chances of publishing, let alone success, are slight. Here’s our first foray . . .

and here are some of Gevian’s favorite covers:

As businesses and business owners struggle the impact of COVID-19 on operations going forward, I thought it would be useful to revisit the issue of asset protection for wealthy families. Liability is around every corner and the best laid plans can be wrecked with a car accident, an employee suit, or the discovery of asbestos in an investment property.

Joining me is IKE DEVJI to discuss some of the ways to address this issue. He is a prominent attorney in Scottsdale, Arizona who focusses on asset protection for executives, business owners, athletes, entertainers, and other high visibility people that can be the object of creditors. Ike has personally practiced from Phoenix and Scottsdale, Arizona for over 17  years as an Asset Protection-only lawyer and helps protect a national client base of thousands of clients representing nearly $6 Billion in personal assets.

He can be found at

Here are some real examples of the “impossible” that actually happened and resulted in large claims:

1. FAILING TO ACT (Timing) 

2. THINKING YOU’RE NOT RICH ENOUGH  

3. RELYING ON YOUR TRADITIONAL ESTATE PLANNING

4. TOO MANY EGGS IN ONE BASKET

5. SQUARE PEG ROUND HOLE – USING THE WRONG TOOL

6. DRAGGING LIABILITY INTO YOUR PLAN

7. RELYING ON GIFTING TO RELATIVES (SEE ALSO FAILING TO ACT)

8. USING UNPROVEN, POORLY STRUCTURED TOOLS OR SCAMS LIKE “FRIENDLY LIENS”

9. RELYING ON INSURANCE ALONE OR FAILING TO ADEQUATELY INSURE. WHY CAN’T WE SIMPLY INSURE OUR WAY TO SAFETY?

1. Concept (erecting speed bumps for creditors); natural tension between protection and access

2. Using a jurisdiction with good law and good trustees

3. Reducing Nexus Issues and using good assets (real estate being a less desirable one)

[FRAZER’S NOTE: We don’t get too much into the weeds on the trust topic (I’ll use another podcast for that), but it is important to note that trusts can be a flexible tool in an asset protection plan. It is also important to make sure that tax planning, estate planning, and asset protection planning are integrated.

With the tensions brought on by the confinement, new roles and financial pressures of the Coronavirus, I thought it would be good to take a new look at one of the greatest threats to wealth . . . Divorce. High-end family law attorney, EVAN SCHEIN, and I got to sit down and talk about what is happening in the world of divorce. Evan is an expert in the field as Partner and Head of the Litigation Department of New York-based divorce firm, BERKMAN BOTTGER NEWMAN and SCHEIN. He has seen it all in the space.

Here is a quick outline of what we covered:

EXTRA POINTS:

Finally, (since I’m running this!), Evan and I take a quick tour of our favorite sports teams and how they are dealing with the sports disruption.

https://mehlmancastagnetti.com/wp-content/uploads/After-COVID-Mehlman-Q2-2020.pdf

The political consulting firm, Mehlman Castagnetti, put together an interesting presentation on what a post-COVID world is going to look like. HAVEN and I synthesized some of the highlights and broke down what we saw as important. The link is above and it’s useful to have in front of you as we deliver our comments.

Here is a quick outline of what is covered:

SECTION 1: WE WERE NOT PREPARED

“Recreational government” is neglecting what the true government functions are.

Our system is overly focussed on luxuries and there doesn’t seem to be any political will until disaster is upon us.

SECTION II- M/C’s PREDICTIONS

#1- New Psychology- what will the population’s mindset look like going forward?

#2- “Deglobalization”- Will there be a retrenchment?

#3- Freedoms Trade-Off: Can you be worried about the virus, the economy and political freedoms at the same time?

#4- “Techlash” – will the suspicion of tech companies persist? It may pause but will return in earnest when our situation stabilizes-

#5- Asset Bubbles as search for yields and stability becomes paramount.

#6- COVID Inequalities Widen Social Divisions

#7- Initiatives will move away from the state

SECTION III: REASONS FOR HOPE

#1- Americans Stepping Up: Fauci, Front- Liners, Community

#2- Innovators Stepping Up

#3- Government Trying to Step Up- Even If Incompetently

OUR BIG ASK-

More Cooperation Between Public and Private Spheres as we look for solutions to the virus and revitalize the economy?

