What You'll Learn In Today's Episode:

  • How to ask your clients the right questions.
  • What clients really want.
  • The importance of sticking to your core values.
  • Why you must build strong relationships with your clients.
  • How to understand where your client is at with their estate planning.
  • Why you should encourage your clients to think about the goals, not about the numbers.

This industry is about so much more than simply offering financial help. It is about building honest connections and trust with your clients and ensuring that they always feel heard, valued, and understood. In this episode, Micah will be joined by Rod Zeeb, founder and CEO of The Heritage Institute, to discuss how to deliver massive value items, specifically several things we need to focus on as advisors to make sure we’re always exceeding expectations.

Listen in as Rod explains the four things that clients truly want, as well as the questions you need to ask in order to get there. You will learn how to understand your clients’ goals with their estate planning, how to approach a conversation around an estate that is not being split equally, and why you should always start with the vision.

Podcast Article:

Estate Planning: Asking the Questions that Really Matter

Are you helping your clients get what they think they want—or what they really want?

When most people think about what they want to leave their heirs, they don’t often stop to think, “Will this money help or hurt my children?” In this article, Rod Zeeb of the Heritage Institute offers advice for guiding your clients to consider what they really want their money to do for their loved ones.

Action Items in This Article

  • Don’t start with the tools; start with the vision, then decide what tools will best help you (and your clients) get there.
  • Practice asking the right questions and encouraging your client to think about what they want for their family beyond the dollar amounts.
  • Practice listening. It’s your job to help your clients discover how they want their wealth to benefit their loved ones. 

What Do Your Clients Really Want For Their Children?

It’s every financial advisor’s nightmare: Bob and Sue, your dream clients, walk in for their annual meeting and announce their decision to leave their eighteen-year-old grandchild a million dollars. They’re thrilled about the idea . . . and your stomach sinks.

We’ve all heard the stories of young people who inherit more money than they know what to do with. The parties, the drugs, the lavish vacations—and the bankruptcy, heartache, and loneliness when the money runs out and the real world comes crashing in.

Estate planning is one of the most emotional topics you’ll ever help your clients face; mishandled, it could lead to a loss of clients at best or years of litigious family infighting at worst. Here are three ways to ensure that your clients’ wealth helps their kids, not hurts them. 

#1: Ask the Right Questions

The question isn’t “How much money do you want to leave your children?” It’s “How do you want your money to impact your children?”  You can’t exactly say to your top client, “Leaving an eighteen-year-old kid a lot of money is a terrible idea, and here’s why.” But by asking the right questions, you can get them to draw the right conclusions and put the right safeguards in place. 

Start by asking them what could go right. Whether they want to give a million dollars or a hundred thousand, what do they want to see happen for the beneficiary of that wealth: college, business, a fund for a major life milestone? Invite them to dream big and picture a world where their hard work can benefit their loved ones in the ways they’ve always dreamed.

Then, ask them to consider what could go wrong—but tread lightly. According to Rob, it’s all about the approach. “Let them tell you what’s going to go wrong. One of my mantras is, what they say is fact, what we say is opinion. You ask that question and they go, ‘Well, they could end up blowing it all.’ Now, it’s a fact, and now they want to do something about it.”

By leading them down this guided discovery process, you’re asking strategic questions to have them tell you the answers you expect. You already know what they’re going to say, but for ultimate buy-in, they need to discover it for themselves.

#2: Find the Right Person to Help

When you’re a top advisor who manages the estate for a growing family of children and grandchildren, over time, you tend to gain the entire family as clients. That means finding yourself with a few accounts that don’t really fit in your wheelhouse. What do you do when Bob and Sue are the perfect clients but their grandchild is woefully in debt? 

The key is to focus on delivering the highest value possible for your client, even if that means sending them to someone else. If your wealth management firm isn’t the right place for someone planning their way out of debt, then your firm isn’t going to deliver the value you’re known for (and word of your subpar performance will reach the entire family before long).

Instead, Zeeb recommends asking every client—from Bob and Sue right down to their grandchildren—to list all the things they really want from your service. “If they come up with things on that list that I don’t do, I find somebody who does it. I won’t just leave them hanging. It’s like, ‘Okay. I don’t do that, but let’s go find the best person in the world we can get for you to do that.” By using your clients’ own needs to help you graduate a debt-ridden client to a new advisor, you can free up your time for more appropriate clients while being a hero to the entire family.

#3: Encourage Communication

Families are tricky, and emotional estate conversations have driven a wedge into many a grieving and unprepared family. How estates are divided always makes sense to the people doing the dividing, but when they’re no longer around to explain their reasoning, loving relationships can dissolve in litigation and anger. 

The antidote: clear communication as a family, so beneficiaries aren’t learning about the will at the same time they’re grieving a serious loss.

