Wealth Actually

Family Office Security with EDWARD MARSHALL, CEO of PRESAGE GLOBAL https://youtu.be/uLbbZg52ABg In this conversation, Frazer Rice and Edward Marshall delve into the complexities of security within family offices, emphasizing the importance of understanding risk as a multifaceted concept. They discuss the vulnerabilities unique to family offices, the interconnected nature of various risks, and the necessity of a comprehensive approach to security that encompasses governance, internal threats, and physical safety. The dialogue highlights the need for families to engage with security experts who prioritize diagnosis over fear-based marketing, ultimately aiming to enhance the quality of life for families through effective risk management. Transcript Frazer Rice (00:01.173)Welcome aboard, Eddie. Edward Marshall (00:03.074)Hey Fraser, how are you? Frazer Rice (00:04.375)Great. Thanks. You are now a member of the two episode club. We’ve got a few of them out there. We one of my favorite ones was with you talking about there is no such thing as the family office, which I thought was a terrific bromide that I bring out every once in a while. It can be controversial depending on who you’re talking to. Edward Marshall (00:23.15)So some people like that and some people hate when I say that, but it’s all good. I mean, it speaks to the whole issues around family offices and I think some of the things that we’ll probably talk about today around security is if you’re defining it so many different ways, we’ve to look at it more as a process than some actual thing that we can put our finger up. Frazer Rice (00:46.421)Well, so security and whether it’s family office or regular high net worth or people generally is foremost in the headlines these days. We had the United Health Care executive who got shot. We’ve got different scenarios of global conflict out there. The theft around financial assets is everywhere. The urgency in the family office space, though, it seems like it’s really taken on a new thing. What is your experience with it? Edward Marshall (01:17.612)Well, mean, I think we could take a look at it from the perspective and start out with this, is risk is really what we deem it and how families and companies… offices and investors are looking at risk, they can perceive it in a lot of different ways. But I think one of the things that are important for high net-worth individuals or family offices is that some parts of their just organizational DNA create these engineered vulnerabilities. So what they are makes them more susceptible. And if you think of it just from the Willie Sutton effect, right? Why do you rob banks? Because that’s where the money is. It’s kind of myopic. Because you have to look at the other factors. What does the family office typically have as characteristics? You tend to have a very lean operation. There tend to be sources of time, line, agnostic capital. They have a lot of trusted relationships. Their customer is the family. And they’re pretty agile. So a lot of those factors come together and make them attractive for bad actors in a lot of different aspects. They could also be politically outspoken, which attracts a different kind of attention to them. And so it is… It’s really an ability to understand the nature of family offices and what makes them attractive for them because they have enterprise level wealth and oftentimes amateur or retail level security and risk management practices and processes in place. Frazer Rice (03:08.009)So how do you get your arms around it? When I hear risk, think, my gosh, you’ve got physical risk, you’ve got technological risk, you’ve got all sorts of other things. One of the frameworks you have is really these 10 domains of risk. And we may not list all 10, but how do you get your arms around it when you’re helping a client think through what their vulnerabilities are? Edward Marshall (03:30.873)Yeah, think the 10 domains of risk that we have put together as kind of an organizational philosophy for Presage Global really harkens to the fact that traditional security, traditional risk management is very siloed. I’ve got my cybersecurity thing that I’m focused on, then I’m focusing on physical security. Unfortunately, risks and threats don’t really respect your self-constructed silos. And that old school mentality tends to lead to lot of whack-a-mole behavior and reactive behavior to these types of risks that come out. So we came up with this framework. The risks range from privacy, technological, reputational, legal, operational, financial, and so forth. And the reason we came up with that is that we were seeing the interconnected nature of risks in this space, whether it’s for family offices, companies, or investors. there’s a lot of interconnectivity between these risks and they can cascade. So something that starts out as a privacy risk, exposed information, a bad tweet, an Instagram post that puts out some information around you can lead, cascade into reputational issues or financial… fraud types of issues or even legal fights depending on kind of the situation that’s there. And if you’re not looking at risk across these different domains, how they interact and really taking a deep dive to assess it, you don’t look at the entire picture. And I think that combined with not just focusing on the shiny object of a technology driven Edward Marshall (05:31.617)approach to solving risk in these issues is important as well. Oftentimes you’ll see folks that work in the security space or people that have purchased something to support them on security or risk management. They’ll say, you know what, we’re doing great because we have X, X software, X tool or whatever it may be. But they haven’t even evaluated if they even need X tool that’s out there or even if X tool is properly configured so you could be spending thousands of dollars hundreds of thousands of dollars or millions of dollars if you’re a company on these tools, but if they’re not properly configured then all that money is for nothing and it’s and And it becomes like security jewelry. We’ve got all this stuff that’s in place. We have cameras that are of X brand and they’re doing all these things. We have firewall that is of Y brand and it’s doing all these things. But if you haven’t properly configured it or the people that are supporting you internally and externally… some of the externally creating supply chain risk there, then it’s all for naught. it comes down, and it’s similar in the work that you do. If you’re not looking at somebody’s entire trust and estate picture just beyond the documents that they’re trying to draft, how do you figure things out? It has to be not just a black and white, here’s a legal document for your trust and estate. It’s part… archaeology, part anthropology, part psychology, multiple other science disciplines and other disciplines that come into it to develop a document, to develop a plan, to have an execution that actually keeps the family safe. Frazer Rice (07:30.315)So when, part of this seems like a real governance issue at the family level or at the family office level. When you see it done well, who owns this task, the security task at the family level? Because I could imagine the Generation One, the matriarch or patriarch, they wanna deal with it, but I’m not sure they’re the best ones to be driving it. What is a good practice there? Edward Marshall (07:58.189)Well, listen, think risk management and security, oftentimes, whether you’re talking about a Fortune 100 company or a family office, is looked upon as a cost center. And I think that’s an unfortunate aspect to it, instead of an enablement factor for you to go and do the things that you want, right? Good security, good risk management for a family should enable the quality and improve the quality of life for that family. If you’re constantly thinking of it, we have to spend X amount of dollars on our cybersecurity or planning for our travel or purchasing this trying to reduce my privacy footprint by buying some security tool that does that and says that I’ll get all of your information off the web news flash. Not possible. You know, there’s thousands of data brokers that are in this country. There’s legislation that is going on in different states and at the national level to try to limit the aspects of the data broker stuff. But you know what? At the end of the day… Edward Marshall (09:14.178)that information is out there to nation states and to bad actors and try telling a hostile foreign country or a hostile hacker whether they’re in Brooklyn or Belarus to remove your private information from their data sources. It’s not going to happen. you have to, putting it in the perspective of governance is shifting the mindset away from Frazer Rice (09:31.318)Right. Edward Marshall (09:41.467)Just being a cost center and to how does this help? All of the family office operations that are there and the family improve their quality of life by keeping them more secure. And that’s a critical step to it. Then having a robust plan and really looking at the plan and testing it. This may say simple, but if you’re not, if you don’t have a plan and you’re just trying to patch things together and you’re not testing that plan, then you’re spending a lot of time and not of getting a lot of good results. If you’re not thinking of security governance and risk management governance through a maturity model, understanding what good looks like, where we are today, where we want to go into the future, here’s my gaps, here’s the things that a good family office that’s focused on this issue or a good company that’s focused on this issue looks like, then I think you’re missing out on a lot of things for these families to really keep them You gotta be able to fix those gaps and somebody has to own that mandate within the family and not be looking at it as, well we didn’t have any incidents this year as a metric. That’s too simple of a metric because you don’t even know. of how can you predict which incidents occurred or could have occurred during that time frame. that KPI for security and for risk management has to be important too because if you’re just trying to prove a negative, it’s very challenging for anybody within the family. And unfortunately, what this results in is a very reactive approach to security. 80 % of people will come to a secure Edward Marshall (11:35.201)or a risk management firm after something has happened. After attack, after a fraud, after insider threats of stealing of proprietary information, after a data leak. And the costs are enormous to do that kind of remediation and those kinds of fixes. Meanwhile, if you look at the front end of this issue and you look at ways on prevention, it’s much cheaper. It’s much less stressful for the family. Frazer Rice (11:38.423)Mm-hmm. Edward Marshall (12:05.104)And it really comes into that notion of don’t start with technology. Start thinking about people, then thinking about process, then thinking about technology. And that gives you a different mindset. Frazer Rice (12:16.279)I was going to say we’ve been alluding to people and processes internally. We’d been talking probably a lot about external threats, but then how do you manage the internal staff, the people that, the threats that are inside the family office and sort of the review process that probably makes a lot of sense in terms of understanding Who has access to important information, things like NDAs, staff, what happens when someone leaves? Do they take a key fob with them and all of a sudden, all the family secrets are out? How is that distinguished as part of the process compared to the external threats? Edward Marshall (13:02.072)Well, I’ll take that as an ability to have a gentle plug for a survey that we’re putting together and is currently launched. You know, we’ve done a lot of surveys in the space for family offices, but this one in particular is focusing on the estate management and kind of the security areas around estate management. can check it out on our website. It’s presageglobal.com forward slash survey. We’ve been working with the team at Nines very heavily to develop this over the last six months and launched it earlier this earlier this month. And I think that helps. think of some of the issues around insider threat and insider risks for estate management. So that’s the end of my plug for that survey. But going back to your question, and excellent to work with the group at NINES. If you guys haven’t checked out NINES and their estate management technology, it’s definitely, they’re great partners on this survey and beyond. The insider threat issue is one of those that is challenging for families because a couple of different factors. Where is that insider threat risk coming from? Where is the staff risk coming from? Well, you can look at it from a pre-hire perspective. How are you evaluating this person before they come into your family office? Oftentimes, if you’re working with a recruiter, they’ll say, we’ve done a background check on this household staff member, the person that comes into the family’s orbit, whether they’re a housekeeper or they’re a driver or they’re a nanny or they’re Edward Marshall (14:48.452)the CEO of the family office. Oftentimes the background checks that we’ve seen for those individuals are the same level of effort and level of quality. And all of these people have different aspects of access to the family. You might spend more money on the family office CEO background check, but the nanny is in your home 40 hours a week. and has access to your home 40 hours a week. oftentimes, people will fail to do the proper due diligence on that person because it’s been passed on by a recruiting agency that says that, you know, we’ve done the proper background check on this person that comes from there. So I think there’s very, families are not aware of what good looks like on a background check. Just focusing on the digital checks that are out there is not sufficient. I’m sorry, it just isn’t. And that matters to people that have access to your… to your family, your home, to personal spaces, as well as your finances, your operations, and your strategy for your family office or your operating business. The amount of diligence that you do there is critical, and what good looks like is challenging for families to see. And then the research tells us that 80 % of family offices don’t have an insider threat program, meaning once that person comes into the family office or to the company or some sort of for the family, they don’t do an additional check, periodic updates on that person’s background check. So obviously following employment laws for each state, which is critical, but there are ways that families can do and should consider around how you monitor the people that are there. Circumstances change. If you hired somebody and five years later, ten years later they’re working Edward Marshall (16:53.44)in your family office and you haven’t done any kind of background check on that person. Lots of things change in people’s circumstances that family should want to know about. as part of their diligence because of the level of access and the level of private information that that individual may have to the family. And again, you have to do all of this through counsel. You have to do all of this through employment law at the state level. As you’re doing all of these things, you should be working with smart legal representatives to one, make sure you’re following those standards, making sure if you’re doing evaluations of your security in general, hiring them to maintain privilege. of the information that people are following for you. But again, I think people fail to do those things because they don’t look at risk across the different domains of risk that are out there and just don’t know that those things are best practices because they’re really good at their silo. We are really good at this cyber tool. We’re really good at this privacy tool. We’re really good at this HR solution. But we’re not thinking things broadly around insider threat and insider threat management. And you can do all of it without making the family office feel like the KGB. You really can. And you should. Frazer Rice (18:19.192)The quick step to physical security. We’ve had a lot of violence around lately. We have geopolitical risk all over the place. the technological and the data breaches, et cetera, are one thing. It’s quite another when people are targeting to hurt. How do you think about that? Edward Marshall (18:24.32)Yep. Edward Marshall (18:41.506)Well, think you have to look at it from the lens that a lot of this and kind of the methodologies haven’t changed that much since John Wilkes Booth and Abraham Lincoln. It’s the same type of scenario. and how they’re targeting these folks in exposed places. I think that’s an element that people need to be aware is that it’s not just that there’s some technological breakthrough that’s happened in this space that causes physical threat to individuals, whether they’re outspoken or they’ve fallen into an industry that’s controversial for some people or for others. You know, there was the very sad incident that occurred in New York with the insurance company CEO. But you know, was another incident that a couple weeks later in the Chicago area that was very similar and didn’t get a lot of press and didn’t get a lot of headlines as part of it. So the physical security risk is a real one, but it’s one that you have to have a good understanding about it and you can’t just apply a blanket solution. A blanket solution is wonderful for the bottom line of a security company saying, well, you you think you have physical security threats, then you need a bodyguard or you need a residential security team. That’s the easy button. And that may not be the right case. And you have a lot of families that say, I don’t want executive protection. I don’t want to have a security driver. I don’t want to have a properly trained three person team that’s providing, doing advance work that’s doing security driving, that’s got all of the different aspects of proper body guarding and executive protection because I just don’t want that intrusion in my life. Edward Marshall (20:42.368)So you have that factor playing into that people do have physical security risks and they don’t want that kind of protection. And, you know, just like in the family, you have the ability to do that because it’s your family and no one can force that upon you. So how do you protect yourself? How do you think about monitoring of, Sometimes those threats, and this is not always the case, but sometimes those threats come in through social media because somebody might be a publicly very well-known person on social media or a very well-known person and people will… present those threats from there. How do you keep up with those types of threats? What kinds of technology, what kinds of analysis, what kinds of process should you bring into those types of threats? How do you determine if something is credible, actionable, or just somebody shouting into the wind? Because unfortunately, these devices are some of our best friends for productivity and our worst friends for security. And it also allows these people to sit behind a keyboard and say some really obnoxious things. But how do you know what is obnoxious versus what’s a credible threat? The specificity of that threat and all these different factors and identifying who that person may be is very challenging. And then, you you see it on stalking of family members or children or cyber stalking. How do you how do you get the attention of law enforcement when they’re focused on a lot of different things? to look at these things. There’s a finite amount of resources that exist in law enforcement, especially around these types of issues. Yes, there are state-level and federal-level laws and statutes that you can use to protect yourself and your family from it, but if you’re not organizing the information in a proper manner to give to law enforcement so they can take action on it… Edward Marshall (22:53.182)it’s going to be a challenge. And these are all wonderful people that work in federal, state, and local level law enforcement, but it’s just a question of resources sometimes. And these families that are facing these terrible types of issues need to have a good understanding of what’s there. But physical security, again, people will harken to Well, we’ve got great cybersecurity, but we haven’t paid that much attention to our physical security. Well, that means you have no cybersecurity. Because if I can walk into your office and I can get into your server closet and I can be proximate to it, then all of the fancy tools and the money that you’ve spent on cybersecurity and taking your information off the dark web, not possible. Just telling it out there in case somebody… And understanding that, Frazer Rice (23:40.16)Reiterating. Edward Marshall (23:47.445)then you have no cybersecurity. Or we’ve got cameras, we’ve got this fancy camera system that’s, we even have license plate readers for a car, for a neighborhood, for our office. Wonderful, who’s monitoring it? Who’s monitoring it two o’clock in the morning? So is all of that physical security you’re putting in there reactive? Or is it layered to make it you have a less attractive target for bad actors that are out there and having somebody looking at it? And unfortunately, again, families don’t know how to put those… areas into place in a systematic way because a lot of the vendors in this space are very focused on just this. I’m going to get it done, we’re going to sell the camera system and go from there. Or I’m going to sell this widget and go from there. Great for them, terrible for the family because if it’s not properly installed, monitored, you haven’t done a physical security assessment of the home during the day hours, during the night hours, looking for different changes in the environment. then you’re trying to bail water out of a ship that has got a hole in it. And you don’t know where the actual risks lie in that aspect. And you get into the notion of survivorship biases for families. Well, we haven’t had an incident happen, so we’re fine because nothing bad has happened before. And that’s a challenge. Frazer Rice (25:18.304)It reminds me a little bit of zero days since the last workplace incident. It’s awful. That’s great right up until you have one. And then it’s an embarrassing and counterproductive problem that you have to deal with. As we start to wind down here quickly, if we’re advisors, lawyers, accountants, people around families, family offices, et cetera, who are Edward Marshall (25:37.048)True. Frazer Rice (25:44.586)aware that there’s an issue, how do you interface with experts like yourself to get the conversation started? Edward Marshall (25:52.899)Well, I would say whatever group you’re working with on security and risk management for family offices, you should really be looking at a group that is focused on diagnosis first versus prescription and remediation. And avoid the fear-based… marketing that’s out there because frankly it’s disgusting and people still do it. So I think those are critical factors to it. It’s diagnosis first, understanding what the family is. We talked about it before. It’s not just looking at a checklist. A checklist is a wonderful thing that you have to do if you’re pilot before you fly the plane. But you have to go beyond that and actually have the experience and the understanding that the anthropology, it’s the cultural awareness of the family, it’s the understanding of what a family office is versus some abstract notion for many folks that are there. Looking across different domains of risk as well and seeing how these things go. know, a prescription before a diagnosis is challenge. Are you looking, starting out from a vulnerability aspect and understanding what things are out about the family because that’s a critical step and what’s important to the family. Who do they need to protect? Maybe the principal doesn’t need, says that I’m fine, I don’t need security, I’ve got this handled. Okay, that’s great, but you have children and a spouse, so how would you feel if something happened to them? And because they have, if a bad actor doesn’t care if it’s you or your family, they’re going to look at the principal as somebody who’s a hard target because there’s a lot of resources on there. But the soft target could be the kids or the nanny driving the kids to school and all these different elements. So really thinking beyond just what’s in front of your face around risk is critical as well. And being able to have that conversation with the family to understand what’s there. Going from understanding those vulnerabilities of what’s there Edward Marshall (28:07.984)to understanding how those vulnerabilities occur, valuing your technology, evaluating your physical risks and all these other risks that are there, how they’re developed, why they develop for your family, at, you know, not looking at devices, looking at setups of everything, and then putting together a real plan to say, we’re here, we have these aspects in our family office that are, you know, not as good as they could be on our security front. And how do we actually build a plan and then execute to develop good security around that? One of the areas that families, and again, sorry for the small plug, but one of the areas that we have found that families like is a comprehensive look at security, where we’re acting as their family chief security officer. and looking at risk in a holistic, strategic way. So they’re not looking at all these different disparate aspects of security and risk management. And it’s not just choosing off of a menu. We’re really providing you that aspect. There are very few families that have a full-time chief security officer in their family office. know, smart people that do this well are very well compensated. So if a family is looking at resources and how much they’re going to be putting towards this, might not be something that they’re thinking about until they get to a very, you know, very different level of what they’re looking at. But. But being able to do this on a managed basis is something that families have found to be very effective, rather than just choosing off the gas station sushi menu of security solutions. Edward Marshall (30:02.146)that look attractive but might not be the right thing that you need. That might be great for the security company or the risk management company, but not necessarily making your life safer, improving the quality of life for your family, and then going on from there. Again, I go back to what we talked about at the beginning. as a family looks at it, risk perception is what we deem it. And that plays a big factor into how families look at risk management. Is it, there might not be an awareness of what the risk is, or even if there is an awareness of what the risk is, there’s not a desire to focus that heavily on it, apply resources to it. I don’t like physical security, I don’t like fill in the blank. But you have to at least know what those things are. so that you can plan around it and plan to protect the things that are the most important to you in your life. Frazer Rice (31:03.02)Great stuff. How do people find Presage and reach out to you? Edward Marshall (31:06.862)Sure, so we put a ton of stuff online on our website, lots of good white papers, lots of good frameworks that people can look at. Our website is www.presageglobal.com. P-R-E-S-H-E global.com. The surveys on the website as well. LinkedIn, we put a bunch of content on our… Security matters. We have newsletters. focused on the 10 domains of risk. have a weekly newsletter that gives you strategic insights around the world across the different domains of risk. if you could sign up for it there, email us, call us. We’d be happy to have a conversation as you’re trying to go through this. know, Fraser, I really appreciate our ability to have this conversation again, because I think it’s an important one. And you’re taking a very view of how to support these families on a number of different issues and I think this is this is an area and an issue that doesn’t get a get the right a kind of attention towards it so I appreciate your time. Frazer Rice (32:21.194)No, thank you for being on. It’s a vital topic and frankly, if you’re looking for risks around a lot of different things around a family situation and you don’t include security as part of it, I don’t think you’re doing the full job. So Ed, thanks for being on. Edward Marshall (32:36.151)Yeah, no, I really