Wealth Actually

NICK MAGGIULLI, successful author of "Just Keep Buying" has a new book out called "THE WEALTH LADDER." It's a well done framework on how one's relationship with money has to change as they move up the different strata of money and spending. We get into the book, how major life changes can shape our views, and the writing process.

https://youtu.be/pFmWTHlPTUY

https://www.amazon.com/Wealth-Ladder-Proven-Strategies-Financial-ebook/dp/B0DKMPFTR3/

OUTLINE

What does this book seek to accomplish?

How was the experience different from the last book?

Surprises in your findings?

Has getting engaged and married change your lens on any of these topics?

THE SIX LEVELS OF THE WEALTH LADDER

Level 1: Less Than $10,000

Level 2: $10,000 - $100,000

Level 3: $100,000- $1M

Level 4: $1M-$10M

Level 5: $10M-$100M

Level 6: $100M and beyond

TRANSCRIPT

Frazer Rice (00:02.178)Welcome aboard, Nick.

Nick Maggiulli (00:04.138)Thanks for having me back, Frazer. Appreciate it.

Frazer Rice (00:04.911)Easy to have you back and congratulations on two fronts. You just got married and you've also in a sense given birth to a new publication here. Tell us about the last few months and what it's been like.

Nick Maggiulli (00:14.41)It's just been very busy, lots of things. We were doing wedding planning. We got engaged late last year and so wedding planning did that, had a few small celebrations. And now it's book launch time. We're delaying our honeymoon until the end of August because the book's coming out now and the book's out, so going from there. So it's been fun.

Frazer Rice (00:38.094)Big things happen in three, so it's all coming together in a couple of months there. So I've been watching this book getting written over the course of last, I guess, two years now. What was the gist of the book for the audience here? What got you into the wealth ladder concept, having written Just Keep Buying?

Nick Maggiulli (00:41.374)Yeah. So the gist of the book is that your financial strategy needs to change over time. I think it's very easy to get caught in a certain set of habits and you can follow those to their logical conclusion. But if you're trying to kind of go to the next level, so to speak, as I say in the wealth ladder, you might need to change your strategy. And there's a ton of examples of this and it really depends where you want to go, how much wealth you want to accumulate, etc. Knowing all those things will help you better determine which strategy you should follow. That's the high level of the wealth ladder.

Frazer Rice (01:30.574)So as you were sort of getting into the research on it and you take a lot from your personal experiences, you've moved up the wealth ladder and have had to have a little self-discovery on that. What would have been the interesting findings in your own experience and in the research that you've had and maybe things that were surprising?

Nick Maggiulli (01:51.338) the Origins of the Wealth LadderI think this is something that I'm hoping a lot of people who have built wealth have come to the same conclusions, which is like as you build more wealth and have more money, like money doesn't mean the same thing to you anymore. It doesn't have the same value. Like I remember still being a, you know, semi-broke college student, you know, and then being a, you know, semi-broke just graduated college student, just started earning money and stuff. And I remember not wanting to pay for a beer at a festival because it was $9. And now that beer is probably 15 or 20 bucks.

But at the time I was like, this is crazy. I can't pay for this. But looking back now, it was because I just didn't have a lot of money and I was trying to be very careful about my spending today. Looking back, if I had known everything I know now, I'd be like, I can, I can buy the beer. I'll be okay. Right. I don't have to sneak these little mini liquor bottles and all the crazy stuff I used to do. Right. That's like an example of like over time, just money changes.

Because of that, you're like, yeah, I shouldn't have been as, you know, I shouldn't have cut back as much when I was younger. also just how you view it. I view it more as a tool now and less from like as a scarce resource. Like it's a tool I can use to do things. I can help my family with it or travel with it. I can donate.

There's all sorts of different things you can do with your money. And I think seeing it as a tool is really the important part. And lastly, it's just how like the amount of money I need to change my lifestyle just keeps getting bigger and bigger. Right. We're like, you know, ten thousand dollars back when I was 22 would have been like, wow, that's like a ton of safety. I wouldn't worry as much about money.

Today, $10,000 just doesn't mean as much as it used to. And so it's great. would still be, used, hand me a $10,000 check. That's great. I'd be happy, but not even close to as happy or wouldn't have as, as big of an impact on my life as it would have when I was 23. Right. I think everyone understands that, you know, what's $10,000 to someone with a million. It's not as big of a deal compared to someone with close to nothing. And so, yeah.

Frazer Rice (03:36.14)Yeah, one of the things that, you know, as was reading the book, super interesting is the idea that as you move up the wealth ladder and more and more people become involved and are part of your responsibility umbrella in many ways. And it gets back to something I wrote in mind where I talk about how the liabilities increase geometrically even though the assets may increase linearly. Is there a process around when you start thinking less about yourself and wealth than you start thinking about a family unit and then… intergenerationally and beyond. It's something that I think gets lost in many times in the sort of the financial planning shuffle, but it's something that I think your book covers well.

Nick Maggiulli (04:23.454)Yeah, I think the big error that people make in that front is thinking too much about the monetary and the financial piece of that and not the non-financial piece of it. So it's like, Hey, my gosh, I accumulated, say $20 million and I'm going to have this for three generations and I'm planning this and I've trust and all this stuff. And you can set up all these structures and do everything perfectly right. But if you don't have the right relationship with your kids, if you guys don't have a shared set of values to build off of going forward,

It's going to derail as soon as you're gone because you know, maybe they're just following your wishes while you're here and as soon as you've passed, how do you know that those things are going to live on? You don't at all, right?

At the end of the day, I think what's more important is having a stronger relationship with your children so that you can talk about these things and listen to them, get their feedback and then plan your money more together instead of just doing it completely on your own and trying to create this control beyond the grave, right? And I think that's what can create other issues within the family.

It's the thing that people overlook because I think everyone's just like, if I just get the wealth and it'll last. And I don't think the second part is true unless you have the value set up. You've thought about all these other things that people tend to overlook.

Frazer Rice (05:35.883) the Wealth Ladder and CouplesJoelle and Doug Bonaparte have come out with a book about wealth and marriage and money and you're going through it right now having just been married. What's been sort of the first takeaway in getting married and sort of the principles of the wealth ladder? And I guess another different way of asking that is how do you merge your way of thinking about these wealth concepts with what your wife is thinking about?

It's not pinning you down specifically, you've been buried above. But at the same time, I'm sure you saw that where when you're merging different views on wealth and as you sort of put a timeframe and a ladder frame to it, what have you found interesting in your research on

Nick Maggiulli (06:22.25)Yeah, so I haven't done too much research on couples in particular. I can tell you that my wife and I are very aligned on a of our finances. She's actually more frugal than I am. I try and I even use, you she's read the book at this point, right? Cause I, you know, I was writing in and I gave it to her.

Frazer Rice (06:34.526)You forced her!

Nick Maggiulli (06:51.69)

Yeah. And for no, she wants, she wanted to read it on her own. So she wrote like a EPUB version of it and read it and stuff. She really enjoyed it. But I think for her, like she still has trouble spending money. And so I like came up with this spending framework using the 0.01 % rule, which is like, Hey, take your net worth multiplied by point zero one percent or divide by 10,000. It's the same thing.

