#201– The Horrors of Not Having a Will & Estate Plan w/Steven Goodman

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Episode Summary

In today’s episode, Krisstina interviews Steven Goodman. Steve is an expert in business succession planning and estate planning. His knowledge and first-hand experience is exactly what we all need to better understand the importance of planning out our finances for the future. It doesn’t matter if you’re a small or big business; making thousands or millions— we all have the responsibility to tackle such major decisions. 

Steve and Krisstina both share real, raw stories and personal experiences in the day-to-day practice of working with lawyers, family matters, money moves, and all that fall under that legacy umbrella we’re scared to open!


5 Topics Mentioned in Episode: 

  1. “Good Businessing” by Creating a Business Succession Plan 
  2. “Good Parenting” by Completing your Estate Plan
  3. Protecting Your Money by Understanding the Emotions Behind Such Decisions 
  4. The Horrors that Families Create for Themselves by Ignoring the Estate Plan
  5. The Biggest Mistakes Business Owners Make when it Comes to their Money


Fun Take-Aways from Episode: 

“Trusts are the best instrument to protect things. The biggest issues with trusts are: who is the trustee? It doesn’t work without the right person…” – Steve Goodman ([36:00])


Favorite Moments:

“The smartest thing you can do: [Learn] every day… I find there’s a lot of closed-mindedness in a lot of business owners. They have a couple of advisors, they have their little bubble, they don’t let anybody in.” – Steve Goodman ([19:35])

“Money is always moving and money is always something that we need to pay attention to. You can’t just set it and forget it.” – Krisstina Wise ([45:55])


SHG Planning

Sovereignty Academy


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K [0:00]
Hello and welcome back. In this episode I interview Steve Goodman. Steve’s an expert when it comes to business succession planning and estate planning. Even though it doesn’t sound sexy, this is a must listen for everyone. succession and estate planning is a crucial piece to building wealth, even when you don’t think you have any. But when you do have some wealth, it’s growing. You’ve worked so hard to create it, it’s equally important to protect it. This is a fun interview. I promise you it’s not dry and boring. Steve tells lots of enlightening stories that will light a fire underneath you if this is something that’s been put on the backburner. Steve’s a CPA and former VP of the trust and investment division at JP Morgan Chase, he served hundreds of estate planning clients over the 30 years. He also holds an MBA from Fordham University and was the supervisor for KPMG peat Marwick, please enjoy my conversation with Steve Goodman. Dave, welcome to the wealthy, wealthy podcast. Thanks for being here.

S [0:57]
Well, thanks. Thanks for having me. I’m looking forward to it. Great.

K [1:00]
Well, like as mentioning off air, I get pinged all the time from these podcast services that are saying, Hey, is so and so a match? And usually I say no. So when people are on the show, it’s because I’m interested, really in this topic. And I’m usually probing in to learn something myself. And you’re an expert really on succession planning, wills, trusts estates. And I’ve just noticed with a lot of people I work with, that’s really something that in the back of the mind, people know, they should probably do, but they’ve really not done it, or they’re really not thought all the way through it. So if you don’t mind, just share with the audience a little bit about you, where you’re from, who you are, and what you do. And then we’ll jump into some really good questions.

S [1:46]
Well, thank you. So basically, I’ve been in this business for 30 plus years started out in public accounting work for one of the big accounting firms. KPMG on the CPA, also have my master’s degree in finance, work for about three years for JP Morgan as a VP, and 30 plus years doing consulting work name of the company is shg. Planning, and hit upon a lot of the areas you mentioned a lot of business succession estate planning, I deal with a lot of high net worth ultra high net worth individuals, family businesses, that deal with a lot of things that they don’t really take care of that they should.

K [2:24]
Yeah, so let’s just jump right in. So let’s, let’s tackle the business side first, you know, those that, that I have a family business, you know, so hopefully, my kids will want to take over at some point. And a lot of my listeners have small family businesses and, and so let’s just talk about that talks about, really what we need to be thinking about, as you know, the business is maturing, and the kids are maturing, and the adults are maturing, and you know, there’s going to be maybe a changeover or just even a business that maybe once you know probably needs some succession planning, even if it’s not a family member, just talk about, yeah, what we should be thinking about. And then I’d love for you to really discuss some of the big fundamental mistakes, they end up being very costly.