appreciate it. Have a great one. Frazer Rice (32:38.966)Likewise. Outline of Family Office Security Engaging with security experts can enhance family safety. Security and risk management is suddenly urgent in the family office world. Why now? What’s changed in recent years to elevate these vulnerabilities? You’ve argued family offices are “risk magnets.” What about their structure, privacy, and scale makes them such attractive targets today? What do you mean by “security jewelry?” Where do families get the gap between perceived and actual security wrong? New survey project? https://www.presageglobal.com/survey Most people still picture alarms and bodyguards when thinking of security. What is the risk landscape for family offices in 2025? What’s in the equation that wasn’t before? Your proprietary “Ten Domains of Risk” framework is widely referenced. How does that differ from traditional approaches, and why did you create it? Can you share a real-world or hypothetical example of risk cascading across domains? How a small weakness triggered a much bigger crisis? What does a comprehensive risk audit/assessment look like at Presage Global? How do you keep it actionable rather than overwhelming? What is “intelligence-powered” risk management, and how does it go beyond standard security consulting? Where does the assessment process usually reveal the most hidden or underestimated threats? How has the threat from AI—like deepfakes, adversarial AI, and data exfiltration—evolved? Are families prepared for these risks? What AI-accelerated threats keep you up at night when working with families? If we look ahead three years, what vulnerabilities or attack vectors will be most pressing? How significant is the insider threat in family offices? Why is this such a blind spot, and how can families detect and manage it proactively? How should families and family offices approach vendor risk, especially for technology providers and outsourced services? Executive protection is evolving. What does modern, intelligence-driven protection actually look like, and how should non-celebrity families view this service? How do you integrate physical security across multiple residences and geographies? Cyber threats and ransomware are in headlines. Why are family offices especially attractive targets, and what’s different about their digital vulnerability? In terms of governance, who should own security as a responsibility? How should it be mapped in the family office org chart, especially for lean teams? Advisors (attorneys, CPAs, wealth advisors) are on the front line. What red flags should prompt them to recommend a specialized security review? How should risk and security management be holistically coordinated? Wwith legal, estate, tax, and investment advisors to prevent things falling through the cracks? For families hiring new staff, what are the most common mistakes made in vetting, onboarding, and ongoing security training? What does an initial conversation look like and how should they prepare? What’s the best way for the audience to stay updated and connected with you and Presage Global? BIO:Edward is the Founder and CEO of Presage Global, an intelligence-powered risk and business advisory firm. Presage is a trusted partner to c-suites and boards, family offices, and investors. Edward is a family office insider and a leading family office researcher, advisor, and author. He is also a risk and threat management specialist. He is working with families to reduce their cyber, physical, financial, operational, and reputational risk profiles. Edward is a member of the Advisory Board and co-heads the Family Office Initiative at the UHNW Institute. UHNW individuals by promoting best practices, professional development, and positive change in the family office and family wealth field. He also co-authored the book, The Family Office: A Comprehensive Guide for Advisers, Practitioners, and Students. Prior to founding Presage Global, Edward held leading family office roles at Dentons, Credit Suisse, Citibank, and Boston Private. He joined Credit Suisse from Booz Allen Hamilton and previously was a research assistant at The Kennan Institute. Edward lectured as an Adjunct Professor at the Henley-Putnam School of Strategic Security. He began his career in the public sector, working for the federal government in the United States and abroad. Edward serves as the Senior Advisor to the President of The Kyiv School of Economics in Ukraine. He founded “After Service,” a Ukrainian NGO focused on reducing veteran suicide and supporting Ukrainian veterans in civilian life. He is a board member at the Defense Intelligence Memorial Foundation (DIMF). It provides full scholarships to the families of Defense Intelligence officers killed in the line of duty. He is an advisory board member for Americas Warrior Partnership (AWP), a nonprofit focused on reducing veteran suicide. He earned his MBA from New York University’s Leonard N. Stern School of Business and a BS in Human Biology from Michigan State University. Risk is perceived differently by families and companies. Family offices often have engineered vulnerabilities. Traditional risk management is siloed and reactive. Good security should improve quality of life for families. Insider threats are often overlooked in family offices. Physical security risks are increasing in today’s world. Technology should support, not replace, security processes. Families need to monitor their internal staff regularly. Diagnosis of security needs is crucial before remediation. How to Find Edward Marshall PRESAGE GLOBAL: https://www.presageglobal.com https://frazerrice.com/ep-129-ed-marshall/ https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

RICHARD HAASS returns to the podcast to talk about the US FOREIGN POLICY implications of Trump’s Tariffs and other initiatives. We take another tour of the world’s hotspots after the recent UN conference here in New York. Finally, we weave in an analogy of the recent crowd misbehavior at the Ryder Cup as a symptom of America’s current mood. https://youtu.be/z4FlnrXl8tE US FOREIGN POLICY: INTRO Frazer Rice (00:01.277) Welcome aboard, Richard. We are past our technology glitch, I think. The next big thing here is to try to figure out what the US looks like. We’re on the heels of the UN week and also the Ryder Cup. I’m not sure which one was more chaotic, but as you look at the US’s standing after the UN, what do you take from the events that took place last week? Richard Haass (00:02.744) on US FOREIGN POLICY Great to be back. THE US MOOD (AND THE RYDER CUP) Richard Haass (00:28.172) It was not a great week for what Joe and I, may he rest in peace, called soft power. What happened at Beth Page, the terrible manners, the coarseness, vulgarity, choose your word, the lack of sportsmanship, we could go on, but you get the point, was really poorly received in Europe, as it should have been. And I thought the PGA here just showed a blind spot would be generous. So it was not good. I felt somewhat between embarrassed and ashamed and also just overshadowed some unbelievable golf on both sides. Frazer Rice (01:11.069)Kind of where I came out on it. And it just felt bad watching some really good players doing their thing and then all of a sudden, again, overshadowed by pretty boorish behavior. Richard Haass (01:22.51) Particularly golf, because golf’s a game of rules and norms. I think it was Rory Mclroy who used the word etiquette, and what we saw was anything but. I really wondered at times whether some of those people ever played golf. And then the UN. Look, it didn’t happen in isolation. The President’s US Foreign Policy speech was…at times just, it was seen, it was taken badly by Europeans. It was for understandable reasons, seen by them as something of an attack on them. The comments like about Sharia law in London were over the top. The criticism of immigration policy, some of which, for the record, deserve some criticism, I would say. The total denial of climate change was badly received. So it was not good, even though, and I think the president detracted for some of his legitimate criticisms of the UN. My own sense, though, is the UN’s got bigger problems than Donald Trump’s speech. The UN has basically made itself increasingly irrelevant. It’s no longer a place for serious diplomacy. At most, it’s a venue for side meetings. And since then, you’ve had the announcement of a “peace” plan for Gaza and so forth. So the world’s moved on. quite honestly, what matters is not what happened during a few days of traffic in New York, but rather what happens more broadly. So we’ll see what, if anything, comes of this Middle East announcement. We’ll see what happens next, if anything, diplomatically with Ukraine. President Trump’s about to meet his Chinese counterpart in less than a month in South Korea. So there’s a lot going on. And not to mention domestically, there’s a lot going on we can discuss. So the fact that the Ryder Cup or the UN were not great in and of themselves, they’re more data points. And I think what matters is more the larger story for better and for worse. US Foreign Policy: Russia and the Ukraine Frazer Rice (03:32.339)As we just a couple of quick points to hit back on Ukraine Russia. What’s the state of play in there right now? Richard Haass (03:41.71) Well, we’re reaching the end of what you might call the third fighting season of this phase of the war, the one that started just over, mean, just under three years ago, in February of 22, if I have my dates right. My sense is things will dial down militarily somewhat during the winter, and then they’ll dial up again early next year for a fourth fighting season. I don’t believe diplomacy will gain traction until the United States does probably two things, puts much more economic pressure on Russia and gives Ukraine much more military wherewithal, both to withstand Russia and to take the war to Russia. Ultimately, diplomacy will only happen in a context where Vladimir Putin comes to the conclusion, however reluctantly, that time is not on his side. Right now, he believes time is on his side. He has no reason to compromise or settle. Only if we convince him. The time is not his friend, I believe. Will he agree to something like a ceasefire? I don’t think we should be pushing for peace for any number of reasons. We can go into it if you want, but I don’t think we need to. So at the moment, diplomacy is dependent on the calculations of the two sides, and I think the Ukrainian leadership is willing to accept a ceasefire in place, but the Russian leadership isn’t. We’ve gotta change that calculation, and that’s more than anything, I think, a function of whether we give Ukraine greater military help, which persuades Putin that more war will not give him more results. Frazer Rice (05:15.571)Any inside baseball and any potential weaknesses in Russia that we don’t hear about over here, as opposed to sort of the general posturing we get from Putin? Richard Haass (05:25.389) There’s been a lot of talk about it recently. The president mused on true social, about Russia’s economy and so forth. Look, Russia’s paid an enormous price for the war in terms of manpower, in terms of its economy. But China continues to buy oil, India continues to buy oil, Turkey continues to buy oil. So think the Russian economy limps along. Militarily, they’ve got a pretty good wartime economy. Putin still controls the narrative within Russia. I don’t sense, I’d love to be wrong, but I don’t sense that Russia’s on any brink where it can’t sustain a version of what it is doing. So no, no, could we reach a point, phrase it like that, is no longer true, and Russia, literally and figuratively, begins to run out of gas? Yeah. But I don’t think we’re there yet, but time, the medium to long term is not in Russia’s favor, only because their productive capabilities are getting diminished and so forth. again, I still think what we want to do is help Ukraine more. don’t know if we will. I don’t know if we’re going to impose sanctions. can’t explain why this reluctance to pressure Russia directly and indirectly. It gets into places I don’t have any evidence on. But I would simply say…President Trump is right to want to bring peace. I think he’s sabotaging or undermining his own US Foreign Policy efforts by not creating a context in which diplomacy is more likely to succeed. But I don’t see any signs at the moment that either side is ready to essentially shout uncle. US FOREIGN POLICY: ISRAEL AND GAZA Frazer Rice (07:10.163)Trump just came out with his 10 or 20 point plan for Israel and Gaza to Richard Haass (07:15.373)It was to inflationary times. It was 20. Frazer Rice (07:18.951)It’s power of compounding. Hopefully, maybe that’ll help. What do you make of that? We’ve just had all sorts of different iterations of from the invasion to the counter invasion to all the fighting. on one hand, I’m happy to see that there’s an attempt to try to stake out some peace plans here, but I’m not confident that it will come to pass. Do you have any thoughts on that? Richard Haass (07:44.258) I pretty much agree with what you said. Look, it’s the shortest 20-point plan in history. And by that, I mean there’s 20 points to it, but none of them is fleshed out. So the immediate question is whether Hamas agrees to it, the Israeli government did. But even if Hamas does any number of implementation questions. Certain preconditions have to be met and so forth. When I used to teach at Harvard, we used to say that 90 % of life is implementation. Well, this plan is the 10%. It’s a design. It includes all the things a peace plan would need to include, at least it mentions them. But they’re not developed. And so all sorts of things to tall for a technocratic that could run Gaza, a stabilization force, full humanitarian aid, all sorts of things about political and diplomatic processes. The plan is more, I guess I’d say it’s more aspirational than operational. So the good news is the Israeli government agreed to it. We’ll see what Hamas does. My own guess is at some point, There’ll be all sorts of hiccups in implementation. And probably early next year, in the spring or so, I expect Bibi Netanyahu will call for new elections. He’s got to do it within the next 12, 13 months. He’ll choose an opportune moment. The fact that he’s gotten this plan put forward, which is quite sensitive, shall we say, to Israeli interests, and he’s agreed to it, puts him in a very good position. So either Hamas…capitulates or Israel’s given a green light to continue the war from the United States. So I think, my own view is this plan in its current form will not reach fruition to say the least. And at some point sooner rather than later, we’ll probably have Israeli elections, possibly as soon as six, seven, eight months from now. CHINA AND INDA Frazer Rice (09:48.392)Got it. So it would be geopolitically crazy not to talk about the two most populous nations in China and India. I know they got together with Russia in the room as well to maybe to broadcast their sort of emergent standing in the world. Is there anything we should be watching on that front besides sort of the obvious in terms of how they deal with themselves and how they deal with US Foreign Policy, especially in a tariff environment? US FOREIGN POLICY: INDIA Richard Haass (10:16.279) Couple things come to mind, in terms of India. I think it’s fair to accuse the administration of diplomatic malpractice. The U.S.-Indian relationship has been carefully nurtured over the last few decades by Republican and Democratic presidents alike. It made sense economically. India is the world’s largest country. It’s probably, the fifth largest economy, but it’s going to grow by any measure. Strategically, it’s a real concern for China. So the idea that we’ve slapped these heavy tariffs on India and pushed them and China’s direction seems to me to make little sense. And don’t get me wrong, I’m not happy with India buying oil from Russia. India’s long bought its arms from Russia, but this hostility towards India just makes no sense. And this embrace of Pakistan, again, what’s Pakistan? A country of 1 6th, 1 7th the population of India. It’s got a long association with terrorism. The army, shall we say, has disproportionate power. I don’t understand this fondness for Pakistan and this distancing from India. So I think this is one of those head shakers. In terms of the Indians showing up at the powwow in China, yeah, it was a sign that the Indians are alienated. Now they did leave before the military parade. But again, I think it’s India in some ways. Re-embracing its tradition of a kind of strategic independence, something that it had during the Cold War, even though it tilted towards the Soviet Union. And I think it was the Indians’ of pushing back against US Foreign Policy, saying, we have options. If you Americans are going to treat us badly, we can lower the temperature with China, which is not in our strategic advantage. We want China to have to think about India. So that’s just at the moment drifting in a kind of bad place in India. We have what, it’s the 50 % tariffs, which again, it’s not that India isn’t protectionist it is, but this is not the way to deal with it. This is not the way to reach a point where India becomes much more open to American exports. US FOREIGN POLICY: CHINA Richard Haass (12:12.398) In terms of China, again, President Trump and Xi Jinping are gonna meet in less than a month in South Korea on the margins of the APEC meetings. There’s talk about a summit in China sometime in 2026. And I think the real question is not just what happens economically, what is it the United States and China can agree to, but also what happens geopolitically. And to what extent is it a narrow economics conversation, or to what extent is there a grand bargain in which there’s some trading off, if you will, between geopolitics and economics. What a lot of people in the strategic world are worried about is that China gives us some of what we want economically, and we give them some of what they want strategically. And that gets into the question of the South China Sea and even more Taiwan. I don’t know. But this is an administration that has consistently put what it sees to be the country’s economic interests before its strategic interests. And so I can’t rule that out, that that might be the approach. I’m not going to say, I’m not going to rule it in. But I think this meeting in October and then the meeting sometime next year, the summit sometime next year, could go in any number of directions. the meantime, though, I think China has pushed back successfully against American tariffs with their cutting off of exports of rare earth minerals. It’s interesting that we tariffed India, but not China, over purchases of Russian oil. So stay tuned. But I think China has considerable leverage in things like agricultural exports, as your listeners will know. Essentially the Argentines, the Brazilians and others are benefiting and American soybean farmers are paying an enormous price. The Chinese essentially are saying, you want to play a bit of economic warfare. Well, two can play that game. And by the way, we might be at least as good, if not better than you, at playing it. US Foreign Policy: Nepal Frazer Rice (14:36.148)Quick flashpoint question about Nepal, which I thought was sort of an under-reported story and how basically the leadership there was in a sense overthrown. And you have that happening right in the middle of India, Pakistan, China right there. there anything, it’s tough for me to tell whether that’s a contagion that’s been closed off or whether that’s something that just bears further monitoring. Richard Haass (15:01.324) I mean, I go on at great length, except I don’t know enough to go on at great length. So I haven’t seen a lot, but what I don’t know, to be honest, is whether the fact I haven’t seen anything after the initial few days of reports, whether that shows a lack of media access and interest or that things have seriously or fundamentally calmed. Sorry, I just don’t know. I don’t know how to interpret the lack of news coming from there. US FOREIGN POLICY’S IMPACT ON THE US ECONOMY Frazer Rice (15:29.086)Got it. So let’s move stateside for a second. It’s the economy, stupid. That’s what they all tell us. And it’s actually, in my opinion, probably very true. Trump’s tariffs have now had a set of months to bed in, and it’s had its different issues related to sort of geopolitical relationships. It’s unclear to me whether we can really sort of take any solace from it other than a high stock market. But even that scares me a little bit. What do you think about in terms of the economy and how the US is set up both for everybody sort of individually who are citizens here, but then geopolitically and otherwise as we look forward to things like the midterm elections and other phenomenon. TARIFFS AS AN ARM OF US FOREIGN POLCIY Richard Haass (16:15.286) Sure. You wrapped around six questions into that one, my friend. Look, I think the tariffs, they’ve certainly hurt us geopolitically because a lot of them are against allies. And we’ve essentially said being an ally doesn’t insulate you, whether you’re Europeans or the Indians or Japanese or what have you. So I think they’ve had a strategic impact of weakening a lot of our relationships. Economically, we’re still in the phase of seeing the effects, but I think the preliminary effects are increasingly apparent. They’re inflationary, they have slowed growth, and they have led to a bit of job loss. So I think that’s the, but this is a work in progress, and my sense is that’ll get worse and it works against what the administration wants, which is for the Fed to dramatically lower rates. On one hand, the slowing growth does, it reinforces the desire to lower rates, but obviously the inflationary impact works against it. This is an article of faith, not analysis for this president. So I’m on the skeptical side. It will raise some money, maybe a couple of hundred billion a year. in terms of added revenues. But the real question is whether how it nets out. If the economy slows and there’s less growth, then that’s going to hurt us on balance because the IRS, the extent that still in a position to take in revenues, reduce the effectiveness there, will have less to work with. The economy will just be smaller. Richard Haass (18:04.16) I think on balance both strategically and economically, the tariffs are unfortunate. They’re ill-advised. But like I said, it’s an article of faith for this president. It’s the centerpiece of a lot of his economic program, even if it works against some of what he wants to see. And I do think politically it hurts him. You see the numbers in the economy. Look, Joe Biden and Kamala Harris, essentially what led to their defeat, as much as anything, was the cost of living. And, you know, people get reminded of higher prices several times a day. I think it will hurt the Trump presidency as well, both in terms of food prices, which are pretty robust, or in terms of mortgage rates not going down much. So I think this will politically be a… net loss for them plus with specific constituencies I already mentioned certain farmers who live by exports they’re to be they’re they’re they’re furious they are they have been they they have been made you know what they’re paying an enormous price for this policy they didn’t realize they were voting for. US FOREIGN POLICY AND THE ECONOMY CONTINUED Frazer Rice (19:06.057)Right. The other part that scares me a little bit is if you subscribe to the notion that AI is going to lead to productivity gains, that could lead to unemployment in pockets that people didn’t expect. In Midtown, if have whole bunch of guys in vests walking around that suddenly don’t have cushy jobs anymore because they’ve been replaced by GPT-5 and all that, that’s not great either. Richard Haass (19:27.118)Yeah. Richard Haass (19:37.999)That’s happening and it’s gonna happen more. And I think it’s inevitable. It’s gonna affect white collar and not just blue collar. People who have incurred serious debt to go to a fancy four year school. And they’re gonna have a lot of debt and not a lot of jobs. Look, I don’t think we’re ready for that. For the hit it’s gonna take on jobs. We haven’t really begun this conversation in this country about a safety net for people who, for long-term unemployment, for people who had never had jobs. It’s one thing to get unemployment insurance for a limited period after you’ve been laid off. What if you can’t get that first job? These are, I just don’t think we’re, as a society, as a polity, to get political science here for a moment, we are not positioned to have that conversation yet. And whether we’re talking about universal basic income. Whether we’re talking about lifelong education and re-skilling and re-tooling opportunities and so forth. So the question is, how do we deal with this? What is the responsibility of the state? To what extent do we condition the various types of economic support on certain willingness of the individual to do certain things? We haven’t begun that conversation, but we’re going to have it. I don’t know when, whether it’s in a year or two years or three years. I don’t know if it’ll happen before 2026, but do I think it’ll happen by 2028? Yeah, I do. I actually think that that will be one of the conversations that will, whoever the candidates are in 2028 for the presidency and for Congress, this is gonna figure significantly in the public, if you will, in the political marketplace. 