That's the amount of money that your wealth is like generating daily in like a very conservative sense. Right. If you point zero one percent do that, you know, let's say 365 days in a row. That's about three point seven percent a year. It's a very conservative return. And so if we assume that like you could spend that in theory every day and it's like a trivial amount of money to you

So she'll be like, oh, I don't know if I want to spend 50 bucks on this thing. I'm like, baby, our net worth is over 500 K. So we don't need to worry about that. Right. Because at 500 K, the point zero one percent rule would say you're spending about 50 bucks a day on these like marginal purchases. So I'm trying to get her to not think through that. like, yes, obviously, your spending depends on your income. That's obvious. But I think the marginal spending decision, hey, can I afford this thing? I like to think of it using this spending rule because it

BRANDON RAINS from the Denver-based Rains Law Firm and I discuss estate planning in an era of artificial intelligence, scalability, the democratization of advice being delivered by non-lawyers and the fun and games that exist when people die and plans go into action.

"IS THE CIO DRAGGING DOWN THE FAMILY OFFICE'S PERFORMANCE? (And What Can You Do About It?)" with R. ADAM SMITH.

https://open.spotify.com/episode/1Cl26HkpjZBnovg3zumuBx?si=0c7e252e629d4603

https://youtu.be/p3VtFCVpp8o

The Family Office CIO job involves a delicate high wire act. The position can be the fraught intersection of:

Asset Allocation (& collision of "endowment" vs "family adjacent" strategy)

Cash Management

Deal Sourcer/Vetter

Club Deal Gatekeeper

Risk & FOMO mitigater

Overall One-Man Band

R. ADAM SMITH advises families around deal and investment structure via RAS CAPITAL PARTNERS. We discuss the evolving CIO in family offices, Our discussion addresses the importance of expectation-setting on both sides. We get into what the families can do to understand their own needs (and why they might be the problem!). The goal is to help both sides unlock potential and get out of the way of performance.

Adam Smith's Background (2–3 min)

Adam gives a brief personal background and current work with family offices

Set up the problem: Many family offices operate with misaligned or underperforming CIO structures

Mention growing tension between opportunistic deal flow vs. structured allocation frameworks

CIO Dragging: Defining the“Non-Functioning CIO” (3–4 min)

Describe what a non-functioning or misaligned CIO looks like in a family office

Common traits: reactive, relationship-driven over process-driven, lacking risk discipline

The consequences: inconsistent returns, governance confusion, lack of accountability

Deal-Driven vs. Allocation-Based Models (4–5 min)

Explain the difference between a deal-centric CIO vs. one focused on institutional-style allocation

Why the dealmaker mindset often prevails in emerging family offices

Tradeoffs: speed and access vs. diversification, scalability, and defensibility

Challenges when there’s no clear investment policy statement (IPS)

Why Do Families Tolerate This? (2–3 min)

Emotional and trust-based dynamics—families often default to familiarity over structure

Over-indexing on "access" as value

Underestimating the long-term risks of ad hoc strategies

What CIO Institutionalization Looks Like (3–4 min)

What a functional, institutional CIO framework looks like (clear mandate, reporting, delegation, rebalancing discipline)

Role of governance in supporting this structure

When and how to make the transition—triggers and best practices

Cultural and Generational Resistance (2–3 min)

Why some families resist institutionalization

How generational shifts are challenging legacy CIO models

Importance of aligning values and objectives—not just tactics

Closing Thoughts THE CIO DRAGGING ON THE FAMILY OFFICE PERFORMANCE (2 min)

Tie back to broader themes of sustainability, legacy, and governance in family offices

Call to action: revisit your CIO model—does it reflect your goals or just your past?

Emphasize the importance of aligning investment leadership with broader family vision

Other CIO Dragging Considerations-

Do the staffing and comp models adequately align the employer and employee?  

What does a successful structure look like and how much does it cost?  

What dos a minimum structure look like and how much does it cost?  

Are CIO’s under resourced and put in a failing position?  

How does career risk factor into CIO decision-making?  

Does the threat to the family's relevance in decision-making risk factor into this?  

How much time is wasted doing “pretend” work to maintain access to other family offices deals?  

Do you measure investment adjacency to the family specialty and how should that affect the evaluation of the CIO’s performance?  

What happens when a deal-centric CIO is thrust into an asset class that is out of their expertise?  

What is the benchmark performance for a FO CIO these days?  

On the ESG, DEI, impact and philanthropy front, are these buckets in an overall allocation (sometimes where younger generations can be brought along?) or are you seeing FO’s incorporating the values metric in the overall allocation?  Is there a trend to think of family offices as useful for one generation and then to have them split up?

BRIAN ADAMS ON FAMILY OFFICE RECRUITING

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

https://youtu.be/UizVi4fJzPs?si=MeLp0txegEzBkVLl

CIVIC ENGAGEMENT: The Secret to Revitalizing Communities- this is how we improve our neighborhoods. It's a great way to teach the next generation about citizenship and how to be a part of something bigger than themselves.

But what is involved in getting involved? Politics has an ugly reputation. How does one participate, get meaningful results, and keep ones sanity?

Friend of the show, BLAIR DUQUESNAY, takes us through her experience navigating levee governance and politics in her hometown of New Orleans after Hurricane Katrina. She explains why civic activity is important to her and the example she wants to set for others. It's a great example of citizenship that we can all learn from.

https://open.spotify.com/episode/3BjQeTf3nz5mgt6UD2pgpy?si=ntfqCSR1S2aCQvmVxSNQoA

Summary

In this conversation, Frazer Rice and Blair discuss the importance of community engagement and civic responsibility, particularly in the context of New Orleans post-Hurricane Katrina. Blair shares her journey into civic activism, the challenges faced in flood protection governance, and the grassroots efforts to raise awareness and advocate for reforms. They emphasize the significance of being informed and active citizens, the lessons learned from local democracy, and the need for ongoing engagement in community issues.

Takeaways

Civic engagement is crucial for community well-being.

Personal experiences shape one's commitment to volunteerism.

Grassroots advocacy can influence local governance.

Awareness of local issues is essential for effective activism.

Democracy requires active participation from citizens.

Building relationships with elected officials is important.

Researching issues enhances advocacy effectiveness.

Community coalitions can broaden outreach efforts.

Caring about local issues is a fundamental aspect of citizenship.

Voting is a critical component of civic responsibility.

The Secret to Sound Bites

"We're all just humans in this process.""It's important to research the issues.""You have to vote to have a voice."

Civic Engagement Chapters

00:00 Community Engagement and Civic Responsibility05:59 Political Challenges in Flood Management12:11 Lessons in Local Democracy?

Titles

Reinvigorating Our Communities Navigating Governance After Hurricane Katrina

Other CIVIC ENGAGEMENT EPISODES

https://frazerrice.com/civics/

WHAT IS CIVICS?

https://frazerrice.com/all-the-presidents-money/

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

Keywords

community engagement, civic responsibility, Hurricane Katrina, governance reforms, flood protection, grassroots advocacy, local democracy, civic engagement, informed citizen, activism, belle curve, blair duquesnay, ritholtz wealth, next capital, next vantage, frazer rice

The massive costs of caregiving can be a big surprise to most people. It is an expensive undertaking in the best of circumstances and can be a full time job. BETH PINSKER, a columnist at Marketwatch and the author of the new book, "My Mother's Money- A Finanical Guide to Caregiving" takes us through her experience. There are many great tips to help get support for this difficult experience.

https://youtu.be/WNYLOR_Pvw8?si=8dS2LPG3vfe1FWIX

https://www.amazon.com/My-Mothers-Money-Financial-Caregiving-ebook/dp/B0DW3RLJSF/

https://open.spotify.com/episode/120pb9198YPecMzPir7RyC?si=mqlnY7XmRA-gtRzfJemq_w

Outline

00:00 Introduction to Caregiving and Aging

02:15 The Importance of Planning Ahead

08:28 Navigating Legal and Financial Caregiving

10:33 Understanding the Emotional and Physical Toll

14:29 Making Informed Decisions for Loved Ones

19:40 Financial Planning for End-of-Life Care

25:28 Essential Documents and Digital Access

Transcript

Introduction to Caregiving and Aging

Frazer Rice (00:04)This is a real treat for me in the sense that I have had personal experience around this. Your book, which we'll get into in just a second, is going to be coming out in November. I think it's going to be an important resource for pretty much anyone who has ⁓ any exposure to aging or anything like that or any sort of caregiving. Give us a little bit of a sense of the timing of the book first and we'll get that out of the way, far away.

