Episode
Join host and CEO, Greg Weimer, as he speaks with our COO, Gregory Weimer, CFP® , CPA, and Director of Wealth Planning, Randy Holcombe, CFP® about the significance of planning around wealth transfer.
Whether you are growing and developing in your career, or contemplating the legacy you’ll leave behind in the latter stages of life, this discussion sheds light on the impact of estate planning and effective communication.
Tune in and discover how these elements can shape not only the inheritance for your heirs, but also the enduring legacy you’ll leave for generations to come.
- Greg Weimer
- 00:04
- Hello, and welcome to the Imagine that podcast. I’m your host, Greg Weimer, founder, partner, and wealth manager at Confluence Financial Partners. Each month, we’ll explore new ways to help you maximize your life and your legacy and meet some extraordinary people along the way. So if you’re looking to get more out of your life today and legacy tomorrow, let’s get started. You. We have a really important topic today, and it’s it’s a megatrend. It’s a megatrend facing the families we serve.
- GW
- Greg Weimer
- 00:35
- It’s a megatrend facing the families in our country, and it’s a great opportunity. It’s also an incredible responsibility. And that is there’s $96 trillion that’s going to transfer to the next next generation. Unfortunately, some of those transfers will not go well, and the transfer will be viewed by the next generation as a burden and will cause controversy in a family and stress in other families. It will be a blessing. Our goal today is to give you, the listener, some ideas on how to make your family transfer your wealth in a way that it’s a blessing. So have two of my associates with me today.
- GW
- Greg Weimer
- 01:25
- One also happens to be my son, Gregory. And just to give you a little bit about their background, gregory’s a CFP. He’s a CPA. He’s also a certified exit planning advisor. I also have with me Randy holcomb. Randy’s a CFP, be, and he’s also the director of our wealth planning. So there’s a lot to think about in this transfer.
- GW
- Greg Weimer
- 01:47
- We pride ourselves in helping people maximize their lives and maximize their legacy. And by the way, there’s a balance to that, obviously, right? There’s a balance to how much of your legacy do you want to create while you’re living? How much do you want it to be inherited? Let’s open it up for a discussion. And obviously, we’re going to start with what do you want the money to do for you? What are your goals with this money?
- GW
- Greg Weimer
- 02:13
- Next, we’re going to go into, like, okay, does an estate plan make sense? What are some things to think about in the state plan? How do you communicate it to your family, and then how often should you review it? They’re just some thoughts, right? And that’s just a general framework. So you, the listener, know where we are in this conversation. Let’s start out with goals.
- GW
- Greg Weimer
- 02:33
- So, Gregory, you work with a lot of families. Maybe give the listeners some things to think about as they’re and, Randy, you can chime in too, but Gregory, give them some things to think about on some of the things you should be thinking about when you put together your goals.
- GJ
- Gregory J Weimer II
- 02:50
- Yeah, and I think you started off with maximize life and legacy, and I think starting there is a perfect spot to start because it is a balance. And so as we’re talking about a wealth transfer, we immediately go to the unfortunate passing of one generation and passing that wealth to the next. But during the life also, how do you balance maximizing moments with your family that they’ll remember or getting involved with philanthropy or whatever is important to you, with your legacy also? So we work with a lot of clients to figure out, okay, with your planning, how much do you want to leave to the next generation? What does that mean for them? And maybe during their life, can you take that extra vacation to create memories? And a lot of times that’s important, and there’s ways we can have those conversations to really bring that out with families.
- GJ
- Gregory J Weimer II
- 03:36
- Maybe we can get into that later. But it is really interesting, and everyone does have different goals 100%.
- GW
- Greg Weimer
- 03:43
- And by the way, you would think you spent your whole life thinking about it. Right, but sometimes it’s really hard to articulate. And so, to your point, we can talk about a family meeting if you want and how we help families sort of decide what those goals are. But, you know. Maybe buying the second home is really not about how you’re living, but it’s also about the legacy. I unfortunately just came back from a funeral, and we’ve all been there. When you hear them talk about the person that has just passed and let there be no mistake.