2026 ELECTIONS Frazer Rice (21:27.728)We painted a pretty gloomy picture for Trump in his sort of era here. And in many ways, I feel like he’s trying to run out the clock before 2026 in the midterms, where if the House switches over, I think a lot of what he’s trying to do slows down to a crawl. But the Democrats themselves are not creating or taking advantage of the conditions they inherited. I spoke, or I didn’t speak, I was at an event where NY1 was talking about the mayor’s race in New York and Mondami and sort of the progressive element in the Democratic Party having a big impact on what’s happening here in New York City. I guess just from a broader question, how do you see the Democrats lining up for 2026 in something that seems to me to be very winnable, but at the same time, they seem to not lose an opportunity to lose an opportunity? DEMOCRATS Richard Haass (22:25.006) I have a couple of reactions. One is you can’t speak of the Democrats when it comes to 2026 because they don’t have a candidate. What they have is 435 candidates for the House and 33, 34 candidates for the Senate. And I don’t know how many governors. It’s decentralized. So the Democrats are going to be all over the place. From center left to center to far left to Democratic socialists like the likely next mayor of New York. So. They’ll be all over the place. And all politics is local. Some will win and all that. But I don’t know what kind of clarity politically will emerge from it all. I also think there’s some big questions, it’s awkward to talk about, how the administration will try to shape the environment so the Democrats don’t emerge with control of the House. I don’t think there’s much chance, there’s some, but not much chance they could regain the Senate, but the House is paper thin margin. This administration clearly, strongly does not want the Democrats to take control of the House of Representatives, given the subpoena power, the hearing power, and all that, what would accrue. So the question is, what lengths will the administration go to to see that that doesn’t happen? We’re already seeing what you might call aggressive gerrymandering. You had the president just recently talk about the deployment of American military in many cities and so forth. I think the jury’s out on what’s gonna happen in this country over the next 13 months. I’m not predicting what will happen. I’m simply saying I’m not confident that I can sit here and tell you what will be the run-up to the elections in… in 13 months. But I do believe this administration will go to great lengths to see that the Democrats do not gain control of the House of Representatives. I can’t talk about 2028 yet. There the Democrats will have a representative. Someone will ultimately win the party’s nomination. And I don’t know if it’s somebody of the center, the center left, or the progressive left, the far left. REPUBLICANS Richard Haass (24:45.998) And on the Republican side, I don’t know if you essentially, could have everything from the President running for a third term, if that’s even a possibility, to Vice President Vance essentially representing what he would do is represent a de facto or effective third term of President Trump, whether you might have a Nikki Haley or Glenn Youngkin or somebody like that who might represent a little bit of a correction. I don’t know. Again, a week’s a long time in politics. We’re now talking, we’re two years away from the beginning of the primary season. So we’ll probably have six more conversations, you and I, before then. So we can revisit that. I think we’ve got to get through this November, which is the mayoral election, a couple of gubernatorial elections in New Jersey, I think Virginia, and so forth. We’ll see what signs they tell us about disaffection over the economy and over other issues. Frazer Rice (25:21.492)Ha! POLITICAL INDICATORS TO WATCH Richard Haass (25:41.643) Then I think the next big political, well two things, one will be Supreme Court decisions on such things as the power to enact tariffs and post tariffs and how the court decides and how the administration reacts to those decisions. And then I think the other big thing will be the run up to the midterms, among other things again, the use of National Guard, military and so forth and how that all plays out. I would just say, this is largely a business audience. The range of potential futures over the next, what, 13 months is much larger than we’re used to. Now, investors used to live in a world where the range of possibilities was pretty circumscribed. We were maybe playing between the 50 yard line and the 40 yard line on whatever side of the field the occupant of the Oval Office came from. Well, now we’re playing on a much wider playing field. Now, we’re not playing within a span of 10 yards. We might be playing within a span of 30 or 40, 50 yards. So, to stretch the metaphor, and I can use football metaphors this week, because the Giants finally won a game the other day, that I think the range of possibilities is much greater. There’s the two parts of our conversation, to use my two favorite words, home and away, given my substack, I think the range of possible outcomes, both domestically and internationally now, is far greater than we’re used to. We’re all…trained to operate in a world where you get up in the morning and you can make a large number of pretty big but safe assumptions, I think that world is probably gone for the foreseeable future. And that we’ve now got to operate in a world where both domestically and internationally, we don’t have that luxury of making confident assumptions or predictions. THE EROSION OF CIVICS Frazer Rice (27:33.041)I recommend your book on the Bill of Rights and Obligations. Emphasis on obligations because people forget the concept of dutt. What do you think about the American electorate and the citizenship? My personal thought on it is that I feel like people are really in it for themselves a lot and that the idea of contributing back to the society and the politics, the confidence in the institutions and the trust is in a weird place right now and something that needs some emphasis. You’ve written a book on it that I love. I’m interested in your opinion on it right now. Many of us are fatigued over the last six months to a year. THE BILL OF OBLIGATIONS Richard Haass (28:16.366) Well, thank you. Yeah, I wrote the Bill of Obligations because I’m worried. And I feel a sense of urgency. Here we are. We’re less than a year away from the 250th anniversary of this experiment. And coming back to what we just talking about, it’s hard to feel sanguine, shall we say, about our prospects. I’m not defeatist. I’m not negative. But I’m worried, which gives me a sense of urgency. But, we don’t teach civics or foreign policy in a lot of our schools or if we do teach it, we don’t teach it well. It’s become harder to operate a democracy given how we fund our politics, given social media and cable and radio. you know, go on and on. We began the conversation by talking about the Ryder Cup behavior. There’s things that are amiss, I would simply say, in American society. Things have gotten coarsened. They’ve gotten rougher. There’s fewer norms that are recognized and respected. So we’re on the brink of yet another shutdown in America, in Congress, what’s gonna happen there. And regardless of what happens this time, there’ll be a next time. We’ve been unable to deal at all with a deficit that’s what, north of 37 trillion. So, American politics are not working terribly well. I think American citizens are not informed enough or active enough right now. So, yeah, again, we can analyze how we got to where we are, but it’s a worrisome situation. I don’t know if it constitutes a crisis, but probably you could make the argument that it… does, we had about a third of the eligible voters didn’t bother to vote in the last presidential election. I would think upwards of 40, 45 % of eligible voters at least won’t vote in the midterms. So we’ve got a problem with civic participation. We’ve got a problem with civic knowledge about what people are learning and where they get their information from. TikTok, I know this comes as a great shock to you. No matter who owns it. TIkTok is not a reliable source of information for citizens about their democracy or the issues of the day. So yeah, I mean, I think this is a testing period for American democracy and what we’re seeing in Washington is in some ways a reflection of that Frazer Rice (31:09.48)Great stuff. Richard, how do listeners and watchers now find you and find out more about US foreign policy? Richard Haass (31:14.68) Well, they can find me on Substack. I publish a weekly newsletter called Home and Away, where I talk about, as the title suggests, things domestic and things international. I try to throw in just a little bit of golf and sports so people don’t get too depressed when they read what I have to say. And I do a lot of media. They can find me there, whether it’s on Morning Joe or some… this shows in you were kind enough to mention my last book, The Bill of Obligations. I’d for more people to read it, particularly in the run up to, again, July 4th, 2026. This is a time for Americans to reacquaint themselves with the DNA, shall we say, of our political system, of our democracy, which has served us pretty well for two and a half centuries. And if we’re lucky, we’ll continue to. Frazer Rice (31:48.233)Me too. Thank you. Richard Haass (32:10.969)Thank you, sir. Good to see you. Frazer Rice (32:13.087)Likewise! RICHARD HAASS AND US FOREIGN POLICY LINKS RICHARD HAASS SUBSTACK “HOME AND AWAY” ON US FOREIGN POLICY Listen to my first interview with Richard Haass on US Foreign Policy READ THIS FREE PREVIEW OF RICHARD’s “THE BILL OF OBLIGATIONS“ Council on Foreign Relations on US Foreign Policy https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/ US FOREIGN POLICY

In this conversation on “TAX ALPHA”, Frazer Rice and BRENT SULLIVAN (of TAX ALPHA INSIDER) delve into the complexities of tax awareness in investing, focusing on capital gains, income tax, and various strategies for tax efficiency. They discuss the importance of tax loss harvesting, the challenges of managing concentrated portfolios, and the implications of estate planning. The conversation emphasizes the need for advisors and trustees to understand these strategies to optimize tax outcomes for their clients. https://youtu.be/pCIXFq4YoS0 Outline of Tax Alpha Quick Overview of Tax Rates Ordinary vs Capital Gain (Usually Income vs Asset based taxation) Short Term vs Long Term (Long Term Treatment) (we’ll talk about Estate Later) Federal vs State (Can be important!) Netting Losses/Deductions vs Gains and Income Owning assets Taxable vs Non-Taxable vehicles https://open.spotify.com/episode/3uL924aOlPd2hgmC9s7KCI?si=hBS09OKDTd-uHhT8PAj7aA Tax Alpha in stock investing (Universe) Long Only Concentrated Positions Timing – Getting LT Capital Gain treatment Basis – increasing basis Exchange / 351 Funds to defer and diversify Dramatic foreshadowing with step-up later in estate context Blind Trusts for political appointees Diversified Positions Passive (Lower Cost, acceptable returns, “lower risk/tracking error”) Active (Now frowned upon – except in the after tax world w/ TLH) Deferral Carve-Outs like QOZ’s Tax Lost Harvesting Owning an index vs owning a sample of the index Buying Coke and selling pepsi Wash Rules Loss Carry Forwards Capital Losses / Not Ordiany Losses Amplified Tax Loss Harvesting Own the sample of Index AND Borrow off those holdings to create long and short positions to generate capital losses while having beta of 1 Trends: Pre-Liquidity Event planning Storing Losses for the bulky sale Timing the event(s) to have the losses line up with the gains Pre-Diversification planning Pre Death Planning Integrating the Estate Planning with the Income/ Cap Gains Planning Step-Up Avoiding Estate Tax, But Prolonging the Cap Gains Tax exposure (and concentration risk?) Grantor Tax status and he swap power How does turbo charged loss creation look in an estate environment? Trustee/ Executor and Fiduciary / Beneficiary risk issues Vehicle evolution Funds SMA’s 351 and other ETF vehicles (+/-‘s) PPLI,PPVA How did you develop this expertise? How do we find you? Transcript of Tax Alpha Frazer Rice (00:01.122)Welcome aboard, Brent. Brent Sullivan (00:03.035)Well, happy to be here, Fraser. Frazer Rice (00:04.558)It’s fun to chat in person. I’ve been following it to call a blog I don’t think gives it the proper respect because I think you’re uncovering a lot of great information for advisors like me and wealthy people and other people generally speaking in terms of Really getting going on the tax alpha end of it Let’s start a little bit with some basics because I think you know for someone new to the concept of Being particularly tax aware in terms of investing taxes can be, they’re more than just income tax, that’s for sure. How do you think about it? How do you get your framework around what people are trying to avoid when they’re dealing with their investable portfolios? Brent Sullivan (00:45.723)Yeah, I mean, there are really just a couple of different ways to break it down, but I probably start with the concept of a capital gain as a distinct thing from income tax. so capital gains come in really like four different flavors. There’s short-term capital gains, short-term capital losses, and then long-term capital gains, long-term capital losses. And then these things are different if you have collectibles or other types of instruments too. But the point is here that you’ve got those four quadrants that you’re always sort of operating in. And I think that’s where the management and the prowess around portfolio design, execution, that’s where all of that really comes into play. And the final point I’d make about capital gains versus income is that capital gains is really a planning opportunity. Income is gonna come at you and there’s really not much you can do about it. Strong caveat to that. But capital gains are really about timing. You can accelerate losses, you can defer gains. Frazer Rice (01:37.929)Right. Brent Sullivan (01:45.079)And that’s really the beginning of the conversation when I’m talking with advisors about this usually. I operate in B2B space, I’m not retail facing. And usually that’s where the planning conversation starts. Frazer Rice (01:57.655)So as you sort of step back and help people think about the tax planning aspect of it, for advisors generally speaking, they’re very interested not only in the investment perspective, but the structuring of wealth such that they’re taking advantage of what they can and mitigating that which is destructive, but otherwise not really something they can avoid. If we settle in a little bit on the investment piece a little bit, what is the universe that we’re looking in in terms of how people allocate their portfolios? Brent Sullivan (02:33.22)Well, mean, so probably I’d say the hot topic in tax management nowadays is really getting the portfolio to be more equity like. And so the reason or part of the motivation for more equity like exposure is to utilize to the extent possible the planning opportunity of capital gains, realization and acceleration and things like that. So that’s that’s probably the core concept. The biggest chunk of the investable portfolio. The idea is to make it more equity like. And then the planning opportunities sort of expand beyond the core portfolio. That’s in, you know, how can we align total diversified exposure across the right types of investment accounts? In your space, it starts to get really interesting. You know, I say your space, like in a state planning world, it starts to get, you know, the idea of asset location, putting the stocks, you know, in the high growth portfolios or tax exempt portfolios, depending on the profile. Frazer Rice (03:17.228)Sure. Brent Sullivan (03:26.458)Putting the bonds in tax advantaged accounts or tax exempt accounts, again, depending on the profile. All of that is like, these are like really crisp, interesting planning questions that do not have crisp answers. And I think that’s where the planning opportunity really emerges. Frazer Rice (03:42.668)We talk a little bit about asset location. The investment vehicles we’ll talk about shortly and some of the things that can happen to turn the dials on that front. But in terms of location in whether ERISA accounts or life insurance or trusts or things like that, as people are trying to get their arms around the matrix, as you called it, and certainly with the capital gains and short and long, there’s almost a matrix of different things you can think about in terms of the tools in your toolkit. How do you get your arms around that if you’re new to the space or otherwise trying to really provide subtle advice as opposed to maybe speculative advice? Brent Sullivan (04:23.214)Yeah, I mean, I think that the first step is really trying to understand how each investment decision impacts not just the current investment returns, but also future investment returns, after-tax returns, pre-liquidation, post-liquidation, but then also estate considerations, like are you choosing the right vehicle if you’re trying to isolate or exclude assets from the estate? Do you want to keep a strategy on for multi-generations? Is it private? Public? Is it liquid? Iliquid? Inflation protected? All this kind of stuff. You have to realize that every single investment decision involves or impacts this really complex ecosystem. It’s super interesting, but I think like first order decision is like how much of a thing should I own? That is just like the tip of the iceberg. And I would say that’s where 99 % of like the financial media focuses. You how should I invest a million dollars now? It’s like, no, boy. Like there’s so much more ground to cover that could make portfolios resilient today, but also with multi-generation in mind. Frazer Rice (05:29.835)As I like to say, trying to get past the two dimensions that most people are normally thinking about in terms of the X and Y of income and capital gains and then sort of layering on asset allocation to be responsible on that front, but then add the Z axis of the estate planning, really kind of years 10, 15, 20, and then going beyond your use of the assets to different constituencies that are going to benefit from it later. Brent Sullivan (05:55.365)I mean, I get so excited when I think about the opportunities in this space because they’re so messy and bespoke. And I say messy in a good way. These are real problems that planners have an opportunity to step in and address for high net worth folks. really, down market, I don’t say down market in a pejorative sense, but mean, in down market too, there are really opportunities for planners to step in and add meaningful value and like again, I am an observer of this industry. I’m an independent tax analyst, which means that I don’t have a stake in the game. I don’t, I’m not trying to sell anyone’s product. So I just get to see the opportunities that planners have when they’re engaging with, with clients at all wealth levels. And again, like to your point, yeah, multi-generation is super exciting. It’s so messy and interesting. Frazer Rice (06:43.755)As we look at it here, the one unifying theme is most people don’t want to pay taxes if they don’t have to. success really does come down to what do you get to keep at the end of the day from the fruits of your labor or your investment. Without that unifying principle, then we’re sort of grasping at straws I guess. Let’s start with the simplest sort of tools that we have in the toolbox. And this is gonna combine a little bit of investment vehicle and tax awareness in the long only space? What are the things that you’re thinking about in terms of the tools that a lot of people have access to, but maybe not have the tax awareness that we think is a good idea to think about? Brent Sullivan (07:27.332)Well, mean, the easiest thing or probably the highest level thing is just asset allocation specifically. And so that’s just like at the very, very simplest level that would be, you know, how much of your portfolio is allocated to growth assets like stocks versus how much of your portfolio is allocated to fixed income assets or something fixed income like like bonds. That’s the first decision you need to make. It already has tax implications attached to it. And the first tax implication is are we dealing with the character of capital gains in the equity sleeve and we’re dealing with income in the fixed income sleeve. Okay, you already have like made tax decisions at that point. So should you be augmenting portfolio allocation to make sure that your after-tax results are more favorable? Now again, to my earlier point, this is where more equity-like exposure starts to come into the fold. We haven’t even layered in any complex products or anything yet. We’re still just talking about stocks and bonds. But then if we’re expanding beyond those core allocation decisions away from stocks and bonds and we’re adding different types of accounts. Again, like you said earlier, ERISA, other qualified accounts, IRAs, whatever it might be. Now we have an extra lever to pull. Okay, great, maybe we should be putting all those bonds in the advantaged accounts such that we’re not realizing income or such that we’re not paying income tax and experiencing tax drag like on an annual basis. So that we can expand even beyond that and we can start thinking about planning around accelerating losses and deferring capital gains. If we start matching those income or we start matching those assets, tax assets, probably through something like tax loss harvesting as a trick, and we’re matching that with capital gains liabilities that we’re expecting either through routine portfolio management or through an exit, we can start matching these things and really pushing out tax into further and further years. And that’s really the planning opportunity there. And again, there’s plenty more we can do beyond that. But I think the basic tools, again, allocation and then location. And then if you want to get into the portfolio itself, there are specific products that might be able to dial in those concepts even a level further. I’m talking about things like no dividend ETFs to the extent that’s relevant and attractive to the investor. Brent Sullivan (09:47.567)And then there are other things now, interesting happening in fixed income. Okay, are there ways to defer the income such that, and to have it have a capital gains treatment instead of ordinary income? That’s probably, you know, those three tiers again, allocation, location, and then investment selection in the portfolios themselves, very powerful right off the bat. And again, we haven’t even done anything complex yet. Frazer Rice (10:08.115)So let’s dive into the complex. Tax loss harvesting, is really kind of the bell of the ball right now in the investment community and getting talked about on many fronts. Talk a little bit about the concept there of what it is to generate losses while maintaining the character of an investment profile that you think is appropriate for a client. Brent Sullivan (10:28.91)Well, OK, so let’s say that we’ve got a portfolio that’s 80-20 stocks and bonds. Let’s set aside the bonds for now. Let’s just focus on the stocks. So the stocks have capital gains treatment as an investment asset class. And what that means is that as the portfolio is oscillating around its cost basis, right? So you buy the portfolio, you buy an asset for $100, and it appreciates above the $100 to $110. You’re in capital gains territory, unrealized capital gains. If it trends below the cost basis, you’re in capital loss territory. And so the portfolio is bouncing around that critical number, the cost basis. If it’s below the cost basis, you have the opportunity to liquidate that asset, capture that tax loss, and then reinvest in something that is not exactly the same, but is similar in risk profile. Similar is the key word, not substantially identical. And the idea is that you’ve captured this tax asset sits on your household balance sheet and it can be unlocked and utilized when you realize capital gains somewhere else, again, in the entire household portfolio, as long as it’s still within the estate. That’s really the strategy there is to capture those tax losses and then to use them to offset gains that might be occurring elsewhere in the portfolio just through routine portfolio management, but it also might be through tax inefficient vehicles like managed futures. It could be from some income program, again, capital in nature, not income. And those are really the opportunities that are immediately present through tax loss harvesting. Frazer Rice (12:06.92)One of the things I think is important is that typically most people say, oh, if you’re taking losses, is my portfolio going down? The reason why this is appealing is that, you know, instead of having one index that represents a particular, say the SP 500, you’re investing generally in a basket of stocks that is Sam is a sampling of the S and P 500, which allows you to take advantage of the oscillation while maintaining the investment characteristics of the larger S and P 500 index. Did I square that correctly? Brent Sullivan (12:38.224)Yeah, 100%. Yeah, that’s it. I mean, so you’ve got S &P 500 exposure or Russell 1000, Russell 3000 exposure. And then what you’re referring to is really the granularity of individual holdings. And so you can imagine, if I hold one ETF and it’s oscillating around the cost basis, well, that these oscillations occur with much more violence and interest if the portfolio holds individual positions. The idea is that as those individual positions dip below cost basis, you sell them. You reinvest in something not substantially identical but economically similar such that you maintain the same exposure. So you’re still getting the benefit of appreciation in the portfolio and the same risk reward characteristics. But now you’ve got these tax assets sitting on your household balance sheet. Frazer Rice (13:26.123)Now, one thing that’s sort of popped up as a product enhancement in this type of scenario is the idea of embedding short and long term overlays on top of this tax loss harvesting so that you can get the notional value beyond what’s being invested and generate more losses in addition to having your exposure to the underlying investment. Maybe talk about that a little bit for the listeners. Brent Sullivan (13:55.995)Yeah, I would say probably the white hot topic in core portfolio management nowadays is exactly what you said, Frazier. It’s adding additional margin or it’s adding a margin to the portfolio and then complementing that margin with short positions. Just to give it like a simple example, suppose that we have simplest possible example is probably imagine you have an S &P 500 ETF. Okay. Start with that as your core allocation and then you borrow against that ETF, you use that ETF as margin and you add more long exposure. And so the long exposure, let’s assume that it adds another 100 % to the portfolio. So you started with $100, now your portfolio is $200 gross. And then you complement that extra margin long with shorts, and you do them the same as the margin. You have $100 core portfolio, $100 margin extension, $100 short exposure and the idea is that the long Margin and the shorts are market neutral such that the manager who’s handling this is really interested in relative value between the two So your gross exposure in that case would be 100 margin 100 core 100 short for 300 gross exposure But your net exposure is just that 100 and the again those those extensions are market neutral ideally such that we’re capturing relative value. That’s the pre-tax alpha argument. And then there’s a post-tax alpha argument where it’s like, there’s a lot of interesting opportunities to accelerate capital loss realization in the longs the shorts, depending on how violent the market is that you’re. Frazer Rice (15:41.069)That it’s one of the things that for the mad scientists among us, you can turn the dials and if you want something different than market neutral, i.e. you’re willing to take a little bit more risk on that front in the theory that you’re able to maybe generate some more alpha by in a sense just being a little bit more aggressive on the risk side of the investment. Then you’re able to dial in a little bit more return while going for it on the tax loss generation end of things as well. We’re seeing that with different clients here. where the market neutral is very interesting and as part of a core allocation, a good idea. Then they’re willing to listen to the manager underneath and say, might be an area where your prowess might be rewarded in a way that helps us on a pre-tax and a post-tax scenario. Brent Sullivan (16:33.628)Yeah, 100%. Yeah, I mean, so that’s probably the first order concern is always like, hey, does this investment make sense? Does it add, you know, maybe additional diversification principles, maybe, you know, whatever it might be, maybe pre-tax alpha generation. Like, that’s the first order concern. Does this make sense? And then once you’ve broken through or confirm that barrier, because you’re going to expose the portfolio to additional tracking error, that is to say difference between the portfolio performance and the underlying benchmark, these extensions have risk attached to them. If you’ve confirmed that it’s worth taking that additional risk and paying financing costs and whatnot, and all that is not free, then if all that makes sense, then finally you can say, actually there’s a lot of really great post-tax opportunities here too. And this really comes, let me just give you a quick flavor of it because it’s interesting. On the long side, this is just as if you had injected a bunch of cash into the portfolio. And so from my earlier example That’s just like you had reset the cost basis high again. So what that means is that the portfolio is pretty close to cost basis. Again, it’s oscillating around that really critical number. If the long extension dips below the cost basis, you can harvest those losses. That’s interesting, maybe even intuitive to some folks out there who are used to sort of direct indexing, typical tax loss harvesting. But on the short side, it’s really much more interesting. Essentially, your shorts are a bet against the market. Okay, so if the market keeps going up, there’s almost always, nearly always, I don’t wanna say it’s not unlimited, it’s not in perpetuity, but almost always, there’s an opportunity to capture losses on the short side. So this one’s quite simple to understand, it’s technically complex, but the idea is if the market’s going up, you have losses. Now that’s totally different than a long only mandate where if the market’s going up long enough, you sort of run out of losses, you run out of basis to mine. If you think about it as like a little gold pile that you’re working into to try to extract tax assets, that disappears over time. Long short extensions reinvigorate that possibility, I don’t know, say almost in perpetuity, almost, heavy asterisk there. Frazer Rice (18:44.068)That’s right. No guarantees or anything like that. The asterisk is in bold and underlined. So we’ve been talking a little bit about really in a sense diversified portfolios and allocating in that world. If we get into the concentrated portfolios, many people build wealth. They work at Google. People sell a business. They do something like that and they have or they have a business that haven’t sold it yet, but their wealth is concentrated in one thing or the other. What is the universe around