The Business of Family - Episodes Tagged with “Estate Planning”

Frazer Rice - Decision Making for Wealthy Families

Mike Boyd — Mon, 19 Apr 2021 19:00:00 +1000

Frazer Rice is a Regional Director for Pendleton Square Trust Company. In that capacity, he focuses on trustee, fiduciary and family governance issues for wealthy families. He is the author and podcast host of "Wealth, Actually" which centers on decision-making for wealthy families The podcast interviews wealth experts and entrepreneurial families and individuals.

Standout Quotes:

"Something that's happening industry-wide or at least in the US is the concept that being a corporate trustee is a different business than the asset management side of wealth management" - [Frazer]
"Most of the trust planning is articulating a move at the minimum from Gen 1 to Gen 2" - [Frazer]
"I view the Trust and the planning around the Trust to be an outgrowth, when done correctly, of a solid communication structure that has been developed within the family" - [Frazer]
"What the family bank approach is offering to families is a way for them to pass on their intellectual capital...to their human capital, the next generation by having them apply for the financial capital" - [Mike]
"If the kids see what's important to the other kids early, and attach a dollar manifestation around that, I think that you're building the context so you have fewer blow-ups later on" - [Frazer]
"I think the most important thing anyone can have in their lifestyle is the ability to be comfortable in their own skin" - [Frazer]

Key Takeaways:

Frazer shares his background and experiences so far, from college to working in politics, after which he decided to study law and gained exposure while working in different firms. His career started down the path of wealth management when he worked with a Trust company.
He is also the author of the book "Wealth Actually" and the host of a podcast that discusses topics related to finance and wealth management even though that was not the initial plan for the podcast.
Pendleton Square Trust is an administrative Trust company that fulfills the function in a Trustee role aimed at helping families get access to good Tennessee jurisdiction.
3 main Functions of a Trustee: First is the administrative function which includes safeguarding and reporting on assets, paying the taxes. The Second is the distribution of the asset to beneficiaries. The third function is the investment management of the asset which is excluded at Pendleton, Frazer believes most places don't do everything well.
A trustee does not have to be a corporation, it can be an individual acting as a trustee with the ability to perform all 3 key functions, however, it may be difficult to find one person who is great at all functions.
A lot of families would prefer to have more control, and a private trust company allows them to control the aspects they're comfortable with and outsource the rest.
There is a possible conflict where corporate trustees who also provide asset management services invariably provide their asset management services.
The most common customer for the company is a US family that is either actively transferring wealth from the first generation to the second generation or generally has a multi-generational approach.
For those families that have taken their hands off the wheel in terms of managing the wealth, the Trust company operates more like a family office but for those still actively engaged in the continuation of the business, that business becomes the real center of the family office.
One of the real destroyers of wealth is bad communication amongst the family, this leads to conflict, which leads to litigation and litigation is expensive
There's a lot of good work that needs to be done ahead of building the structures so that you're not only setting something up that takes care of the money for the family, you're also getting the family ready for the money.
Family or Shared Philanthropy is one of the tools that helps to work with families as it gets the family members to express their interests and helps them work together while considering the needs of each other.
The Vacation Fund Concept: This is another tool, and the idea is to have the kids make a joint decision around the investment of money by getting them to plan the vacation based on a particular amount available. It helps identify which kids have aptitude and interest, the aggressive or conservative ones, and other responses exhibited by the kids towards the task. Summarily the kids get involved in financial planning and learn critical points related to it.
The idea of a Family Bank is putting structure around the request of money for projects so that it forces preparedness in front of real people who have to make a decision. Learning that persuasion is important helps the next generation to deal with the real world.
It also provides an opportunity to combat the situation of assets growing linearly being overtaken by liabilities growing geometrically, as more opportunities explored can increase the growth of assets.
There's a big difference between Operational succession and Ownership Succession of a family business, the difference in roles may mean some people get paid more but this needs to be discussed earlier on before the transition period.
From Frazer to his kids: I think the most important thing anyone can have in their lifestyle is the ability to be comfortable in their skin. The concept of trying to please other people's sense of success is a difficult road because you're never going to please everyone all the time, more so you will be running from things that could be your path to success. o
Run your own race, be comfortable in your own skin.