- GW
- Greg Weimer
- 04:11
- They’re talking about the legacy that person’s already created. And it doesn’t have a whole lot to do with money. It has a lot to do with moments and how they live their life.
- GJ
- Gregory J Weimer II
- 04:21
- Normally, at that point, no one’s concerned about the money. The estate has to settle, right, and it has to get passed. But when you’re standing there, everyone’s thinking about the legacy of moments. So it’s a really important part of the wealth transfer. And we’re calling it wealth transfer, but it’s a bigger transfer than just that.
- GW
- Greg Weimer
- 04:38
- It is. And then when the wealth transfers, one of the things you have to consider is how much control do you want? So you’re gone. How much control do you want to make sure that money transfers the way you want it to transfer? The other thing that we should probably talk a little bit about in goals, I think it’s of the $96 trillion, there’s about 19 trillion that is expected to go to philanthropy. So how you want a charity that you really care about and make an impact on to be transferred to that charity is really important.
- RH
- Randy Holcombe
- 05:09
- I think it’s important to remember, too, that that 96 trillion is not all financial assets. A lot of its real estate, a lot of its businesses. So the goal depends on the asset. If it’s a business you’re passing on, that could be a whole different set of goals than money.
- GW
- Greg Weimer
- 05:23
- Yeah. 100% of the 96,000,000,000,001 3rd will be in financial assets. That leaves businesses. That leaves car collections. I know your goal may be for someone to really inherit that car collection because that’s what they always wanted, et cetera. The next generation may or may not want that. So you really need to make sure under the goals, that you think about how those things should be transferred.
- GJ
- Gregory J Weimer II
- 05:51
- Yeah. So every type of asset may be transferred differently also. But then even if it’s going to your children and even if it’s just financial assets, do they get it all upfront? Is it in trust? Is it not in trust? Are the beneficiaries right? Do they get it over a period of time?
- GJ
- Gregory J Weimer II
- 06:06
- There’s a lot of different language you can put into trust and estate documents to effectuate that, but you have to make sure you have the right team around you so that that’s set up upright or it could put a burden on the next generation if it’s not written the way you intended. Yeah.
- GW
- Greg Weimer
- 06:22
- I don’t want this to sound as self serving as it maybe is about to, but. It. You really need to make sure Your team of advisors is experienced in thinking through this. I mean, this is what we think through all the time with our families, whether it’s through exit planning, successions, whether it’s through philanthropy, whether it’s through helping them review Their trusts and their wills. I mean, all this stuff’s really important, and it has to really be a team. And so really spend time and ask yourself, do I have the right team of advisors? The acid test in this firm is I visualize I’m no longer going to be here maybe in 30 or 40 years.
- GW
- Greg Weimer
- 07:06
- And I want to make sure that this organization Is appropriately structured, that when my wife Is sitting in this office without me, that is here to make sure that our wealth, whatever we have, is transferred appropriately through our family. So our promise to you is we’re thinking through this. Our promise to you is we think about how to structure this family for our family and your family on a daily basis. So now that we think about the goals. Let’s think about the estate plan, because I think some misconception about estate plan. Oh, you have to have $30 million to think about that. It makes me crazy.
- GW
- Greg Weimer
- 07:45
- Randy, why don’t you touch on a little bit on why would you think about what documents you need, or do you need an estate plan?
- RH
- Randy Holcombe
- 07:53
- Yeah, so there’s several reasons. One is, like you said, some people do have the $30 million estate, and they are really concerned about taxes. So there are certain things you can do to minimize your taxes. But more often, and I don’t care if you have a million, 30 million, your family needs clarity on your estate plan, and you need to provide that. When you put the plan together, people will fight over just about anything. If you don’t make it clear the way everything’s supposed to flow, how it needs to go. And you talked about blessing versus burden.
- RH
- Randy Holcombe
- 08:26
- If they and have a clear picture of what needs to happen, it can shift quickly over to the burden side.
- GW
- Greg Weimer
- 08:32
- And when there’s a business involved. It gets a lot more.