S [3:09]
For sure stuff. So first off, Every business has a succession plan, whether it’s been planned for a night, you know, unfortunately, for some businesses, the succession plan is somebody gets sick or dies. And you know, who takes over some businesses really don’t have anybody that could take over the kids are not old enough to be in the business. They don’t have a partner, the employees either don’t have the capital or the expertise. So you know, people getting sick or dying, you know, many times that upsets whatever possible plan they would have had in the future. They just hadn’t reached that stage yet.

S [3:52]
Some people have thought out a plan, whether it’s amongst children, whether it’s amongst, you know, partners, key employees. I would say to you that I’ve mentioned this many times, there are two major reasons why people don’t adequately plan and then plan for the succession of their business. The first is that entrepreneurs by their nature, are type A personalities driven, always putting out fires always dealing with what’s the problem today, you know, we all wake up, I’m a business owner, you’re a business owner. Every morning is like, Oh, my God has six more, you know, fires I got to put out today. I don’t think I’ve no matter. I’ve always been in business, I can have the greatest business day in my life. I’m still gonna have aggravation with something. There’s never like a day that goes by like this was a perfect day. So as an entrepreneur, you know, you’re busy. So getting focus from an entrepreneur is very, very, very difficult because it’s not just focused for the moment. You know, to properly plan can easily To be a six month process, and it’s an, it’s a never ending process, it’s not like you do when you just put it away, you always have to be updating and monitoring it. But let’s say that first go round, which is going to be the most time consuming, easily a six month process, very difficult to get a business owner to, to give the commitment of time. And that may be over six months, that could be 10, or 12 meetings or phone calls. work that the business owner has to do to prepare for these meetings, thinking and thoughts of coming to conclusions and decisions, which takes time. So probably the single biggest problem is getting them to focus and getting the momentum. Because if they start canceling meetings, that six months process could take three years, you know, like, because every meeting you have, it’s like, oh, we have an F of six months, it’s like you’re starting all over again. So that’s probably the the main reason there is a second reason, that’s a much more emotional reason. And people don’t think about it as much. So let’s, let’s take the family business setting, which is where I do a lot of my work and with his kids involved in the business. So I have two children, then out of my business, they’re now older. But you know, growing up, I had to tell them a million times how I love them the same way, well, you got me a red lollipop, how come I don’t get a lollipop and this one got a phone, the other one gets a phone, this one gets a TV, the other one gets a TV. And of course you love your kids at the same America too many parents that don’t love their kids the same, maybe when they get older things happen. But certainly when they’re in the home, they love them the same. And they’re always reinforcing and reminding them and then one day you wake up and you’re 65 years old, and you look in the mirror and say, you know, wow, I built this really big business, I have three kids, only one of them is in the business. Two of them are not. I’ve always told them I love them the same I always told them, I’m gonna give them everything equal. I’ve always been fair to them. But now I gotta look in the mirror and say, Well, wait a minute, I have one child in a business to not the business is my main asset. Am I gonna leave this business, a third, a third, a third to three kids when only once? And then how do I protect it, I don’t have enough other things to leave to my other kids to be not necessarily equal, but fair. So what ends up happening is a lot of times, and typically in the generation of 6570 year olds, most of those business is still run by men, it’s obviously changing over time. 20 years from now, it may be 5050. But in that age group, it’s still principally men. And men can be chickens, they’re afraid of this stuff, they run away from it. And what happens is, as a man, like, I would sit there and say, if I’m that person, I say why I got three kids, I got a son in the business, I got a daughter and a son that in the business. And I don’t get along that Well, my dorm room or of the sun was not in the business. And if I start explaining to all of my kids, what my plan is, and let’s say my plan is that I’m going to give the business to my son or daughter that’s in the business. And I’m going to try to treat the other kids fair, but they’re not stupid, they realize that like, my brother is going to live a totally different life, than we’re going to live based on inheriting a business that let’s be real dad. 95% of the value in this business is caused to you it’s not because of my brother, you know, yeah, he’s in the business. And he’s working. And maybe he’s helped a little bit, but most of his value was created by you. So now all of a sudden, the daughter in law gets involved speaking to the son and saying, you know, I didn’t love your dad to begin with, I never got along with him that great. And like, this really gets me annoyed. And you know what, I’m your dad, mom, then I see no kids anymore, I have no interest to maintain a relationship with them. And now dad has lost a relationship with his son and his grandkids, which I know as a father and a grandfather like that would not make me happy. So a lot of times, they’re not stupid, like they realize it, I’m going to open up Pandora’s box. And really, like if I let it out, somebody is not going to be happy and how I do this. And And not only do I risk a relationship with my children, but with the you know, the daughter in laws in the sun and bless the grandkids. So a lot of times the combination of the investment of time coupled with the risk of jeopardizing relationships, a lot of people run away from this. So you know, that’s, I see you shaking your head because you understand that you could see this that this happens, you know, you probably know friends that this has happened to it’s a it’s a big, big issue. And that’s probably the two major reasons I find people don’t plan.

