Wealth Actually

The transition of wealth between generations has put the spotlight squarely on fiduciary roles. With the rapid changes in the financial services space, directed trustees and independent administrative trust companies have exploded in popularity.

The Evolving World of Directed Trustees

Most advisors, wealth management firms, and clients under-appreciate the responsibility and risks of proper trusteeship.

They remember a culture and business model that existed decades ago.

These days, individuals trustees usually can't handle the rigors of the job and law firms are leaving the space for liability reasons.

Finally, in an environment where clients want more flexibility and control, the large bank-owned trust departments provide a cumbersome experience and high turnover,

With this in mind, modern estate planning has unbundled traditional investment, administrative and distribution trustee roles. There is a huge appetite for jurisdictional planning and best-in-class providers.

With all of this change, it is confusing for the advisor to know who is responsible for what and how much it should cost.

The Problem for RIAs

RIA's do not have the resources to advise or service clients with this complexity. The administration and oversight of these structures is a distraction.

Building a trust company to solve this problem does not make business sense in a private equity-backed RIA aggregation environment.

Moreover, using conflicted trust providers is out of the question for fear of putting client relationships at risk.

An increasingly popular option for RIAs and wealthy families is the use of directed trustees and the independent administrative trust company.

CHRISTOPHER HOLTBY is a co-founder of an independent trust company that works specifically with wealth advisors and directed trustees.

Not only do we highlight the best practices for identifying and partnering with an administrative trustee, but we also discuss the typical workflow between an RIAs and directed trustees.

Chris' Background with Directed Trustees

How RIAs work with directed trustees and an independent trust company:

1/ What are the basic requirements of independent trust company?

2/ Accordingly, which "value adds" should RIA firms should look for?

3/ Are there key attributes to spot when deciding to work/partner with an independent trust company?

4/ Lastly, should you be aware of any "Gotchas" in the space?

How Do We Stay in Touch with Chris?

WEALTH ADVISORS TRUST COMPANY

Video of the Podcast:

https://www.youtube.com/watch?v=6YyqlULg1GA

"Wealth Actually" is now on Video!

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

Dr. RICHARD HAASS takes us on a tour of The World's Hot Spots. We also discuss the U.S. in 2024 and the concept of citizen ship.

Episode 151 - MARK HOUSE

Cryopreservation and wealth was once the purview of science fiction and Hollywood. Freezing one's self to be revived in the future is not just something out of Issac Asimov book or a Ridley Scott movie. The science, estate planning, and economics of this "call option on immortality" are here right now.

There are legitimate and current issues with cryopreservation and wealth- fascinating ones at that! Science, estate planning, ethics, governance, economics and good old-fashioned drafting are in focus as I speak with Scottsdale-based attorney MARK HOUSE.

We're going to get our arms around the misconceptions of the freezing process and what that means legally and practically. With that background, we'll dive into the structuring and drafting considerations to effectuate this amazing concept. Finally, we have some fun by guessing at what the world may look like with revived citizens hundreds of years from now.

INTRODUCTION

BACKGROUND

-How did Mark get into estate planning and how did he get into cryonics?

CRYONICS

-Let's define freezing "pre-death" vs "post-death."

-Behind the Science: GREG FAHY'S WORK and BIO

-What is the legal and funding process?

ESTATE PLANNING AROUND CRYOPRESERVATION AND WEALTH

-Usually when people die (and the being's existence terminates), the assets transfer to beneficiaries. However, here something different happens.

-Is there a difference between being kept alive but in "suspended animation" and dying?

-Does having various features including DNA maps serve as the basis for a new being?

DIRECTED TRUSTS

-Ownership in a trust should be able to provide the structure that allows the Grantor to be resuscitated when the science catches up.

-Trusts have a Grantor, Trustee, Corpus (literally in this case) and beneficiaries.

-Trustees must administer, invest and distribute. 

-How does a directed trust allow the Grantor's intent to persist?

TRUST REQUIREMENTS

-Perpetuity and a Good Trust Protector Structure are vital.

-With that in place, trustees must have distribution flexibility and discretion around "beneficiary determination"

-Why is it important to have broad Trustee choice?