- GJ
- Gregory J Weimer II
- 08:39
- Yeah. I mean, one thing that Randy said, too, is on taxes, and obviously we’re talking about estate taxes. I think even for those who don’t have a big estate, sometimes there are situations where there’s an inheritance tax that’s coming that you could do some planning around that may not be obvious to the naked eye right. But because of the situations, there’s a big one, and because we’re in Pennsylvania, one of the three states, or whatever it is that charges inheritance, this does happen. And that’s something because we’re focused on estate taxes and what the exclusion is, and the state’s not that big, it doesn’t mean there’s not going to be a tax.
- GW
- Greg Weimer
- 09:16
- And please understand that everybody’s like, well, I don’t have as much money as exclusion. You have no idea what the exclusion is going to be when you die. We know in the next two years. It’s over 20 million or $20 million. We get it. 22 million, whatever it is. Um.
- GW
- Greg Weimer
- 09:30
- But in 2026, it goes back down, and who knows where it is in ten or 20 years? So regardless of the assets, you have to be smart. We run it all the time. I just saw this week where you see in life insurance policies not owned by trusts, you see a lot of things happen that just could save the families if they’re meaningful means. We you and I have worked on some you look, and we could save them ten, $20 million in state tax, tens of millions. Yeah. It’s remarkable.
- GW
- Greg Weimer
- 10:03
- And unfortunately, I think people say that they’re going to do this stuff someday. Going to someday. I’m going to do it someday. And you could plan a lot of things. Your death isn’t one of those. So really getting on this stuff right away, and this is front and center. I mean, this is happening now, $96 trillion, and it’s frightening how many people are really not prepared for that moment.
- GJ
- Gregory J Weimer II
- 10:26
- Yeah. And I think it’s important with the communication and making sure you have the right team to make sure for your next generation there’s things you can do to make sure that when they do inherit wealth, whatever that number may be, they’re ready to live with that. And they know how to invest, they know how to plan. And so help them understand, help the next generation understand how to get started early investing so that it’s a seamless transition. And yes, the dollars are changing, but it’s not the first time that they’re seeing an investment statement go up or down and them accumulate wealth. And to the next generation, start early and do your own planning. If your parents or grandparents haven’t instilled that in you, it goes both ways.
- GW
- Greg Weimer
- 11:09
- And it helps when you do that planning along the lines how the next generation receives the money. I mean, you see, people say, I’m going to give them a third at 35, a third at 40, a third at 45. There’s another way to do it that you can make sure it goes on for multiple generations and you say they’re allowed to take a stream of income off that, but the principal goes on to the next generation. So then you, as the person passing on your wealth, has the comfort to know that your grandchildren and your grandchildren and I say that very deliberately, will benefit from your wealth over the long haul. So that’s also extraordinarily important. So one of the ways to start the conversation. On how to invest money and how to think about money.
- GW
- Greg Weimer
- 12:03
- Is philanthropy. Do you want to talk a little bit about, like, a donor advice fund, for example?
- RH
- Randy Holcombe
- 12:07
- Absolutely. So donor advice fund has become very popular in the last ten years, and essentially what that is, is you can make a donation to a donor advice fund. You get a charitable deduction. It’s just like giving to any other charity in that year. But then what you have is essentially a pool of assets that you can then direct to whatever charities you like. So it’s a great way. We have a lot of clients that will do that and use it as an opportunity to bring the next generation in on wealth conversations, because they say, hey, we have this pool of money that we’ve designated for our family to give to charity, and we want your input.
- RH
- Randy Holcombe
- 12:43
- We want to make these decisions as a family, so let’s talk about this.
- GW
- Greg Weimer
- 12:47
- And it’s a great entree into the financial conversations, so we actually can help you think about which charity you want to really participate in. If you need contacts at local charities, we can find out what you really care about and we can connect you with those charities and then we can talk to you about do you want to put it in your estate plan and do a planned gift? Do you want to do a donor advised fund? Do you want to contribute highly appreciated securities? Do you want to think about how to help children with education through EITC? There’s so many ways to do it and do it effectively. It’s a great conversation for families.