that to help sort of a tax-efficient component of either disposition or otherwise planning so that capital gains tax is as low as possible and it can get to the next generation or elsewhere in a more efficient way. Brent Sullivan (19:28.634)Well, let’s start with the long short as a solution in that specific case, because this is a very popular topic. It’s also, advisors are very interested in it because I think, because they’re getting inbound from clients who are just like, hey, I’ve got this really gnarly situation. I’m holding, like you said, too much Google or I’m about to exit. So what can we do here? And I think this is really where the planning opportunity steps in. So if we assume. Frazer Rice (19:35.299)Mm-hmm. Brent Sullivan (19:55.397)Let’s assume that the investor is holding a publicly traded large cap stock just for simplicity. Let’s assume that we’re going to consider long short extensions around that concentrated position as a means to diversify, to de-risk over time. The way that that works is the investor would contribute, let’s say their Google shares into a portfolio margin account. And the portfolio margin account just essentially uses risk-based criteria to be able to dial up the leverage pretty aggressively on the margin and short sides. So the investor contributes the Google to a portfolio margin account and then uses, the manager uses the Google as collateral to again add that margin position on top and then shorts a complimentary portfolio to maintain that market neutral exposure. Okay, so you’re getting that pre-tax alpha that is helpful for, know, always pre-tax alpha never hurts. But what’s actually happening is that, or what’s really happening in compliment to the pre-tax alpha is that you’ve got a lot of loss realization. As you’re realizing capital losses, you are using those capital losses to offset capital gains as you wind down the concentrated position. Depending on the amount of leverage that you’re using in this portfolio, you can really exit the position tax neutral. That would be the objective. This is again, deferral, not avoidance. It’s deferral. You’re eventually pay the tax. Another strong asterisk! The idea is that you want to try to execute this position tax neutral and you can do so if you’ve not already realized the gains that the typical timeline with a heavily leveraged portfolio, something like two years to exit tax neutral from that concentrated position. And if you’re uncomfortable with really, really high amounts of leverage, then you can do it something like in five years. Frazer Rice (21:45.115)I mean for people who are thinking long term, two to five years is much more palatable than say the standard where you have this big bulky position and you’ve got, let’s say you came in at 200,000 and it’s worth a million, and you’re saying, gosh, how do I get from here to there? That’s a meaningful sort of absorption of time to get you into a diversified place. Brent Sullivan (22:09.562)So that is really the critical point that you’re making. Like what is a graceful way to get from A to B? So it’s like, do you know what you want? Do you know what B is? What’s your ideal state that you want to gracefully transition into? So if your initial state is concentrated stock and you’re like, wow, my ideal state is Russell 1000 diversification. I still want to upside exposure, but I just want to not be so idiosyncratically concentrated. Okay, cool. Frazer Rice (22:23.81)Mm-hmm. Brent Sullivan (22:38.128)What’s the most graceful way to get from A to B? And there are a bunch of different methods. Long, short, just a direct extension over a concentrated position will allow you to gracefully transition from A to B. Now, there are other tools too in the concentrated toolkit. Probably the simplest is, of course, just to sell it. You could just exit the position instantly. Now, is obvious ramifications, tax ramifications. Frazer Rice (23:03.788)Simple, graceful. Brent Sullivan (23:05.264)Not graceful, know, yeah, yeah, it’s like yeah, it gets yeah, it gets gnarly now that makes sense for some folks though You know just be done with it, you know, let’s transition. Let’s diversify instantly. You know, there are other tools there to like an exchange fund depends on the capacity the fun depends on the underlying characteristics of the name but probably for your audience I think it’s worth having the variable prepaid forward on their radar and so variable prepaid forward achieves a couple different objectives. First, the way that it works is you’ve got a concentrated position and then you can imagine a cap and a floor placed on that concentrated position and then a loan granted against that collared position. Then the loan is usually something like 75 to 90 % of the notional value of the position. So again, you contribute $100 worth of Google put on the variable prepaid forward. This requires an ISDA, it’s a very complex arrangement, but you put on the variable prepaid forward and then the loan that you’re granted against those $100 would be something like, again, $75 to $90. What you do with those proceeds is you put them into a diversification program. And nowadays, ideally, that diversification program includes loss harvesting potential such that when the variable prepaid forward matures, you’re able to match losses from the diversification program with gains from winding down the isolated position. You also retain the optionality to extend the variable prepaid forward. So again, like Frazer, just to your exact point, it’s just like, how do you get from A to B in the most graceful ways? There is just like the whole toolkit to get this done thoughtfully. Frazer Rice (24:46.506)Well, one of the things that, you know, if you start talking about the estate tax perspective, one of the tools is the step up in basis when you die. And so for some people who are willing to absorb that concentration risk, sometimes it’s worth holding onto those shares. if the idea is that you’re thinking long-term enough to pass them on to somebody else, you end up getting a step up in basis. Your estate does when those shares, when you pass away and then that capital gains part goes away. Now you have to net that against the estate tax. Fortunately, we have large exemptions in place, but that’s another tool in the toolkit that we think about. Brent Sullivan (25:23.984)It’s insanely valuable from a planning perspective. I think you could educate me a little bit here, from the on community property states, you’re going to get spousal step up. tell me about that, because that does come up with some regularity. Frazer Rice (25:31.84)Sure. Well, a lot of times you have to be careful in terms of how these are owned so that you don’t get half of it split and half of it not. Essentially there are some States that allow community property to be co-mingled into a trust so that you get the step up immediately. That deserves its own episode on its own probably. we’ll dive in. We’re going to, dramatic foreshadowing for our listeners, we’ll probably have a separate estate planning one, but Yeah, no, that’s a big deal where you have to really understand the characterization of the features there of ownership so that you’re not splitting one and not the other if it’s owned jointly. Brent Sullivan (26:20.794)Yeah, that’s a fascinating topic. That’s a real planning opportunity in community properties states. There are other solutions too we could get into another time. But just suffice it to say that like the planning opportunities here, this is really the work of an advisor, I feel. It’s not investment selection. I mean, to a certain extent, it’s investment selection, but it’s design, it’s thoughtful planning, it’s accelerating losses, deferring gains, optimizing gains, using tax as a risk mitigation device. That’s probably a little complex, but this is the work of a thoughtful advisor. Frazer Rice (26:52.288)No question about it the it just to get back into the estate planning world even though it just said we’re going to hit the pause button on that one of one of the main things that that in terms of getting things out of one’s estate the the basis carries over and so when you’re doing planning to get away from the estate tax oftentimes you’re not necessarily going to avoid the capital gains tax if you go sort of the simple route There’s the concept of a grantor tax status where sort of dialing up good estate planning is having the grantor or the donor of the assets into the irrevocable trust pay the taxes on that and that’s done by keeping a set of powers that makes it an incomplete gift. One of the things that we talked about I think in a different vein was the idea of in a sense having your cake and eating it too where if a grantor is able to put low basis assets into an irrevocable trust for and or maybe low basis and then they grow later so that the growth happens out of the estate maintain the power to substitute those assets which is that’s the real juice here uh… and then be able to substitute those assets that correct fair market and provable valuations through uh… through a firm uh… you know valuation firm. To substitute it with something like cash that has a high basis so that when you substitute, you’ve gotten the value out of your estate, but then you get the low basis back into your estate so that you can take advantage of the step up later when you pass away. Is that something that’s come across your desk? I’m sure when people are looking at everything from low basis of stock to companies to so on. We’re seeing it as well where people are saying, okay, you know, what are the best assets to put into these vehicles short and long term so that we try to avoid as much of the different types of taxes that are out there. Brent Sullivan (28:58.084)Well, I’m pleased to say that this is definitely a fringe topic. So yes, it comes up for sure, specifically swap power. as deep as we want to go on this, Frazer, we’re more or less bringing what some folks, I think, in estate planning would consider routine practice, where we would be shedding light on it. Because I think these opportunities are interesting, but I think are rarely discussed out in public. So I mean, that’s really the opportunity for us to create some really interesting knowledge sharing just for the community of listeners or both for my readers. I think this area is, it’s in its nascency if we’re talking about concentrated positions from a public exposure standpoint. Frazer Rice (29:41.886)One other thing to put a pin on so we can maybe discuss it and we’re now we’ve now created a whole new podcast not just different episodes but we’re seeing a lot of interest in private placement life insurance and private placement variable annuities really more as a location device in terms of allowing tax-free growth because these is this is life insurance But then when it’s stitched together with the estate planning component, because oftentimes life insurance is bought in order to match up with the liability of an estate tax. so when someone dies, it’s there. and PPLI is something that we’re seeing a lot more interest in because as a vehicle for owning alternative assets, which are usually high, high, highly taxable, either from an income or otherwise component, why not own it in a vehicle that kills two birds with one stone? You avoid the taxes on the sort of income and capital gains basis, but then you also get good estate tax treatment if you’re able to own it that way. Brent Sullivan (30:42.67)Yeah, totally. I mean, yeah, you’re going to educate me on all that stuff. I mean, that’s that’s one step beyond what I normally encounter, even though I’ve got the PPLI books sitting on my desk over there. Frazer Rice (30:52.564)It changes hourly because it’s becoming more more popular as we get going. the, you know, as we sort of, I don’t know if we want to wind down here quite yet, but the one thing that’s interesting here is we get to a, for people who are operating in that estate world with where executors and trustees and people who have what I call fiduciary with a “Capital F” types of roles. Do you get people asking you, know, what do I have to think about? If I’m an individual owning it, that’s one thing because those people are responsible for their own investments. I maybe they’re getting help from an advisor and there’s some back and forth on that, but the concepts are sort of limited to that person or that generation. So you start going to the world where you have to probate in a state or then manage a trust with these types of concepts. To me, the functions are important because you’re not only managing assets, like when things go wrong, you’re personally responsible. And that to me is, think, some of an area where we’re to have to discuss even further what we’re doing here because not having a really steady hand on the wheel and understanding what’s happening underneath all of this. If you don’t take advantage of these things, not only from an investment perspective, but a tax perspective, that people can come back at you later and that can get ugly. As an example, if you’re in a long short situation and someone passes away, in my mind, you want to wind that down as fast as possible because you don’t want liability to … all of a sudden balloon on you and then all of a sudden the beneficiaries of these states say well why didn’t you wind this down? Brent Sullivan (32:45.034)I think that’s one of the most interesting planning opportunities that I’m getting into the weeds in now. And so that’s like, know, just stepping all the way back. If we’ve got a portfolio again, that’s got margin extension and shorts, those are liabilities like on the household balance sheet or on the estate. Then the typical default behavior is that the estate has to settle all liabilities. Now, of course, if you don’t want to settle the liabilities, you want to exclude these assets from the estate using some vehicle. There’s multiple options. Could be a trust, could be an LLC, family limited partnership, a bunch of different solutions to ensuring continuity if that is the family’s priority. But then to your point, and it’s such a good one, it’s just like, if you do want to use a vehicle that requires a trustee, does the trustee know what’s going on here? Do they understand that there’s an alpha model and that the alpha model introduces tracking error into the family circumstances and that the portfolio has leverage attached to it? Now here’s an analogous case here, which might be real estate, The entire balance sheet of the asset passes. I think this is a very common situation in estate planning. Is that a suitable analogy for what’s happening with long short mandates? That investors want to keep on for decades? There are reasons for doing that, by the way. I mean, part of the reason is that they just want to keep the alpha exposure. Like, hey, this thing is great. I love this relative value. It’s market neutral. Cool, like let’s keep this going. Another thing is that if the assets are in the estate and someone passes. We’re going to settle and if we have unused capital losses, they essentially evaporate. They don’t pass on. Okay. But if these assets are excluded from the estate, those losses are part of the balance sheet. They just like keep on, they can be continually used by future generations. There are a lot of just different interesting concerns here. To your earlier point, are trustees familiar with what’s going on? Maybe this is actually all routine and I’m just not privy to that, but I think, yeah, I mean. Frazer Rice (34:51.417)I’ll tell you right now it’s not. The whole body of law has evolved that way so that there’s a concept called directed trusts. The functions are bifurcated. the mailbox admin component can be one person or one institution. The distribution decisions can be more family oriented, et cetera. That can be a group of people or an institution. And then the investment part, that can be a different group of people or an institution. a lot of people got frustrated with the idea of having a bank sort of taking control of all that. Their gut instinct is going to be to diversify because they don’t want to take any investment risk because if something goes wrong, it’s going to be the, you know, the beneficiary on one hand 25 years from now who sues and says, well, you know, why did you do that? In a more familial situation. The trust law has really, in a sense, stepped ahead of some of these concepts, probably really to deal with the real estate wealth that you were describing before. These new tax alpha strategies are becoming much, much more of an asset and much more of a short and long-term asset that A, have to be taken seriously, and then B, I think have to be managed much more adroitly than I think the typical trustee can deal with. Brent Sullivan (36:08.388)Yeah, especially when talking about nuanced expressions of planning. When we’re talking about utilizing these losses very deliberately for a specific purpose. Whether it’s for the trust itself. Because the trust is a taxpayer, it’s got compressed brackets, all of that is a planning opportunity. How is a trustee gonna handle all that? That seems nuanced to me, but it also seems like there’s incentive, I guess, at that point for the… The assets to pass to the heirs like almost as soon as possible for the trustee to mitigate liability. Is is my understanding right there? mean, like. Frazer Rice (36:46.373)So the short answer is yes. I mean, if you’re a trustee, you’re set up to be investing as prudently as possible. The real leap forward in the last five years, is these tax tools have become so powerful so quickly. Prudence now has to be looked at on a pre-tax investment perspective and a post-tax perspective. Then the other sort of component of that is if you’re the trustee of a limited vehicle, just a trust. Whereas you’re advising a whole family and sort of going in between individual ownership and trustee ownership. Pre estate and post estate and things like that. It’s not fair to take somebody to task for that. Especially if they’re the trustee of a specific trust from a pure legal perspective. I see a big thing coming down the pike. Someday where someone said, the trustee did not take advantage of the tools that were available to us. And we had a tax bill that we shouldn’t have paid. whether shouldn’t, shouldn’t’s doing a lot of work there. And there’s probably going to be a 95 page brief describing the underpinnings of shouldn’t. But that’s something that I think modern trustees, especially in the directed world. Modern investment directors of these trusts are going to have to really understand well. I think they understand that well in the real estate sense. All the 1031 exchange things have become sort of fait accompli knowledge for people who own that. These new tax rules on the investment side are going to be important to digest and understand. Both from a strict trustee in the trustee role, but the advisors that are advising. Brent Sullivan (38:40.496)I mean, you made this incredible point. The power of these strategies is that it gives additional planning flexibility to advisors. And now you’re saying, OK, trustees also have this additional flexibility. Are they going to be taken to task for not prudently administering the “tax assets” that are sitting on the trust balance sheet now? That’s a really interesting concept. It’s sort of like if we zoom out we’re saying like these products are actually quite powerful. It’s funny to think about somebody being held accountable for not exercising or using them to their full potential. And that’s an interesting wrinkle, but it’s suffice it to say investors are, I think, well served by these products. I don’t want to go too far there, but I want to say that these are planning capabilities. These are important arrows in the quiver. Frazer Rice (39:13.945)No question. Brent Sullivan (39:39.894)They have a suitable profile for an investment household. And I think in certain circumstances, they are just incredibly useful planning devices, especially multi-generation. Frazer Rice (39:53.518)Question. Let’s stop there because I think we could go on for four hours. Frankly I need to get my research hat on to know what I’m talking about for four hours. What a treat and Brent how do we how do people get a hold of your blog? How do they find you and stay in touch with your work? Brent Sullivan (40:14.004)I’m sorry, I’m very obnoxiously on LinkedIn all the time. This makes some folks shame on us. We’re on the cringe platform, but just having a ball there, it’s fun. But yeah, LinkedIn, you can just search for me, just Brent Sullivan. And then my blog is taxalfainsider.com. And I’m in market three times a week. So new stuff, and this is usually expert interviews. It’s oftentimes really, I think, some novel research on Frazer Rice (40:17.527)Me too. Frazer Rice (40:23.158)Exactly. Brent Sullivan (40:43.95)These issues specifically. I’m really talking about core portfolio management and nowadays spending a lot more time in estate investigations. So this is highly relevant for me anyway. You can find me at TaxAlphaInsider.com. Frazer Rice (40:55.563)Well, and for listeners and watchers on the show, I highly endorse it. learn a lot every time it pops up.I’s got a nice little dose of humor attached to it too, so it’s a lot of fun to read. Brent Sullivan (41:08.304)Yeah, mean, you know, we’ve got to keep it light, serious. I mean, this work is deadly serious. We need a refresher every once in a while, just because it’s, yeah, because it’s hard work. Frazer Rice (41:20.153)No question. Brent, thanks for being on. https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/ Further Reading on the Wealth Tax

In this conversation, Frazer Rice and PAUL HOOD delve into the evolving role of trustees, particularly in the context of Delaware’s new Well-Being Trust Statute. They discuss the broader responsibilities of trustees beyond mere asset management, emphasizing the importance of understanding beneficiaries’ needs and the implications of well-being provisions. The dialogue highlights the challenges trustees face in balancing the interests of multiple beneficiaries, the potential liabilities associated with well-being services, and the necessity of having clear processes in place. The conversation concludes with reflections on the complexities of trust management and the importance of careful drafting in trust documents. https://youtu.be/9LFt6HsjpWM https://open.spotify.com/episode/4uqhoeXtfaIIWLbKhd62ej?si=nDTf-09bRSWjT0O_YKX49g Takeaways Trustees have a broader role than just managing assets. The well-being statute in Delaware is an opt-in provision. Balancing the needs of multiple beneficiaries is challenging. A clear process is essential for trustees to navigate their duties. Well-being provisions can complicate traditional trust structures. Trustees must be cautious about the liabilities they assume. Decanting trusts can lead to unintended consequences. The intent of the settlor is paramount in trust management. Trustees should document their decision-making processes. Effective communication with beneficiaries is crucial. Sound bites “I would never opt into 3345.”“Decanting is not that easy.” Well Being Trust Chapters 00:00 Understanding the Role of Trustees04:45 The Concept of Well-Being in Trusts10:33 Balancing Beneficiary Needs17:53 Navigating Well-Being Responsibilities24:30 Challenges and Considerations in Trust Management Well Being Trust Transcript Frazer Rice (00:01.078)Welcome aboard, Pop. Paul Hood (00:02.648)Great to be with you today. Frazer Rice (00:04.598)The Delaware legislature has tried to give us some new tools to give us a holistic approach to planning for trustees and for beneficiaries. Help us sort of think through first from a function perspective what trustees do. I always thought of it as, you know, they held assets for the benefit of beneficiaries and then with that they have to administer them, they have to invest them, and then they have to distribute them. Have we got that about right? Paul Hood (00:35.34)Well, I’ve always had a broader view of trustees. Jay Hughes, a good friend and fellow pilgrim in this field, he talks about the trustee as a persons with confidence and like a trainer, an elder, and for a lot of beneficiaries, and I believe trustees, especially in discretionary trusts, The trustee needs to be that. There needs to be some attention to the person of the beneficiary, not just the finances. Send us a budget. The distributions committee who’s in secret will meet, and we’ll decide how much we’ll give you. Well, I think a trustee’s duty is broader than that. Or let’s say this, you can meet the minimum requirements of being a trustee by doing what you said, but I think the very, very best trustees are persons with confidence. Frazer Rice (01:41.17)I agree with that. The problem is identifying the people who mix the temperament and the talent and then paying for them. So to that end, with those different functions, the world of bifurcation came about. Directed trustees where people got to be good at certain things. Maybe you had a good investment person, you had someone who was with the family who understood the dynamics from a distribution standpoint. and then the administrative side making sure the I’s are dotted and the T’s are crossed as far as the administration’s concern. How do you view that in the evolution of the trustee function? Paul Hood (02:17.612)Well, it’s interesting because I haven’t been in practice. since well the 20th anniversary of Hurricane Katrina is August 29th of this year. My life changed that day. I didn’t know it but it did. And I left Louisiana. So I haven’t practiced law in 20 years but I remember the directed trust percolating up and it was driven by the investments. People wanted the bank trust or the institutional trustees but they hated their investment performance. So the compromise was, okay, we’ll reduce our duties because the bugaboo was always whether it was a proper delegation of investment authority. The trustee could still be held liable for what if the court thought it was an improper delegation, okay, or oversight of the delegation. They started out investing right, but then they got real heavy in crypto and foreign flips. you can go there. So we’ll take fewer basis points, but we don’t have the liability for that. That liability is not delegated. We have segregated it. But enter the Wellbeing Trust, and this is only true in Delaware in the Wellbeing Trust statute because it’s an opt-in. Once you opt-in, you are required, the trustee and all the advisors are required to perform that those well-being, provide those well-being services. Now the question is who is responsible for providing them. Frazer Rice (04:16.891)Let’s step back for a second. The well-being provision, which is designed to give the trustee the tool to promote, improve, advance the well-being of the beneficiaries, which I think we can agree is a good thing in concept. What do we think of well-being as being? How is it defined? And what part of the function is it taking from the trustee’s perspective? Paul Hood (04:45.228)Well, I’m going to default back to, I think it was Potter Stewart who said he knows pornography when he sees it. I think that’s the same with well-being. I think things are either obviously well-being related and are not. And there’s a continuum of them. But the whole concept, I think it’s just pretty much to promote the betterment, the improvement and the just the the maintenance personal maintenance of a trustee i mean of a a beneficiary Frazer Rice (05:26.269)So how do you think about it from a trustee’s perspective when there are multiple beneficiaries and maybe the wellbeing for one is not the wellbeing for another? Very often a trustee has to balance a lot of different equities and I don’t mean that from a stock perspective, sort of taking care of one possibly at the expense of the other with the trust’s assets. How does the new statute in Delaware address that? Paul Hood (05:54.222)Well, and you raise an excellent point. what you said, you were talking about equities, okay? What it really is, is the trustees duties. And the big one is the duty of impartiality. And arguably, the 3345 statute, and I’ll call it that, that’s the wellbeing statute. That’s the opt-in. They have another one and it is to provide, it’s an immediate power. It was added to 3325 as number 32 in the Delaware trust code. And it allows almost the same things. It empowers trustees, now not the advisors. It doesn’t say anything about the advisors in that statute. Whereas 3345 includes, and remember in Delaware an advisor is