Today’s guest is one of our repeat offenders, Tom Deans.  We’re talking about Tom’s newest addition to the Willing Wisdom family of products, one I think is an important part of long-term planning for your family.  Tom and I have spent many hours talking about what it takes for families to be successful in the long-term.

One of the things we’ve often talked about is having regular family meetings where everyone share’s what’s in their will.  Tom has developed a new instrument that helps you get a readout of what your family needs to do in less than ten minutes.

In this podcast you’ll learn:

  • What it takes to have a psychologically healthy family.
  • Why the first step is having a will and some depressing statistics about how few have them.
  • The fact that you need to share what’s in your will with those involved.  (Only 5% have done that.)
  • What the Willing Wisdom Index is.
  • Where family meetings fit into the larger context of having everyone on the same page.

Transcript:

Narrator:         Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.

Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh:                Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business.

Today, I have a repeat guest, or some people might say a repeat offender. I like repeat guest so we’ll go with that. It is my friend, Tom Deans. Tom– gosh, I don’t know how long ago I met Tom. It had to be five or six years ago after his– maybe 10 years ago. After his first book, Every Family’s Business, came out. And then recently, he wrote a second book called Willing Wisdom.

And today, we’re going to talk about something that you might find really interesting which is taking the information Tom put in Willing Wisdom. He’s now created a questionnaire about that so you can find out where you stand as far as your estate planning, whether you’re doing the right things, whether you’re following best practices, and all those fun stuff.

So what we’re going to talk about today is, what are the best practices behind Willing Wisdom? And Tom is the expert on that so we’ll bring him in and we’ll start talking about it.

Hey, Tom, how are you today?

Tom:                Josh, fantastic. And I think it is closer to 10 years. I think it was in Boston, at one of the Legacy meetings and then, of course, the ever shrinking universe at PPI meetings. It is actually a small community of advisors who are doing the kind of work that I know you’re doing. And certainly, the kind of issues that I’m writing and speaking about.

Josh:                Yeah, really. I mean, there’s hundreds of thousands of people in the world who do this work. And I would bet there’s less than 5,000 who actually do the work at a deep level. So I would agree with that. It is a very small world and you keep seeing the same people in different places, so that’s always a fun thing.

Tom:                It is.

Josh:                So, Tom, tell me about Willing Wisdom and why is this such an important thing for people to pay attention to?

Tom:                Well you know, Josh, I wrote the second book to fill in the gaps – the questions, the issues that were raised by my first book. So as you know, the first book was dealing with the transition of family businesses. And there was a rallying cry for business owners not to gift their business to their children. I believe that if children love the business, they need to buy it. And guess what happened? A lot of business owners had that conversation and a lot of kids said, “Ah, I think I’ll take a pass.”

So it was actually that first book, it was leading to a lot of businesses being sold. It was leading to a lot of liquidity events. And what I learned very quickly, from readers, was that I was solving one problem and actually creating a much larger, more vexing problem which is – great, you don’t have a business to transition. Now, you’ve got 10 million, 30 million, a hundred million dollars of cash to transition. What does that look like? How is that going to happen?

And so, I was getting questions from audiences and I didn’t have the answers. And as a speaker, you know there’s nothing more terrifying than not having answers. So, I really felt like I owed it to my readers to do a lot of research. I interviewed over 500 estate planning attorneys in the preparation of the second book. And it is not a technical book on wills. It is really a thematic, Socratic book on the whole preparation of families to receive not just wealth but wisdom from their parents.

And so, that’s really what led to the book. I mean, of course, as you referenced in the introduction, that’s what led to this dynamic, interactive tool to help families answer the question, “How prepared is my family to inherit?”

Josh:                So there are seven things that you talk about in the book. How many things are there in the Willing Wisdom survey instrument that you developed?

Tom:                Well, they are all there in one shape or form. So there are seven questions in Willing Wisdom, the book. There’s 60 questions in the questionnaire that take nine minutes to produce a 20-page report and a score and sub-scores which basically, as I said, answer the question “How prepared is your family to inherit?”