-If we're making guesses about the future, why is nimble decision-making process around "science determinations" important?

-When talking about investment flexibility, is endowing a future being a "prudent investment'? If so, how does a trustee sign off on that?

CRYOPRESERVATION AND WEALTH ISSUES

-Who pays the freezer? How much does this cost?

-Once we know that, how does the trust pay for it?

-When should a person use life insurance? When employed, does the presumption of death change anything?

-What happens if you run out of funds?

-Does it make sense to (also) endow the future persons' lifestyle? If not, how will they function in the future?

-Should other the trust not include future beneficiaries to reduce a potential future conflict

-How do you staff this? (See here for an interview with Betsy Brown on Corporate Trustees designed to deal with tricky situations: https://frazerrice.com/ep-63-betsy-brown/)

-What if the individual or corporate trustees cease to exist? (Trust protector)

-Is there liability for the science committee if they unfreeze too soon?  Can other beneficiaries then be added? Should they be?

-Are private trust companies common in these situations?

BEST PRACTICES AROUND CRYOPRESERVATION AND WEALTH

-What’s the best way to get started?

OUTRO -

How do listeners find Mark House?

MARK HOUSE CONTACT INFORMATION

ARTICLE ON CRYONICS

TIM URBAN'S ARTICLE

OUR TRUST AND ESTATES PROFESSOR, JEFFERY PENNELL

Firms that do this

ALCOR- https://www.alcor.org/

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

Episode 150 DAVID LESPERANCE AND MELVIN WARSHAW

In this 150th Episode, we revisit the topic of citizenship and expatriation and try to answer the question, "Should I expatriate?."

Establishing a life outside the friendly confines of the United States is a popular wealth conversation.. In the last few years, fueled by local dissatisfaction, political polarization, wealth divide animosity and positive "working abroad" experiences, "Expatriation" is now a big word in the cocktail party circuit. It's a word that shouldn't be taken lightly. Done correctly, it is a multi-year decision and planning process with significant consequences.

Long-time friend of the podcast, DAVID LESPERANCE and fellow cross-border tax expert, MELVIN WARSHAW, share their expertise on the three levels of "detachment" from the USA. They will set out the administrative and tax consequences of moving up the ladder of recission from the United States.

(David's previous interview here EP-76 Citizenship Diversification)

What factors have caused a dramatic increase in Wealthy Families seeking second citizenships and residence as "Fire Insurance"?

Tax the Rich proposals,

Rising racism and anti-semitism,

political polarization,

mass shootings etc.

What are the tax consequences of being a United States citizen?

How does one obtain a second residence? What factors to consider?

How does one obtain a second citizenship? What factors to consider?

What are the types of "Fire Escape Plans"? (i.e. Go Bag option, American Living Abroad, Expatriation) 

What are the Tax consequences of leaving the United States vs a full "Expatriation"?

What are possible factors that may cause one to trigger their Fire Escape Plan? (SCOTUS decision in Moore, Election mayhem, natural disasters, election results etc.)

What is the impact on the US of Wealthy Americans triggering Fire Escape Plans?

Should I Expatriate?

Contact

David Lesperance on Linkedin

Melvin Warshaw on Linkedin

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

Episode 148: Aon's Latanya Simmons

Aon's LaTanya Simmons on Florida and California Property Insurance

The challenging Florida and California property insurance environment is a huge topic of conversation. Anyone looking to insure a property knows that this has become tricky business in the last five years. Floods, hurricanes, wildfires and mold have are major problems for successful families' homes. These and other conditions have driven up premiums if you can find insurance at all. Add into the mix the complexity around the liability and the long term viability of the insurers. It becomes obvious that you need an expert to help navigate these risks.

LATANYA SIMMONS is an Atlanta native and 2nd generation risk management professional. As the National Sports Practice Director and Private Risk Advisor with AON Private Risk Management, LaTanya provides expert personal property and casualty insurance advice and advocacy for successful individuals. executives, entrepreneurs, athletes, entertainers and family offices nationwide count among the people that she serves.