Episode Timeline:

[00:46] Introducing today's guest, Frazer Rice, Regional Director for Pendleton Square Trust Company.
[07:26] About Pendleton Square Trust Company and Wealth Management.
[08:46] The 3 main functions of a Trustee.
[11:21] In the US, do families have to appoint a company to act as Trustee in an administrative capacity.
[12:16] The concept of a Private Trust Company.
[18:54] Who would you say is your most common customer?
[28:02] Frazer shares tools used when working with families.
[32:51] The Vacation Fund Concept.
[38:40] Frazer's insight on a Family Bank.
[47:57] Frazer's letter to his kids

For more episodes go to
BusinessOfFamily.net

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Special Guest: Frazer Rice.

Jeff Gould - Generational Real Estate Families with Lineage Asset Advisors [The Business of Family]

Mike Boyd — Mon, 14 Dec 2020 19:00:00 +1000

Jeff Gould is the founder Lineage Asset Advisors (LAA) a full-service commercial real estate advisory and consulting firm providing customized commercial real estate services to help families make seamless transitions with their properties – from one generation to the next.
Lineage collaborates with estate planning advisers to develop and implement portfolio solutions that meet the goals of multiple generations. Their aim is to preserve and enhance family wealth and legacy during difficult life transitions while establishing a culture of respect, peace of mind and financial sustainability.

Standout Quotes:

"Like most forms of financial planning, the sooner you plan ahead, the much easier it is to implement and follow through" - [Mike Boyd]
"Even if the family is risk-averse, I think it is really critical for them to understand that the risk of doing nothing may still be higher than the risk of doing something if they plan to keep the assets" – [Jeff Gould]
"I think many families need to stay nimble in the future and really adjust for change" – [Jeff Gould]
"Wealth and wealth transfer doesn't always lead to happiness, in fact in many cases it leads to conflict and challenges and strife among family members, so we want to try to shift that conversation, and that takes effort and planning" – [Jeff Gould]
"Life is generally empty and meaningless, and we have the ability to establish positive and productive meaning in the midst of a world in constant transition" – [Jeff Gould]

Key Takeaways:

The ideal scenario would be to involve Jeff early in planning for the transition but the reality is that he is engaged much later when things need to move quickly.
There is a unique skill set that is needed to be a trusted adviser to help the family understand what they have in regards to Real Estate, and develop a plan with that Real Estate called a "Shared Asset Ownership plan" that considers the variables of the next generation.
The 3 phased process includes Discovery, Planning, and Implementation.
Addressing the issue of Deferred Maintenance; the 'Do Nothing Scenario' and the 'Do Something Scenario'
5 Transition Strategies in Real Estate planning: Communication and Education, Conflict Resolution and Accepting differences, Rediscovering your commercial Real Estate portfolio, Developing a mindful asset transition plan, and Implementing the plan and adjusting for change
Jeff's advice to Real estate entrepreneurs: Creating your estate plan and developing a shared asset ownership plan that aligns with the next generation.
Jeff explains that he helps the family understand that it is a fortunate situation to be carrying on and stewarding the transition of the assets rather than focusing on the personal value of the asset to each family member.
Be respectful to everyone you encounter.

Episode Timeline:

[00:49] Jeff Gould and his professional background
[06:06] Do you usually get called in at the time of a transition event in a family or ahead of that time to plan a healthy transition?
[08:37] Jeff gives a general picture of the different categories of clients he works with.
[11:12] What are the particular challenges with the real estate space that create the need for Jeff's specialty, to steward assets in family transition rather than a generic accountant or financial planner?
[16:51] Jeff describes the 3 phased process of his work with families
[24:00] Addressing Deferred Maintenance
[30:50] What would you say is the appetite for innovation in Real Estate?
[35:06] 5 transition strategies in Real Estate planning
[39:44] What advice would you give to a founding generation or Real Estate entrepreneur to best prepare themselves to have a great plan in place?
[43:24] Do you work with any families that are multigenerational into the 3rd, 4th, or 5th generations?
[49:38] From Jeff to his kids

*For more episodes go to *
BusinessOfFamily.net

Follow Mike on Twitter @MikeBoyd

If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!

Special Guest: Jeff Gould.