- GW
- Greg Weimer
- 13:25
- So let me back up, because I just want to recap, because then I think the next part for us to talk about is essential. Think about what you want your money to do, not only now, not only for your moments, but into the future, the next 1020 years, once you understand what it is you want to accomplish. Put together your documents to make sure that you’re doing that tax effectively so you’re not spending a bunch of money in estate taxes. And additionally, it creates clarity, which I promise you, we do this all the time. Your family wants clarity, so give them the benefit of having clarity. I remember saying to you about something you’re like, yeah, dad, that’s too vague. Make sure you clarify that.
- GW
- Greg Weimer
- 14:16
- I don’t want to think about that when you’re gone. And that’s just being honest. And that was you being honest, and I appreciated it. So we made it more clear. So please be clear. Your family will appreciate it. Your family has the ability right now to see the impact you can make over philanthropy, exit planning.
- GW
- Greg Weimer
- 14:34
- There’s so many things we could talk about. But then once you decide on your estate plan, the next essential part, because, remember, it doesn’t always work out well. 90% of money that’s inherited is squandered in the second generation. I’m sorry? 70% of the money that’s inherited is squandered in the second generation. 90% in the third generation. Don’t allow that to be your family.
- GW
- Greg Weimer
- 15:02
- The reason that happens is one, something we already talked about, and that is because of a lack of structure and estate plan. Second is because of lack of communication, so not communicating about it does not help the next generation. We just had a meeting this week, but all three of us participated. There were six, seven of us. Whatever there were. You want to talk a little bit about what that was?
- GJ
- Gregory J Weimer II
- 15:29
- Yeah. And then maybe, Randy, you can provide some clarity on this, because you’re the one kind of spearheading it. But we think family meetings are extremely important in sitting down with a family and allowing them to talk about their goals, the estate plan, charity, whatever is important to them to start to communicate those values now about what’s happening now and what’s going to happen in the future. So we’re working on some modules to allow families to have structure to that conversation. So we’re putting in the work behind the scenes to make those conversations easier with family, because not easy. They’re hard, especially the first one, and hopefully it gets easier over time in our family.
- GW
- Greg Weimer
- 16:08
- The second one is that.
- GJ
- Gregory J Weimer II
- 16:09
- Actually the yeah, and we were probably four in or something like that, and the topic’s a little bit different every time, but it’s important, and they’re helpful, and so I don’t think they need to be over engineered, and I think that’s something that probably holds families back. What am I going to talk about? What do I want to say? What’s the kid going to learn? Don’t over engineer it. We’ll do that for you and give you the information we need and simplify it. Randy, maybe you can mention in some of the modules we’ve put together well, we’ve done several, a lot of it.
- RH
- Randy Holcombe
- 16:38
- We’ve already talked about estate plan, legacy, charitable giving, investing, passing down some of the knowledge to the next generation. But we think there’s very few things that are more important than a family meeting. And if you talk to most clients and you say what’s important to you, if they have children, almost always that’s number one. And yet, despite that, a lot of times they have trouble bringing up the concept of their wealth. Wealth transfer. It’s not always a fun thing to think about, and you know how it is. If you’re uncomfortable with something, you’re less likely to bring it up.
- GW
- Greg Weimer
- 17:13
- I think they’re the most rewarding, enjoyable I love those meetings.
- RH
- Randy Holcombe
- 17:17
- They’re always great.
- GW
- Greg Weimer
- 17:18
- They’re always great. We’re fortunate in that most families, we serve multiple generations, so it would be unusual. There are cases, but it’s unusual that we work with the. Parents and not the children. That would be unusual. And regardless of the age of the children, we’re sitting in my conference room. There have been many 20 year olds and 25 year olds, including my daughters, in here, talking about how to invest whatever money they have so they can start to gain that knowledge.
- RH
- Randy Holcombe
- 17:48
- Absolutely. And just imagine yourself in a situation where your children are inheriting your money, and think of the difference. If they’re just inheriting it, they’re seeing all of it for the first time. They didn’t know how much was there. They didn’t know what all the accounts said. They didn’t know what the trust said. Imagine how difficult that situation is versus a situation where you’ve been meeting with them for the last ten years, and not only going through the structure of the estate plan, but you’ve been communicating your values, you’ve been communicating what’s important to you.