Very interesting, we have over 1100 people who have completed the survey to date. And the quick answer to the question is, “How prepared are families to inherit?” Pretty awful. Pretty appalling. And these are the people who are the most inclined to actually complete the questionnaire. People who actually have wills, advanced healthcare directives. These are people who are naturally inclined to do planning.

So the state of affairs of estate planning, in both Canada and the United States, is absolutely appalling – 137 million. That’s 137 million American and Canadian adults without a will. It is unbelievable. At the very moment in time where we’re leaving staggering amounts of wealth, we’re writing fewer and fewer wills.

Josh:                So when people do a will and they write this stuff down, it still isn’t done very well. When I took mine, I have a will. I have a living– you know, a healthcare proxy. I have all that sort of stuff. And I found I was woefully short on lots of areas in my planning with my family.

Tom:                So what the Willing Wisdom Index is actually measuring is not just governance which is your documentation, your powers of attorney, your will, your healthcare directive. It’s actually going beyond that. It’s actually measuring, “How well are you communicating those documents?”

Are you ready for this? “Does your executor actually have a copy of your will?” When Bobby Kennedy took that bullet in Los Angeles in 1968, it was a terrible event. He did have a will. Guess who his executor was? His brother, John F. – assassinated five years earlier. So my question is, who is advising the Kennedy?

This subject eludes some of the most powerful, brilliant minds on the planet. It is such a fascinating subject how smart people really miss the most obvious things. And that’s what the Willing Wisdom Index is trying to do, which is remind people. It’s not just about writing your documents. It’s about sharing them with the people who are impacted by your life, by your death and by your wealth.

Josh:                So here comes a loaded question. You go through your survey and you do it, and you find out you’ve got these gigantic holes in your life. And it’s not documentation that you’re missing because you’ve done all your documentation but you haven’t crossed the i’s and dotted the t’s– or actually dotted the i’s and crossed the t’s, I guess, how you should say that.

Tom:                Right.

Josh:                What do you recommend you do after that? You get this information. Where does one go from there?

Tom:                So it’s very interesting. This client engagement tool is really self-selecting. The advisors who are subscribing to this– so what happens, Josh, is they subscribe. They receive access codes which they then dispense to other prospects or existing clients.

It’s self-selecting. The advisors who are doing values-based planning, the advisors who aren’t just selling products, the advisors who are doing deeper dives and understanding that money has an impact on relationships. Those kind of advisors are using this tool. And those kind of advisors are actually in a position to implement the recommendations that are set out at the other end of the questionnaire.

So, really, what the best advisors and then doing, once they have a copy of the report which is shared voluntarily, I should note, by the respondent, is it leads to a family meeting that is facilitated by who? By the advisor. Why is this important? Because 66% of inheritors switch advisors.

The biggest strategic threat to investment firms is, “What happens when the client dies?” 66% of the money just walks out the door. So this comes at a really important time when 2 billion, that’s billion with a B, being inherited every single day – that’s day with a D. This issue is the single largest threat to investment firms.

So this tool, really is both a client retention tool and it is a tool to help advisors attract new clients – high net worth clients. And the target market is really, for this questionnaire, adults over the age of 50 with at least a million to 100 million in investable assets.

Josh:                Okay. So let me go down some basics here. We know why would be good for the advisor but I’m really more interested in why this is good for the person who takes it. And my question would be, “Okay, I’ve got this information. Why do I want to have an advisor facilitate a family meeting? Why don’t I facilitate it myself?”

Tom:                Oh boy, that is a great question. The problem is if we just leave it to ourselves, for the same reason that 137 million North Americans don’t have a will, most people say, “I’m going to have a family meeting” and then they just don’t have one. Or, they do have one and it devolves into a kind of an emotional kind of chaos because there’s no kind of professional third party in the room.

What I find– and I’m a speaking resource in a lot of family meetings. I’m just brought in to present and then they ask me to leave. But I’ll tell you, some of the stuff that goes on in these family meetings, in the absence of advisors, is really alarming.