K [9:55]
Well, yeah, it’s beyond not planning. It’s just completely avoiding it because of the discussion. And at the end of the day, though, let’s say dad gets sick and has a heart attack and dies. And his planning hasn’t been there. Now what happened? So you know, we’re trying to avoid this discomfort, but how much chaos has dad created by not addressing it?

S [10:16]
Yet, sometimes what happens is dad takes the position, you know, if I don’t do anything, which probably means I’m gonna leave everything to my spouse, and then when she dies, if she doesn’t change things, just gonna leave everything equal to my kids. The worst thing that anybody could say about me if I do that is I cannot believe is such a smart person who built this big business that they never like planned. And then they would ask the accountant and the lawyer and they say, look, we tried to get your dad to plan, you couldn’t get him to plan. So that’s the worst thing. But if you actually plan and like when you die, your kids sit there and say, like, this was not like by accident, like this was thought out. And I can’t believe that dad, slash mom actually thought it out this way. And basically, and then the brothers and sisters are in litigation, and they’re fighting over things, which, you know, money does that. I mean, most litigation is either between siblings, or like a second spouse and the kids from the first marriage. That’s where most of these lawsuits come out of, you know, for obvious reasons. So I’ll give you I’ll give you a perfect example. Like, it’s good to have like practical situations. So give you one that fits right into this scenario. So So I go in and I have a meeting with somebody big building, you could tell a really big successful business. guy sitting behind a desk looks like he’s in his mid 50s, maybe 60s. So if they get you know, a little you know, chitchat I get into the meat and potatoes. And I asked him, so what percentage of the business do you own? And he says, I don’t own any of it. So I’m kind of like, I think I know where this may go. But so I go, so who owns the business? And he goes, my mom, she owns 100% of business. I go, is your mom involved in the business? No, she’s never been involved in a business. So kind of Now I know what happened. But I keep going along. So tell me the story goes back to what you mentioned.