It may be a difficult conversation to have, but according to Zeeb, it’s worth having now: “I’ve never seen a case where the parents had the family meeting and explained, ‘This is what we drafted up and this is why,’ and it ended up in litigation.” By encouraging your clients to have these important conversations as a family, you eliminate any future questions among the children about whether it’s really what their parents wanted. 

 

Resources In Today's Episode:

Read the Transcript Below:

This is The Perfect RIA, in case you didn’t know. Bringing you all the strategies to help your business grow. Are you happy? Are you satisfied? Are you hanging on the edge of your seat? Sit back and listen in while you feel the beat. Another myth bites the dust…

Micah Shilanski:

Welcome back, podcast listeners, to another amazing episode of The Perfect RIA. I’m your co-founder, Micah Shilanski. Today, we have a very special guest on our podcast today to talk about some delivering massive value items, some things that we really need to focus on as advisors with our clients to make sure we’re always upping that bar. Our special guest today is a gentleman by the name of Rod Zeeb with The Heritage Institute. I think I’ve met Rod over 20 years ago, actually, when I was just starting off. Actually, I think I was a teenager, believe it or not, when my dad first brought me to some of your conferences. But Rod, thanks so much for joining us today.

Rod Zeeb:

Yeah, it’s been about that long. Yeah. I remember you coming down and you were pretty young.

Micah Shilanski:

Well, right. I got to say, back when you created The Heritage Institute, which is amazing, and before that, it was the predecessor thing. It was the American Tax Council.

Rod Zeeb: 

Tax council. Yeah.

Micah Shilanski:

I’m pretty sure I was a teenager. My dad had brought me down there to go to the conference to start learning some of this stuff. He reminded me about this story the other day when I told him you were going to be on the podcast. He reminded me that we went there. There’s a room of a bunch of advisors. You guys were talking about estate planning. I was lost to say the least and he goes, “Micah, take some notes for me and I’m going to be right back.” Him and another advisor left, went and played a round of golf and came back that evening. And so, he was like, “Did you take notes?” I was like, “Absolutely not.” I was 17. I had no idea what all these trust war we were talking about, but it was a good experience.

Rod Zeeb:

Yeah. I actually do remember who we played golf with too. So yeah, that’s…

Micah Shilanski:

Yeah. Lyndon?

Rod Zeeb: 

Lyndon. Yeah. The only time I saw Lyndon at that whole conference was him walking in and out of the hotel with his golf clubs.

Micah Shilanski:

Yeah. Yeah. Pretty much, which is something that we talk about, right? Conferences are really good and really important, but sometimes it’s not just about the meeting rooms. Sometimes it’s about those other experiences, those hallway conversations, which are so valuable to have with other advisors.

Rod Zeeb:    

We’ve been saying that for years. As much as you like to be the one that’s giving all the wisdom when you’re the one up front, I’ve always believed that you learn more in the hallways and at lunches and afterwards than you do in the sessions themselves and we learn… I mean, I learn something at every one of our conferences from somebody else. It’s just that’s where the wisdom comes.

Micah Shilanski:

This is a little off-topic. We’ll have to get onto the estate planning side of this in just a second, but one of the things that we’ve created is these mastermind events. With that same concept, Rod, we actually say, “We’re not going to plan a full day of events. We’re going to plan maybe half day of training and that’s about it. And then a half day of activities, and we’re going to force that creative time.” It’s amazing how much more people get out of it because we’ve created more of a space for that to live instead of a 15-minute hallway break and someone coming around with a chime, trying to get you into the next room, right? Why don’t we just create for hours of time, where we can go between different, fun activities and events and really get that creative time flowing? So, again, the power of conferences, the power of those break sessions, those masterminds are just so important.

Rod Zeeb:  

Yeah. The wisdom of other peers is amazing. Yeah.

Micah Shilanski:

Yeah. Well, speaking of that, let’s get into some of your wisdom. So, Rod, walk us through just a little bit about your history, if you don’t mind, in creation of American Tax Council and then now The Heritage Institute, and then let’s get into some good value stuff for advisors.

Rod Zeeb: 

Well, my background is I’m a recovering estate planning attorney. So I was nationally known estate planning attorney. This goes way back in the late ’80s. I had a couple cases where great tax planning, and then I watched the families implode. One of the cases was a friend of mine actually. And so, the dad died, huge estate, passed a tax-free so I’m a hero, but the oldest son ran three businesses, bankrupted within a decade and blew his entire share.

Micah Shilanski:

Wow.