But it’s amazing how well people behave when there’s some structure, when there’s some agenda, when there’s , you know, a proper facilitator. And so, that’s really the benefit of this Index. It really underscores that point that the advisor is essential to the process.

Josh:                So what kind of training would an advisor need to have to be an effective facilitator at a family meeting?

Tom:                Well, the kind of advisor that understands that he was born with two ears and one mouth and probably should use them in that proportion. I mean, it’s great listening skills, that’s what makes a great facilitator. It’s the advisor that listens carefully for the tone and subtext, is able to take some notes to really distill family conversations into actionable items, the kind of family advisor that can follow up to ensure that action items are implemented. Good minute takers.

And also, advisors that are really good at shelving some conversation and putting it aside and saying, “We’ll come back to that later. Let’s stick to the agenda” and move the meeting along in a business like way. And I’ve got to tell you, there are so many advisors that are timid. And it is such a misplaced concern.

And I’ve watched some advisors be very nervous about facilitating their first family meeting and their first one. And I really encourage advisors who are listening to start with maybe a B or C client. They do their first family meeting and it’s a little bit awkward but okay, they survive it. Second one, a little bit better. The third one, not bad. Fourth one, pretty good.

By the time they get into their fifth family meeting, it’s like they’ve discovered their inner Dr. Phil. They become inseparably good at this stuff. And they can’t wait to do their next one. And then they understand – this is the ultimate transformation. That, in fact, that is their product and that is their brand.

They are family facilitators. Wealth has always been about family. It has always been about family relationships. And advisors who understand this and early on in their career, really go on to do great things. The uber wealthy who have more capital than they can consume are concerned about one thing – their family, the impact that their wealth will have on their heirs. And advisors who are not tuning in to this are missing a huge opportunity.

Josh:                So what is it likely that someone who takes this instrument will learn, besides the fact they need a family meeting?

Tom:                Well, I think there’s a lot of people who think that they’ve got everything buttoned down. And they have a will. They have a health directive. They have a power of attorney. But they find that there’s a whole bunch of subtle gaps in their estate plans.

So the Willing Wisdom Index is – basically, it’s a gap analysis. And I think, really, what I reveals is that there are so many subtle gaps – the communication piece, the sharing the documents. Having back up executors, for example, that’s often overlooked, sharing passwords to social media.

I still get a message from a friend, who passed away three years ago, on LinkedIn wishing him “Happy birthday!” I mean, it’s one of the most public declarations of estate planning failure is these social media accounts that continue on well after someone’s life. It’s just like everyone knows if you probably die without a will and the family has no access to those accounts.

So it’s really getting at the really subtle differences. And I have to tell you, a lot of business owners are scoring between 35 and 45 out of 100 and they’re shocked. These are accomplished people who don’t like failing at anything. And when they’re getting 35 to 45, it really kind of makes them sit up and say, “Holy smokes! I mean, I’ve made some loans to my children but I haven’t documented them. And my executor doesn’t have those promissory notes.”

There are so many things that have gone on that are going to create real problems for executors and for intended beneficiaries, whether it’s litigation, which is going through the roof. I can tell you, in the City of Toronto, there are not enough estate litigators to keep up with the volume of cases. Just given the demographics – the number of people who have amassed significant wealth, the demographic – the aging population that is now dying in record numbers, are leaving behind such chaos, disorganization and fraught relationships. You can see where this is heading.

So I think it’s a super, super timely tool to help, I think, people and families kind of take stock of where they are in their life and to get back to basics which is “We’re a family. We’ve been fortunate to accumulate wealth. How will this money transition? To who? To when? How? And what impact will it have on my family?” And more importantly, “What is the connection between my wealth and the kind of long-term care that I hope to receive from my intended beneficiaries?”

You know, Josh, this is really where Willing Wisdom started. It’s connecting these ideas. These are not separate events.