Beth Pinsker (00:35)Great, you know what, we're all in this together and nobody's gonna escape any of this. You will either need to care for somebody or you're gonna need to be cared for yourself at some point in time. Like it's inescapable. you ⁓ know, we're all, we all need this information.

The reason I put it together was because I couldn't find it out there when I went looking for it. When my mom got sick, there wasn't a resource that told me how to deal with the things that I had to deal with. Being a CFP and being a retirement columnist and a journalist, I got the caregiving information. Then I wanted to put it out there for other people to benefit from it so they could plan a little bit better or get through whatever they were stuck in the middle of.

I pulled together a bunch of columns I had written and brought in them out. I interviewed a lot of people, like almost 100 people, especially for this book. Over the years as a journalist, I've interviewed probably, you a thousand people about, you know, planning and estate planning and all of that stuff that goes into it. This book is coming out November 4th from a Penguin Random House imprint. You can pre-order it on bethpinsker.com or through the publishers portal. Hopefully you'll see it everywhere and every bookstore you go to.

Frazer Rice (01:51)One of the concepts of the book that I think is vital is that it's important to have these steps. This caregiving analysis, this process established while everyone is at least a little bit on the top of their game. That you're not making decisions under maximum stress, either emotional, financial or otherwise. Maybe take us through a little bit about how you came to that realization and how you articulated that.

The Importance of Planning Ahead for Caregiving

Beth Pinsker (02:06)

Yeah, so I got a call from my mom ⁓ one day. You know, she's perfectly fine, 76 year old, and she's like, I'm gonna have surgery. It's gonna be a big one. I'm gonna get my back operated on so that I can continue to walk. She really wanted to be able to walk and she was losing her abilities.

The thing we need, we needed two things. We needed a power of attorney for ⁓ financial needs and a healthcare proxy because she was going to be incapacitated for a certain amount of time. We didn't know how much and we needed those documents. If we would not have had those documents, my life would have been an utter disaster. It was already really hard with those documents, but without them, I would have had to go to court.

I would have like not been able to do anything. I would have had to pay her mortgage out of my funds, I would have had to pay the caregivers out of my own funds. I would have been locked out of her life and locked out of making decisions for her and I would have had to, you know, get a lawyer and, you know, that cost about $18,000, right? So instead we had forms that said I could act on her behalf and she got them as part of her estate plan.

The equation I put in the book is you can get those documents for free or you can pay $18,000 to go to court. Like that's the position that people are in before something bad happens. Like, do you want to just spend 10 minutes and get a power of attorney and healthcare proxy? Or do you want to go to court and spend months and agony and lots of money?

So, you know, if you put it that way and you explain to people why and show them how hard it is to not have those documents, I'm hoping it will spark a discussion that somebody in the family will say, hey,

Does mom have those documents and does dad have those documents? Does Aunt Sue have those documents? We really need to get those and do it. Everybody over the age of 18, so don't send a kid off to college without them. My son turned 18 and he needed some minor surgery before he went off to college.

Printing out documents and marched him down to the notary and got those signed for him. He's like there was no way I was gonna have him do even a minor surgery where he wasn't even gonna be really fully under and Was gonna come home the same day I wasn't gonna let him do that without having some sort of paperwork in place because he's 18. He's a legal adult You know

Frazer Rice (04:46)I mean, everything related to the Terry Schaivo case to situations where decisions for accidents that happen abroad and so on to not have those documents in place is a disaster waiting to happen as you described.

One thing that I've gotten from my experience is that it's important to not only keep them reviewed to make sure that people are in place, et cetera, but also to have them just generally updated. I've found that hospitals and medical practices sometimes say, you know what, this is more than five years old. We're not going to respect it.

Beth Pinsker (05:22)Yeah.

Frazer Rice (05:23)Was that any part of your experience or have you heard about that from anyone?

Beth Pinsker (05:26)Absolutely, because ⁓ people move, right? And so my mom and dad had their estate plan done in Pennsylvania. ⁓ Then they retired and moved to New Jersey, primarily. So Pennsylvania and New Jersey have different rules. If they would have gotten sick in New Jersey and had a Pennsylvania power of attorney,

Frazer Rice (05:30)Right. Mm-hmm. No question.

Beth Pinsker (05:47)We would have had trouble. Then they packed up and moved to Florida. So if they would have gotten sick in a time period where I needed to take over for them and they still had their old documents, we would have been stuck. ⁓ As it was, my father died in 2018.

The first thing I did was have my mother redo her entire estate plan in Florida as a single adult, right? No longer, I give everything to my husband and my husband gives everything to me, ⁓ which they call sweetheart wills, which everybody in your audience already knows, but ⁓ if you're watching and you don't know, that's what they call those. ⁓

Frazer Rice (06:18)That's right.

Beth Pinsker (06:25)But so they had sweetheart wills and if something happened to one of them they said I give the power to the other in a power of attorney and my brother and I were named as you know successors. ⁓

But after my father died, those things are no longer any good, right? So my mom needed to update her plan and I was already a CFP and a retirement columnist by then. So she listened to me and she went and got all these documents done in Florida. And so when she got sick, it was within five years. ⁓ Nonetheless, I went to the bank with them and tried to get access to her bank account and they just look at me and they shook their heads.

They said, Nope, you need a court order. And I said, Nope, I don't. I don't need a court order. have valid paperwork. They said, Nope, you need a court order. We went back and forth like that in like, you know, for like 10 minutes. I knew what I was doing and I stood my ground, but I wonder how many people don't ⁓ and go off and you panic. But I made, I stood my ground. made them, you know, let me talk to a customer service rep. made an appointment. I came back and they put the paperwork through, but I really had to like, ⁓ you know, hold a sit-in and refuse to leave.

Frazer Rice (07:42)Gosh, the one of the things that that brings up, go in all sorts of directions on this. But the first one is that is the changing of planning once an event happens. And so when your father died and your mom was on her own and the characterization of the estate planning is different at that point, you know, it's sort of take it's taking one set of circumstances into account.

Well, those circumstances happened and now you have to prepare for the next tranche of life. both from a caregiving perspective and then from an estate planning perspective. It's also, I think, a unique opportunity to sort of look in as you sort of diagnose too and understand who is actually making the decisions for people at this point because the dynamic is now completely different.

Navigating Legal and Financial Caregiving

Beth Pinsker (08:28)

Yeah, no, my mom, you know, didn't know a lot of this ⁓ stuff. And I think a lot of people don't like in the process of writing this book. I got an edit note that was like, I didn't know this, you know, and it was that when you have a couple and they're both getting Social Security when one dies, you know, you go down to one Social Security income and you can can shift to the higher of those Soci

There are plenty of LESSONS FROM GENE HACKMAN'S ESTATE PLANNING.

https://youtu.be/HZI4oiP0ZtM

It's a cautionary tale about managing changing circumstances. Proper implementation and monitoring has to be in place. Periodic reviews of the documents, asset titling, and staffing of the fiduciary roles are a must. Finally, understanding the family dynamics and desire for confidentiality are vital in putting the estate plan in place. The disposition of $80 million was at stake here.