S [12:15]
son came into business when he was like, 32 years old. Dad died suddenly of a heart attack at like 60 years old. That left money to Mom, you know, simple. Well, I leave everything to my to my spouse. They didn’t think the plan, the son wasn’t in the business long enough to know like, Is he right for the business. And basically, dad, guys, so now mom inherits the business. And let’s just say in that case, most of what mom had was the business. There wasn’t a lot of other things. You know, maybe she had a home, maybe it had some money, but mostly a business. Mom was a homemaker. Mom relied on Dad, dad was the breadwinner. Mom is no longer obviously no longer a wife because her husband died, which is, she’s not really a mother anymore. She actually takes on a new title. And it’s called widow, when somebody becomes a widow, as especially if then they were not the breadwinner. And they really left everything to the husband. totally different person, as a widow than as a mother. And as a wife, totally different, scared, protective, nervous, you know, that’s not there. My husband who made the money and made these decisions isn’t around anymore. We know this is going to change as time goes on. But a lot of that still is in existence and not generation. And basically, mom gets protective, mom scared. So what happens is mom gets this business when she’s 30 years old, has three kids, a son and daughter not in the business sun is in the business. Sun now built a business from a $5 million business to $100 million business was built by the sun. It wasn’t built by the mom, it wasn’t built by the dad. This is an example of really where that the next generation built the business. So now I’m talking to him and I say, you know, you, I hope you realize that when your mom dies, you’re going to overstate taxes. On this 100 million somebody is going to estate taxes are those 100 million dollar business, the IRS isn’t going to say well, Oh, I know you built it. So you can get it without taxes. Your mom still owns it. So her asset, so when she dies in her estate, one of the assets is going to be XYZ business, worth $100 million. So that’s your first problem. He goes, I never really thought of it. But that’s a problem. I go Do you have any idea what planning you mom’s done? No, she will not have a conference you will talk to me about it. Now. In fact, I don’t even use the same lawyer as my mom because it’s like a conflict of interest. I don’t know what she’s doing. So I say so. You really lives when mom dies, not only could they be enormous estate tax, but do you even like do you Is mom gonna leave the business to use, you leave it to all three of you like, I have no idea. So I say well, out of curiosity who gets along best with your mom, we’re really my brother and sister, both of them get along they, they see mom a lot, they see the kids, the grandkids. So I guess you’re saying you get along worse with mom by four, we fight constantly over the business, she doesn’t want to raise, let me raise my salary, she doesn’t want me to grow the business, she doesn’t want me to invest money and things, she just wants to get her paycheck, and doesn’t want me to take any risk. Even though if she looks she’d See, this big business I built up, she just sees me as you know, son who doesn’t know anything, you know, and he’s not my husband and my dad who started this thing. So, so really, not only, not only could you all major estate taxes, when when mom dies, but you don’t even know if you’re going to inherit it, or you inherit a third of it. And now you’re going to be a minority shareholder, to your brother and sister don’t know anything about the business. And like getting, you could see sweat dripping down his head, like, you know, like he, he kind of like knew some of these things, but didn’t kind of like toe, nobody really like, you know, hit him right in the face and said, like, this is what you’re dealing with. And and it’s a sad thing, because as a parent, if I asked my son or daughter to come into my business as a 30 year old, you know, they’re making a commitment. So I have to make a commitment, like, you know, I don’t want my son or daughter at 45 years old, they’ve given up 15 of the most important years of their working life to build something, and then I’m not happy in the business here, I don’t really want to pass the business down to them, or I want to sell the business without getting their permission. You know, it causes you could see, like, all these things cause issues. So I wanted to give you a little story on that. Because people could relate to that.

S [17:01]
Yeah, absolutely. And I mean, you can just see how that’s going to, you know, go down, it’s not going to be pretty, you know, there’s no, there’s nothing pretty, there’s no good solution in that case. You can see that is probably pretty common. Yeah. So I mean, it’s just a responsibility is the parents to really think through this and set it up, you know, the best they can for the for the success of the longevity of both the business and the family. But what I mean, outside that as the as the I guess probably the biggest mistake is just not making a plan for you know, usually one or both of these reasons.

S [17:38]
I would say that that’s part of it. That’s what is clearly that. A lot of people like so many times, people will say, Steve, I want to introduce you to this guy, but he’s really a wealthy guy, he’s he definitely had to take care of all this stuff. And I tried to explain to him, like, I meet people with hundreds of millions of dollars who haven’t taken care of this stuff. You don’t think they have good lawyers and good accountants and smart people around them. It’s, it’s because they don’t want to do it, you know, they, they don’t want to do it, they don’t want to give the time. So part of it is lack of planning. The other part is, many times, the business owner is a control freak. That’s part of how they got successful. So they not only want to control the family, they want to control their advisors. So many times, they bifurcate their advisors, like they listen to their lawyer, they listen to their account, they listen to their financial advisor, and they like pick their brains, but they don’t like to get everybody together. Because they concern that if I get everybody together, and everybody tells me I’m wrong, I’m not going to like that. And it’s going to be hard for me not to listen to them. Because why am I paying them? If they all together? Don’t think I’m doing it properly. So it’s another big reason is a bifurcation of advisors, you know, they, they don’t like to get everybody in the room together, where they have a controlling advisor, like one advisor, the lawyer accountant, like wants to be in control, and they shut everybody else out. And they and they don’t really let other voices come into the room. Because I tell a lot of people is the smartest thing you can do always in life. Like I believe there’s life. I want to learn every day. Like I read myself. I like to listen to people. If I have a problem with my family, I don’t hide it. I tell people I’m dealing with this with my son, because I’m going to learn from them. They’re going to say, you know, Steve, I don’t talk about this with a lot of people but you opened up to it. So let me tell you what I dealt with. So I just find there’s a closed mindedness in a lot of business owners, they have their couple of advisors, they have their little bubble. They don’t let anybody in you know, I did it already. Like how do you know you did it? Like you’re an electrical contractor? Like, how do you know? every idea has been brought to you? You don’t know? But like, they shut people people out. And that’s some of the other reasons it’s the lack of, it’s their control control of advisors not being open to listening to people, those are all, that’s probably the main group of reasons. People don’t properly plan.