- RH
- Randy Holcombe
- 18:16
- You’ve been building a legacy as a family. And so that when the time comes for them to inherit it, it’s just a natural next step as opposed to a jarring event. Yeah.
- GW
- Greg Weimer
- 18:26
- We’ve had, what, four?
- GJ
- Gregory J Weimer II
- 18:27
- Yeah, I think we have four in.
- GW
- Greg Weimer
- 18:29
- Yeah. So I tell you that it’s really important. It’s important to do it, and we enjoy it.
- GJ
- Gregory J Weimer II
- 18:39
- One of the tools that has been used in a lot of family meetings, we’ve used it just in some client meetings also, that, I think, just gives an example of. Outside of what does my estate plan say? What’s my net worth and what could be passed down? Right? If that’s what you get into. But the other thing that is really important that people really enjoy are the picture cards. And many of you have probably heard us talk about them before, but it’s just a deck of cards with pictures on them.
- GJ
- Gregory J Weimer II
- 19:03
- And it allows every member of the family to pick out what’s important to them. And it gives people way to share their values. And so you really start to learn what’s important to the family. Do people start picking something that reflects philanthropy? Is it about vacations? But back to the beginning of Maximize Life and legacy. This can help with that.
- GJ
- Gregory J Weimer II
- 19:24
- This can make the family realize we want to do a donor advised fund and give to. Charities with animals. This could be we love vacations, and we want to spend time making memories now with vacations, whatever it may be. It’s one of the parts of one of the modules that is almost always in one of the first family meetings.
- GW
- Greg Weimer
- 19:44
- It is so much easier to find the picture that speaks to you than find the words that claire so these pictures is what, 100 cards or something like that? Probably. You pick three or four. Everybody picks three or four. You compare them, you talk about them, and it really does create a wonderful dialogue. I know our family enjoyed it. And by the way, I feel like family meetings, like, overdoing it, right.
- GW
- Greg Weimer
- 20:07
- All we’re doing is really we’re facilitating a family conversation. So, like, in our family, I sent them out, like, hey, here’s ten things we could talk about. What do you think? So we picked two, and we talked about philanthropy, and we talked about trust, and every year We’ve talked about something different. But it’s really just facilitating a family conversation. So everybody’s on the same page. So wonderful.
- GW
- Greg Weimer
- 20:36
- It. The goals are important. We can help you through that. Also to say, hey, here’s some things to think about. The estate plan is critical. Find the right attorney. We’ll put you in touch with some attorneys that we think match your personality.
- GW
- Greg Weimer
- 20:50
- So we work with a lot of different attorneys. We’ll find one that matches your personality. Our job is to make sure your goals come alive in those documents. US. Because so many times there’s a disconnect there, even when you find someone that matches your personality. So we’ll go through the documents they created and we’ll bullet point it for you, saying, hey, this is what the documents say. Is this what you expected them to say?
- GW
- Greg Weimer
- 21:16
- Sometimes it is, yes, sometimes not. Also, from a communication standpoint, we would love to help you to facilitate those family conversations. So what did we miss, guys? Anything that you think would help the listeners of.
- RH
- Randy Holcombe
- 21:34
- I think one thing is that we should think about, and we talked a little about businesses, but if you do have assets that are a little bit different coin collection, classic cars. Think through that. You can carve out something special in the estate. Plan to deal with those. If it’s a coin collection, for example, don’t make your children go out and find some way to sell those coins. If you have relationships with people, write that in there. Just make it real clear.
- GW
- Greg Weimer
- 22:00
- Yeah. We have both of those issues right now. Right? Yes.
- GJ
- Gregory J Weimer II
- 22:06
- That? No, I think if we’re summarizing two words, I just say that are really key are communication and organization. I think communicating amongst generations is really important and we’ve talked about some ways to do that. And I think organization is also key. Some of that comes from the estate plan and the documents. Some of it comes from your assets not being all over the place. Maybe we didn’t get into businesses too much, but if you’re a business owner, it what happens, right?