LAWRENCE D MANDELKER, Partner at the NEW YORK OFFICE OF VENABLE, and I discussed the fact pattern, what could have been avoided, and points to take away in one's own affairs.

https://open.spotify.com/episode/1ndlYCQRiAokJ4FyATL9Te

Transcription

Frazer Rice (00:02)Welcome aboard, Larry. VENABLE ARTICLE ON GENE HACKMAN'S ESTATE

Lawrence D. Mandelker (00:04)Thanks for having me, Frazer.

Frazer Rice (00:05)This is, I wouldn't say it's fun talking about someone's estate, but this one's particularly interesting. We all remember Gene Hackman from Hoosiers and Superman and Mississippi Burning and all sorts of great movies. Unfortunately, his end was sad and as it turns out, Gene Hackman's Estate was complicated and public. From a planning perspective, we can learn a lot. ⁓ Take us through a little bit about where where Gene's estate kind of went from and ended up as far as a fact pattern.

Fact Pattern in Gene Hackman's Estate Planning

Lawrence D. Mandelker (00:37)Sure. So, you know, the news sort of surprised all of us when we heard that he had died. And then over the next couple of days and weeks and even months, more more detail came out. And as you said, it was pretty disturbing. But it seems as though Gene Hackman was a very successful ⁓ actor and he engaged in estate planning.

Gene worked with attorneys, which is always a good thing to do it to work with people who are experts in the field And he had a you know a normal estate plan. He lived with his wife It seems like he had a little bit of a fractured family. It was not his first marriage. We learned after he signed his estate planning documents sort of things over the next 20 years sort of changed for him he He had some health issues.

He was suffering from advanced dementia at the time he died and as we know his wife died from a virus apparently a week before. Then as the details came out we learned that he had the advanced dementia. There was a fractured family the the wife and his kids did not get along so well. It's unclear what the situation was with how much contact he did have with his children. But he had a will, he had signed it 20 years before he died. The facts changed. It looks like he hadn't reviewed it in a while. His attorney died so we have a sad situation here.

Frazer Rice (02:12)Many lessons to get from that. Let's start with the first one. He definitely had ⁓ sort of dementia situations, cognitive dysfunction that eroded over the course of time. Maybe take us through a little bit about the scope of that issue. mean, it affects lots of people and a growing number every year and some things that should be in place because of that.

Lawrence D. Mandelker (02:38)Yeah, you know, we all think we've got a lot of time and for someone who gets a diagnosis of dementia

It's sort of a warning sign as soon as that happens that, you know, we never know when our time is going to come, but the dementia is sort of the warning. You know, maybe you're entering the second half of the game or the fourth quarter of the game. So maybe you should start getting your affairs in order while you still can. So it's a good ⁓ impetus to do that. You know, when we're looking at estate planning, there's, you you can do different types of estate planning, but really think about it as, you know, you can do it for yourself.

You can do it- your loved ones and then you know for depending on the nature of your assets you can do it for tax purposes but you know getting the the warning that you have dementia doesn't mean that you can't sign a will doesn't mean you can't do any estate planning it just means that you know you're probably heading towards a situation where you are going to face you know a number of years during your life where you can't make the same decisions on a daily basis for your own benefit that you can today.

And going back to that idea of the first level of estate planning is for yourself. So you want to make sure that you've put in place a plan of who's going to make decisions for you when you can't make those decisions, rather than having those people fighting amongst themselves to decide who's going to do it. You're empowered to do it yourself.

Standard Documents

Frazer Rice (04:08)Well, and it goes to goes so far as to reiterate the notion that you should review these things periodically. The idea of making decisions around health care, making decisions around financial ⁓ situations. We're dealing with a sizable estate and to have that in a confused state, you know, someone's health starts to decline. That's a dangerous place to be.

Lawrence D. Mandelker (04:31)Yeah, absolutely. mean, you're at the very basic documents.

You want a healthcare proxy and a power of attorney. The healthcare proxy is going to name a healthcare agent to act for you to make your decisions when you can't make them. And the power of attorney is going to name someone who can do anything that you can do by signing your name.

So they can sell your house, they can buy a house, they can take out a mortgage, they can buy stock, they can sign your tax return, they can pay your electricity bill. The people that you trust to do those important jobs may change over time. So when your kids are young and if you've got a teenage child, maybe you don't trust them. But as they are in their 20s and 30s, and at that point when your kids are young, maybe you're naming your siblings as these agents, or good friends, or trusted advisors, whether it's your accountant or your attorney, people that you've known for a while whose judgment you trust.

But then when your children get older, that changes a little bit. Maybe now you start trusting your kids to do that. Your advisor is no longer working or you've moved on a different advisor. Maybe your siblings have their own health problems so they're not able to do it. So it always changes and it's always something that you don't need to look at the documents every day. And I sort of tell my clients, know, keep the documents someplace where they will be found but not where you see them every day. ⁓

Frazer Rice (05:57)Well, the backup to that is don't leave it in a safety deposit box at a bank where necessarily the bank may have trouble getting to it if you don't have those documents in place or they are in the vault.

Lawrence D. Mandelker (06:12)Yeah, you know, that's the thing that's one of the first things you learn out of law school as a trust and estates attorney that you you need a court order to open in New York, at least you need a court order to open up a safe deposit box after someone died. So if the will is in there, you you've increased your complexity, you've increased your costs, you've increased your time just to get the will.

Implementation

Frazer Rice (06:32)So let's get back to the important notion of implementation and then the close cousin to that monitoring the estate plan as it goes forward. A lot of what's going on in the Gene Hackman estate is going to be related to titling of assets and making sure that they are in the different entities that were set up, making sure the designations are in place, and then understanding that that is where that it follows the intent of Gene going forward. What do we learn on that from what we had here.

Lawrence D. Mandelker (07:04)Sure, know, a lot of our clients come in, they sign the documents, and they think, wait a minute, I'm done, right? And, you know, sort of there's a next step.

You want to make sure that you've implemented your plan. So that means you know if you have a revocable trust because you want to avoid probate Well, the assets have to be in the revocable trust You actually have to retitle your assets if you want to update your beneficiary Designations on your retirement accounts or on life insurance policies.

It's not enough to just say you want to do it. You have to actually fill out the forms. You have to send them in. Practice pointer: you should follow up with the insurance company and get written confirmation that you've done it correctly. If you name three children and they only put down two, then they're only going to pay it to two kids. You want to always check and recheck to confirm that everything that you've done.

Frazer Rice (07:58)This was a case where sort of the way of going about it, where they "set it and forget it." It really hurt things going forward.

Lawrence D. Mandelker (08:06)Yeah, he signed his will and he didn't review it, it seems like, for quite some time. So he named as a fiduciary, he names his attorney. And meanwhile, his attorney ⁓ predeceased him.

We don't know if that was because maybe he lacked capacity to change those documents at the time the attorney predeceased or he just didn't look at it. But in any event, if the attorney's getting older or something's happening, you you should know, you should constantly monitor.

If these are the people that you're counting on to take care of you, then you want to make sure that they're in a good position to do that.

Frazer Rice (08:42)I tell people that it's a good idea to have the people who staff the different roles in your estate plan be, as a rule of thumb, 10 years younger than you are. Maybe more, just so that you don't have these types of issues.

Lawrence D. Mandelker (08:57)Yeah, no, that's a good rule of thumb. You usually don't want someone older in the event that you really have nobody else....

US/UK TAX PLANNING with ALEX JONES, Partner at London Tax Firm, RAWLINSON-HUNTER

https://youtu.be/UjgQRpfqJ-E

Thousands of Americans live and work in the UK and record numbers of them are applying for British citizenship. Planning for taxes for these folks has always been challenging, but in 2024, with the change in the non-DOM rules, it's gotten even more difficult. To help us understand what's happening here and to try to identify some of these issues is ALEX JONES. He's a partner at Rawlinson Hunter, the British tax firm. Enjoy.