A reminder that you can subscribe to the podcast on most major platforms. More from Haven on his PUNDIFICATOR blog below. . .

And “Wealth, Actually” can be found here:

The COVID-19 phenomenon has created worldwide economic upheaval and problems for many business owners. One area where the coronavirus has created opportunity is in the field of estate planning.

I was able to speak with AARON FLINN about the opportunities that exist right now. We will go into some of the tools in his toolkit (including the use of preferred jurisdictions like Tennessee) to help successful, and often complicated, families take advantage of a difficult economic environment.

Aaron is a partner of WALLER, a full-service business law firm based out of Nashville, Tennessee with offices across the Southeast and Texas. He specializes in trust and estate work, wealth preservation, business succession and family office structuring.

Why is right now is an optimal time to review estate planning affairs and wealth structure?

1)  The shutdown has been a rare quiet time to think about the how families want to set up future affairs and have internal discussions about the investment, use, direction and purpose of the wealth.

2)  Lower valuations:

With markets generally lower across the board, the valuations of most family assets has decreased as well. This provides added flexibility when using estate planning tools and government defined exemptions to shift wealth out of an estate into the ownership of the next generation.

3)  Generationally low interest rates:

As the government has lowered interest rates to stimulate the economy, many of the standard interest rates used in estate planning have fallen as well. Government defined “Applicable Federal Rates” (AFR’s) are the lowest they have ever been. The amplify the effectiveness of even the simplest of planning techniques.

As part of that planning, there are lots of instruments, jurisdictional choices and legal devices to effectuate a family’s wishes. What makes Tennessee an interesting state for families to consider?

The Friendly Trust Environment of Tennessee

Directed Trusts 

Avoiding State Income Tax on Accumulated Income and Capital Gains

Asset Protection

Distribution Flexibility

Perpetual Trusts

Flexibility for Family wishes

Specialized Protection for Independent Advisors

COMMENTS or QUESTIONS

Aaron can be contacted here: AARON FLINN

Additionally, I can be contacted here (FRAZER RICE) or here (FRAZER RICE) for further comments and questions.

What if the 2020 election was delayed or cancelled? Haven and I take on this scary, and not-out-of-the-question, possibility . . .

The mechanics of a delay or a cancellation are complicated. Here are three good articles for context on the topic from:

Anthony Fisher, from Business Insider (“We need a backup plan to ensure all Americans can vote in November’s presidential election. Our democracy could depend on it.”) and . . .

https://www.businessinsider.com/coronavirus-we-need-backup-plan-voting-november-presidential-election-2020-4

Ian Millhiser from Vox (‘Can Trump Cancel the Election?”)

https://www.vox.com/2020/3/21/21188152/trump-cancel-november-election-constitution-coronavirus

Haven Pell on the Pundificator (World War Three at a Time)

Here is an outline of the potential chaos.

Fighting The Three Political Wars and where an Electoral Dysfunction may fit in . . .

In this episode we dive into the world of real estate development and the use of LED conversions to save money and drive returns.  Joining us is Judd Stensrud.

Judd is the founder and CEO of LUMEN GLOBAL.  The firm uses energy efficiency to help drive real estate returns.  Judd has an undergraduate degree from Duke University in economics and an MBA from the University of Chicago.  However, it wasn’t until he got to Costa Rica in the early 2000’s that he began to truly grasp the impact of costs within a vast portfolio of income producing real estate.  Using these tools later in his career, Judd

Recognizing the typical reasons that investors miss out on maximizing their profits led him to found Lumen Global.

Background-

Tell us a little about how your Costa Rica experience and how that impacted your view on managing real estate.
How did this and your other experiences lead you to found Lumen Global?
Process

What does Lumen do to add value?

While Lumen Global utilizes a number of energy efficiency measures to help increase your bottom line, we believe there is not a better available tool than converting to LED lighting technology.

Why?  What is Your Process?

How?

Examples

Outro
How do we keep tabs on Lumen Global?
For those who want to use you or get involved, how do they contact the firm?

LUMEN GLOBAL WEBSITE

[email protected]