- GJ
- Gregory J Weimer II
- 22:34
- If something happens to you, who does it get passed down to? Is there a next generation ready in the business? And that may not mean family next generation, that could just be next generation. But how do you get bought out? Are the business documents in place? What does your estate plan say? If you have one person in the business, one family member in the business and no one else, what happens?
- GJ
- Gregory J Weimer II
- 22:55
- How do you communicate that? So there’s a lot there. And so that’s part of organization of make sure all of your ducks are in a row. So that there’s no surprises or stress when that day comes.
- GW
- Greg Weimer
- 23:06
- They buy you out, right? I mean, how do they buy you out? You have three kids, one’s in the business, the other two aren’t. How do you make that not equal but maybe fair, all of those things. And we can help you think through that. And by the way, the time to think about succession planning in your business and exit planning is 15 years before you do it because that next generation needs to be prepared. So it’s absolutely seamless.
- GW
- Greg Weimer
- 23:36
- We actually are entering and no one’s going anywhere, but things happen. Every key a person, we just went through this table recently, every key person, if they get hit by the bus, are we ready for that? Just to make sure we’re overly prepared. But in family, that’s also true. So really thinking when you think through the amount of businesses that are going to go, the next generation, there’s the people that will be ready, there’s the people that won’t be ready, and there’s a group that don’t want them. So to really think through how you’re in some families, that’s their biggest asset. So making sure that transfers effectively is huge.
- GJ
- Gregory J Weimer II
- 24:18
- Yeah. And if you’re the business owner, do you know the number of what at a minimum you would need to receive from the business? And that gives you some flexibility in understanding an internal transfer to the next generation. Or how would family buy me out? Or selling to a third party? That can change. I mean, if all of your wealth is wrapped up in that and you want to retire, you probably need a certain number to maintain your lifestyle.
- GJ
- Gregory J Weimer II
- 24:41
- So plan for that early so you’re not surprised when that day comes.
- GW
- Greg Weimer
- 24:45
- So two things just the importance of getting started and then let’s talk a little bit about the importance of review. But I really think it’s important for everyone to just hear that the biggest obstacle to having a good estate plan is the expectation of having a perfect estate plan. So get it started and then understand that from time to time, you may want to review it.
- GJ
- Gregory J Weimer II
- 25:11
- Yeah, I mean, you’re so right. The estate plan can change in most cases. The documents can change. As life changes, so can the documents. You may add a trust, you may change beneficiaries, you may change guardians. It can change. And so there’s nothing making it permanent in most cases.
- GW
- Greg Weimer
- 25:30
- It’s really important to get it started. If you don’t, you’re putting your family at risk and the government’s going to benefit at some point, and you’re not going to have clarity. As Randy was talking about earlier, I’m actually on my fifth reinstatement, so that’s not unusual. I’m on my fifth reinstatement of my plan, and our life changes. Fortunately, our family’s growing, so our situation changes.
- RH
- Randy Holcombe
- 25:52
- And there’s different things I’m sure most of you have heard irrevocable versus revocable trust. Revocable is obviously easier to change, hence the word irrevocable versus revocable. But either one, there’s different things you can do depending on how it’s set up. So, like Greg said, the important thing is get it started. I think. Another thing you say a lot is it’s what it’s like 100 pounds of pressure to get the locomotive moving. Only 20 pounds of pressure to keep it moving, so get it moving, and then you can always adjust it from there.
- GW
- Greg Weimer
- 26:23
- Totally agree. Be. Thanks, guys. Appreciate it. And hopefully, our gift to you, and we look forward to working with you on these conversations, but hopefully our gift to you is your wealth. Your part of that $96 trillion will be transferred as a blessing, and you will avoid it being a burden on the next generation. So for the families that we are privileged enough to serve, we look forward to being on that journey with you to help you make that succession of wealth successful.
- GW
- Greg Weimer
- 26:54
- For those of you that we don’t currently work with you, if you think we would be the right advisors for your family. We would welcome the opportunity to continue the conversation. Thank you.