like the trust protector and the administrative trustee, that kind of thing. They call them advisors. I don’t favor that language because I believe that they should all be fiduciaries. So I call them trustees because I think in the end they’re going to be held, especially if they’re professionals, they’re going to be held to that standard as it is. But that statute was immediate when the law went into effect. So they’re authorized to provide those services now. For me, would provide, I would never opt into that statute. Because why do you want to take on a mandatory duty that’s unclear? Frazer Rice (07:30.12)That’s it. Frazer Rice (07:34.908)Yeah, it sounds like a Roach Motel where you get in but you can’t leave. That’s right. That’s right. So if you were to encounter one of these trusts in the wild and you’ve got multiple beneficiaries, but let’s say three, one of them needs a lot of help. Another one could use the help and then the other one is completely self-sufficient. How do you… Paul Hood (07:40.35)Eagles Hotel, California. You can check out anytime you like, but you can never leave. Frazer Rice (08:02.693)sort of build a process around that so that you are being impartial but you are invariably taking away from potentially the corpus of the trust in order to effectuate different goals as they develop for these beneficiaries. Paul Hood (08:16.782)Well, it obviously starts with the settlors intent. And it’s the settlors intent first as set forth in the instrument. However, because this is not a court case where you’re construing, because I I used be an expert witness, know, construing, you know, problematic clauses in operating agreements, trusts, wills, whatever. You, you, you, you construe that including more information you investigate. The trustee, let’s look more, because you look at the language and well it would authorize it here, but let me find out a little bit more. If the settlor is still alive, I would at a minimum also talk to the settlor, okay? Also, if he or she is not still alive or sentient, I would investigate. I would talk to other people. I would make that into a process so that when you’re questioned down the road, here’s my process. Anytime you have a process, you’re better off. When all that planning was done in 2012, you know, and we filed more gift tax returns. I was the only guy in the country saying, don’t. put your marginal wealth clients into anything big, irrevocable. I said, because I think this is gonna work itself out. And for six hours, I was wrong on January the 1st, 2013, but there were lawsuits. And Jackson versus Colon was one of the cases and poor Colon, the lawyer got sued. because he didn’t have a process for evaluating whether his client had put too much or had retained sufficient assets after they did this planning. So it’s all about a process in the end. So instrument, settlor, and I would investigate and I would wrap it up into a process that was documented. Frazer Rice (10:36.848)So if I’m a clever beneficiary, I look at something like this and maybe if there is a HEMS standard, which made it imprudent maybe for the trustee to disperse assets to me, I might go to a wellbeing component of a trust and say, well, you know, maybe this is something that I could petition the trustee for assets. Is that an area of concern for you or is this something where those are two different things entirely and therefore not particularly related. Paul Hood (11:10.998)I think the latter. Well, first of all, obviously every beneficiary trustee relationship is different. And it’s governed first by the trust instrument. What is the beneficiary entitled to from a standpoint of distributions? You know, do they get an annuity? Do they get a unit trust amount? Do they get fiduciary accounting income? Are they only a discretionary beneficiary of principal and or income? You have to look at all of that. So if it’s something that isn’t covered, well then, you know, the answer’s probably no. Because while I think that the well-being provisions are similar to him’s, they’re not identical. And that would concern me. And that’s if I was drafting it. I would not allow the trustee if it was subject to a HEM standard. And I’m not a big fan of HEM standards. I think they expose you to asset protection, problems. There a lot of things. And I’m just not a fan of it. I like wholly discretionary trusts or unit trust, annuity trust distributions. Easy or hard. That kind of thing. for me, the well, and particularly if it’s an interested trustee, I would define it so it cannot, whatever wellbeing power is exercised stops at the Hems line, the Hems County line. It cannot cross over because then you’ve got a state, know, of course, if there is a state tax problem. Frazer Rice (13:08.216)Right. No, and to that end, you know, I was thinking about this as we were sort of leading up to this today. And, you know, from a prenuptial planning standpoint, I would think the well-being clause would frustrate sort of prenuptial planning with regard to the assets of that particular trust, because a good family lawyer would take a look at that and say, well, you yes, there may be discretionary elements that the trustee has, but overall of the well-being sort of transports not only to you, but maybe the rest of your family slash kids, that that should be part of negotiation in a divorce settlement. Is that something that’s popped into your head or am I fantasizing poorly? Paul Hood (13:50.386)Doesn’t that undercut the holy discretionary nature of the trust? And I don’t see how it doesn’t. Do you? Frazer Rice (14:28.612)No, it’s mandatory, it’s “shall” versus “may”, those two words are important. They’re important in other parts of law too. Paul Hood (14:39.278)Well, and the statute uses, the statute uses shall. Frazer Rice (14:44.078)Yeah, well, I agree with you then. it’s mandatory, mandatory does a lot of things to the word discretion for a trustee’s perspective. So point taken to be sure. Paul Hood (14:53.23)Well, I can tell you this. If I was running a Delaware trust company today, first thing I would do is I would never opt in to 3345. Not until the legislature fixes a few things. The directed trust, sure that whoever clarifying who’s responsible. So if you have an administrative trustee and a distribution trustee and an investment trustee, investment trustee is probably not gonna be involved, okay? It’s going to be one or the other two. And it’s going to depend on what the service is and how it’s treated. If it’s treated as distribution, would argue that the distribution advisor is the one who has the duty and the liability. But their statute right now does not protect, or at least the 3345 statute, does not protect those in that bifurcated All we did when we started the whole idea of this type of trust is to basically segregate because trusts are the bifurcation of legal and equitable title. Beneficiaries have equitable title, the trustees have legal title and the duties. And we’ve just subdivided legal title and those duties. But in the statute they all seem to get melded back together, commingled in a way. So I would not if for a directed trust there’s no way I mean the trust instrument would have to be so beefed up to make sure that was clear that despite what the statute says here’s here’s what our deal is but I’d feel better if they changed the statute. Frazer Rice (16:55.331)So it is a practical matter. Anybody who takes these roles on, takes on, know, with great power comes great responsibility, as Ben Parker told Peter Parker. You get these incredible amounts of power and responsibility and therefore liability. is a practical matter if someone has to, has to, mandatorily deal with the well-being component here, whether as a distribution advisor or as a full trustee. How do you get around that? mean, how do know that you’re picking the right advisors or not subjecting beneficiaries to the drug addiction industrial complex or the psychological industrial complex? And maybe a better way to put it is if you get going and you’ve made a mistake, how do you fix it or… Can you turn it off later if the problem is solved but you have a mandatory duty for well-being? Paul Hood (18:01.782)Well, and that’s a great question. And your comment about the addiction complex, I call most treatment programs 28-day spin cycles. And that’s why the rate of success is so little and so low. So I get that. Yeah, how do you turn it off? And what do you do if a beneficiary says no thank you? Frazer Rice (18:16.033)You Frazer Rice (18:32.216)Yeah, that’s a good question too. I was just gonna say… Paul Hood (18:34.796)Well, I’ll give you another one. I’ll give you another question. What if five years from now you’ve opted in and a beneficiary says, you know, I’ve been damaged because you should have provided me this service three years ago and I’m going to sue you or try to remove you for breach of your duty to provide those services because you didn’t guess right. Frazer Rice (19:01.291)Right. Paul Hood (19:01.516)And I think that gets to where, I think that gets to your concern about all this. How’s the trustee gonna know, right? Frazer Rice (19:08.95)Well, and you know, knew or should have known that, you what happens if the beneficiary lies to you, which happens in tough situations like that. It’s just a brutal one. I look at that and say that, you know, when, that function is melded with larger funding and distribution functions, I, I come to the conclusion, okay, why wouldn’t, why wouldn’t you have a separate trust if the grantor wants to Paul Hood (19:17.814)lot of Frazer Rice (19:38.699)provide for the wellbeing, why wouldn’t you endow, let’s call it a self-improvement trust or something like that with extremely limited functions and distributions and segregated from the bulkier assets so that you aren’t mixing those functions and creating a real quagmire for the trustee to navigate, you know, when they’re worried about selling the company on one hand and then taking care of this on the other. Is this too many functions delineated in the setting that we’re providing here? Paul Hood (20:14.402)Well, I just did a webinar for Lionbird with Jocelyn Borowski from Duane Morris. She has written about well being trusts. She and her partners and firm worked in the committee drafting. I think Todd Flubacher was on that committee. That is, she made that point. that you either could call out a part of a trust that is limited to the wellbeing or you create sort of a sidecar wellbeing trust. And I think that’s a good idea. One thing we did not get to, and I didn’t, and it really slipped my mind to ask, are Trustee and you’re obviously much closer to Delaware than me sitting over here in Michigan and close to Motor City. Are trustees doing anything about this? Are they implementing these types of programs? Frazer Rice (21:19.655)From my perspective, yes. IThey have asked the trustees to fund or take assets and fund a variety of things, whether health or beneficiary education programs, governance programs, things like that. The short answer is yes, I think that happens all the time. I think they folded that into some of the distribution provisions. I if I haven’t seen this specifically, but if I were a good trustee, I’d want a note signed by the various beneficiaries that are participating in this saying that we’re doing this to provide an improvement in this or that. We’re doing it in a way meant to further family goals and sort of set out by the grant or somewhere. But I don’t know of any. corporate trustees that are doing this other than maybe as an add-on service that is separate and apart from their trustee function, which I bet they probably take great pains to put up firewalls so that the decision-making on the fiduciary side is a little bit different from the service provision on some other side. Paul Hood (22:31.176)I think that’s probably right. Again, right now, if I was a Delaware trustee, it would be no opt-ins and by no, even if you wanted to opt in, never, never, never on a directed trust, which now most trusts are. You know, about almost 30 years ago, Frazer Rice (22:53.12)Sure. Paul Hood (23:00.474)I spoke to a national group of trustees of a bank that is no longer here. And I told them, if y’all make the mistake of going to 1-800-TRUSTEE and quit making the hard decisions, you’re going to go the way of the dodo bird. There about 400 of them in the room. And they looked at me like deer in the headlights. And I was right about them because that’s essentially what they went to and then they went down. So, and this is a big national bank. it’s, is, this is, these are the times that tri fiduciary souls and, and, Frazer Rice (23:49.749)at fiduciary insurance providers too. I’m sure. Paul Hood (23:53.678)Well, that’s exactly right. And you had mentioned about could you, you know, could you. get out of it, could you change it? Well, one obvious way is a non-judicial settlement agreement. We all get together and we force King John to sign the Magna Carta on Runnymede. We go from there, but I can see accountings going forward. When they ask you to sign off, there’s gonna be a wellbeing accounting. And it’s going to include things like, okay, here’s the services we provided. Here’s the values, blah, blah. And that’s all the services we believe you need. And if you need something else, you need to let us know. I’d try to flip as much of it back on the beneficiaries as I could. Frazer Rice (24:51.141)and when you open up the idea of qualitative benchmarking to the trustee function, if I’m wandering into a trustee situation personally, I’d be going, no thanks. Hence the term qualitative. There’s no amount of money you can pay me to guess whether someone will sue me 15 years from now. Paul Hood (25:04.438)Right, right, right, because you can’t quantify your risk. Paul Hood (25:18.892)Well, you’re exactly right. And I think that’s where they ultimately are going. I don’t know, because I haven’t been able to investigate and Columbo the information out yet. Because I will go back and pardon me, one more question for you. What I want to know is why… did they, what prompted them to think they had to act then with a quickly enacted law? And my suspicion is the big banks, they all have their upper end concierge service. I Wells Fargo’s Abbott Downing, know, Ascent, I think is US bank. And those groups, Merrill has their own, those groups have PhDs in family psychology and wealth psychology and everything else. They’re providing those services now to their people. And I think the Delaware trustees want to make sure they don’t miss out on that train. But with that comes a lot of liability, as you said. Frazer Rice (26:35.029)Yeah, and also they had to find a way to pay for it. Those services aren’t cheap. Those people are expensive. And invariably, the trust tends to be a pot of money to compensate for that and maybe the only pot of money. And if it’s unclear whether that’s an allowable distribution, mean, that to me, I agree with you, that’s probably part of the reason they did it. I think there’s a good reason they did it, which is ultimately providing another tool in the toolkit for the trustee to help with the long-term wellbeing of the beneficiaries. We’ve gone through a lot of different references before. The road to hell is paved with good intentions here. I think we’ll probably agree that there might be some better precision with the drafting here that could make this a better tool for everyone involved. Paul Hood (27:29.326)Well, I will tell you another area that and Jocelyn agreed with me on this. If you read the unit, the Delaware’s version of the old UPIA. because Umifa replaced it. Okay. If you look at their law, it’s unclear where to charge those well-being payments, whether they’re deductions or distributions . If you look at the new Umifa, they charge 100 % to principal for those services. Jocelyn said under Delaware law right now (and this is something she agreed that they needed to change) those services are all 100 % chargeable to principal under current Delaware law. So that’s another area they need to change. Frazer Rice (28:28.659)Crazy stuff. Paul Hood (28:28.81)You did let me also go back to something that you mentioned about turning it off. Okay well obviously besides the NJSA that we talked about there’s also the possibility people say just decant it out. Well be careful before you decant because people are getting bad news. in state fiduciary, I’ve seen 18 adverse decisions in the last three years in state fiduciary duty actions. And they’ve involved more than just the trustee. A lawyer in an Illinois case got zapped by his malpractice carrier in a decanting. They said it was an intentional tort and excluded from coverage. Another lawyer got disciplined for an improper decanting. People are saying, this is easy. Just pour the bottle in, new trust. It’s not that easy. Frazer Rice (29:24.391)Yikes. Frazer Rice (29:39.059)Perhaps for the unwary. Paul, great stuff. Let’s pause there because we can probably go on for two more hours. How do people find you and your writings? Paul Hood (29:48.318)well, have a lot of webinars and articles at lineburgservices.com. My website, paulhoodservices.com has a lot of my latest articles, as well as some, real interesting checklist, one of the best client development tools that I’ve ever seen and I developed it and I bet it’s for free on my website is my buy sell options grid. And there’s a lot of other stuff there. My email is Paul at Paulhoodservices.com. I get questions from people mostly all over the country, but occasionally from foreign countries. And so, and I’m, you I always respond. Frazer Rice (30:30.803)Great stuff and go Tigers. Go G-E-A-U-X. Further Information on the Delaware Well Being Trust Statute Todd Flubacher Article INDIVIDUAL TRUSTEESHIP Keywords trustees, well-being, Delaware trust code, beneficiary needs, fiduciary duties, trust management, directed trusts, trust responsibilities, estate planning, trust law https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

We go inside the the enormity, complication, and notoriety of the BEZOS PRE-NUP AGREEMENT with divorce attorney, MARILYN CHINITZ of BLANK ROME. https://youtu.be/nMMp6He056Y https://open.spotify.com/episode/39KMPMRhwGfYbdZVMJHEan?si=36c5c8a927bf4a6f Outline of the ISSUES INSIDE the BEZOS PRE-NUP General Concepts What happens without a pre-nup? Process for disclosing assets Previous marriages and those pre/post-nups? Community vs Equitable Distribution (Does the Pre-Nup contract this away?) Separate property Outside trusts?  Estate Planning? Pre-nup vs ultra high net worth pre-nup Financial Considerations (and Complication) Non-Financial- NDA, media activity, scope of negotiations, data and tech issues Let’s go through the General Fact Pattern High Profile Asymmetric Net Worths Kids? Which state is used for choice of law? Portability?  How do you make sure this has teeth?  (Coercion penalties) Spousal support / alimony? Escalator or sunset clauses? Disqualifying or  “infidelity” or “weight gain” clauses? What happens if children? Other constituencies – charities, businesses, political causes etc  Integration with estate documents, life insurance, other vehicles Is there a check-in every five years? What else can we learn from what is inside the Bezos Pre-Nup? Transcript Frazer Rice (00:02.07) – Inside the Bezos Pre-Nup Welcome aboard, Marilyn. Marilyn Chinitz (00:04.088) Thank you, really nice to be here and nice to talk to you about what’s inside the Bezos Pre-Nup. Frazer Rice (00:07.541) We sort of regaled ourselves with a mutual friend and we’re already, I feel like we’re already related. That’s right. So we’re going to talk a little bit about probably one of the highest profile marriages in the world that just happened with the Bezos Sanchez union and get inside the Bezos pre-Nup. But for just for a little bit here, let’s talk about what happens in a sort of family law divorce setting. Marilyn Chinitz (00:13.39) Your best and glorious buddies are ready. Frazer Rice (00:35.232) With general concepts because we’re going to be diving into some specifics with the case study here. What happens when something goes wrong and we have a divorce that happens without a prenup? Marilyn Chinitz (00:46.734) So it depends what state you’re in. If you’re in a state like New York, then we have equitable distribution laws. If you’re in a state like community property in California, then those laws are very different. So if you have no prenup, and a lot of people don’t because they start their marriage with very little assets, and everything that you acquired during your marriage is now subject to a division. Frazer Rice (00:49.569) Of course. Marilyn Chinitz (01:15.918) And what happens is you start to trace the assets and you look at, what do I have? You look at homes that you purchase, real estate that you purchase, stocks, securities that you purchased. It doesn’t matter in whose name the asset is held. It’s a marital asset if it was acquired during the marriage and it was not gifted or inherited. If you come into the marriage with assets and you have no prenuptial agreement and you keep those separate property assets clean, and I’ll explain what that means. When they go up in value because you actively caused their appreciation, they may be subject to a marital claim, the appreciation aspect. If you… have an asset that went up in value because of passive reasons and you kept that asset separate, it will remain separate property. So let’s talk about an example. If I owned a building before I got married and that building was worth five million dollars and then I get married and years later I get divorced, that building is now worth twenty million dollars. It appreciated by 15 million. Did it appreciate because of market fluctuation, because the market went up, real estate did better? Or did it appreciate in value because I managed it, I collected the rent, I made sure the repairs were done, I made renovations to the building, and therefore it went up in value. If it went up in value during the marriage because I actively did something, I renovated, I took care of the building, I managed the building. That appreciation from five million to 20 million is gonna be considered marital. Then the question is, what percentage does the other spouse get? Do they get 10 % of the appreciation or 50 % of the appreciation? If that asset went up because of market fluctuation, I sat back, I did nothing, the market went sky high. Marilyn Chinitz (03:38.905) Then that property will remain separate property and the appreciation is separate. So you have to look at those different factors. But other than that, if you come into the marriage with no assets and you create a marital estate and you have no pre-nup, that marital estate is going to be divided. Now the question is, how is it going to be divided? If you’re in an equitable distribution state, Frazer Rice (04:04.907) Right. Marilyn Chinitz (04:08.718) What does that mean? It means what a particular judge feels in a particular courtroom on a particular day. What does equitable mean? It’s completely subjective. So did the other spouse take care of two, three children while you were managing that property? Did the other spouse work but supported you? Or did the other spouse do their own thing and had no real contribution? It’s very fact specific. And if you can show that the spouse really contributed in a meaningful way while you were running your business or running your properties, I took care of the children, I took care of the home, I took care of you, then the court is likely to give you a more substantial percentage interest of that appreciation. And in New York, for example, equitable, and then we’ll talk about community, California, for example, generally, Bank accounts, retirement accounts, stock security accounts are going to be divided pretty much 50-50. Where the court will not give 50-50 is if it’s a business. And then the court can go anywhere from 10%, 15%, 20%, up to maybe 40 % in unusual cases. What do those cases look like? They work together in the business. They took care of things together. It’s very unusual for a court to give 40 % interest to the non-working spouse unless they were really actively involved in the business. Now, conversely, take California, which is a community property. When you get married and you acquire property in California, that’s 50-50 off the bat. Now, why does that become really important? We’re seeing a lot of cases where people have really created a lot of wealth in their marriage and they are correctly and smartly putting some of that wealth into trust. They’re gifting it to a trust for their children. New York, for example, is a title state. A title state means if I own the asset during my marriage, I can sell it, I can gift it, I can do whatever I want with it. Marilyn Chinitz (06:33.718) As long as there’s no divorce. If you are in a community property state, you can’t do that because that person, that spouse already owns 50%. It’s almost jointly owned. So you can’t give away a marital asset unless you consult with me, your spouse, unless you ask me, is it okay? So in New York, if I wanted to take an asset, an interest that I own during the marriage, it’s a marital asset, but because there’s no divorce, there’s nothing that prohibits me, I gift it to a trust, I have the right to do that. In California, I may not have the right to do that unless I got my spouse’s consent. So, number one, what’s critically important is you need to know what the laws are in the different states. Now, Sometimes people get married. They get married in New York. They enter into a prenuptial agreement in New York. But now they move to California that has very different laws. And if they thought they were going to move to California, then you want to make sure as a New York lawyer to advise the client, we need to engage California counsel. We need to find out what their laws are so that your prenup is portable, it could be enforced in a different jurisdiction. Frazer Rice (08:03.559)So choice of law, obviously very important. Then I would say sort of the process and hygiene around using assets and deciding what happens jointly versus what stays separate is something that’s important to manage going forward. How do you think about that with clients? Marilyn Chinitz (08:20.346)So, I mean, interestingly enough, when I do a, let’s talk about prenups for a minute. Because when I do a prenup for a client, we have a check-in every year. We go to lunch. We talk about what changes, what’s going on. Does the agreement need to be modified? So many times people will sign a prenuptial agreement, they put it away, they don’t even know where they put it. And 20 years later, sadly, somebody triggered. the terms of that agreement. Now they pull it out and they go, my God, everything’s changed. When we signed that agreement, he was only worth X amount. He’s now 20 times wealthier, but I didn’t increase anything. That’s not fair. If the agreement is…an agreement that you entered into with the advice of counsel. If the agreement had full financial disclosure, if the agreement was negotiated, if you had your own counsel, etc., all the bells and whistles, it may be an unfair agreement, but it’s going to be enforceable unless it is unconscionable. So what does unconscionable mean? Unconscionable means shocking to the conscience. So I represented, and I could say it because it was in the media, Liba Icahn, married to Carl Icahn. And he had a prenuptial agreement prepared, and she signed it. Years later, he decided he wanted a divorce. And she argued to the court, I was not her first lawyer. I was not her second lawyer, I was her third lawyer. And I’ll tell you why that was important. She argued to the court that the agreement is unconscionable. He’s now worth several billions of dollars, and all I got was X amount of dollars. That’s unconscionable shocking to the conscience. And the court, lower court said, well, I’m sorry. That’s a lot of money for most people. And by the way, in the statement of net worth, there’s a notation that there’s a diamond emerald necklace worth Frazer Rice (10:23.239)A lot!. Marilyn Chinitz (10:42.56)A million and a half dollars. So coupled with that, there’s nothing unconscionable about your agreement. Now, it was appealed, but the more important thing is that the court said the following. You are barred by the statute of limitations to set aside the agreement. So years ago, you had six years to set aside a contract. Now, if you’re happily married, You’re not going to wake up and go, hmm, honey, it’s six years. I got to set aside that