Retire Smart Austin | Episode 177

Cynthia de Fazio  00:27

Welcome to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, senior of Empower Wealth and Tax and to our viewers at home in our viewing audience. Today, we’re going to talk about the importance of working with a fiduciary who’s not a family member when it comes to distributing your estate, a very important topic. We know a lot of people are thinking about this right now. So welcome to the show today. Phil, how are you?

Philip Capriotti  00:51

Blessed. Cynthia, how you doing today?

Cynthia de Fazio  00:53

I’m so blessed. Thank you for having me with you today. I’m so excited to be with you, and I know you’ve been so busy. So, thank you for always coming in to do the shows.

Philip Capriotti  01:01

I absolutely love the shows. And the shows aren’t the same when we’re not doing them together. Yeah? Well, it is what it is. We have, I don’t know, almost 180 shows now. I guess we’ve been working together for about five years, years, yeah? And it’s just a beautiful thing. And as we both thought, you know, originally, when we started doing these shows, and maybe it’ll last a year or something like that. Yeah, and now it’s really gaining a lot of popularity. I didn’t realize we have a fan club out there. There are folks that have been watching us for three, four, going on five years, apprehensive about calling But at any rate, now we’re starting to get higher net worth folks calling coming into the office, they’re starting to realize all the services that we provide, unlike their current financial advisor, who’s pretty much one dimensional, you know, they may be a wealth manager, but they really don’t do all. They’re not in all of the above or take a shotgun approach to retirement planning, one of the questions that we get, and this was one of the reasons I wanted to do this topic. We’ve never done it before. No, we have not. And a lot of folks are concerned that when they pass away, like, for instance, you have a husband and wife, they’ve amassed assets. And many, for many folks, they’re not going to spend it all. They’re more concerned about paying too much in taxes, giving too much back to the government, and what’s left over. They want to go to their children and grandchildren. Well, with that being said, they had no idea that we also specialize in our private wealth management firm the distribution of the assets of an estate by a licensed fiduciary, somebody who is impartial. One of the concerns they have is the fighting. The kids.

Cynthia de Fazio  02:53

Oh, absolutely.

Philip Capriotti  02:54

Especially when you have multiple children. And I got to tell you, folks, I’ve been in business now for several decades, and I’ve seen a lot. I’ve seen the tightest of families torn apart when it comes to money, unfortunately, and many times it’s the ones that have done the least that want the most in retirement, and really all of all of our family, all of our clients want is a peaceful distribution by an independent source to their family, meaning, this is what mom and dad wanted. You get this, you get this, you get this, because of this. And so, this way we can be the heavy. It’s not maybe the matriarch of the family who is left to be the executrix of the estate. You don’t want to keep your kids involved uninvolved, and you also want to keep them independent, but with a close relationship to your fiduciary. So great topic. I can’t wait to address all of the different aspects of it.

Cynthia de Fazio  04:01

Me too. I’m so excited about it because obviously the first one that I think is so important to talk about is impartial decision making. Yeah, very important.

Philip Capriotti  04:10

It’s extremely important. The reason is, you have no family bias. You have no personal bias. Okay, we are hired to execute the will of the individual of that particular state. So, we don’t have any emotional attachments. We’re not involved. The children and grandchildren many times do, and this really helps in making the decisions, because the decisions- we are there to assist you. You hire us to help you make sure that your will is done. The biggest thing, though, is avoiding family conflicts. Oh my gosh, for sure. Yeah. So, with many folks, what we see is the tightest of families all of a sudden aren’t as tight as they used to be, yeah? So, I like to sit down, number one, with the husband and wife, and especially we see this when there’s a second marriage, of course, okay? And you have children from a first marriage, so sometimes there’s a little tension. Maybe it’s not as maybe it’s not as obvious, okay, but it is normally after the death, so you don’t want to make sure that your estate doesn’t have what we consider competing interests. So, and not only that, you don’t have to worry about, what if one of the children, something happens to one of the children who you placed as the head of distributing the assets. What if they come down with a medical disability, God forbid. What if they pass away? What if they come down with some sort of a mental issue? Anything can happen. What if they’re swayed by one of the other siblings or maybe even the spouse? You take all of that out of play. And not only that, I think it’s extremely important you worked hard for your assets. The last thing you want is a fight over money at your death. We should be more focused on the thought and the memory of our parents. And I got to tell you, the children like it when there’s an impartial mediator. This is what mom wanted. This is what dad wanted. This is what- the way we’re going to distribute the estate.

Cynthia de Fazio  06:27

It definitely makes it a lot simpler. Phil is what I’m thinking. And it’s unfortunate that we can’t always have the Brady Bunch when you’re blending families, right? Everyone got along. Yeah, it doesn’t always turn out that way, especially when it’s the loss of a loved one and someone thinks they should deserve more than what the other person gets. So, thank you for bringing that up. What about the importance with working with someone who’s actually an expert in estate administration?