S [20:15]
Yeah, and sometimes too, it’s one of those things first, like, I’ll get to it eventually, you know, it just doesn’t seem a priority right now, you know, I do plan and I want to do that and set things up. But Business is business and life is busy, more in the time side, but then, you know, you get sick and all of a sudden, you don’t expect to get sick cancer or some disease, and you’re out and, and, you know, these things you intended to get to. Now, it’s, again, it’s just leaving a mess for others to clean up, it does make me think that, you know, even in my small businesses that I have is my daughter really, is focused on one my son and the other. And they, you know, if they worked with underneath the same roof of the same company, they would, you know, wouldn’t work well, but they do very well. And they both love that they each get to kind of have a very important stake and you know, the day to day of these two different individual businesses I on but it does make me realize just listening to this, I

S [21:12]
thought, you know, I’ve

S [21:12]
set things up, everything’s in a trust and, and you know, how things will be dispersed, yada, yada, yada, just on more the state planning side, but you just brought to my attention. Like if something happened to me, you know, today that it’s not, I mean, I don’t have it. I don’t have it. What’s the word I’m looking for? buttoned up?

S [21:35]
Yeah, well, but

K [21:36]
Well, yeah, buttoned up, but just where it’s like, okay, Macy, my daughter, now she’ll get this business, my son will get this business. And, you know, if something happens, I would want it to look like this. So even though I think like, hey, I’ve got my state plan, I’ve got these different things. I’m like, Oh, yeah, I wouldn’t want to cause it where they have to, they get along. I can’t, you know, I my belief, which is silly is like, Oh, they both know that. That’s hers. And that’s kind of his, but again, you wouldn’t want to make any assumptions. I just want to make sure it’s clear so that there’s no animosity or something like, well, that business is better than that business, or

K [22:10]
what am I gonna do got that one in this business makes more money than that business? And hey, right. Look, you’re 100 you’re 100%. Right. And the one thing is, parents sometimes, like Dave was smart, as parents, we know that there are we know that there are issues sometimes between our kids. But basically, the problem is that sometimes things come out after we’re not here anymore, that the kid said, I didn’t want to bring these things up, because I didn’t want to upset the applecart. But now mom and dad are not here anymore. And now all of a sudden, pardon my French, some, you know, blank gets thrown on the table. So you don’t know. So you can never do everything. Yeah, no matter how much you try to be fair, and even if you took a million hours in your life to do planning, there’s certain things you can’t plan for an interview, kids are not going to get along, sometimes they’re not going to get along, or sometimes if you’re if your son’s married, if his wife doesn’t get along with your daughter, you know, that’s gonna cause problems. And, you know, there’s only so much you could do, but it’s just most people don’t do anything, or they do so little, they could do a lot more, but you can’t do everything.

S [23:19]
Yeah, and you brought up a couple points there. But, you know, I just would want to take as much, you know, disagreement off the table, like, Hey, this is what mom wanted. And this is why it is opposed to with anything that’s really vague, would open up an opportunity to cause you know, some type of, you know, conflict or animosity or something. So, you know, just as a mom, I’d want to reduce as much as that as possible, you know, they can hate me after I’m gone. But I don’t want them to hate each other, you know, do you make another unit make another point to that, again, I had never really thought about is, is, you know, my kids aren’t, aren’t married yet. They’re both just, you know, young adults. But you’re right, like, now the husband and wife get into the mix. And they’ve got a lot of influence over the, you know, the children to the parent that’s leaving, you know, the estate, and that goes a long way. So they they want a little something, and that can wreak all sorts of havoc that you know, otherwise might not be there.

S [24:21]
Well, you’re right. And as you know, I told my kids when they both got married, that understand that you’re not marrying an individual, you’re marrying a family because, you know, somewhere between the parents and brothers and sit like you just when when they get together, it’s more than just the two of them, you know? Yes, that’s why I said like planning a wedding. It’s almost like a business transaction. Like you plan a wedding and you learn now I know what my daughter Asana going to deal with. Now I know what I’m going to deal with just planning this wedding is just giving me an idea of what I mean. It’s almost like a business transaction with somebody who you didn’t really have a relationship with before. So, look, life is complicated. And families are complicated and know that no matter how good of a job you do as a mom and I do as a dad, some stuff isn’t 100% within our control,

S [25:12]
and how that money can make it just that.