agreement. You don’t do that. And so finally, a judge in New York County, Phyllis Gangel-Jacob, wrote a decision that said, wait a minute, that’s unfair. We’re going to toll the statute. Because people, they’re happily married, they’re not going to wake up and say, I’ve got to change the agreement. Frazer Rice (11:34.961)Right. Marilyn Chinitz (11:35.151)You’re going to toll the statue until there’s a triggering event. And then you have six years to set it aside. Now you would think a seasoned lawyer would know that we talked about knowing the law in different states. You’ve got to know the law in your own state. So in New York County, the first department, Phyllis Gangel Jacobs said, toll the statue. That would have meant that Mrs. Icahn would not have been barred by the Statue of Limitation. She could have brought her case to set aside the agreement. In Westchester County, that’s the second department, they had a totally different law. They went by a six-year Statue of Limitation. So had her lawyer made inquiry about how that…ruling how the statute of limitation works in the different departments, they would have probably started the action in New York County because they owned a home in New York, not just in Westchester. So when we were chit chatting before we went on, I said to you, it’s all about being in the right hands. You can’t be sloppy in this business. It’s too complicated. It’s too detailed. You’ve got to have an attorney who really goes out of their way to find out what’s the best jurisdiction, what are the different rules, what are the different laws. I had a client in Hong Kong and she would have jurisdiction in New York or Hong Kong. We then retained Hong Kong Council to find out what would be the benefit if we brought the action there versus here. I had a similar situation a year ago where I had a client who had jurisdiction in Germany and jurisdiction in New York. That was critical because her husband came from a very wealthy family and there was a lot of separate property. In New York had she brought the action, the court would have said separate property, you don’t get any portion of it. It’s remained intact, no commingling, no transmutation. That’s his. In Germany, they throw everything into the pot. So I called German council and I said to her, you need to go and pursue this in Germany. It was the best decision because in Germany, she had the access to all the assets. Frazer Rice (14:04.732)Again, it’s so hyper-specific. You’ve got to know, as you said, not only the state, but in the state, how things work. Whenever I wouldn’t go as far as to say I advise, I really more issue spot. I had a friend of mine, it wasn’t a client, but basically New York, Florida, Dallas, Texas, and then got married in Ireland. I said, you’ve got a lot of things to work out here because I’m not sure which one’s the best. Marilyn Chinitz (14:11.416)Correct.Yeah. Frazer Rice (14:32.63)And it turned out to be a good thing for him five years later on when it didn’t work. And he ended up using Florida for whatever reason that was the one to choose. So let’s apply. Marilyn Chinitz (14:44.654)You reminded me of something that I did want to bring up because it’s very interesting. So a lot of people will get married and they’ll have these big weddings and big affairs and invitations and come to our wedding and it’s a destination wedding and there is all the bells and whistles. But what happens if you didn’t have somebody to really officiate the wedding? It was someone who just signed up with a website. Marilyn Chinitz (15:12.556)What happens if you did not get the marriage license? And we’re seeing a lot of cases like that, where people thought they were married and they’re not married. Frazer Rice (15:24.008)Those technicalities could just cave your knee in. Marilyn Chinitz (15:26.348)Right. that’s right. So then you look fact specific. Well, let’s see what they did inside the Bezos Pre-Nup. Let’s see how they held themselves out. So it is so many complexities. And that’s why it’s really important that you need to have an attorney who’s in the know who asked you these questions. Frazer Rice (15:42.747)So let’s apply some of these concepts that are inside the Bezos Pre-Nup. First of all, high profile. So I imagine in the prenup that you’ve got not only the financial, which has its own elements to it, but the non-financial, the NDAs, media activity, what the scope of negotiations are, even so far as the things like data and tech issues and privacy. How do you think about that in those big high profile cases? Marilyn Chinitz (16:08.782)I will tell you, I was in Italy at the time they got married in Italy. And it was like on every station in Italian, but it didn’t matter. was all you’re doing is looking at all these beautiful people and beautiful dresses. And it was very elaborate. The thing that I found very interesting is what happened before the wedding? So what happened before the wedding is Bezos, I think, sold Frazer Rice (16:14.2)Right. Marilyn Chinitz (16:37.294)Over three million Amazon shares, generate about $700 million. Was that used for the wedding or as a gift or whatever? But I thought that was an interesting fact. So when you have a prenup like their prenup, number one, it was negotiated over a very extended period of time. And it was viewed not by one lawyer, not by two lawyers, by a team of Frazer Rice (17:02.797)Whole fleets! Marilyn Chinitz (17:05.966)Trust and estate lawyers, tax lawyers, real estate lawyers. This was structured as if it was a business merger. And it was carefully structured to withstand any kind of scrutiny, because there’s a lot at stake, obviously. He had already gone through a divorce where there was no prenup. And that resulted in a $38 billion award to the wife. I think that was great. because she started the company with him. But now you have a different situation where he had this massive wealth long before he got married. Amazon stock, Blue Origin, Washington Post, real estate, and the future appreciation of those assets, just to name a few. There’s a lot to protect here. And so clearly, there’s going to be a massive amount of financial disclosure. Because every prenup has to be accompanied by full financial disclosure. You can’t wave something when you don’t know what you’re waving to. Frazer Rice (18:13.657)Question. So, Lauren Sanchez gets a book of his finances that’s two feet thick minimum. At what point, the detail can be overwhelming and the marriage may not have ever happened if there was, let’s call it complete understanding of his financial situation. At what point do you sort of say, okay, here’s generally what we think he’s worth and therefore that number underpins? Marilyn Chinitz (18:41.868)Well, here’s how you do it. It’s not that complicated. It’s called a title agreement. Everything’s in my name is going to be mine. Anything in your name, Lauren, will be yours. What will be marital is what we put in joint names. It’s very clean way of keeping it. So if he buys interest in future companies and private investments, properties, et cetera, and he puts it in his name, then under that title agreement, it’s his. It doesn’t get sloppy. If she purchases something, it’s in her name, it’s hers. If they purchase something together and they put it in joint names, it will be a marital. But he may say, I put in some separate property. I get that back off the top, it comes to me. Frazer Rice (19:32.706)So once we get that in place, the idea of if something were to go wrong five or 10 or 20 years from now, the concept of alimony or spousal income or any other sort of payout, how does that happen in the negotiation? Marilyn Chinitz (19:51.159) Inside the Bezos Pre-NupSo, you know, you have to look at, let’s put it this way, if Lauren Sanchez is gonna walk away with $400 million, she’s not getting support, right? That’s obvious. And we know she’s not walking away with $20 million. You could have in the agreement that for every year that we’re married, I give you a million dollars, that’s your separate property, you do whatever you want with it. That’s not an uncommon situation for very wealthy people. But what he wants to do is to make sure in the agreement that she does have wealth so that it’s a fair agreement and that he does create marital wealth that they end up sharing. So I’m sure some of the houses and I believe that they already have homes that are in joint names under the agreement will probably be a marital asset. So off the bat she’s probably going to end up with a significant amount of wealth. If this marriage lasts a long time, do they put in a sunset clause? Most likely not. know, sunset clauses can be very dangerous and clearly under the law, he’s entitled to all the separate property because he earned it long before he ever met her. So I don’t expect that there is a sunset clause in there. But let’s face it, you can gift your spouse whatever you want. But it doesn’t have to be in the agreement. So if he is so happy and the marriage is fantastic and they live a very long time, he may never look at this agreement and he may give her a substantial amount of assets jointly or in her name and make it very, very fair. What happens though, a prenup is not only what happens in the event of divorce, it’s also what happens in the event of a death in an intact marriage. I’m sure that he wants to fully protect her. If they’re not divorced and God forbid he dies and it’s an intact marriage, there could be a marital trust that’s set up, you know, that has $200 million or $400 million or more. She gets the interest on that so that she’s well taken care of for the rest of her life. And, and, you know, everybody says that he’s an incredibly kind, generous person. Marilyn Chinitz (22:18.156)I’m sure he’s also made provisions for her children inside the Bezos pre-nup and estate planning. Frazer Rice (22:21.111)How does this integrate with the other pre or post-nup or the divorce settlement with the first wife and then with those estate planning documents? That to me, you’ve got a conference room with the marital family law attorneys, the estate planning attorneys, her attorneys. How does everybody stay organized on that front? Marilyn Chinitz (22:45.774)So it’s something that we do all the time and you separate it out. Look, there’s a lot of issues that get involved in these kind of agreements and settlements and as I said, a business merger. There are tax issues, right? So if he gifted her anything before marriage, that’s a taxable gift. So… The estate lawyers know that nothing should be given to her until after their marriage. And then these trusts are very sophisticated. And you separate out what’s trust related. When you put assets into a trust, they’re no longer part of the marital estate. They now belong to a separate entity. And so these trust and estate lawyers carefully craft trust that are going to accomplish different things. One, could be to take care of a spouse’s health, education, welfare. One could be to distribute property or principal. It’s not uncommon. It’s very common when there are agreements like this that you have people who are of extraordinary wealth. Mackenzie, the prior wife, has nothing to do with this at all because she got her Amazon shares. And I’m sure those shares now are worth probably $180 or $200 or $300 million because they’ve gone up. But the first wife issue, there’s no issue. If you got $38 million, you’re not a support candidate. He doesn’t have to consider it that. So this is really being looked at as if there are no other factors involved. But this is probably why the negotiation of this agreement took place over a long period of time. Frazer Rice (24:44.802)For the some further down the pike certainly not at the Bezos level but let’s say at the high net worth level where you’ve got outside trusts that you that you don’t have ready access to there’s a trustee that can make payments at a discretionary basis. Do you have to be careful as far as how you receive money that’s distributed from a trust so it doesn’t get tainted ultimately. The other spouse if they’re divorcing that that’s not part of, you know, maybe a standard of living that they’d become accustomed to. Marilyn Chinitz (25:18.836) INSIDE THE BEZOS PRE-NUPThat’s a very, very good question. So I’ll give you an example. Joe and Mary marry. Mary comes from a wealthy family. Her family set up a trust and put $20 million in that trust for her, for her benefit. And during the marriage, he made a lot of money. Marilyn Chinitz (25:42.2)I’m sorry. During the marriage, he made a lot of money. They lived a good lifestyle. Her parents would on occasion distribute money to her. But it was a discretionary distribution. 20 years later, they divorced. And he said, I don’t want to pay you any support. We’ll divide up the assets, but you get no support. And the reason why you get no support is you’ve been getting distributions from your parents. That’s more than enough to take care of your expenses. And she said, That’s not fair. It’s discretionary. I don’t know when my parents are going to distribute. I can’t force them to distribute. And therefore, I’m asking the court for support. Well, the court agreed with her. The court said it’s a discretionary trust. And therefore, we can’t she can’t bank on when she’s going to get it because she may not get it. You must pay support. So the court will look at again, fact specific. Are they discretionary or are non-discretionary? If she was getting distributions on a regular basis, the court would impute that, its income to her, they would consider those distributions because they’re non-discretionary. She’s getting them, she could rely upon them. She could use it to pay her own expenses and her own support. Frazer Rice (27:08.766)Is it good hygiene, I guess, to have it go into an account in her name as opposed to a joint account? Marilyn Chinitz (27:16.842)If you want, well see, you’re raising really good questions. Here’s why. If you want something to be separate property because of the gift of an asset, if you put it into joint names once you get it, you’ve now commingled it. You transmuted what was separate and you’ve now made it marital. So if you get a distribution from a trust or a gift, You’re going to have to put that in a separate account in your name only. And let’s say you buy stocks and your husband works for Morgan Stanley. And he says, well, wait a minute. I can trade that account for you. I’ll make it go up in value. Once he does that, he’s actively contributing to the appreciation. He will now have a claim. I caused that account to go from 800,000 to 5 million. I want a piece of the appreciation. So when I said to you earlier, I meet with clients a year later, and it’s really to say, keep your assets separate. Do not commingle them. If you did, then you may have lost them. What does the financial circumstance look like now? People can amend a prenup. They can enter into a postnup. But you’ve got to look at the agreement to know what you signed. If you look too late, it may be too late. Frazer Rice (28:41.63)So I hate to wind down on this because we’ve gone through and there is a ton of unbelievable information here. Most of us do not have the Bezos Sanchez wealth, not only the asymmetry, but the size that we’re talking about here. What are some good lessons for people to take away? Either going ahead and marrying or if circumstances changed after the marriage? Marilyn Chinitz (29:07.63) So I think there’s so much wealth of information out there. I think number one if you are I Think prenups are great. First of all, why because you learn about the other person’s or or debt So a lot of times people live a very lavish lifestyle. They have a beautiful apartment. But you don’t know if there’s a mortgage on that apartment. They have a beautiful home in the Hamptons but is at their home. They drive a fancy car, but is there dead on it. So when you enter into a prenup, you have to make full financial disclosure and all you find out, wait a minute, I thought you own that apartment. You don’t own that apartment? Or you bought that? Did you borrow against it and it’s all debt? Or you owe this to your former spouse? And now all of a sudden you’re finding out the full picture. You can make a decision, yes I want to marry that person, but you’re in the no. Being in the no is important on every scale. So if you’re to enter into a prenuptial agreement, number one, you want to get the best attorney, and you need to know and have the time to really negotiate the terms, you have to understand what do I want to accomplish? Do I want to create a marital estate? I recognize you came into the marriage, let’s keep that separate. I agree to that. But anything that we build together, I want that marital. You take the time to negotiate. You don’t rush into it. Never sign an agreement given to you on the heels of a marriage. Do not feel pressure. You’re not doing yourself a service at all. So having good counsel, financial people, a good team of professionals, I find is super, super helpful. And then in terms of… What happens after marriage? Again, stay in the know. Don’t tell me that you didn’t know that there was a mortgage on your house. That he refinanced three times and you signed the documents and you have no equity in the home. So ask your spouse, tell me what’s going on. Sit down every year. Marilyn Chinitz (31:30.146) (INSIDE THE BEZOS PRE-NUP)Can we look together and figure out what we have because if God forbid something happens to you I want to make sure the children and I are okay. Can we go and meet with a trust and a state attorney because we need to understand in case anything happens how do we set things up. If you just close your eyes and you bury yourself you’ve buried all the information and who wants to do that in life. I think no one should be afraid to ask questions nobody should be if you are then you’re in the wrong marriage. But you have every right to know, what do we have? What kind of debt do we have? How would we pay this off? How are we protecting ourselves in the event something happens? Should we get life insurance? Should we put some assets in trust so that it grows in the trust tax free? There are important decisions to make in marriage, just like there are important decisions to make in business. You don’t enter into a business transaction and sit back and hope everything goes well. You are a part of things and make decisions. And that’s what you have to do in your marriage. Frazer Rice (32:35.876)Great stuff. Marilyn, how do our listeners slash watchers find you? Marilyn Chinitz (32:39.51)So I am a partner at BlankRome, B-L-A-N-K-R-O-M-E. I’m in the matrimonial department. If you go on the website, you’ll see my name, my email, my phone number. And it was pleasure talking to you. Ask great questions. Frazer Rice (32:54.268) Inside the Bezos Pre-NupLikewise, thank you. Other Resources Related to Pre-Nup Planning and Inside the BEZOS Pre-Nup LINKEDIN FORTUNE ON INSIDE THE BEZOS PRE NUP PAST EPISODE: ULTRA-HIGH NET WORTH DIVORCE WITH BROOKE SUMMERHILL https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/ https://www.northcarolinadivorcelawyersblog.com/billionaire-vows-what-jeff-bezos-prenup-teaches-us-about-high-stakes-marriage-planning/ Inside the Bezos Pre-Nup

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 does scale very well with wealth. Right. And so I have these six levels of the Wealth Ladder and I can walk through those and then talk through the spending real quick. So level one is less than $10,000 in net worth. Level two is 10,000 to $100,000. Level three is a hundred thousand to a million. That’s like your typical middle class level four is 1 million to 10 million level five is 10 million to a hundred million. And finally level six is over a hundred million dollars. When you apply this to the 0.01 % rule, that means, you know, let’s say you’re in level two, that marginal decision when you divide by 10,000 is going to be between $1 at the beginning of level two up to $10 by the end of level two. So I call that grocery freedom. Like when you’re at the grocery store and you’re trying to decide which brand of an item to get like eggs or cage free eggs, the difference in cost is going to be somewhere between one to $10, right? It’s a small difference. Level three, which is a hundred thousand to a million dollars in wealth. When you use the 0.01 % rule that ends up being 10 to a hundred dollars in the marginal spending decision. So I call level three restaurant freedom because when you’re at a restaurant, when you’re deciding which item to purchase, the difference in the cost could be anywhere between you, let’s say 10 up to let’s say a hundred dollars at the extreme. If you’re getting like a nice steak versus, you know, just a, you know, a salad or something that’s much cheaper. And so you start thinking through this stuff and that rule I found is very helpful for spending. Lastly, in terms of how my wife and I do our finances, actually wrote a blog post about this recently. We kind of have a joint account where all our income and expenses go into. Nick Maggiulli (09:11.644)And then I’m sorry, all of our income goes into all of our expenses come out. And then if there’s like, if I’m assuming we’re, know, earning more than we’re spending. our, you know, there’s a growing balance in that account over time. We will then do like quarterly. We’ll take a distribution. We’ll say, Hey, okay. We have an extra 20 grand in the account. Okay. You take 10, I take 10 and we take that as just like almost like a. dividend payment to ourselves, right? And then we do it again for another quarter and we’ll keep doing that. and obviously if we need to, let’s say we need to buy a house, then we need to take our, from our separate assets and we put money back into the joint account to buy something. So if we, we need to put down a hundred K on a home. Okay. She puts in 50, I put in 50 and then we, know, into the joint and then we buy from there. So that’s just, it’s a simple, very easy way of doing it. It allows for separate assets throughout the marriage and it also, so can kind of have your own assets. At the same time, there is this joint component, is like everything’s pro rata in terms of income and expense splitting. Frazer Rice (10:02.633)uh… i’d really like to get the point of one percent rules of the general framework uh… great little rule from one of the things that you know as i get older uh… i i have a greater appreciation for cash and having comfort in the cash balance and is as you move up the ladder even for people who get in the ten million hundred million and center and certainly not that but the uh… would like to be but uh… not quite there That cash component, which in some ways, there’s a comfort and safety aspect to it. It stitches interestingly with your last book where if you can keep buying assets that accumulate produce income over the course of time, that that’s a good outcome too. What did you think about in terms of that? Did that come across your authorship while you were going through? Nick Maggiulli (10:55.508) on the Rungs of the Wealth LadderIn general, like the whole idea of the Wealth Ladder is that every level has a different strategy you can focus on. And so in level three, the love, the strategy I talk about, and once again, level three is a hundred thousand to a million dollars in wealth, which is about 40 % of us households. I consider that like the middle class in the United States, that wealth level, the strategy there is just keep buying. Right. The strategy for that is that book basically. And because it’s like every, you know, if I say, if I want to get from level three to level four, what do I need to do? You need to keep investing in income producing assets and just give it enough time. And, know, in theory, if you do that and you do it for, you know, 30, 40 years, you should be able to get into a million to 10 million. And of course that’s not going to be true of everyone. Some people need to raise their income to make sure they can save enough to do that. But that’s a part of that. And so when I was thinking about. you know, income producing assets, all those types of things. It’s really a flywheel up the Wealth Ladder because the more income you have, it’s usually easier to save. Then you can take that money and invest it in income producing assets, which create even more income, which makes it even easier to save. And so like you end up getting this flywheel where the amount of income in each wealth level just keeps kicking up. Like in level four, the median household incomes about $200,000 in level five, it’s closer to $750,000, which is, know, once again, level five is 10 million to 100 million. And by the time you’re in level six, which is over a hundred million in net worth, the median household income is $4.3 million annual income. You can see like from 200 to 750 to 4.3 million, there’s just these massive jumps in income. And a lot of that is due to wealth, right? Once you have wealth, that wealth is usually kicking off income for you. And so it makes it a lot easier. Frazer Rice (12:32.056)The as you get up the ladder here and I guess this is some of the, know, where my day job kicks in and you have to start thinking about the spending that goes beyond you, beyond your family. And you’re worried about different constituencies, whether it’s charitable or generation two or three or even four. That the flywheel for income also turns into a flywheel for expense in many ways. And this is something that it’s easy to. It’s easy to observe, sometimes different to experience. What did you see on that front when you were talking to various experts in that world and how people handle it? Nick Maggiulli (13:14.004)So I don’t know too much about generational planning and I didn’t focus on it too much in the book. I talked about it briefly but once again I focused on the non-financial aspects because thinking through the finances of a multi-tier strategy it’s not my area of expertise like a multi-generational like approach. I have no idea how you would even structure that. can start guessing at that but it’s not something that I’ve done for a long time or anything like that. So I didn’t focus on it too much. The one thing I did think it’s easy to overlook as I said earlier is You’re probably not. need to make sure that the, you could set all that stuff up, but if you don’t have the right conversations and the right relationships with those family members, it’s very likely going to fail. Right. And so I think as much as I care about the math and the structures and all those things, which I don’t have the expertise in the other piece is like, wow. You need to think through how you actually approach this from a personal standpoint. Like how do you approach this with your children? How do you how do they all make sure that we’re all on the same page and everyone feels like it’s fair you know and your will and you know the trust you set up etc. So when I’m thinking through that I am thinking through the non-financial piece because I think it’s the most overlooked right like you can pay someone if you’re if you’re in level five you can pay someone to do all the other hard stuff like all that expertise stuff that that the person in level five may not have any expertise and you can pay people to do that right. The thing you can’t pay someone to do is to get your relationship with your children correct. That’s on you, right? So when I’m writing the book, I’m saying, what are the things that the person in level five actually need to do? They need to do this because the other pieces can be paid for. This piece can’t be paid for and that’s the difficulty. Frazer Rice (14:50.758)You know as I tell people that you know there are a lot of smart people that can help you get through the tax and finance and legal and all that that that’s beside the point but the communication aspect if you don’t get that right your your house is on us on a rickety foundation. You know I to sort of flesh out the point a little bit differently I’m now in sort of a world where you know when people come to me asking my advice on this stuff yeah there’s the blocking and tackling but it’s really a citizenship exercise it’s defining the terms under which you living within the family and with living underneath all of these resources what are the rights and obligations that come with it. Without a real firm understanding of what that looks like you know the rest of it, it’ll be in place and it’ll give you a chance of maintaining things from one generation to the next but It’s certainly not going to solve for everything and it