Rod Zeeb:

We’re talking nine to digits, okay, in the ’80s. The youngest son drank himself to death in about seven years. He was a good friend of mine and it was all because he wasn’t prepared. He just like, “I don’t know what to do.” I remember sitting at my desk going, “That’s not an acceptable outcome to me. I’m not going to spend all my time getting as much money as I can in the next generation just to kill it.” So I started in research about it if I did something wrong, and that’s when you start finding all… First quote we found is from China from 2000 years ago that says, “Wealth never survives three generations.”

We found them from all over the world and realized that when you talk to the clients, most of them, when you say, “What do you want?” well, they want their wealth to help their kids when they die, not hurt them. And so, that’s where this all triggered into is just doing the standard, “How old are your kids and when you want them to get the money?” didn’t make it. So it was like, “We need to do that. But then we also need to understand what do you want it to do for your kids?” Yeah. So I stopped asking the question, “How much you want to give your kids?” to “What do you want it to mean to your kids? What do you want it to do for your kids?” which changes everything when it’s-

Micah Shilanski:

Yeah.

Rod Zeeb:  

So, that’s where it all came from. And so, I started working on… I wrote a book called Beating the Midas Curse back in 2005. We’re on our third edition now. It was all about how do you build a relationship with client and then prepare the kids for what they’re going to get and to keep the family together, and that’s when you were coming down there. I remember the American Tax Council, I think it was a two or three day old day deal and there was a final at the end.

Micah Shilanski:

It was.

Rod Zeeb: 

Yeah, it was pretty brutal. And that was really for… We really wanted to train people to do what I do with families, which is work with them to build it for multiple generations. What we found is a lot of the advisors who came through said, “Okay. That’s really great, but I only have maybe one or two clients that need to do that. But I’m using the stuff you taught early on about how do I find out what they really want and how do I build the relationship with every client.” So, that’s how we’ve morphed over the years is… That’s where we start. And then if somebody wants to learn the whole heritage process, we still have the coaching program and the certification program, but that’s probably 10, 15% of the people who come in. Most people, what they really need is, “How do I ask the right questions? What do my clients want and how do I ask the right question?”

What the ball boiled down to is we found that our studies showed that clients really want four things. Number one is they want to be heard and they want to be understood. Now, it was number two, which means you got to ask more than just how much money do you want to give to your kids? They understood is who am I? What do I care about? And then number three is they want to connect the dots between what you’re doing and what they said they want and we often miss that. I mean, we’d assume that they’ve connected those dots and they haven’t. And then number four is they want their wealth to help and not hurt their kids. So, knowing that, it’s like, “Okay. What do we have to do to get them there? What kind of questions do we have to ask? How do we build that relationship?”

Micah Shilanski:

One I just want to pull out that you just said a second ago and correct me if I’m wrong here, but instead of saying how much money do you want to go to your kids, it’s what do you want this money to mean to your kids? This is huge, right? This is the difference in a B-level advisor and a rockstar level advisor type of question right here, because really you’re getting at that impact question that’s there. Let’s just say, okay, we didn’t ask that question. Let’s say we asked this B-level question, how much money do you want to go to your kids, right? I think that’s probably a standard advisor type of question. This is in my opinion, and correct me if I’m wrong here, Rod, this is regardless of wealth, right? So we’re not talking ultra high net worth or high net worth estates. These are people with kids, right? When they’re going to pass money, this is almost across the board. Is that a fair statement?

Rod Zeeb:

Right. Yeah. We had one group of families and I said, “How much did you think this is applicable to you?” And they said, “Anybody who’s giving more than $100,000 to their kid.” You got a house, you’re probably there.

Micah Shilanski:

Right.

Rod Zeeb: 

So yeah, no, this isn’t just the ultra high net worth. This is everybody.

Micah Shilanski:

So, where could this go wrong? So if an advisor just asked that question, “How much money do you want to leave your kids?” why is that a B-level question, or how can that end up hurting in an estate planning situation?

Rod Zeeb: 

Let me give you an example. It’s actually a story from a guy that you probably met, Tom Epping in the Seattle area. He had a client that the client said, “I want to leave…” He’s buying life insurance. “I want to leave a million dollars to each of my kids and my grandkids, each of my grandkids.” So they did. Okay. He dies suddenly. 18-year-old grandkid gets a million dollars. What could possibly go wrong, right?

Micah Shilanski:

It sounds great for the first week. I mean, this is going to be amazing. I’ve been to those parties, actually. They were pretty fun.

Rod Zeeb:

Yeah. He buys a Porsche, fills it with drugs and stuff and takes off for three years. By the end of three years, he’s broke. He’s got no friends and he doesn’t want to go back to school because now all his friends are juniors and seniors and he doesn’t want to be a freshman. I mean, it totally ruined the kid. If you would’ve asked the dad or the grandfather, “What do you want this to do for your kids?” it wasn’t go buy a car and get on drugs and blow it all in three years. And so, that’s how it can go wrong, I mean, if you just focus on the money and not what the money could do.