We discuss the Florida and California phenomenon and what she sees as the future of the property and casualty insurance market in the high net worth space.

The Florida and California Property Insurance Challenge

Tell us what is going on in the Florida and California property insurance markets? What is the impact on customers?

Are Florida and California (and New York) just the beginning for the risk markets?

What strategies should those and others contemplating moves or purchases in other states consider beforehand?

How has the insurance market changed over the last 5 years (and specifically in the last 2)? Where do you see it going?

Will states like Texas, Colorado and Georgia feel this?

Where do you identify the biggest insurance risks for highly successful individuals?

How often should insurance policies and programs be reviewed, including the health of their insurer?

Many clients are high profile due to their or their family’s success and involvement in the community. This puts them in the spotlight often – in the news, on social media, front page of their company website.

What risks do higher profile people need to be thinking about?

What other guidance you can share for successful individuals and families when it comes to managing the risk around their homes, autos, collections, and other property?

Contact LaTanya

LaTanya Simmons LINKEDIN

AON

Other "Wealth Actually" insurance discussions:

https://frazerrice.com/ep-106-ahmet-bidav/

For More . . .

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

The new audio version is out now!

EP-148

LALIT PANDA on Optimizing Supply Chains in a Chaotic World and the Steps to Protect and Improve Company Operations

Defining the term "supply chain" and understanding what a company should control and what to outsource has never been more important to a business. Optimizing supply chains in a chaotic world is a huge challenge. Strategists at the executive and board level face:

Major global flare ups that threaten inputs

Huge pools of data to analyze, and

Increased complexity of logistics as customer preferences develop (almost to the point of irrationality).

LALIT PANDA has spent his career safeguarding, managing, de-risking and optimizing supply chains. Having worked with major companies like Sony and Altria on these problems, he joins us today to discuss the challenges and opportunities of in today's supply chain framework.

Lalit is an Operations and Technology executive with leadership experience across 7 different industries at companies of all sizes that were Public, PE and VC backed. As a Chief Operations Officer or a Chief Information/Digital Officer in global companies, he has led digital and operational transformations at scale.

Companies where he had roles range from large public companies like Sony and Altria to mid-size firms like Harman, Denon, Tronox etc. He has also been in late stage startups, ranging from consumer products to industrial chemicals and medical devices.

He is a blogger and thought leader on supply chain and digital transformation topics. These are increasingly important in a world of rapidly changing technology and geopolitical risks.

Latit holds degrees from Massachusetts Institute of Technology, Indian Institute of Management, Ahmedabad and the National Institute of Technology. Based in Princeton, he co-chairs the programs committee of the Private Directors Association NY/NJ and the Technology and Industrial SIGs of The Executive Forum.

Intro

Background

Supply Chain Definition

What is the definition of Development?

How do we categorize Planning, Sourcing, and Delivery?

What is the importance of Execution?

What goes into the Making of the Product?

Finally, what are the complications around the Delivery of the Product?

Traditional Notions and Recent Shocks

With Recent geopolitical impacts, how are companies mitigating risk?

What are the opportunities with recent Transportation advances?

Are companies taking advantage of recent Advances in information technology and logistics management (last mile)

What has been the impact of Covid / Work From Home (WFH)?

What do companies traditionally get wrong when optimizing supply chains in a chaotic world ?

Where is Strategic Perspective (and Oversight)?

How can there be a Lack of Board Representation ?

Looking into your crystal ball- what are the ways to improve supply chains amidst instability?

How do listeners find you?

LALIT PANDA LINKEDIN

LALIT PANDA TWITTER - @latitpanda

PRIVATE DIRECTOR ASSOCIATION

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

Episode 147

DAVID WASSERMAN of the COOK POLITICAL REPORT on Analyzing the Crazy 2024 Elections

How should we be analyzing the crazy 2024 elections? Coming off of the Iowa Caucuses and with almost a week before the New Hampshire Primary, the United States is in full swing for one of the zaniest election cycles in memory.

With histrionics coming from both sides, it's hard to separate the signal from the noise. The stakes for the 2024 election cycle couldn't be higher, but the confusion and distrust around the process is at its all-time highs.