K [25:17]
No money, there’s

K [25:18]
not a lot to fight over. Yeah, yeah, exactly. Well, let’s let’s flip over to the the more just the estate planning side. So, you know, whether one has a business or not, again, what do you what do you just talk about the, you know, what happens after, you know, a parent dies, or both parents, but you know, whoever, like, wherever the money might be, what happens, like if there’s not an estate and walk us down that road, and then you know, again, what you see as the fallout by not doing any type of estate planning, again, I think it’s for similar reasons. When I did my estate planning, it’s one of the things it was a pain in the ass, you know, meeting with the attorneys and trying to get all this paperwork together and figure out what all my assets are, you know, where they are, what they are, how much there is, and I mean, and it’s so detailed working with the damn attorneys who want like, just the drop out of like, you know, the turnip, and at any I mean, but it’s just like, Nope, I’m gonna stick with the process, stick with the process, but it feels so good. Once it’s done. You know, it’s like who that’s done. So I mean, I know that feeling of like, you just don’t want to do it because it’s brutal. It’s it’s painful going through this. And, you know, the better the attorneys are, the more sticklers there are for all these little bitty details when you miss this, Christine, and you miss that I’m still waiting on this, like. But, um, but yeah, talk about, you know, so just just the importance of estate planning, what happens when we don’t do that is especially that, you know, there’s some money and assets that will be, you know, handed down. And then, yeah, and then I’ll ask a follow up question.

S [26:54]
Well, first of all, I love how you just did that. I mean, because it was very real, how you did that, because that is how people feel. It’s, it’s getting, like, just like, I can’t tell you how many like rich people like people like successful people like, which, obviously, with COVID, this isn’t so easy, but like, pre COVID, hell, like I would have to sometimes come to your house and say, like, I’m never getting this stuff from you. So here’s what we do a meeting it a meeting you today, at like five o’clock, we’re going to go down to your basement, wherever you have all your stuff. And we’re going to open up your files. And I’m going to make photocopies, it’s like, it’s like, I gotta like hold your hand and like, take it because if I don’t do it, we haven’t as compensation for three and a half months, and we’re not going to get anywhere. So it’s like, the way you did it was great, because it is, it’s like a marathon. It’s like I’m gonna train for the marathon. It feels great. When I finished that marathon, and they put the water on me and I get my number and I mean a newspaper, but boy, oh, boy, training for that marathon was a lot of work. And it wasn’t fun. So. So you’re right. So that that is key. With C with estate planning. There’s, there’s there’s a couple of different components of it. There’s a very, very, very small percentage of people under today’s law. And now obviously, we have a democrat Joe Biden is president, clearly, you know, is going to probably look to lower the amounts that you could pass, you know, free of estate taxes. I mean, today, federally, you could pass $23 million between a husband and wife to your children without a federal estate tax. I mean, every state has their own rules. No tax. I’m a New York resident, we do have a tax. Florida doesn’t have an estate tax. So but federally, is so few people under today’s law that have to worry about a federal estate tax, it’s probably like, you know, like 1/10 of 1% of the people in this country fit into that category. It may come down, it could be go from 23 million to like 7 million. Now, it’s still not a still a small percentage of the population. But there’s a lot more people worth more than 7 million than there is worth more than 23 million. So it could bring a lot more people into the taxable estate. So that’s a whole different market, you know, the people that have that and have major estate taxes. Now you’re dealing with a lot of complex things that we probably don’t have enough time in this interview to get into detail. So but even if you put aside the complex tax issues, you still get back to issues like like what do I find the big problem areas when people are doing planning, you don’t have this because your kids are older. I don’t have this because my kids are older. But you know if you did this 10 years ago, and your kids are 10 years old, or 15 years old, or eight years old, or whatever it is. first big fight major, single reason why a husband and wife don’t do a well. They don’t agree upon who the audience should be if they kids when the two of them are not here. I don’t care. What’s your brother, you don’t trust my brother, I don’t want your parents. You don’t want my parents, they’re too old. They don’t live near here. I don’t want to move the kids from, you know, Austin, Texas to like Santa Fe where the parents are. I don’t want to uproot their lives. So I got to find somebody here. But I, you know what, I can’t ask a friend because like, that’s a big financial burden, are they going to be willing to have my kids live with them? And maybe the house isn’t big enough. And you can see where this could all go. So it’s like, that’s the, I can’t tell you how many people I’ve met with that don’t have wills, just because of that. And then when I tried to explain to him, I go, do you guys understand something that unless you die in a joint accident, which is so so remote,