And I argue in the book, and really, it’s all the way though the Willing Wisdom Index, this idea that the more transparency that we can bring to our estate plans, the more likelihood it’s going to show up in the quantity and quality of long-term care that we receive – from whom? From a total stranger? From our lawyer? From our accountant? No, from our intended beneficiaries. Which is who? In 99% of all estate plans, it’s our family. And that’s what the Index does. It reminds people that those issues are connected.

Josh:                So let’s talk about transparency for a second. Because I think that’s a big deal and not only in estate planning but in life. We tend to keep secrets which we really shouldn’t keep. And in my experience, the more secrets that we have, the larger chance we have for misunderstandings to occur, and hard feelings, and Thanksgiving becomes difficult in the future. Or at least, that’s my experience.

Why would you think transparency, besides what I just said, is such an important thing to do?

Tom:                Well, I think that transparency is culturally informed. And we know from Family Systems Theory that people repeat.

And so, in many cases, we are the first generation of serious wealth accumulators. And so, really, we have a generation that’s heading towards the exit. And they’re looking back into their own family narrative. There’s nothing there to guide them. The good likelihood that their own parents didn’t have a will. Or, if they had a will, it really wasn’t much anxiety or family discord because there really wasn’t much to divide.

But this generation – this generation of investors, savers, successful business owners, all they’re going to do is look into their own family history for guidance. They are going to leave one whopping big mess for their own– well, first of all, for their spouse, and then for their children.

And I think this is going to have a huge impact on the very wealth of our nation and the very communities in which our children are growing up in. Because if we’re not having the family conversations, then we’re prepared to die intestate which apparently 137 million American adults are prepared. If nothing changes, then there’s no provision for plan getting in those wills – zero. So we’ve got record wealth transitioning, a record number of wills not being written, and a record number of charities being ignored.

Josh:                And speaking of charities, you had an interesting question in your instrument. The question was, “Are you giving more to charity than your heirs?” And what were you getting at with that question?

Tom:                Well, really, what that question was acknowledging is the fact that one of the fastest growing areas of estate litigation right now are children who are suing charities because they’re finding out, not from their parents while they’re alive but after their parents have died and at the reading of a will, that they’ve left more money to the local university, local hospital foundation, or whatever and they’re not happy. And so, we’re not reading about this because, almost always, what happens is the charity settles and they don’t want a long public dispute over those funds.

Josh:                No. That makes perfect sense.

So what you’re saying is it’s a really bad idea that if you’re going to give all your money to charity, you better tell your children about what your plans are before you die.

Tom:                Well, absolutely, Josh, because one of the great things about a family meeting is everyone hears the same thing at the same time. If you’ve six brothers and sisters, it’s not six different renditions of who gets the cottage or what charity gets what. Everyone hears the same declaration at the same time.

And, of course, it takes away the potential for litigation because there’s minutes of those meetings. And if there’s a family meeting and the same giving intentions are expressed and articulated clearly then those wills are not going to be challenged on the basis of undue influence.

Or, the other biggie, on the basis of incapacity like mom and dad were showing signs of dementia so that last impetuous change to the will, we should challenge it. Family meetings are all about continuity, and consistency, and transparency, and values. And it just takes the litigation wind out of the sales.

Josh:                Okay, so let me push back a little bit on that, Tom, because here’s what I would expect would happen in a lot of families. Senior who has created the wealth and is kind of a hard guy or a hard woman. And they say, “Here’s what I would like to see happen.” And everyone else who’s in the meeting kind of nods their head. Senior dies. And they still sue the charity because they really didn’t agree with what Senior was saying in the first place.

Tom:                Yeah.

Again, so back to my point, if there’s minutes to those family meetings, if it’s not an impetuous change to a will by a 95 year old who is showing some signs of mental incapacity, those wills are going to stand up and those challenges to the charity are not going to succeed. So they may disagree with it but the point is it was a decision made in an open, consistent form.

Josh:                Okay. Well, what if it’s not a group decision? It’s more or less, “Here’s what I’m doing and you have to accept it.”