Enter David Wasserman.

David is Senior Editor & Elections Analyst for The Cook Political Report with Amy Walter.

Recognized as one of the nation's top election forecasters, David leads the development of key data visualizations and new product development.

He manages CPR’s coverage of the US House of Representatives and redistricting developments.

Founded in 1984, The Cook Political Report provides analyses of Presidential, U.S. Senate, House and gubernatorial races. The New York Times has called the Report "a newsletter both parties regard as authoritative."

Polling- ANALYZING THE CRAZY 2024 ELECTIONS

Polling is an intimate look at the mindset of the population (or at least a certain part of it). However, it is far from a perfect science. What is involved in polling and what are the common poll limitations? Are there significant changes with technology in the way polling has been conducted or are the questions different?

The current state for the presidential candidates, congress and major state races

What are the things we should look for during primary season?

With that in mind, what are the battle ground states and counties?

How much does Gerrymandering fit into the outcome this cycle (NY case- especially with Congress)?

What are the Six States We Should Focus on?

Arizona

Georgia

Nevada

Michigan

Pennsylvania

Wisconsin

Who are some of the Dark Horses?

Against this backdrop, do you have any Crazy Predictions?

To stay on top of this, where do we find David Wasserman?

COOK REPORT WEBSITE

TWITTER (@redistrict)

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

NEW Audiobook version out now!

Episode 146 - Roles and Responsibilities in Trust and Estate Documents with Jenny Rozelle

What if you are named in a will or a trust?

In the world of estate planning, many people who are written into important roles don't know they are mentioned in documents or what is expected of them. These roles can be a lot of work, thankless and carry significant liability.

What happens if you are part of someone's estate plan? What If you are named in a will or trust?

JENNY ROZELLE helps us get a handle on the roles and responsibilities that are out there. Jenny is the founder and owner of the Indiana Estate and Elder Law. We talk about the role of executor, trustee and beneficiary and the pluses and minuses of each.

(More on being an individual trustee here: https://frazerrice.com/ep-75-marguerite-lorenz/)

Jenny's Background

Terms

Executor 

-What does executing a will mean? How long does it take?-What do executors have to do? Do I have to accept the role?-What type of people are good with this?-Are you paid? -Are there risks (can people sue me)?-Whom do you hire to help with this? (lawyer, accountant valuation expert)

Trustee

-What does a trustee do? Administer/safeguard assets, invest assets, distribute assets-What type of people are good with this?-Are you paid? Are there risks (can people sue me)?-Whom do you hire to help with this? (lawyer, accountant valuation expert)

Beneficiary

-If I'm a beneficiary, what should I ask from the trustee?-What provisions should I focus on?  (Distributions (mandatory vs discretionary etc . . )-When asking for something from the trust, what is a good process for that?-Do I have recourse if I think things are being managed poorly?

Summary of other roles

-Successor Executor-Successor Trustee-Trust Protector

How do we find Jenny?

Firm: INDIANA ESTATE AND ELDER LAW

Twitter: JENNY ROZELLE (@jennyrozelle)

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

The municipal bond market has been long-prized as a stable, tax advantaged income generator for individuals,

After years of a low interest rate environment, the asset class is getting renewed attention . . . And it’s not just from investors! Tech disruptors are eyeing the space and they see a massive, disjointed uncoordinated market in need of modernization.

I spoke with STEPHEN WINTERSTEIN on the state of the municipal bond market. He has a 360 degree view of the muni bond space.

Steve is the Founder of SP Winterstein and Associates which advises dealers and buy-side firms on municipal fixed income data and technology procurement, vendor engagement, workflow, and market structure.

He has over 35 years experience in municipal SMA and mutual fund management, electronic trading, fintech. Most recently, he was head of municipal fixed income at MarketAxess and head of Capital Markets at Alphaledger.

We’ll tackle his view of thoughtful municipal fixed income management, the size, delivery and fractionalization of the market and the technological challenges faced.

Finally, we’ll get some input on where Steve thinks AI, Blockchain, LLM's and some of the other buzzy words out there may have some real world impact on the asset class.