probably won’t be flexible enough to deal with life as it intervenes and causes people to veer off in different directions. Nick Maggiulli (15:55.604)Yeah, that’s very true. so once again, it’s always difficult, even when the communication is set up properly, like things come up, the future’s hard to predict, like bad luck happens to people, right? All sorts of things can happen that derail these generational wealth planning ideas and concepts. But. At end of the day, you gotta just try your best and hope for it. And then once again, by the time you’re gone, you’re not gonna know the result anyways. It’s one of these, like you just imagine, you imagine all this stuff and it like doesn’t really matter. You’re gonna pass one day and that’s the end of it, right? Frazer Rice (16:18.35)Right. I was recently been dealing with a trust that was set up so long ago. was essentially electricity was recent. The airplane was recent. There’s no way any of the things that we worry about and stew over were even contemplated in terms of the different levels of spending, the different risks that were out there. so you do the best you can with what you’ve got. The difference between this book and Just Keep Buying: was there any difference in writing it and the publishing process we talked about a little bit that was a little bit different? maybe take us through what it was like getting off the post high and I would describe it as sort of a nice slow burn in terms of sales with Just Keep Buying and how that fed into finding the topic that you were interested in and then getting through the process of doing it. Nick Maggiulli (17:25.034) on The Wealth LadderYeah, so we just keep buying the writing process was, you know, 70% old blog posts that I stitched together. I created a structure and then kind of cleaned it up a little bit with the wealth flatter. It was based on a blog post I did in December 2019, but I had to take this one little, know, I spent five to 10 hours on this one blog post and then I had to take it and expand it and just dig deep onto every single sub concept and come up with new concepts and really clarify. A lot of my ideas. I remember when I posted the Wealth Ladder blog post in December 2019. It was on the front page of hacker news for like eight hours, which is like crazy. And so I read every comment in there. People had all these comments about the post. this post doesn’t address this doesn’t do this. I addressed every single one of those in the book. I went through every comment and I addressed all of them. So if someone’s going to read this book, they never heard the idea was like kind of getting a site. It was getting a insight into the hive mind. What do people think about this. Someone’s going to start reading this and say, wait, what about this? keep reading. It’s addressed. It’s going to come up later in the chapter. Right. And so all those types of things, I think that for me was very helpful because it gave me this insight of like, Hey, here’s the pushback I’m going to get. As soon as I address it in the text, people are like, wow, this person thought this through. And it’s like, I tried to do my best with that. So in terms of the Wealth Ladder writing process, they both took about the same amount of time to write. obviously the wealth letter is far more new material. Like I would say it’s like, you know, 70 to 80 % new material and the old blog post that became it was like you know 20 percent of it if that and then I expanded from there so I’d it’s mostly new material versus my old book was you know mostly old blog post and so that’s the big difference here in terms of the writing process I still think Even though this was new material, I had done it before. So I kind of know how to write a book. You know, the most important thing is the beginning and just getting the structure set up. And once you have the structure, the writing is not as difficult. As long as you know kind of what you want to say roughly in these chapter, the writing isn’t the hard part. The hard part is, in my opinion, is the structure. Right. And I think that’s where a lot of books go wrong because they just put a bunch of stuff together. They don’t think about the structure and that structure is the planning. It’s like the plot of the book in some ways. And so that is very important. And I think it’s probably the most important thing when writing. Frazer Rice (19:31.237)I’m fascinated that the Wealth Ladder Reddit subheadings and so on where people went in and had the different questions for you almost, you workshopped it before you even workshopped it. And also you almost had a focus group in place to kind of help steer it correctly. When you were doing Just Keep Buying, you didn’t have any of that really. We were just sort of writing and some things were popular and some weren’t and you sort of picked and choose between them. Nick Maggiulli (20:01.298)Yeah, it was more like that. And so I did have some feedback from people telling me about different ideas and different things. So there was some but it was more just like what I remembered I didn’t have. I can still go right now. I can search it on hacker news find that article click on it and go and see every single Comment that’s ever been posted on it, right? Patrick O’Shaughnessy said something or he talked to someone on one of his podcasts one time. He said a lot of things that succeed usually succeed like right out the gate. That’s not true of everything. Some things take a very long time. Compounding all the stuff, but you get like a, an insight that this could succeed, right? There’s always a possibility. Usually get some feedback. The fact that this blog post did so well said, Hey, there’s something more here. I would have written it sooner, but just given the timing of everything I started writing, just keep buying in 2021. So I had to kind of go through that cycle, let that play out. And then I said, Hey, In late 23, I was like, I need to start thinking about the next book. I started thinking through that. Go through the agent process, talk to the publishers, et cetera, and go from there. It all worked out in the end. I had let that process kind of finish before I could get back to the wealth ladder. That’s when I knew I was going to write it. After I wrote Just Keep Binding, I knew I was going to write this book. I just didn’t know when or when the timing was right. And late 23 was the time to start. And I had the manuscript done by August, by October. I didn’t really start writing it until really April ish I kind of had just ideas But then we signed the contract in April and then I really started writing in April and got it done by October. So Frazer Rice (21:28.727)Sometimes being obligated by a piece of paper like that can create focus for you. Those people who are writers out there, just keep buying with one publisher and wealth ladders with a different one. There’s pluses and minuses with everything. Was there anything particularly helpful about the new publisher? That sort of helped get things pushed forward or create some focus where maybe… Nick Maggiulli (21:32.233)Yeah. Mm-hmm. Frazer Rice (21:57.876)You didn’t have the same type of thing with just keep buying. Nick Maggiulli (22:02.026)I think the there’s two things that a bigger publisher can offer you. One is money, obviously, like pay upfront, like nothing against Harriman, but they just have a different model. And the second is they’re just, they have a bigger marketing. They have like, you, have a publicist now I have a specific publicist for me, right? There’s a marketing person I work with, right? The design team, it’s everyone’s just hot. Like this, if I had self published the Wealth Ladder, I wouldn’t have a cover this good. And I’m not just saying that, like people have told me like, my God, that’s a great cover. There’s six wealth levels or six, you know, everything kind of just fits very nicely. And so I wouldn’t have been able to come up with this stuff on my own. And of course we went through rounds with the cover and this and that, and I, you know, went back and forth and they came up with this. said, wow, this is great. I love this idea. Let’s kind of keep expanding on it. And so that’s an example where if I went self published or something, it just wouldn’t have come out as good. And so I think there are times in working with a publishing house. There’s just a like a higher quality unless you know a good designer a good editor a good like you can go down the line unless you know all these people already you kind of want to go with a publishing house because they have this expertise and if it’s not I just want to focus on writing and doing the best writing I can do and like let the rest of the stuff up to the publishing house. That’s my goal. And so whatever I’m that may change in the future. I may not use a big publisher again. I’m not sure. I got to see how this does how the marketing does like all those different things or what’s really important to me. Frazer Rice (23:19.244)Cool. So, we’ll wind down here. The book launches when? Nick Maggiulli (23:25.228)July 22nd. So by the time this comes out it will be out. It should be out now. So Frazer Rice (23:30.253)be more thrilled for you on that front. Between that and the day job, what’s next? Being married, you’ve got a lot on your plate. You’ve got the next probably six plus months framed out in terms of making this a big success. Have you got any other projects in mind? Nick Maggiulli (23:49.322)I don’t have anything framed up for this. It’s like, let it release and see what happens. See what opportunities come up, which ones don’t, et cetera, and go from there. Next big thing, I mean, next big thing in my life is probably gonna be me, you know, if God willing having a child. hen that’s gonna happen, who knows? We have to kind of wait and go through that process. but yeah, so that’s about it. I don’t have any other big plans. Just kind of doing my thing, staying with Ritholtz, promoting this book. We’ll kind of see where it goes from there. It’s hard to know the future. Yeah. Frazer Rice (24:15.98)Well, I’m ecstatic for you, And we need to get dinner shortly. those, Wealth Ladder is here. And I got to read it and watch it through its gestation period. So it’s been a lot of fun and I’m thrilled that it’s coming out. Nick, how do people find the book Wealth Ladder? I assume it’s on all major platforms, that type of thing. Nick Maggiulli (24:19.27)I appreciate it, Frazer. Yeah, Amazon Barnes and Noble, Target bookshop.org anywhere you can everywhere books are sold. You’ll find it. Frazer Rice (24:45.384)and how do people find your blog? Nick Maggiulli (24:48.162)Ofdollarsanddata.com. You can also follow me at Twitter slash X at dollars and data. I’m also on LinkedIn at Nick Maggiulli or on Instagram at Nick Maggiulli. So, and I respond to every DM. So you have a question, feel free to send one to me. I may be a little delayed because this week is launch week. Whenever it just depending when you get to me, I can, I will definitely try and respond. Frazer Rice (25:06.762)Put up a big sign when you go on your honeymoon so you can enjoy that please. Nick, thanks for being on. I appreciate it. Nick Maggiulli (25:10.492)Yeah, of course I will. Something of that nature. Thanks for watching. HEAR MY INTERVIEW WITH NICK FROM HIS FIRST BOOK: JUST KEEP BUYING. https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

The Business of Estate Planning is in the midst of a revolution- or is it? BRANDON RAINS discusses advising clients responsibly, profitability, and the “firm of the future.” https://youtu.be/a7VdZvrH9LI 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. https://open.spotify.com/episode/6FeR3ACd8vXVkKyMZODnlu?si=Q0XrGGMRR92usDUiKcsT9g Outline for the BUSINESS OF ESTATE PLANNING What is involved with the process of educating/advising a person or family ? Good judgement, discretion, and experience is something worth paying for What does drafting and implementing involve? The benefits of “Professional Liability” and experience The intersection with technology / AI / drafting tools The dangers of DIY How to be a good client and get to adult conversations sooner Puttng thought into staffing important roles (and backups) Ongoing maintenance / administration Transcript Frazer Rice (00:02.954)I’m Frazer Rice. Today we have Brandon Rains. He is a practitioner in Colorado and owns his law firm in Denver. We’re going to talk a little bit about the business of estate planning and what it’s like to have an ongoing profitable enterprise when trying to help people arrange their affairs and do the right thing as far as advising. Brandon, welcome aboard. Brandon Rains (00:22.222) Thanks, Frazer. Pleasure to be here. Frazer Rice (00:23.926) So we’ve had a nice back and forth on the topic and maybe tell us a little bit about your practice generally and what you do, who your ideal client is, and then we can go into why we think it’s important to get paid for this type of advice. Brandon Rains (00:42.254) I my own firm about nine years ago, the Raines Law Firm, very originally and imaginatively named. I was leaving my previous firm, was interviewing with a bunch of other attorneys trying to find a good landing spot, and it just kind of hit home to me through those conversations and kind of debriefing with my mentor that they’re lots of times the state planning attorneys interact with their clients in the same way, generally speaking across the board. In some of those aspects, just not necessarily how I’m wired as a person, not that it’s necessarily better or worse or anything like that. I just felt that there might be more space and to kind of throw my elbows around within my own firm to kind of figure out what that could look like for me and serve clients in the best way possible. so started from scratch and still here and alive and kicking. Frazer Rice (01:38.028) So one of the things that I think is interesting is, I talk to people all the time and they indicate that they don’t understand the process of drafting and implementing and what does a lawyer actually do in putting together in a state plan? Take us through little bit about the process of advising and educating a client to help them understand what they’re identifying as far as an issue is concerned and then solving it. Brandon Rains (02:04.942) Well, I mean, think some of it is some of that answer is kind of what you would expect, right, which is asking good questions and listening. Beyond that, I think a lot of attorneys are going to be really different. I know that some attorneys that I’ve talked to, they have very strong feelings about our role to make recommendations, sometimes even tell the client what’s best for them or not. I think there are some situations where that makes sense. Again, it’s even though that’s not how I go about it, I think that they have, there’s some good sense there too. Some, think there’s a lot of decisions that can be personal that the client is best positioned to make those decisions of. so for me personally, kind of shy away from making recommendations for the most part, helping them have the information and advice and counsel that they’re looking for, for them to decide what’s best for them and their family. That’s kind of the tack that I take. For other attorneys, I know that they have stronger feelings. It’s like, we are not going to do this. This is not a good option. This is, you know, the best ones might say that and then explain why. But generally speaking, walking the clients through the decision-making process, I think offering that advice, being able to explain things in layman’s terms is so incredibly vital and important. Throwing… Legal jargon in our world doesn’t really offer too much help to people. They’re just going to end up just dazed and confused and going along with whatever you say because they don’t understand any better. I think deep down at the end of the day, that’s not really anything that what anybody wants. then, you know, understanding the questions that we’re asking, the decisions that we’re guiding our clients through is vital. as I understand, we’re gonna be talking even more about later on the benefits of working with an attorney as opposed to other options out there. But I think it’s kind of touching on that. And then on the back office side, you know, there’s over the last 10, 15 years, the growth of centralized drafting software programs has proliferated. Brandon Rains (04:31.982) Whereas before each firm would have their own templates and Word documents, copy, replace, copy, paste, and replace, and stuff like that. I know that there still some firms that still prefer to do it that way. But third party companies providing the forms that company, that attorneys or their staff use.has kind of proliferated. I personally am in that camp just being able to learn from hundreds or thousands of other attorneys and their experiences and the process of keeping those documents up to date with legal changes. It’s a lot easier with something like that. But sometimes that sense of ownership of those documents is lessened when someone else has prepared them and updating them and maintaining them. Sometimes it’s easy to take it for granted. But the process of drafting, the basic principles of drafting of legal advice are the same, really is we need to match the language that we prepare for our clients to their goals and their vision, their hopes, their dreams, their concerns. We really kind of capture all of that in the legal documents and do it in a way that’s understandable and ultimately is going to be effective after our clients have passed away. Then of course, walking clients through them and explaining it in the hopes that maybe a week or two after they’ve signed their documents, they might remember a thing or two of what they’ve been fighting. Frazer Rice (06:14.719) on the business of estate planning Always a challenge. One of the things I tell people is that you’re hiring an attorney to help you out on these situations because you’re going through it something that’s very complicated and opaque with huge ramifications for your life and after your life. With this being usually the first and only time that they’re dealing with that, it’s helpful to have a very well-equipped sherpa to help you along that journey. But then you’re also paying for the good judgment, the discretion and the experience that working with hundreds of other situations brings to bear to the instant case. describe that experience for me. You came from another firm, you decided to go this route and maybe a case study or something like that where a client really was able to find benefit from your having dealt with something similarly that occurred in your past experience. Brandon Rains (07:17.196) Yeah, I mean it’s you know there’s so many examples, but so it’s interesting how often clients come in. Like even just this morning, had a client, a couple come in, we had an initial meeting and kind of partway through that conversation, I was like, hey, do you have any questions for me in any way? It was kind of towards the beginning of the meeting a little bit. They were like, we don’t even know, we don’t know. We don’t even have the knowledge base to be able to ask you any questions in the first place. It’s like, okay, that’s fair. And so sometimes that’s just subject matter knowledge that is really helpful. I think a lot of times when couples and families benefit from our, to use your terms, your good judgment, discretion, and experience, we see that a lot when clients are making decisions. So it’s what makes sense, know, it’s, it’s, especially when children are struggling, right? I had some clients that I was meeting with earlier this week. We were helping them make decisions one of their one of their children is Just an amazing go-getter and the other one is struggling and so we had a real conversation about whether or not they should give money to their son or actually skip their son and go with give it to their grandson or granddaughter or whoever it was right, but just skipping that generation and walking them through that decision making process. Because some people, for example, think they don’t realize all the options regarding distributions to their loved ones. think it’s just everything. The only option they have is outright distributions, which is giving it to them all at once. Well, I don’t trust my child to give them everything all at once for drug addictions, manipulation, their spendthrift, whatever. So I just need to disinherit them. Sometimes clients have legitimately, literally come in with that mentality. When we talk to them and help them understand that there are more options than that to spread those distributions out over time and protect from those potential bad situations. That burden is just completely lifted off of their shoulders. It’s like, okay, I can give them money, but I can give it to them in a way that is best setting them up for success with some protections, with some guideposts, guidelines with some restraints because we think that’s really what their life and situation calls for. I’m gonna kind of draw an analogy here and I like yours with a sherpa, right? Where, you know, you can go on a, you can climb Mount Everest on your own or you can climb Mount Everest, you know, with a sherpa or you can climb it with a group. Right? You can kind of imagine the different levels of success there. The analogy that I tend to draw, unfortunately, Harkins is back to school time, but that was kind of the thing that came to me. Working with an attorney is like working, is taking a test with the teacher sitting right there beside you explaining the principles, reviewing the question, helping you understand the answers, and helping to quote unquote make sure that you get 100 % on that test, right? That’s what like working with an attorney can be like. Whereas doing it on your own is, you know, and I know that we’ve talked about to kind of talking about this with do it yourself options for estate planning. It’s like just taking the test on your own. Maybe open book, right, because Google kind of serves that purpose. But there’s no outside eyes. There’s no like true explanations. And if you’ve done any search on Google, you know it’s not that hard to find contradictory information. I’ve had clients come in with wrong understanding based off of Google. Now the tough part about is taking a test on your own. I don’t know about you, Frazier, but I always got 100 % on my tests until I got my grade back. And that’s the tough part. What’s especially hard with estate planning is you don’t get the grade back on your tests until after you’ve passed. There’s no extra credit. The grade is final. And you have to live with that. so there’s… Yeah, Frazer Rice (11:44.049) Yeah or others have to live with it even worse. Brandon Rains (12:09.618) You’re right, better said, right? Others have to live with that. And so it’s, you know, there’s something to be said about that. And there’s also a rise in, with companies that are DIY, they’re kind of talking to the financial advisors. There’s a big trend there of financial advisors walking their clients through the business of the estate planning process. setting aside any contentions or conversations about unauthorized practice of law and stuff like that. To go back to the teacher analogy, that’s like asking someone two or three years in school ahead of you for help, maybe like a tutoring type of a situation, but they’re ultimately still a student. They might have more experience than you, they might know more than you, but they don’t necessarily have the education. the hundreds of clients of qualifications, they don’t quite have that teacher certification, right, that has gone to school specifically for that, have been vetted and licensed by the state. There’s still a difference there. And I think there’s some real unforeseen or easily missed pitfalls with a, I’m gonna rely on a mentor type of a mentality rather than turning to a teacher. Now, of course, a mentor or a tutor or a fellow student may or may not have to pay for that, right? Obviously they’re gonna be paid less, because they don’t have the education, they don’t have the certification, stuff like that, than working with a teacher. But the teacher is the one who wrote the test, right? Who has studied the test, who has studied for… hours and hours and hours, the subject matter that goes into the knowledge, there’s still a real substantive difference there that kind of puts you and your loved ones in the best position to succeed, right, which is really where it is. Frazer Rice (14:20.987) To stretch that analogy further, I sit in the financial advisor role, at the multifamily office level, thinking about these issues. I have my thoughts and experiences and comments. It would not really occur to me NOT to use a lawyer. To take your analogy a bit further, having the teacher with you taking the test, but also having the mentor with you taking the test. Brandon Rains (14:47.245) on the business of estate planningYeah. Frazer Rice (14:49.295) That is better if there are really sort of qualitative aspects that need to be dealt with. Issues like: choice of trustee, do I favor one child over another? There may not be an exactly right answer. However, there can be a best answer through consensus building amongst three thoughtful people. One who’s extremely interested in it, and then the people who are sort of supporting of that. That joint approach to the business of estate planning I like that a lot better than the DIY. Equipping the client with digital tools to make a go of it themselves, and hope it turns out okay. Then maybe get a legal imprint or legal ratification elsewhere that isn’t really based on a relationship. I think ultimately people are looking for interactivity and they want that relationship. trend-wise, I think that’s going to argue for, certainly at some level. A return to in-person meetings and some more tactile interactions between client and advisor. Those team aspects are going to be that much more important in getting to the right result. Brandon Rains (16:12.448)I would agree with that. Some of my favorite meetings are… client, attorney, financial advisor, potentially accountant, all involved, right? Because we’re all addressing the subject matter from different angles, right? It’s when you get the tutor replacing the teacher, right? To kind of keep it industry agnostic, right? Whether that’s a financial advisor who’s trying to replace the estate planning attorney. Or the estate planning attorney who’s trying to place the financial advisor. That’s when you start running into, in my opinion at least, when you start running into different issues, right? You’re losing a team member. You’re getting people where it’s not their 24-7 type of a day job, right? But they believe that they can still do that, right? They can fill both roles or three roles or whatever. In my experience, that can run into issues. But yeah, multiple professionals addressing those conversations Frazer Rice (17:14.189)That’s because… Brandon Rains (17:19.248)those questions from their respective angles. It’s almost like the sum is greater than its parts, is my experience in those meetings add exponential value added rather than just purely linear. It’s an awesome dynamic. Frazer Rice (17:37.859)Exactly. think the other part too is that, you know, whereas we used to have to defend against the absence of information, I worry about the noise and the fact that, and I think the advisors can be affected by the noise too. And to have a couple of people surrounding the problem, I think mitigates that risk, doesn’t eliminate it, but to sort of have a back and forth and be able to make sure that the right course is brainstormed, workshopped, and then defended before being implemented, think that leads to a good result at the end of the day. Brandon Rains (18:15.95)Yeah, 100 % agree. Frazer Rice (18:17.773)It’s one of these things where that’s a lot of people and many times charging hourly or charging flat rates or things like that. People look at that and say, my gosh, I just wanted to get my estate plan done and get something in place. And now you’re telling me I’ve got expensive people on the hook to try to get this going. Part of me sort of says, look, there’s two levels of planning here. You have what you need to get done so that you’re not running naked through the park uh… and then then there is the deeper thoughtful estate planning, you’re trying to deal with taxes and creditors or things like that. How do you think about it in terms of the value added when when being in