Philip Capriotti  06:53

If you worked your entire life, and many of the many of the families that we work with, they have generational wealth. Okay? Dad might have started a business. Son took it over and made it a multi-million business, million dollar business, or even if it’s modest, you know, $2, 3, 4, 5 million but the fact of the matter, you want an expert, and by the way, it doesn’t always have to be the big name law firm that charge you a huge fee. You want someone who’s your fiduciary. They manage your assets, they’re managing your trust. They’re managing your taxes. Why would you not want them to manage the distribution of your estate, especially when they have not only just the licenses, the expertise, and they already have a relationship with you, your spouse and your children. When I started this company back in 2005 it was under the premise that I would also, good lord willing, get my children involved. I have five children. Three of them are in- heavily involved in the business. So, our children work with yours, so the expertise is extremely important. Also, you have all of the gears working in tandem. They’re working together. Which brings me to, what about the tax efficiency of your estate? So, many times, the law firm, they want to hire a tax expert. And again, having the all-inclusive, all in one estate planning mantra that we have really is second to none. So, when we take a look at your skilled fiduciary should also be an expert in minimizing the taxes, not just for your retirement planning, but also your estate planning. I look at it quite simply, I love the government. I love our country. There’s no- There’s- there- There’s no other country I would rather live in. But the fact of the matter is enough is enough already when you’ve paid taxes for 50, 60 years, the last thing that you want to do, especially with impending- with pending new estate tax laws. Absolutely, the last thing you want to do is give half of your estate away to the government because it wasn’t structured tax efficiently. So, part of this distribution is the tax efficiency as well.

Cynthia de Fazio  09:15

So, so important. And Phil, we’re going to take our first commercial break, but you have a very special message to our viewers at home before we do so.

Philip Capriotti  09:22

folks, if you’ve been watching for this is your first show, or whether you’ve been watching us for the last five years, call 888-818-6557, don’t be apprehensive. Our complimentary consultations, and we can talk about any one of the topics most folks want a written retirement income plan. They also want us to get a second opinion on their written estate plan. They also want to compare. Hey, what can you do to help my family? What is not already being done for my family? What are the questions I should be asking? Call 888-818-6557, come on in. Let’s have a conversation about your retirement income planning, your portfolio management, and, if necessary, the estate planning and the distribution of your assets once you’re no longer here.

Cynthia de Fazio  10:15

Phil, thank you so much to our viewers at home. That number to call is on your screen, 888-818-6557, you’ve worked your entire life to get to the retirement years. Don’t you deserve to have peace of mind, especially about today’s topic estate planning. Don’t you want to know that your assets are being distributed to your will? I think so that number to call 888-818-6557, or you can snap on the QR code at the bottom corner of your screen that will take you right to the landing page for Empower Wealth and Tax. You can schedule your time accordingly. We’re going to take a very short commercial break here, but we’re talking about a very important topic, estate planning and working with a fiduciary that’s going to be non-partial in your event of passing. We’ll be right back momentarily.

Philip Capriotti  10:57

Hello. My name is Phil Capriotti. You know, we have been helping folks like you create a tax-free retirement income plan for over two decades. I am a firm believer that if you’ve worked and paid taxes for the last 50 years, the one thing you shouldn’t be burdened with is excessive taxation and retirement at Empower Wealth and Tax we specialize in helping you reach your desired retirement lifestyle with a tax free and tax efficient retirement income plan with the probability of taxes going up significantly in the future, let’s plan your retirement right call us today or select one of the options below and start empowering your retirement right now.

Cynthia de Fazio  11:49

Welcome back to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, senior of Empower Wealth and Tax. And we’re talking about a very important subject, estate planning and working with a fiduciary, this is a very important topic, Phil because obviously you have a lot of high-net-worth clients, and they’re thinking about their estate, and they want it to be passed along as efficiently as possible. What about liability? Can we talk a little bit about liabilities?