Background

Take us through your career . . . and your start in the Municipal Bond space

Portfolio Manager - Meridian Asset Management

Managing Director & Senior Vice President, Head of Municipal Fixed Income - PNC

Head of Municipal Fixed Income Strategy & Research - Wilmington Trust

Head of Municipal Fixed Income - MarketAxess

Head of Capital Markets - Alphaledger

Managing Partner - SP Winterstein & Associates, LLC

Investing Process

Discussing the two pillars of Muni Investing - Credit and Duration

Fallacy of being able to predict interest rates

Spending Calories on Credit Research

"Bus Map"- incorporating client input in the design/choice of investment constraints

The Municipal Bond Market

The Size of the Muni Market and the challenges that causes

The fractionalized nature of muni market

Typical means tf transacting

Brokerage vs SMA vs fund

Problems with indexing

Where can technology help?

Pipe-building, blockchain, AI review of docs, what else?

Where are the initiatives of improvement?  What is holding things back?

In your mind What is the solvable low-hanging fruit?  What isn't?

Where does this help the municipality?

Where does this help the market participant?

Where does this help the investor?

Going Forward

With interest rates normalizing- any glimpses into Steve's crystal ball?

Getting rid of tax exemption solves the paradox of the heterogenous borrowing base (institutions of all flavors and sizes) and the homogenous lending base (individuals) by broadening the lending base. While removing the tax favored status would raise borrowing costs, it would improve liquidity - which problem do you want to solve in a world where infrastructure so desperately needs funding?

How do listeners reach out to you to find out more?

STEPHEN WINTERSTEIN ON LINKEDIN

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

The CORPORATE TRANSPARENCY ACT is less than a month away from going live and the wealth management industry doesn't seem to be too worried about it. That worries me because it affects at least 32 million entities according to FinCen- including most small businesses in this country. States like New York may be enacting laws to mirror the disclosure requirements at the state level. Non-compliance is expensive and could lead to jail. How to manage these reporting responsibilities is going to be a big issue in the wealth space.

I covered the general framework in June with attorney Stephen Liss here: EPISODE 134.

Today, we're going to speak with friend of the podcast, JOHN WILLIAMS on the CTA and 2024. He is the President of the Williams Law Firm in Delaware and President of INCNOW.COM, a corporate formation firm.

We're going to talk about taking on this responsibility as an advisor and what businesses (big and small) might expect in 2024 and beyond with this new mandate.

Corporate Transparency Act- A Quick Review

1) Whom does it apply to and how big is this lift? 2) What needs to be reported? Do we know how at this point?3) By whom exactly?  Client?  Advisor? Paralegal?4) What is the timing for reporting? How long do you have to report changes? Can you correct mistakes?5) What are the penalties for getting this wrong?

For Advisers, RIA's, Lawyers, CPA's and MFO's

6) How much time should compliance take? 

Who is responsible?

Simple ownership (90min) vs complex ownership

Change in ownership

If something goes wrong, who is liable (i.e. who goes to jail)?

Paralegal liability

7) What are best practices for compliance?

For clients?

For advisors suggesting entities?

For Administrators?

8) Who should be in this business? 

Headcount?

Is there liability insurance for advisors/admins?

Are Law firms ready for this?  

RIA's and MFO's? CPA's looking to "help"?

9) What is a realistic cost for this? 

Especially given ongoing service and liability? 

Will clients understand what they are paying for and why?

Can this be AI'ed away?

10) How are you thinking about it (for your business)?

Is it a profit center?

Is this for the "Faint of heart" or the tourist?

Is there a danger in treating this as an accommodation?

11) Practical questions-

Who is a control officer?  senior officers / directors / others (trustees)? An incorporator?

Series LLC's = multiple reports?

Information sharing between FINCEN, IRS, DOJ others? 

Is Privacy over?

Should everyone get a FINCEN number?

Are we entering a new era of corporate governance and record keeping for clients and their businesses? (I.e. is corporate governance going to be a "real thing" going forward?)

How to Find John Williams and his firm.

INCNOW.COM TWITTER

THE WILLIAMS LAW FIRM

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