S [30:43]
the remaining one could just go change their wills after so it’s like, you and I are married. And like, we’re fighting over it. And we finally agree that, you know, my brother is going to be the guardian, and I diver and you’re gonna say, well, who do I want the glider to be, you’re not going to use who I picked, you’re gonna see who you want. So you’re fighting over something that has such a remote chance of being an issue because you’re unlikely going to die together in a plane, or car accident, but people don’t address it. So that that’s usually a big, big, big issue. Second big issue. When it comes to estate planning. similar vein is okay, we figured out, we figured out who should be the guardian, you and I are married, your sister is going to be the guardian. Okay, that’s great. But with all due respect, a, I love your sister. And I think she would be great to be the guardian. But your sister and brother in law are not the most financially astute people in the world. So I don’t know if I want to let them also be the trustee and executor, because I want somebody more sophisticated doing it. But how is your sister going to feel if we’re entrusting our children with them, but every time they need money, they got to go ask somebody else for permission to get the money. You know, it’s like it’s it’s, it’s like disrespectful to them, that we pick them to watch our kids, but we don’t trust them with the money, you see how this could be an issue. Okay, so then so then you start saying, is that, okay? But I don’t want to not only do I not want them to control the money, because I don’t think that that’s financially astute. But I really want to check and balance here. Because what has happened in life, I’ve seen this, we’re richer than your system, we die, we have a lot more money than them. We’ve leave money in trust for our kids, they’re the trustees of it. time comes for camp was college, ever whatever. Like they can’t afford to send their kids to the same thing, like trust allows our kids to go. So now, you know, they start rationalizing? Well, you know, my sister wouldn’t have minded this, like, you know, she wouldn’t want my kids not to go to the same camp have kids go to so all sudden, they start taking money out of the trust account to pay for things for their own kids, which maybe you and I would have been perfectly happy, allowing them to do it. But they because nobody’s watching over them. Well, I set your kids to stand for what maybe I’ll send my kids to Stanford, you know what I’m saying. And all of a sudden, this your loving sister who you trusted with your children, starts just rationalizing things like my sister wouldn’t mind that if I do this, or I do that, or I’m going to expand the house because it’s not big enough. So I’m going to take some of them money and buy a bigger house, they wouldn’t mind that to have it. Now, everything I just said, smart planning, you would have taken care of that, like, I would have told you a system that I’m leaving you at of all money for $500,000. Because I want you to buy a bigger house. And that’s yours. You don’t have to ever give that back to me. You take that and buy a bigger house if something happens to us, because I want my kids to not be a burden. And you know, something, when my kids go to camp, I want your kids to go to camp, it’s in the trust, you could spend the money for you like I lay it all out to them, I would take all these things out of the out of the way of becoming issues, because I love your sister, and I’m trusting you assistant to take care of my kids. I want to show how much I love it. Now I still may want to have another person as trustee, just to kind of have more astute financial person just to kind of make sure they’re properly managing the money and stuff like that. But I would also have your sister as its co trustee. So like it’s not like she’s not involved, but there is somebody else and I would tell them upfront, I’m doing it because, you know, I want somebody who’s a little more experienced financially involved. But you know, you guys will have a good relationship and I’ve told them already, I’ve given them like in writing what I want them to feel free to do for you and the kids so you could see this conversation how in depth I’ve gotten and you know, you could see where this could lead to a lot a lot of problems. This has nothing For the state taxes, this is other stuff.

S [35:03]
Yeah, so I mean, such good examples, you can just like see where that’s gonna go? seen the train, you know, wreck before it happens, but And what about, you know, just let’s take the kids piece out of that as far as who would, you know, take custody of the children? What, you know what, what happens when people don’t do estate planning when they don’t set up a trust in a state and and you know, one or both parents unexpectedly die?