Philip Capriotti  12:17

Yeah, so working with a non-family fiduciary, most- in all cases, number one, folks, we have a legal responsibility to act in you your best interest and the best interest of your family. That’s what you hire us to do. We’re your confidant. And with that being said, many times we carry extensive liability insurance as well. I believe that the biggest pressure on distributing assets is the undue influence by family members or other family members. For instance, to give you an example, there are three children. And you know, in my situation, our situation, we have five children, let’s say that there’s only one spouse that I’m not 100% with. We click about 80, 75% of the time it’s irrelevant. Love, the- love- I love- Love that. Love the- it doesn’t matter the spouse of my children, okay, is my friend, but they don’t always see it that way. But the influence of a spouse on a child at the death of their parent, we see it a lot. Yeah, you know, your mom wanted you to have this, this, this and this. How many times are we pressured by our spouse to do things and many times for the better, but not always. And the death of a in the death of a family member, when we’re talking about passing on to the state, an estate to the next generation, we do see that you eliminate it, because when you hire a non-family fiduciary, that risk is eliminated. You may have a situation like that, or it could even be, you know, your child’s spouse, maybe the two of you don’t get along for whatever reason’s irrelevant, the emotional distancing, big one. I hired Phil and his team of professionals to make sure when mom and dad, when we pass away, everything is distributed according to our will. Are you all okay with that? Addressing this situation with your children and potentially your grandchildren or any beneficiary on the front end, mitigates and eliminates any type of problems with the distribution of assets. Number one, how come you picked Joni, but you didn’t pick me? Forget all of that. Okay, and I don’t care if your estate is a million dollars or $100 million it’s irrelevant. So, the point is, is, is what the point is, we want to make sure you have a clean transition. You know, when I lost my parents, okay, very emotional, right? Absolutely in a situation that we had. And I won’t get into the personal minutia, but let’s just say I’ve seen firsthand that when a family member is put in charge of the estate, how the estate, especially they are supposed to act as a fiduciary, but they don’t even know what the meaning of fiduciary is. It’s more self-interest or self-serving. And I’ve seen it firsthand in my own family, and I’ve seen it firsthand in dozens of other families. So, hiring a non-family fiduciary to distribute an estate extremely important.

Cynthia de Fazio  15:48

It really, truly is on all levels,

Philip Capriotti  15:51

and most folks don’t think about it, or they think, Oh, God, it’s going to cost too much. No, it’s really a fraction. It’s really a fraction of the estate. But most importantly, everyone’s on board. Everyone could spend time mourning the parents and remembering all of the good times and maybe some of the bad times. But it’s not about who gets what and when.

Cynthia de Fazio  16:12

Yeah, absolutely, absolutely. What about something important, confidentiality, privacy. Why is that a big thing, Phil?

Philip Capriotti  16:21

Well, it’s, I don’t want anyone to know my personal business, especially my financial business. Okay, many times when you have a family member, the- your business is put out in the street. I mean, it’s talked to about this spouse and that this friend and that friend, and the next thing you know, it’s out in the public domain. And so, for me, we’re very private folks. We’ve worked hard. My children, they’ve worked hard. We’ve all worked hard. And the fact of the matter is, our personal business is our personal business. I want to keep it personal, and I want to keep it private. Now some folks may not mind if their business is put out on the street, but most of the clients we work with, they care. They care a lot, and hiring a non-family fiduciary really eliminates that risk. Again, we’re hired to act in your best interest and make sure that your will is done. So, there is a peaceful transition at the death of both family members.

Cynthia de Fazio  17:26

Absolutely.

Philip Capriotti  17:31

The other thing- I’m sorry. The other thing is, we want to stay adherent to the estate plan. I don’t want to deviate from that. So, a non-family fiduciary, we follow your estate plan to the T strictly. We don’t deviate. Okay, that’s what you pay us to do. So, we want to make sure that even when we see family discrepancies, we’re there to mediate it and resolve it, and that, instead of having a small issue blow up into this big problem, it’s basically the fires put out before the ember even starts to spread to the rest of the forest, so to speak.

Cynthia de Fazio  18:16

That makes perfect sense.

Philip Capriotti  18:17

And it really does. So, we can not only that, what I like to do is I like to get involved with knowing the children. Even if the children live out of state, we normally all have a teleconference or two or now we do a lot of zoom meetings. The kids are on board. And once you get your children agreeing to hiring a non-family fiduciary, it actually puts everything at rest, because your daughter or your son may not want to be involved in it. They’ll do it because you asked them to, but they really don’t want to be involved. They’d rather have a professional handle this, and they can go on enjoying again, their siblings and grand and children or all of the beneficiaries who were involved. Long term stability is also another issue, because these long-term trusts, they change, especially now, and I’m going to throw an off topic in there. I was reading my newsletter from Ed Slott last month, and this secure act 2.0 they changed the- they changed yet again, distribution to beneficiaries. So now, whereas we didn’t really need a trust with respect to distributing assets to beneficiaries, if you have multiple beneficiaries, it actually should be in the trust now. So, this just changed for one year. Now, if you have a single beneficiary, no need, because basically the entire Roth or the entire IRA is going to one person, but when it’s multiple now we realize and so our whole trust department, we had to change things. So, what we see is, when we see long-term changes, your children aren’t going to understand them. They’re not going in many cases, I mean, unless they’re an attorney, and many times even if they are an attorney, there especially is in estate planning. So, I think the most important issue, though, is avoiding the family conflicts.