Outline

00:00 Understanding UK Tax Law Changes for US Citizens07:00 Navigating Residency and Tax Implications11:49 Planning for Inheritance Tax and Trusts19:51 Pre-Immigration Tax Planning Strategies30:03 Managing Double Taxation and Tax Credits

https://open.spotify.com/episode/4Hmqaalhjk3NklfMCWNd4X?si=8e45eac2d2f247cc

Transcript of US/UK Tax Planning

Frazer Rice (00:04)

Well, we have certainly had a lot of news with British tax law changing. And for those of us here in America who may or may not be part of getting to Europe in a major way and in the UK in a more permanent way, maybe give us a little overview of ⁓ A, what happened, but more specifically, how the UK thinks of US citizens, which can take different forms.

Alex Jones (00:31)

Let's start with the back end of that question, how we regard Americans. So from a tax point of view, clearly what we're really saying is how do we regard Americans who are exposed to UK taxes? And typically that means Americans who are here. Like most countries in the world, the UK will tax people on UK sources of income.

If somebody has a trade or business operating in the United Kingdom, we're going to try and tax it whether they are here or not. But if the US individuals physically in the United Kingdom, then the UK is going to try and tax them in a number of different ways, which I'll talk about in a second.

The pause is really just to emphasize the fact that they're American. So a US citizen or US green card holder is going to be US worldwide taxable, whether they live in America or not. So America is going to look at everything everywhere in an American way in dollars in a calendar year. And at exactly the same moment in time, albeit in the UK we have a different tax year end. Our year end is a rather crazy 5th of April year end.

Exactly the same amount of time the UK is going to look at exactly that same person and say, hey, what are we going to tax? And so you're starting with the premise that both countries are fighting over who gets the tax first. And the first thing you have to do is look at the two sets of domestic legislation to see how to start, where the problems are, and then you start looking beyond that.

In principle, the UK is going to tax people who are resident in the UK on worldwide income. So anything everywhere under UK rules, UK fiscal year, in sterling, et cetera, et cetera. And somebody who's not resident in the UK on UK-CITUS connected income only. However, the UK has long had a regime which has been known as the domicile regime or the remittance basis regime, which has been pretty well known internationally where we said,

Look, if you don't originate from here, if you're a foreigner coming in for a period of time, could be indefinite, could be reasonably long, but not permanently, then we won't necessarily tax all things which are non-UK. We would tax things that you brought into the UK, remitted, but we wouldn't necessarily tax non-UK things that you didn't otherwise bring or use or benefit from in the United Kingdom.

So the thing that changed in the budget that was announced at the end of October 2024 that largely came into force on the 6th of April 2025 is that we said, hey, this domicile regime, this remittance basis regime is kind of too beneficial to wealthy individuals. You have neighbors who are paying differential amounts of tax just because one person's kind of foreign and the other person's a blue blooded Brit who's lived here forever.

That's not right or fair morally. So what we'll do is we'll say, okay, we're to do away with this term domicile. We're not going to use it for income tax or the estate tax purposes particularly. And we're going to create some new terms. And one of them we'll create it, which is a four year regime. call the fig regime for an income gain regime where we basically say, again, we're going to tax UK stuff, but we won't tax foreign things for that four year window.

But once you've been in the UK for more than four years, we're then going to tax your worldwide income. And then we have an extra piece we've added on, which says, if however you've been here for a long time, which is basically resident for 10 out of the last 20 years, we're also going to say, now you get worldwide inheritance tax.

If you die while here, well, if you die with UK stuff, we're going to tax you on your worldwide assets. as opposed to potentially just your UK only assets, which is how we typically would have treated you if you were a non-domiciled individual under the old regime.

So lots of change as to how the UK taxes people and therefore how we view the American is all about the interaction of the two. It's all about, yeah, but I've got both. I'm an American, I'm paying US income tax, I'm paying US estate and gift taxes. How do I deal with the fact? How do I prevent?

Two sets of taxation globally, such that my income tax rate isn't a top rate of 37. What I don't want it to be is 37 plus the top rate in the UK of 45, plus maybe some tax I'm still paying in California or New York because I've got a residential property that I'm renting out in one of those two locations. how we treat Americans is we treat them under domestic rules.

We treat them in a way that says what are we or are we not going to tax in our way how we think about things. And by that I mean if we think it's taxable, it's taxable. If you guys think it's municipal bond interest which is exempt, that doesn't mean anything to UK eyes. We look at it go, well, it's just interest income. From our perspective, Britain has our own domestic rules which try and stop double taxation. That means give credit for other people's taxes.

Frazer Rice (05:37)

Sure.

Alex Jones (05:50)

And also, most importantly, between the UK and US, we have two tax treaties. We have one tax treaty that deals with UK and US income tax, and we have a completely separate tax treaty which deals with UK inheritance tax and US estate and gift taxes. So we call estate and gift tax inheritance tax in the UK, and it applies in life or death. So we've got two treaties which are both trying to minimize unacceptable double taxation. That's kind of a… kooky term of art,

Minimise unacceptable double taxation. A little bit of double taxation may be acceptable in the eyes of government. Well, these two treaties, they're designed to try and minimise. So when we deal with both UK and US taxes, and I'm a both UK and US tax guy, I've been doing US tax since the late 1980s, what we're trying to do is try and get the two systems as closely aligned as we can. To the amount of credit we can get between the two countries so that overall the person's paying the lowest amount of tax that they should pay as opposed to maybe double tax.

Frazer Rice (07:00) US/UK Tax Planning

So if you're so let's steer this back to the Americans quickly. The typical situation that you're running into is, guess, an American who has moved over to the UK either for work or for something else. Maybe take us through a little bit of how you analyze that in terms of sort of understanding how long they've been there and then how that sort of surfaces through the regime you just described.

Alex Jones (07:25)

Yeah, so. there's always a duality here so we have to talk about sort of both sides to understand the whole but from a UK perspective when we're thinking about how long have people been here is what we're really saying is hey are they UK tax resident have they done enough to make themselves UK tax resident because if they are they've got an expansion on the things we can tax maybe we can start taxing worldwide income and in the UK we have a test we call substantial residence test, statutory residence test, excuse me.

And that's a slightly complicated set of rules, which is designed to say, hey, if you spent too much time in the UK, are you tax resident? If somebody spends, as an example, more than 183 days or 183 days or more a year in the UK, we're going to treat you as a tax resident under pretty much all circumstances. But if you spend less than 16 days a year in the United Kingdom, we are always going to treat you as non-resident. And that's quite a big gap.

In between those two, there's a combination of day of time and factors which can trigger residency. So we're looking at how much time. We're also looking now under this four year FIG regime as to have you been here for more than four years? Have you been here for more than last four years? Because if you have been, we are going to tax worldwide everything. If you haven't been, if you're still in year two or three or four, then we aren't going to tax the non-UK income or gain sources or at least most of them.

And indeed, we won't even tax you if you bring and use those funds in the UK. We'd quite like you to bring that money into the UK because that's good for the UK economy after all. From a US point of view, ⁓ ignoring US citizens or green card holders, you have a test which is called the Substantial Presence Test.

That's basically what the test you would apply to a non-American who is spending time in America to determine whether they were US tax resident and therefore worldwide taxable in America.

So both countries are looking at a time component as to where you're spending time. We also have to look at time in the context of employment inco

JOHANNA DAVID, Adjunct Faculty Member at Hofstra Law School is with us to talk about three estate planning mistakes and how to avoid them.