S [35:33]
Okay, well, you have a bunch of things. So trust us the term trust, you mentioned it earlier, if you and I look, I don’t benefit, I’m not a lawyer. So I don’t make any money. If somebody sets up a trust trust are the far and away the best instrument to protect things, the biggest issue with trust on who’s the trustee, you know, like, Who’s that person or persons that you pick to do it, because that doesn’t work without the right person. And then, you know, God forbid, you pick somebody and they die. And then like, it’s interesting to kids until they’re 50 years old, and like, Who’s the next person in line and next, so that becomes very complicated, but trust a great, so let me give examples of problems. You and I have married, let’s just say, again, you’re not this successful woman, you’re my wife, you’re home with the kids. And I have a successful business, and I leave everything to you outright. And your young woman at some point in time, you’re going to want to get married. And now you get remarried. And maybe the guy you meet with isn’t, you know, you’re in love with him. But you know, who knows, you know, and he knows you, your husband had money, and you’re living in this nice house. And then all of a sudden, he’s like, Oh, well, I wanted to start a business or Oh, we should buy a bigger house. And like, you know, you’re in love with the person and like you, you know, you don’t want to fight with them and say, Well, this is my money. And all of a sudden, some of your money gets commingled with their money. But if I leave it in trust, like everything’s in trust, then you just have to say that your new husband, look, you know, it’s out of my control. Like, you know, my husband was a sophisticated guy. This is all in trust. And I’m not the only trustee, the trustees, his lawyer, his accountant, with somebody else. I’m like, I on my own can’t make these decisions. And you know, what do you think the odds Oh, when, you know, the accountant, he is that the new husband’s looking to pull money out of the trust to buy something, you know, what, what’s the odds, he’s going to agree to do that? Not very high, you know, so it makes your life as the surviving spouse easier, because it takes friction off the table. Because you just say it’s like, good cop, bad cop, you know, my husband was the bad cop. Like he did all this to protect me, I can’t do anything about it. Similar with the kids, when the kids get the money, divorces, I mean, every parent’s biggest fear, biggest fear is I leave things to my kids. And they get divorced. And then that you know what ends up getting half my kids money. And like they I couldn’t get my son to get a prenup because his wife was crying. And then she hated me. And I didn’t want to like break up their marriage. So I let him get married. And now I got to put things in trust, because I don’t put an interest. I can’t protect these assets. So like, that’s all the other stuff that comes into play here. Because I don’t care whether you have $100,000 or $100 million divorce, of money going to one of your kids spouses is probably one of the things that irks people more than anything else, they’d rather pay the government almost taxes, then let an ex spouse walk away with money, you know, not so much their ex spouse because they could have been married a long time. But a spouse of their kids who were married for four years, and the husband or wife is cheating on the spouse and all sudden they leave and they walk away with you know, hundreds of 1000s and millions of dollars, like the guy’s gonna roll over in his grave if that happens. So that’s

K [38:57]
that’s true. I just I mean, I’m sure you have so many stories of it’d be a good book just to listen to the different stories that you probably have encountered. So I like it, you know, it myself I’m a I’m a single woman and you know, I have my assets and when I built when I done and a couple of businesses and in real estate and and so walk me through and I’ve created I mean I have a trust I did my state plan I have a trust and I’ve everything and you know my trustee is a bank is a you know, banker and bank and then to manage those things and really just work to you know, really, you know, spec out just how things will get distributed and what happens what age they would get the money how much and even put in things like you know, they only get disbursements if there’s a prenup, in effect, you know, and try to try to think these things through. And, again, just to just really to be a responsible mom and try to make just not have a messy situation. So now let’s say everything’s the same, but I don’t have a trust, and I die unexpectedly, what happens to all my money and assets and businesses, if I don’t have any planning in place?

What We Covered

  1. Business Succession Planning ([3:15]-[15:00])
  2. Estate Planning [25:29]
  3. Protecting Your Money & Understanding the Emotions Behind Such Decisions i.e. Life Insurance & Retirement Planning ([30:00]-[45:00])


“Every business has a succession plan— whether it’s been planned for or not.” – Steven Goodman ([3:18])

“There are two major reasons why people don’t adequately plan and then plan for the succession of their business. The first is that entrepreneurs, by their nature, are Type A personalities: driven; always putting out fires; always dealing with ‘what’s the problem today?’. – Steve Goodman ([4:16])

“That’s probably the main reason. There is a second reason that’s a much more emotional reason, and people don’t think about it as much… And that’s probably the two major reasons, I find, that people don’t plan.” – Steve Goodman ([9:56]

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