Cynthia de Fazio  20:21

Absolutely, 100%, especially during such an emotional time, that’s the last thing you want is people just pulling things that aren’t-

Philip Capriotti  20:27

Normally what happens, it’s not really at the funeral, it’s a month or two later, yes, that’s when it happens. That’s when they sit down and we’re like, what happened to this thing? What happened to that. What happened to this piece of property? Didn’t mom have like, 1.5 sitting somewhere, or half a million sitting over here? So, we are completely transparent about all of the assets, where they are, where they’re going, and we resolve this on the front end, before the death. Like I said, we get all of the family members on board on the front end. So, there are no problems later. There are no- Yeah, because there’s nothing worse than one brother or sister not talking to the other because of a death with a family member and the transfer of assets. And Cynthia, it happens more times than you think. I know, folks, this is a negative topic, and I don’t want it to be negative. I want it to be positive. The fact that Amanda is you should pick up that phone. Whether you need a trustee or a non-family fiduciary to handle the distribution of your estate, you should be calling 888-818-6557, come in for a personal consultation. Let’s talk about your estate plan. Let’s talk about your retirement income plan. Let’s talk about the distribution of your assets. Maybe you’ve never even had this conversation, because before, because you’re like me, a baby boomer that thinks they’re going to live forever. We do, right? I mean, certainly, okay, the older we get, we start to realize maybe we’re not that. But the fact of the matter is, it’s a complimentary consultation, or some folks say it’s free. The expertise and the knowledge you will gain by calling and coming into the office is invaluable. So, call today. 888-818-6557, we look forward to meeting you and helping you and your family work through these things.

Cynthia de Fazio  22:28

Phil, thank you so much to our viewers at home. That number to call is on your screen, 888-818-6557, or you can grab your smartphone, click on that QR code at the bottom corner of your screen that will take you right to the landing page for Empower Wealth and Tax you can schedule your time accordingly. We’re going to take a very short commercial break, but we have so much more about the topic of estate planning with a fiduciary who is not a family member. Stay tuned.

Speaker 1  22:54

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Philip Capriotti  23:17

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Cynthia de Fazio  23:55

Thank you, Phil. Welcome back to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, senior of Empower Wealth and Tax, and we’re talking about a very important topic that will involve all of us estate planning and the importance of working with a fiduciary who’s not a family member when it comes to distributing your assets. Phil, this topic is so important because, again, I know that it actually affects all of us in the viewing audience, of course, but you have a lot of high-net-worth clients who are really concerned about this, and rightfully so. One of the things I think we should talk about is how this would help avoid conflicts of interest working with a non-family member fiduciary.

Philip Capriotti  24:34

Most high net worth clients. And again, folks, it doesn’t matter if you have 1 million or 100 million or more, it’s irrelevant. All of these issues really apply, but normally what we see with high net worth is they’re passing businesses on. So, you may have multiple children and even grandchildren, and many times you want a non-family fiduciary, especially someone with expertise in all areas, really, whether it’s tax, legal, wealth management, insurance, all of that, because there are no personal stakes. So, you may have a family member who is involved in the business, they have a personal stake in the estate. So, we can create that which, which, many times, immediately creates a conflict of interest. I’ve been working with that in this business for the last 20 years. Okay, no, I don’t want you to sell it and take your portion of the business. I’m just giving an example. So, when we sit down and we put plans together, whether it be a Buy/Sell agreement, whether it be a continuation of resources to continue the business again, I don’t want my son who is going to be running- Let me put it this way. I have two sons that will be running this business, and probably one daughter. I want it to- I want it to occur the way I want it to occur. I do not want these two boys and girl arguing over dad wanted this. Dad said that. Dad said the other day, or my other children that aren’t involved being left out. Oh, it’s too expensive to sell the business. You’re going to have to wait. We’ll pay you X amount a year. You see, a lot of these children make up their own details when it comes to passing on businesses or the family ranch or the family farm. So, when we take a look at this, what we want to do hire a- I don’t care if your estate is 1 million or 100 million. It’s not just the estate attorney. You want to hire a non-family fiduciary to help distribute the estate according to your wishes and make sure that there’s a peaceful transition to the next generation.

Cynthia de Fazio  27:04

Phil, what it comes down to is peace of mind. And I know, obviously we have only about 45 seconds left of the show, but that one final word of wisdom you want to give our viewers at home before we say goodbye?

Philip Capriotti  27:15

Yeah, I do. So, when you hire a non-family fiduciary, basically what you see is you’re bringing objectivity, expertise, legal protection, tax knowledge all together, so you have the best possible transfer of your estate from one generation to the next. We are experienced in this area. Give us a call. Let us help you and your family set up a plan that’s acceptable to you and also to all the family members.

Cynthia de Fazio  27:45

Phil, thank you so much to our viewers at home that number 888-818-6557, Be safe. Be happy. Be blessed. See you next week.