Johanna is a Trusts and Estates lawyer, and a partner at Forchelli, Deegan, and Terrana. She's also the adjunct professor of law at Hofstra University. We're going to talk a little bit about mistakes that we see in estate planning and the simple things you can do to keep them away from your situation. Enjoy.

https://youtu.be/gD_d9J609Vg

Three Estate Planning Mistakes Chapters

00:00 The Importance of Estate Planning09:47 Common Mistakes in Estate Planning19:54 Understanding Trusts and Their Benefits24:00 Navigating Elder Care and Estate Planning

Outline of "Three Estate Planning Mistakes"

Frazer Rice (00:01)Welcome aboard, Joanna.

Johanna C. David (00:03) -Three Difficult Planning Stories and What Can We Learn?

Hi, thank you. Thank you so much for having me. I appreciate it.

Frazer Rice (00:06)Well, happy to have you on because we are now, most people sort of put their estate planning off toward the end of the year, but I have a feeling given where the legislation is going, et cetera, that the crush is going to happen earlier than we think. In the meantime, you and I were talking beforehand about some mistakes that people make from an estate planning perspective and that they're very avoidable. I thought we'd take this opportunity to go into that a little bit.

In your practice, maybe let's start with a couple of, or sort of the big ones that you see, ⁓ give us some ideas of some mistakes that people make that really should be avoidable.

https://open.spotify.com/episode/57MMskGgp1P3fOVklGt090?si=ISap3Z_YSdqK_zg4-Dlevw

Johanna C. David (00:48) - Structure and Other Planning Tactics

Sure, absolutely. So the number one mistake that I think that people make is not having the proper estate planning documents. I see this happen time and time again. I don't know if it's because of the stigma. People are afraid to approach estate planning, right? Sometimes it makes your mortality very real. But the biggest estate planning mistake is not having the right documents.

Everyone, everyone, I cannot stress, everyone needs to have at least a will, a power of attorney, and a healthcare proxy. And there are people that say, well, you know, I don't really have much, I don't need to do that, or ⁓ everything's gonna go directly to my husband and my children anyway. You know, that's how it works. But that's not exactly the case, right? You and I both know.

So, especially if you have young children, young couples definitely want to have those things in place. You want to think about who is going to be the guardian for your child or your children if both of you pass away. And a lot of people don't think about that. And those only cause problems in the long run. I'll give you a quick example if we have time. But ⁓

Frazer Rice (02:02)⁓ please do.

Johanna C. David (02:03) - Long Term Planning Issues and Avoiding Problems

I remember, this was several years ago. I must have just started practicing and I had been a young attorney. So it was about 15 years ago and a woman came into the office and she and the decedent had been living together for about 30 years. They held themselves out to be married. Now, Frazer, you and I both know that New York does not recognize common law marriage.

Frazer Rice (02:30)This is true.

Johanna C. David (02:32) - Correcting a Big Will Mistake

She was not aware of that. And so they were married for 30 years. Everything was in his name or excuse me, they were not married. They were together for 30 years, held themselves out to be married, not legally married. He owned the co-op apartment. Everything was in his name. Now he had a daughter from a previous marriage, legal marriage that was a strange.

And you guessed it, our client did not get along with the daughter. So the father dies and guess who inherits the co-op that this woman has been living in for over 20 something years, right? And who inherits all of this man's assets. It ends up being the daughter and the woman is out.

Frazer Rice (03:09)It's not the intent.

Johanna C. David (03:13) - The Price of Neglect and Other Costs of a Mistake

Right, exactly, not the intent. And you know, this man didn't have a will. He did not have a will. Again, there are so many myths out there about estate planning. You know, this woman was under the impression that, hey, you know, we're common law married. If he passes away, if I pass away, everything will go to each other. That's not the case. So I always remember that case. I always give people that example because it's so important to have a will.

Frazer Rice (03:38)The other part too on that is that the poor person who has to administer that estate has to go through the court and all that. You're not doing your executor any favors by not having a will. And, you know, there isn't technically an executor in that case, but someone's left to clean up that mess.

Johanna C. David (03:45)

Yeah, the administrator has to clean up the mess and it's not an easy thing, believe it or not. It's funny because this week I had a client come in and this one is a little interesting, but I'm going to, you know, just stay with me because it gets a little hairy. OK.

Frazer Rice (04:09)Gosh.

Johanna C. David (04:11) - Difficult Phone Calls

It gets a little hairy. When I teach at school, cases like this, I like to draw out on the board. So I hope that our listeners can kind of follow a little bit. A woman comes in and she tells me that her cousin died. OK? This man died in, I believe, 2012. Up until his death, she was his power of attorney. OK? Another myth. People don't realize power of attorney dies with you.

Okay, she's no longer the power of attorney. He died in 2012. She was the power of attorney. He was a widow, a widow were rather. His wife had predeceased him. He had no children. She's a cousin, but they're very close. She's the power of attorney. All of a sudden, and I don't know how this happened, she figures out that there is a fidelity account that has about 300,000 numbers in it.

What now?

She's like, well, you know, what do I do? I asked if he had a will. Of course, he didn't have a will. So I explained to her that, you know, we have to go through what is called an administration proceeding. And I tried to figure out his family tree. He had no children, his wife pre-deceased. He was survived by a brother. For example, for this example, let's call the decedent Will. William will call him. Will and his brother- let's call him Dave. So Will was survived by Dave.

Right after Will dies, Dave dies. Dave also didn't have children but was married and had a stepdaughter. So Dave dies, right? As it's go to Dave's wife. Dave's wife dies right after him. I know, it's crazy. So now Dave's wife dies. Dave's wife has one daughter, okay? She dies. I'm not making this up, I promise.

Frazer Rice (05:43)My gosh. Tell us where they live so we can avoid it.

Johanna C. David (06:01) - Complication

So daughter dies, okay? So now, so the brother, Dave, his wife, his stepdaughter, they all die. Daughter had no children, okay? Whose daughter's next of kin?

Frazer Rice (06:18)You've lost me, if you go back up, I think there's a stepdaughter in there somewhere.

Johanna C. David (06:22) - Tracing the Lineage

Right, so that's daughter. Her next of kin would have been her biological father. So guess who's entitled to the assets? So let me bring it all back for our listeners. Basically, Will's assets, so Will died. His assets will end up going to his sister-in-law's ex-husband.

Frazer Rice (06:28)Right. gosh and they may not have ever met.

Johanna C. David (06:49) - The Family Tree

Correct. All because if, again, none of these people had wills, and when you don't have a will, you know, New York State basically writes one for you. And those are called the laws of intestacy. The laws of intestacy determines what happens when someone dies, who inherits, who are their heirs. So we have to follow the family tree. It's very unfortunate. I had to explain to this woman that the truth of the matter is, yes, we needed to administer all these people's estates.

But then at the end of the day, assuming that this man is alive, which we think he is, right, he will be entitled to the assets. Imagine getting that phone call, Frasier.

Frazer Rice (07:28)And not only getting that phone call, but then having to make that phone call when you find this all out. And then part of that too is, some people, and it's easy to get confused, is that you have beneficiary designations. So the fidelity account, guess in theory, could have also been designated, but that doesn't sound like that happened either.

Johanna C. David (07:49) - Beneficiary Designations

All right. There was no beneficiary designation. So you're right, he could have had a will or he could have at the very least if he was very close to his cousin, you know, she was taking care of him. She was power of attorney and healthcare proxy. He could have at least had her as a beneficiary, which he didn't.