front of a client Brandon Rains (19:09.19)I think in a lot of ways it’s, you know, the biggest benefit of working with an attorney is the advice and the counsel and the experience, right? At this point… I haven’t done necessarily a count, but somewhere between 750 and a thousand different clients in the last decade, right? You combine that with just the knowledge that I’ve gained through studying, continuing education and stuff like that. It’s hard to replicate that from anybody else, right? Just as if I were trying to step into your shoes, it would take me 20-30 years to be able to fill in your shoes, right? Because that’s how long you’ve been doing this for. I think that’s something that we as professionals, especially over the last, don’t know, during this time from the information age and generative AI is going to be making it a really interesting thing for us to think about is how well do we explain the value that we bring to our clients and the families that we work with. For me, it’s the advice and counsel, the insights, the experience of this is what other people have decided. This is how I’ve seen this work out. And being able to take these abstract legal principles or even these experiences from other families, there’s always that question, I think, at the back of clients’ minds of like, okay, how is this going to impact my family? Whether it’s from a tax perspective, a control and access to assets perspective. What about family relationships perspective? Brandon Rains (20:57.006) Is this gonna help? What am I going to do? Is it gonna help them interact with these assets that we’re passing on to them in an appropriate way? Are they gonna interact with the world and with each other in a positive, constructive way? All of those things that we can do that I try to bring to the table as an estate planning attorney is to help them understand how these theoretical or not their experience can play out in their own family. Because that’s really what they’re looking for. They’re looking for clarity, they’re looking for comfort. Really the only benefit that clients get through their own estate plan is peace of mind. And so try to help them understand. The only way they can get peace of mind is not by, I would argue, true peace of mind is not just by making a decision. By making a well-informed, well-advised, well-counseled decision, taking all these different data points and being able to apply it to their own family, their own relationships, their own personality traits, their own characters, and the people that are involved, and to be able to say, okay, this is what I think is how people are going to engage with and interact with the estate plan with each other and by extension the world around them after they receive the distribution. So to me that’s the real crux of any value add for me at least. Frazer Rice (22:30.163)One of the things that people ask about is the analog world of estate planning and the new digital tools. Are they going to intersect? I use AI frequently. A variety of other tools help game out scenarios, look at documents, to do all sorts of things. I don’t think what we’re talking about is that the exclusion of technology, because I think technology is going to get us to have what I would describe as more adult discussions quicker. I’m wondering how your experience with technology so far, you talked about it a little bit about, you know, sort of having drafting capabilities and so on. Where do you see that going? Brandon Rains (23:13.74)Yeah, that’s a great question. I think a lot of estate planning attorneys use technology more than people might realize. There’s a difference between technology in the back office and technology on the client facing experience, right? There’s a difference there. Conversations with an attorney is human, right? I would say that’s not even analog, that’s human. And that’s something that… If AI ever replicates a human conversation, like really truly, that we as professionals can have and be just as accurate or more accurate with that advice, which is a whole different, that’s not as much of a given as we might like to think, then we’re all in trouble. But I think what technology does for the business of estate planning, and I’ve noticed with my own practice. Leveraging technology to create systems and processes to delegate to communicate within our internal team and know document sharing with a client or whatever that looks like that allows us to be more efficient to be able to focus on the unique and individual circumstances of our client. The business of estate planning is getting to those adult conversations faster. It also allows us to spend more time with those adult conversations too. I think part of that dynamic is already here. Now looking towards the future, it’s really, really interesting. I don’t play around with AI a ton, I’ll have to admit that. But what they think AI can do could be pretty awesome to leverage, right? Earlier this week, I got an introduction from a financial advisor to a client. The financial advisor used an AI-based estate planning review software program to review the estate plan. And ultimately, the financial advisor and the client had different feelings about the quality of the estate plan. The client thought it was great. The financial advisor was like, hey, this isn’t all that great. And the financial advisor sent me the estate plan and their AI-driven review. Brandon Rains (25:39.63)And with the in those, this is actually the first time that ever had ever done this. What I found with the AI was both a positive and a negative. So in one particular aspect is what really stood out to me. I won’t bore your listening audience with the details. However, just with one aspect of it as an example, I felt like when I was reviewing it. I felt like it maybe overstated the strength of some of that planning that was in the document. It might have missed the mark as well a little bit. Because it used a very specific phrase with this issue, I was looking for it. And one of my complaints about this document was the organization was a little funky. Any attorney is gonna take some time to look through a document that they hadn’t noticed. But because it…I was looking in this one spot for this phrase that this planning structure implied. My first thought for several minutes was, AI got it wrong. I was like, there’s not this planning at all. It’s something else. Since I looked at it, I’d seen it on the AI, I said, let’s just keep on looking through. I hadn’t gone all the way through the document yet, but it wasn’t in that spot. Lo and behold, that phrase was like dozens of pages later. I was like, oh, okay, you weren’t wrong, AI, this is great. There were a couple of places where I felt like it had overstated some of the protections. Because the AI had noticed it and picked it up in one spot at a disconnected location, it actually helped me find it. I can go back to the client. This is the type of planning- rather than me saying, you know, you have this other different type of planning. Then they’re like, well, wait a second. So I thought our attorney said we had this and it turns out that they are right. I was wrong. And that would just make me look like an idiot. Right. So that’s kind of, think where AI is right now, right? People say, you know, trust, but verify or don’t trust, but verify. That’s what it kind of seems like to me is where AI is. how effective it’s going to be. I talking with another attorney just this week on the business of estate planning. He was like, AI is as dumb as it ever is going to be, is right now. I think that AI is going to impact the legal staff. It could potentially replace legal staff sooner that it will replace the attorney. Whether that’s AI-voiced phone calls or AI-driven emails. or AI might become an integral part of drafting where it can take your notes from the meeting and you organize it in a certain way and you train the AI on how to read your notes and it’ll draft your document, right? It could get you that rough draft where before it might take you 20, 30 minutes, two hours, three hours, depending on your internal systems and processes to get to that same point, right? So, should it ever get to the point of replacing legal advice? I might be biased. I don’t think it should. But I think it will certainly have the capability. It’s there to augment and make bigger what we bring to the table, I think is where AI is at its best place. If it’s used to replace us, then we’re running into issues because AI has shown that it hallucinates quite a bit. I guess that’s the official term for creating stuff out of thin air or lying. There are attorneys that have been sanctioned because of inappropriate reliance on AI and replacing legal research and legal drafting. It’s not there yet. I don’t know if it’ll ever get there, but augmenting it and saving time and streamlining processes. Frazer Rice (29:41.758)Right. Brandon Rains (29:59.384)To me is the thing that makes the most sense because then again, to use your phrase, gets us to those adult conversations faster. It gives us more time to spend on those adult conversations. Frazer Rice (30:12.696) on the Business of Estate PlanningGood stuff. Brandon, how do listeners find you? Brandon Rains (30:17.708) on the Business of Estate PlanningYeah, so the website is rains-law.com. Rains is R-A-I-N-S spelled just like the weather. Or they can reach out to me directly. So, Brannon, just normal spelling, B-R-A-N-D-O-N at rains-law.com. Great ways. Frazer Rice (30:32.818) on the Business of Estate PlanningWe will revisit the business of estate planning going forward. We can talk about lots of different issues for hours. Maybe we’ll put a pin in this for now and have episode two, three, four, etc. as we go forward. Thank you for being on. Brandon Rains (30:50.766) on the Business of Estate PlanningThank you for Frazer, appreciate it. THREE ESTATE PLANNING MISTAKES GENE HACKMAN’S ESTATE PLANNING https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/

“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 Social Security incomes. But people don’t realize that. And if they’re counting on paying bills with the two Frazer Rice (08:49)That’s right. Beth Pinsker (08:58)social security incomes, that’s a big shock to their financial system. And people like you, you’re surprised by what people don’t know. So if you’re a professional and you know that and don’t even think about it, but don’t understand that your clients don’t know that they’re preparing for a different financial situation than you’re helping them prepare for, right? They’re thinking they’re getting two checks ⁓ perpetually and they’re only going to get one and they need to plan differently. And so somebody along the way has to explain that to them so that they get an understanding of what their income will be if one of the couple goes. ⁓ Frazer Rice (09:36)One of the things that I really liked about the book ⁓ is the concept of getting the caregiver, usually someone younger, one of the kids of the parent or someone like that, or sometimes it’s the spouse to the other spouse, then there may be an age, ⁓ sort of assymmetry on that front. But getting them used to the idea that caregiving is a full-time job with multi-faceted approaches to it. We’ve already alluded to the sort of intersection with the banking system and the legal system and then the healthcare system, all of which is maddening in terms of detail and again, a full-time situation and then that doesn’t even get into the emotional and physical aspects of it. How did your experience shape that? There are obviously plenty of surprises, probably many of them unpleasant around that. What happened on that front? And I’m sure that was a big part of the thrust of the book. Understanding the Emotional and Physical Toll Beth Pinsker (10:19)Yeah. Okay. It was, and there’s a difference. I draw a line between medical caregiving, like physical caregiving, and the financial caregiving. And I’m purely focused on the financial caregiving. There’s a lot out there on the medical and the physical side, and even the emotional side of caregiving. ⁓ But those are things that you can actually pay other people to do. And it’s really hard to pay anybody else to do the financial caregiving part. Even a financial planner, even a manager. Like you can hire people to do some of it, but ⁓ you know, like my mom was not gonna give her ATM card to just anybody, right? She certainly wasn’t gonna give it to a banking stranger or somebody she hired to be in that relationship. She wouldn’t trust them, especially if she was incapacitated. Certainly, she wasn’t gonna give it to one of the ladies who was helping her in the bathroom. so. That’s another thing. Frazer Rice (11:16)Sure. Or worse maybe she would have and that’s another problem that you have to insulate yourself against. Beth Pinsker (11:33) So, you know, for somebody, need somebody you trust who’s really on the ball to like, you know, have access to the bank account and the credit card and all of those things. And it goes way beyond that because when somebody’s in the hospital or sick or navigating, you know, the care infrastructure in the United States, you have to keep an eye on it because it’s just, it’s so complicated. You have to be on site or visiting often or making spot visits or calling them in some capacity. They’re trying to move your parent. They’re trying to release your parent. Things need to be taken care of every single day. If you don’t check in on them, that person could be waiting in dirty bed clothing to be changed. And you don’t want that for your parent or any sick loved one. Just the amount of mental energy and physical energy caregiving takes. I think I counted them up for the book. In eight months, I made eight trips back and forth from New York to Florida. Each of the trips was at least a week. Some of them were for multiple weeks, like three weeks. I made a trip, I was there for three weeks, because stuff kept happening and I kept having to stay. My mom’s time was short because her illness got serious pretty quick, but it was a lot. I have a full-time job. I’ve got kids. I’m divorced. when I’m with my kids, it’s just me and I have a dog. People have stuff that they have to do in their regular lives. It’s hard to add an entire other complicated human being on top of that. Mom’s coming home from the hospital. You got to go find a place, either a nursing home for her to go to, or you got to be at the house to accept the medical delivery. Somebody’s going to be there who’s responsible to sign for it. That can’t just be anybody, you know, like you need to be on top of those things. Frazer Rice (13:39)Well, and you’re fighting the caregiving business model in many ways. The healthcare business model is not an empathetic thing. Not only are you fighting that and all the different bureaucracy that accompanies it. There is so much mental energy to do what you described. To make sure that the aging process and the recovery or hospice process is done with the dignity that you want. That is squarely at odds with what the healthcare system is wanting to do at that point. I tell anybody on that front to get ready to deal with this stuff. You’ve got to really swallow hard and get ready. It is going to be an emotional and energy tax that you may not have prepared for yet. Making Informed Caregiving Decisions for Loved Ones Beth Pinsker (14:29)Yeah. And you really need to know what caregiving that person wants. So that’s where a living will, ⁓ the healthcare proxy, the HIPAA permission, there are all sorts of ways to express that living will. There are these things called five wishes, which help you ⁓ say what you want in a more ⁓ common way instead of legalese. But the living will is a legal document, right? Like you need that in order to be able to prove what your loved one wants or wanted if they can’t speak for themselves. ⁓ And you don’t want to be making that stuff up. You really need to like have a discussion about it. I think that of all the things I went through taking care of my mom, knowing very clearly what she wanted was the only thing that brought me peace in the whole process is because I was there as a steward to take care of what she wanted. And if I didn’t know what that was, I would have driven myself crazy. Like it’s too hard emotionally to try to make life or death decisions for somebody else, somebody you love, without knowing what they want. And, or especially if you’re going to go counter to their wishes, because that’ll blow up your whole brain. ⁓ But I knew what my mom wanted. I knew what her parameters were. I knew what she considered hopeless and how mostly how she didn’t want to live. Without knowing those things.I would never have been able to make decisions, hard, hard end of life decisions, And you need them, not just verbally, but you need them on paper. You need both. And, you know, estate lawyers, God bless you, like all of you out there, like you help people get those things together and people need them. And I just wish more people had them because like, you know, I’ve, looked at all the stats for this book, right? Perennially over decades, 60 to 70 percent of people do not have any documents in place for their incapacity or death. Like 30 percent of people in almost all surveys, 30 percent of people have a will of some sort. That’s not enough. You need the capacity of documents. You need a living will. Like if you’re going to help, if you love people, like you have to put this stuff together for them. They have to know what you want. Um, and I, what my book tries to do is show people why, right? Here’s my caregiving story of what I went through. Here’s when I needed this and that document. And finally, here’s what having that document meant I was able to do and able to feel and able to survive. Um, and here’s what having that document, not having that document would have done if I didn’t have it and here’s what it did to you know other families that I talked to. You really have to understand that why and I think a lot of people don’t and I think that’s why they don’t get the documents done. That’s why when a lawyer hands them in a state planning binder and asks them to put information in it, it just sits on a shelf. Frazer Rice (17:40)It’s a huge mistake and all it takes is one time touching the stove like that and people understand right quick what it means to not have that in place. And when you don’t have documents in place, you’re stuck with the default rules that the government sets up for you and with the process that the government sets up for you, all of which is painful. And to not do that is to not get things in order. It’s a small thing, ⁓ but it’s not a small thing. If you don’t do it, you’re setting up the people who are in charge of taking care of you or that you’re dealing with that just get raked over the coals with crazy. Beth Pinsker (18:27)Yeah, and it’s even more important, people think about that in terms of ⁓ state mandated succession, if you die without a will. ⁓ But after somebody dies, you have a lot of time, nothing’s gonna change in that situation. When you’re incapacitated, there’s deadlines. If you don’t have access to certain things in a certain amount of time, like money for a mortgage payment or the ability to make medical decisions, even who can see you in the hospital if you’re divorced or if you’re in… There are people in this country who have family members who don’t agree with their lifestyle, say. If you’re in a same-sex relationship, and you don’t have paperwork in place and your family swoops in and won’t let your partner in to see you, that’s still happening out there. And without legal paperwork, you can’t fight it. That’s just really sad. And I don’t want that to happen to anybody. So if you can reach some people with storytelling, that’s what I was hoping to do. Frazer Rice (19:22)One of the things that’s a little bit scary too is the numbers around all of this, where to me, one of the things that scares me going forward, country-wise or otherwise, is the amount that the costs of the last two years of life are and what they’re going to be. And the safety nets that are out there may or may not exist later on. They’re so poorly understood as to how to deal with them anyway. ⁓ Maybe take us through a little bit about what you found related to getting the dollars in order so that ⁓ those last two years, which are the most expensive years of life, usually even the last two months, ⁓ how that can creep up and really ⁓ create a situation. Financial Planning for Caregiving and End-of-Life Care Beth Pinsker (20:12)Ha. Yeah. Probably nothing made me crazier than, than hospice. Like I didn’t understand that hospice like wasn’t a place. I thought hospice was someplace that you went like, oh, when, when you’re at the end of life, they send you to hospice, right? Hospice is like, for the most part, just your house, you know, and they, they pay for some of the medical supplies and they, uh, you know, a nurse will come by. Um, but for the most part, you’re just like living your normal life until, you know, until it’s really, really close to the end. I think a lot of people don’t understand that, you know, because like they go home and think they’re on hospice and then, you know, 18 months later, you know, they’re still footing the bill for all this care or somebody has to quit their job to stay home with them. And I didn’t understand any of that. You know, my mom’s illness went really fast. So, we were in this hurry up offense, the whole hurry up defense for caregivng, I guess it is- I’m not good with sports, but we, you know, we were just running gun the whole time. It wasn’t until we got my mom home for hospice that, you know, we started to look at how long can we handle this. We didn’t, you know, my mom didn’t have a terminal diagnosis. So it’s not like she had cancer and we knew how long it was going to be or something like that. We thought she was potentially gonna get better and she just wanted to go home so she went on hospice so she could go home with some support. We thought that we were gonna be in for a long haul- in Jimmy Carter land, where you’re just on hospice and when you go, you go. He was on hospice for more than a year. Frazer Rice (21:49)Right. Beth Pinsker (22:07)That happens to people, but not very often. We started to plan then. What we did, you know, I these formulas in my book. Which are standard financial planning formulas that you learn, you and that any CFP knows. Mostly you have to plug them into software. The parameters and the Monte Carlo simulations get too complicated. It’s basically, you know, how much are you spending now? How much do you have? How long, ⁓ and then you plug it into a formula about how long is that going to last, right? If you have enough to last a significant amount of time, you need to factor in growth, right? So the money’s growing at the same time you’re spending it. So you can’t, it’s not just subtraction is the point I was trying to get along to people. If you’re spending $15,000 a month, You have $100,000, it’s going to last a little bit longer than just, you know, taking $15,000 chunks out of it. If you’re lucky enough to have, you know, more than that, or the ability to sell a house or whatever, you have to factor all of those in. So you have to make a plan. Okay, for the next six months, we’re going to spend down the savings, and that’ll get us to point B. Then after point B, we’re going to sell the house and you’re going to go to a nursing home. That’s going to be more expensive. but we’ll have the cash. Then after that, you know, we’re gonna have to think about Medicaid or somebody in the family’s gonna have to put up some money to fund the cost. And then you’re sort of playing this like game of catch up the whole time. You know, is the person gonna stay alive for that length of time? You know, are they gonna need significantly more care as you’re going through those equations? Because you have to change them all the time. My mom started out with one set of aides who covered a 24 hour period. Every day, seven days a week. But when she came home for hospice, one caregiver wasn’t gonna be enough, right? So we had based our whole budget on, you know, one caregiver at a time. They would do a 12 hour shift. Then the next one would come in and do a 12 hour shift. When she was home for hospice, we needed those shifts to overlap, because she couldn’t be left alone. If the caregiver needed to go to the store or run to the pharmacy to get medicine or leave the room to go make dinner or whatever a normal life requires you to do, we were gonna need them to overlap a little bit. That was more money, you know, and it lasted longer than we thought. So they were going to need vacations because they were getting burned out. Then you’re paying for a caregiver to go on vacation and then paying for a caregiver to cover for them. And the cost just, they’re just exponential. They’re just, it’s just so much money. Frazer Rice (25:07)It does not stop. As we wind down here, what are the top parts of the checklist that everyone should check off and make sure that they have in place? And I say that as a subtle jab to people to buy your book because that’s going to be, you know, the details underneath that checklist are going to be important. Caregiving: Essential Documents and Digital Access Beth Pinsker (25:28)Yes, so you need to have the power of attorney and the healthcare proxy. You need to have access to the person’s phone. That means knowing their latest phone code. And also, I bring up a thing, I don’t know if, you know, this is some things people miss. Like, I don’t know everybody out there if they’ve done this. If you named a legacy contact for your phone. that is like naming a beneficiary for your phone. And it’s really important because phones are hard to break into. And people ⁓ think that you know their phone code. Then they change it and they forget to write it down, especially old people. If you can’t get into the person’s phone, you’re kind of… It’s as if you don’t even have power of attorney. You can’t two factor anything. ⁓ You don’t know anything about their life if you don’t have access to their phone. So you need those proper documents to do it legally. You need ⁓ access to their phone before and after death. ⁓ And you need some sort of will or trust or something to say end of life, ⁓ you know, cause power of attorney, a lot of people don’t know this either out there in the world. Power of attorney stops when somebody dies, right? So you need something for after that point. So you need power of attorney and healthcare proxies up until the point somebody dies. And then you need whatever you’re gonna do for after. Whether that’s a will or a trust. It depends on your circumstances, but you need those documents and you need access to the person’s key, Frazer Rice (26:45)Sure does. Beth Pinsker (27:06)⁓ digital existence, which is their phone. With their phone you can mostly get their passwords. So it’s not important that they write everything down. Like my mom didn’t. My mom thought she did. My mom had an old check register. She wrote all the passwords to anything that she had a password to. I couldn’t make any sense of it whatsoever. She thought she was so clever and so prepared. I literally couldn’t read her handwriting, had no idea what she was talking about. like it was written in scribbles and I couldn’t make sense of it. So I just went in and two-factor everything and overrode all our passwords and reset them. But that’s time consuming. Think if somebody had to go into your entire digital existence and reset all of your passwords. Conclusion Frazer Rice (27:56)If I’m doing it, it wouldn’t happen. I confused myself on that front. So as we, what is the best way for people to get to the book? I know it’s coming out in November, but pre-sales are important. So everyone get out there and, and, and get it. Beth Pinsker (28:09)These titles are everything. Bethpinsker.com and I write regularly for Market Watch. I’m a retirement columnist, so you can always find me out there on the internet, on social media. It’s just my name. All you have to do is search it and you can find it. I’m readily available on all channels. Frazer Rice (28:28)and title of the book. Beth Pinsker (28:30)My Mother’s Money, a Guide to Financial Caregiving, out November 4th from Crown Currency. Frazer Rice (28:35)Excellent. Beth, thanks so much for being on. Beth Pinsker (28:37)Thank you. ⁓ JENNY ROSELLE on Aging and Roles in Estate Planning https://www.amazon.com/Wealth-Actually-Intelligent-Decision-Making-1-ebook/dp/B07FPQJJQT/