Tom:                Then that’s unfortunate. I mean, because, really, what I’m trying to get at is the best decisions for my will. It’s very much a collaborative undertaking. It’s not about me sitting down and making declarations. I’m really curious to understand what my intended beneficiaries are intending to do with my wealth. It’s very much a conversation and a reciprocity. I may lay out some expectations but then there’s also some really interesting dialogue around what wealth can accomplish, whether it’s starting businesses or supporting charities.

I can tell you, my own grandfather left a gift to my Alma Mater, his Alma Mater. We went to the same university. And it gives me an opportunity to connect with him. He passed away 15 years ago. And it gives me an opportunity to reconnect with him. I go down to the university. He funded a lecture series. It’s such an interesting– the gift was really a gift to the university but it really felt like a gift to me.

And that’s what I’m getting at. When families can talk about philanthropy and engage the next generation in that decision of what charities are selected, then we’re really on to something. Then we’re really tapping into the true essence of a wealth transfer that’s got legs because it’s a conversation. It’s not dictatorial.

Josh:                What I’m driving at here, Tom, this is what I would think where you need to have a skilled facilitator because if the dad is driving and there’s not any push back on a major issue like this, that facilitator better be pushing for push back because it’s there.

Tom:                And I think that’s a really fair point. And I think the really skilled facilitators would kind of use that family meeting form to kind of ask open ended questions that maybe aren’t coming from the patriarch or the matriarch who are considering these large donations. You’re absolutely right, it would be upon the facilitator’s shoulders to kind of say, “So, folks, what do you think about that? Sally, Mary, Billy, what are your thoughts on that?” Hey, better deal with it now because if those issues are not exposed, if those feelings are not exposed, if there is people feeling a little put out by the magnitude of these gifts, wow, now is the time.

And, by the way, these family meetings that are– you know, I’m seeing the average family meeting typically going three to five hours with a proper facilitator. No room rental. Typically, at a golf course or at an independent location. Not the family business. Not the family home, between $5,000 and $10,000, Josh, that is a bargain.

Do you know what $5,000 or $10,000 gets you with family litigation? That doesn’t even open up the retainer. Josh, it is unbelievable.

Josh:                That gets you an initial meeting.

Tom:                It gets you half a letter from your attorney. The average estate litigation is going 11 days at $25,000 a day in court. Folks, you need to do the math. Family meetings are an absolute bargain.

Josh:                No question.

Hey, Tom, we are unfortunately out of time. And I’m going to bet there are listeners who would love to learn more about your books, you, your instrument, all that kind of good stuff. So how would they find you and all the intellectual capital that you’ve been putting out in the world recently?

Tom:                I’ll make it really easy, Josh. There’s two websites but I’m just going to give one because they are linked. It’s willingwisdom.com. You can find the books. You can find access to the Willing Wisdom Index which is this great nine-minute tool that gives you a 20-page report revealing the gaps in your estate plan. That’s it, willingwisdom.com.

Josh:                Okay. So I’m going to give you an offer also, that is if you’re interested in doing the Willing Wisdom index, I’ve got a really easy way for you to do it. All you’ve got to do is text the word – and it’s one word, WillingWisdom W-I-L-L-I-N-G-W-I-S-D-O-M to 44222. You’re going to get a link. It’ll take you to an explanatory page abut what it is. You give me your name and your email address and we will have a code on its way to you. And you’ll get to take the thing free.

And, by the way, normally if you pay out of pocket, it will cost you $199 so I’m giving you a $200 gift free, if you’re interested in participating. And by the way, I will send you mine so you get to see what it looks like. And if you want to talk about yours, I’d be willing to do so.

So again, if you’re interested in getting yourself this instrument and learning about what you need to do around your will, text the word WILLINGWISDOM to 44222. And if you’re driving, please don’t do it now, wait until you stop.

Thanks so much for stopping by. You’re at the Sustainable Business. This is Josh Patrick. And I hope to see you back here really soon.

Narrator:         You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

 

Topics: healthy family, sustainable business podcast, estate planning, wealth management, will

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