Frazer Rice (08:07)Well, as I tell people, ⁓ yes, the beneficiary designation is useful and powerful, but don't let that act as a substitute for a will because there are going to be other things going on in your estate, most likely.

Johanna C. David (08:19) - Dealing with Institutions

Yeah, absolutely. And sometimes people put beneficiary designations. They forget all about it. And then they pass away. So I have seen beneficiary designations that might have been a parent, right? Maybe you had this account since you were young and you were not yet married or had children. And so you put your parent on the account, you know? Now you pass away. Maybe your parent has passed, but now the assets may end up going to, you know, who knows?...

We're going to be talking about the current incoherent world of US ENERGY POLICY.

ANNA KRAMER joins the podcast to help us get our arms around the future of energy in the United States. Anna is a reporter for NOTUS, a non-partisan longform journalism outlet. She has written a series of stories on the the disconnect and frustration around US Energy Policy and paths forward.

We talk about:

The chaotic policy at the federal level (and beyond)

The huge cost overruns and administrative complexity

The role of nuclear

The increased energy demand in this country

Finally, we muse about what can be done about it going forward.

https://youtu.be/3k-N-AGTNfU

Outline

Section 1: The US Energy Policy Transition:

The Goals and the Problem. Discussing Brandon Shores Coal Plant and electricity prices in the Mid-Atlantic Region.

https://www.notus.org/policy/biden-clean-energy-coal-maryland-brandon-shores

https://www.notus.org/policy/electricity-prices-spiking-biden-clean-energy-transition

https://www.notus.org/policy/nuclear-power-energy-crisis-cost

Evidence that the transition is happening. Electrifying = efficiency. Cheap wind and solar, look at the free markets in Texas — ballooning wind and solar there

The reliability, capacity, and resource problem: Needing certain amounts of energy and voltages at all times of day. Leads to keeping coal plants online past scheduled retirement dates, plus spiking prices

How much do emissions and climate change goals matter to the industry? What role does nuclear energy play?

Section 2: Interconnection Queues and Permitting Reform. Bipartisan and Industry wish for Permitting Reform: Why is it so hard for US Energy Policy? 

https://www.notus.org/policy/permitting-reform-bill-manchin-environmentalists

https://www.notus.org/policy/solar-farm-culture-war-biden-climate-change

Section 3: Trump’s US Energy Policy “dominance agenda” disappointing every part of the energy industry.

Idea is not aligning with reality.

DOGE cutting into the basic functions of energy governance.

https://www.notus.org/policy/doge-cuts-trump-drill-baby-drill

https://www.notus.org/policy/donald-trump-tariffs-trump-energy-agenda

Transcript

Frazer Rice (00:01)Welcome aboard, Anna.

Anna Kramer (00:03)Thanks for having me, really psyched.

Frazer Rice (00:04)I went through a bunch of your articles covering the power industry and energy generation and a lot of things that are happening federally, state level, and it's going to be a lot to get our arms around, but you were the person to do it. So just generally speaking, we're at a point in time with energy and transition ⁓ that policy is moving. Maybe take us through a little bit about the goals and the problem we face.

Anna Kramer (00:31)So there are sort of two, I would say, competing problems right now. ⁓ The first one is load growth, which means basically more demand on the electricity grid.

And that is something that we haven't seen in this country in decades. for really around 2000 up until maybe a couple of years ago, energy demand on the grid has been fairly constant or even declining slightly. And the reason for that is that everything has become more efficient. Like every appliance you use, every light bulb, your car, everything that could possibly have a demand on the grid is more efficient than it used to be, which is awesome.

There's a lot of wonderful benefits that we get from that, including the fact that for a long time utilities and transmission planners and states and the federal government have not really ever had to think about the grid or about like where you get your power aside from these sort of technical conversations that the average person doesn't really pay any attention to. That has really started to change as of the last few years.

There's a large number of reasons for that. Basically for the first time in decades we have significant demand expected on the grid. We expect it to grow over the next several decades. The reasons for that are widespread and hotly debated. A lot of people talk about data centers and artificial intelligence which require huge amounts of energy to power

At the same time, there's a lot of research that shows that some of the larger sources of demand are actually going to be manufacturing facilities built in the United States for things like semiconductors. Electric vehicles are a huge demand source on the grid. Basically, the more that we electrify, the more demand there is on the grid. So for the first time in decades, we have the need for a lot more power. And then at the same time, we also have climate change. And for those who really care about

With the emissions we create in the United States or globally, there's a compelling argument that we should be addressing the emissions from the power sector. These are quite significant between coal and gas plants, and then the emissions that come from regular vehicles.

Those are somewhat competing because if you have increasing demand on the grid, while you're trying to reduce emissions, you're both trying to transition the economy from fossil fuels while increasing the amount of power that's available. There are a lot of competing tensions there.

Frazer Rice (03:06)So as we're trying to get more efficient ⁓ and we're sort of transitioning to electricity, how do you think about sort of the downstream effects of that? To me, energy generation is a symphony of measures you've got in everything from coal, the natural gas, to oil, to nuclear, to hydro, to solar, ⁓ hydro or sort of hydrogen based things, that type of scenario. Getting power generated and where it's needed, everything you just described, that's the part that's tougher for everybody to understand.

Anna Kramer (03:44)Yeah, definitely. And this is really where all the debates come in because…

It's not as simple as just creating the power in one place. The act of moving it to the place where it's needed is complicated and equires transmission infrastructure. That's the grid that everybody sort of sees, right? Your power lines, your substations. And there's only a maximum amount of power that can move, know, or sorry, maximum amount of electricity. My power and energy sources would be very mad at me if I said power. There's only a maximum amount of electricity that can move on any given part of the grid at any given time. So you need your transmission infrastructure to be really well built to sort of facilitate maximum movement of electricity to the people that need it. And it's really hard to do that.

And our…Transmission infrastructure system in the United States is not well built. It's quite old. It's aging. It hasn't been well maintained. There are some incredible technologies that can be applied to transmission infrastructure to make it better. They can make one line have the ability to carry a lot more electricity than it does currently. There's a lot of politics around who has to pay for that.

When it comes to gas fire generation, one thing you can do is build a gas plant near a place that needs the electricity to minimize the transmission infrastructure that is needed. But there's a lot of politics there too because the question is sort of like who bears the cost for building, for example, a gas plant next to a data center?

If a gas plant isn't going to contribute to the transmission network, should they have to avoid the costs that somebody would normally have to pay in to maintain it. There's so many complicated political questions involved in all of this ⁓ down and there's so many fights about who pays for what. And at end of the day, the average electricity consumer doesn't know any of this is happening and doesn't want higher electricity bills. But we're now in a situation politically and practically speaking where

Everyone has to understand how electricity moves around and everyone's going to have to reckon with higher bills if we're trying to meet all this new demand.

Frazer Rice (05:59)So let's take as a given, which it isn't a given, but let's take it that the costs could be figured out and we print lots of money and do all that stuff. Where does the world of NIMBYism kick in here? When do people say, "I don't want the power line to go through my backyard or I'm worried about the externalities of a power generation plant within five miles of my house. I don't want to breathe difficult air or radioactivity is a problem" - that type of thing.

Anna Kramer (06:04)It's probably the single greatest problem getting in the way of all of this. It's not just NIMBYism necessarily. In general this very anti… It's not just like I don't want things built in my backyard, but people in general don't really like to change the status quo, broadly speaking. So you have a number of things that happen there. The first thing is that…

Anytime you try to build a transmission line, takes years to longer to build it than it should because people are fighting it in in local systems. The same thing goes for a gas plant and wind turbines. The same thing goes for a coal plant that, you know, might need upgrades and instead the local community wants that coal plant to close because of air pollution issues.

But it's even broader than that. One of the stories that I wrote was about a solar farm that was going to be built in somebody's backyard. Basically they have a large farm, they were gonna cover a lot of the land with solar panels because the farm isn't financially sustainable and the solar panels were going to help.

And the local community essentially revolted against the farmer and prevented them from building the solar infrastructure. Not necessarily because any of them would ever interact with or see it, but the idea that this solar farm would sort of change the constitution of the community was so revolting to so many people that they essentially made this fa

Family Office AI has become a dominant theme at the fancy dinners where families and their advisors chart a course to incorporate new technologies. As wealthy families grapple with the risks and opportunities of AI, institutional rigor and structure hasn't kept up with the often informal world of family offices. This is a mistake High end governance must play a part in the family office AI space.

https://youtu.be/n_KHB_gOc9M

We're going to be talking to TIM PLUNKETT, who's the founder and managing partner of Plunkett PLLC. He advise families on structure, governance and the development of procedure around these exciting, but potentially dangerous concepts. We're going to be talking about best practices for family offices as they deal with the artificial intelligence theme.

Family Office AI

"When looking at AI adoption in family offices it is important to remain true to the culture, operations, reputation and underlying trust among those who built the Office in the first instance. Remain true to your principles and don't get distracted by the new toys." - Tim Plunkett

Family Office AI Transcript

Frazer Rice (00:01)Welcome aboard, Tim.

Tim Plunkett (00:03)Hey Frasier, how are you doing? Thanks for having me.

Frazer Rice (00:05)doing terrific. we're in the midst of Trump tariff season, so it's a little crazy, I'm sure for everybody. yeah. so why don't we, we're going to talk a little bit about family offices and artificial intelligence, which I think is a theme. both themes are, you know, big unto themselves, but how family offices integrate with the space. I think it's something where it's a, it's an area where family offices can be very informal and.

Tim Plunkett (00:11)We're blessed.

Frazer Rice (00:33)Getting some institutional rigor around them is important. And so to that end, you have a lot of broad experiences advising businesses from a governance perspective. Maybe describe your firm for a few minutes and what you do.

Tim Plunkett (00:47)Sure, thanks again. I have three pillars in my firm. I can only do certain things well, so I try and limit what I do. My training is as a litigator, and so I consistently think of things always as having to explain them in front of a judge, which helps with a lot of risk, which goes along hand-in-hand with AI and governance.

The second part is I've done a lot of government relations work, which is working across disciplines and organizations, trying to advocate for certain outcomes and create business environments that are efficient, compliant, ethical. Again, all that ties back to the same foundations in the world of AI. And the third component of it is, is obviously the AI work I do, which came out of working in data privacy and security over the last 10 years. The natural flow was to move towards this sector. And today my practice is

Mostly helping companies learn how to implement strategies that are fair, equitable, just, but also compliant with the laws and keeping in pace with the technological change, is really at breakneck speed and an incredible place to be right now in the world of opportunities in front of all of us. It's very exciting.

Frazer Rice (01:57)So when you're canvassing companies and families that are invested in them, what are the use cases that you're seeing?

Tim Plunkett (02:04)So use cases are, I mean, they're kind of all over the place. you look at in terms of how do you define the practices, have, there's operational use cases. so you have use cases that are like document intelligence and automation. Sometimes in places there's expense tracking and anomaly detection. There's dashboard creation for organizational purposes.

You have investment use cases for deal sourcing. portfolio risk management, alternative data, source and analysis. You have governance use cases for succession planning, philanthropic impact analysis.

So there's a lot of different cases that are out there. Each one of those has lots of different levels beneath them. But back office integration in the family office space, like you said.

Some places are single jurisdictions, some are multiple jurisdictions, some are international, some are local, some are really formalized, and some are not. And so you have basically two buckets that everything fits into.

One is AI for adoption and operational efficiency, and one is for investment. And those are viewed and treated very differently. Others overlap, obviously. But when you're talking about getting down to the fundamentals of building the rigor around these things, and what the institutional rigor looks like. That's where everything emanates from.

Risks

Frazer Rice (03:31)Got it. So, you know, it's difficult to put sort of a roadmap around this. It's all evolving so quickly. And, you know, just when you think you've got everything in mind, there's some new use case that pops up as a litigator, as someone who is trying to advise companies and families around governance so that they stay safe from the various risks that are out there. How do you group those?

Tim Plunkett (03:54)Well, the risks are there's risks that are from compliance. Okay, you have regulatory risk. You have family, know, reputational risks, operational risks. Then you have the obvious investment risks, due diligence, things like that. But and then the fundamental thing about family offices is they're about family, and they're about protecting that asset more than anything else, in my mind, at least. And so and so

What are the risks that go with that? Those are family reputation risks that you want to mitigate as much as possible. There's obvious data risks and security risks. Once you start pulling data in places, then it makes it more of an attractive target.

You have risks that go around that make them more attractive targets because people seem to think that some data family offices don't have a strong data governance strategies or security strategies that they may have decentralized security. There's all kinds of risks once you're inside the office as well between family members, between generations.

One generation looks at technology one way and another generation may look at it differently. That creates a risk from an investment perspective, an operational perspective. the world is fraught with risks, but for every risk, there's a solution pretty much. And a lot of that comes down to really building the governance strategy properly from day one, focusing on what your foundational documents should look like, your AI governance policy, and that is what your, for lack of a better term, your constitution. That's what guides you.

Frazer Rice (05:32)So a client walks into your office and they've got some level of complexity, they've got an interest in the space, they've got wealth and assets in there. It maybe takes us through your process as how you get them to get their arms around the issue and then put structure.

Tim Plunkett (05:50)I think the first thing to do in talking to anybody is finding some common ground. And there are certain principles that guide people, decent people, professionals that have licenses and things like that or certain mandates to do certain things.

Tim Plunkett (06:08)I think that when you're looking at building the bridge, the first thing you have to establish is trust. And trust is something that is in the background of every decision that's made in the world of AI.

So once you've established a level of trust, you can start talking about philosophically what the family is looking for, whether it's from an investment perspective or a philanthropic perspective. But you have to understand what the family is all about, what the family office is all about and their mission.

Before you can start putting on legal tools or technological tools or anything else you have to have that that trust at the beginning.

Once you do that you start to build your your your frameworks Your legal frameworks and that's what I said to your AI governance policy becomes your Constitution The good news is that there's so much information available now on how to set up governance programs.

It's not that hard depending even if you're you know small office or a big office foreign domestic whatever, there's frameworks for everything. But at the foundational level, the first thing is to get the trust together, to get the AI governance policy document together. And that will be comprised, if you go down the line from there, we can get into talking about what the specific core rails are and what you're trying to accomplish there.

Frazer Rice (07:26)Sure, and let's do that. One of the things I think about when we go from paper to operation as many times that, you know, in my world, the trusts or the wills or whatever are well drafted and they stand up to lots of different things. However, the people who are administering them are the weakness on that front. When you're thinking about the guardrails and the legal structures, how are you advising these families as far as staffing them?

Tim Plunkett (07:45)Right.

Okay, so staffing, again, This is about knowing your people. It's about knowing what you have, doing an inventory of what's inside your organization, who's good at what. And there's legal frameworks that you put around those based on what people are good at and what they aren't. So when you're looking at staffing in particularly, you basically want to build a structure where there's accountability.

You have to have, there's expectations in the office for returns on investments and things like that. And then there's also expectations on how these places behave and how they're viewed publicly.

So you have to define the roles and responsibilities very clearly. You're gonna want an executive leadership team to begin with. That's a strategic oversight role. That you're gonna have ethics officers or maybe an ethics committee,...