Micah Shilanski:

Sure. Can I pick on that a little bit as an example? Actually, I want to bring in one of our client examples into this of an issue that we’re dealing with as we go through this. So, you get into that case, right? The client wants to leave their 18-year-old kid a million dollars or grandkid a million dollars. In the back of your mind, you’re like, “All right. This is just a stupid idea, right? This is not going to go well.” Of course, if we come out and tell the client, “Well, this is a stupid idea. You shouldn’t leave an 18 year old kid a lot of money,” that’s probably not going to be a positive conversation. So, how do we help guide that conversation with them when they’re adamant that they want to leave this money to them?

Rod Zeeb:

Then it’s really a question… I think it’s a matter now of asking what we call the appropriate next questions. Okay. When they get this million dollars, what would you like to see happen? They usually have some really… Go to college, do whatever they want. Forget a million dollar, if it’s 100,000, I mean, whatever it is, whatever it is, what do you want to see happen? Then I’ll ask the question, what could go wrong? Have you ever seen a kid situation, where somebody got money that they weren’t lottery winners and things like that? What goes wrong? It’s amazing. They know those stories. They’ll come back and tell you, “Oh, they end up on drugs or they spend it all or whatever.”

“Is that what you want?” “Well, no.” “Okay. Now, how can we meld those two? How can we get them the money that you want to have, that they want to have, and use it the way that you want them see them use it or have it benefit for them the way you want to benefit?” But those are the kind of questions you have to ask is what do you really want to see happen? Let them tell you what’s going to go wrong. One of my mantras is what they say is fact, what we say his opinion. You ask that question and they go, “Well, they could end up blowing it all.” Now, it’s a fact and now they want to do something about it. But you see, it’s a question or two. This isn’t like brain surgery. I mean, it’s just taking it to that next level.

Micah Shilanski:

I love that in these questions, this is not accusing their grandkid, right? Do you realize that your grandkid at 18 is going to blow this and it’s all going to go up its nose and you’re going to kill him in three years? Do you realize you do doing that to your grandkid, right? So, now you’re attacking the client with this. While that may be what you’re thinking, you really got to pause. Rod, I love this and we just call the guided discovery process, right? But you’re asking questions to have them tell you what the answers are. You already know where the answers are probably going to go, but they need to discover this for themselves and not just have you tell them this.

Rod Zeeb:

Right. Yeah. This goes back to the more you listen and the less you talk, the better off you are, because that’s… They will tell you if given the opportunity and there’s some of these things they haven’t thought about. They’ve just thought about all the positives. You ask that question, “What could go wrong?” and let them spin on it for a little bit. All of a sudden they’ll start seeing all those things that could go wrong. “Well, wow. I don’t like that.” Okay. Well, that’s fine.

Micah Shilanski:

Now, why is it important for advisors to have these conversations? I mean, really, isn’t this the estate planning attorney’s job at the end of the day? They’re the ones drafting the documents. They’re the ones that went at law school. Shouldn’t they be doing this correctly to begin with?

Rod Zeeb:

Well, they should, but they’re probably not, but it’s really important for the advisors, because ultimately, it’s building the relationship with the client. Okay. All the studies, we’ve got studies from decades now, if the client and knows that their core values, you get more business from them, you get more retention and you get introductions. We were talking a little bit earlier, they did a study after the big crash in 2008 about why people fire their advisors. What they found was 75.5% of the people who left their advisors didn’t do it because of things going wrong. The bad thing they did it, it was 75.5% of them did it because of lack of a relationship with the advisor.

So, a big thing for the advisor is if you build that relationship and now you’re starting to work with the entire family, because now you can help them train the kids for what it is that they want the kids to do, now you’re talking about, A, you got happier clients. Your retention is going to go up. Your revenue is going to go up. But B, you get to keep the family as clients. We’ve had a lot of advisors done different studies. One guy was getting ready to sell this business and he realized that it took… I can’t remember now. It was like six new clients to make up for one old client that left, because by the time they left, he had all their money and all this stuff and the new ones.

Micah Shilanski:

Families. Yeah.

Rod Zeeb: 

Yeah. The other thing he discovered was he was getting ready to sell his practice and the appraiser, that was the valuation guy that was doing his practice said, “Your multiplier is higher because you have a higher than normal amount of multi-generational clients, which show stability.”

Micah Shilanski:

Interesting. When that money goes, then it’s not going to pass out and leave the firm. It’s potentially going to stay in the firm because you already have the kids.

Rod Zeeb:

Right. And just that increases the value of your business.

Micah Shilanski:

Now, one thing I’d love to throw out there and I’d love to get your input on this, so one of the things we talked to advisors about is sometimes when doing coaching with advisors, they’re like, “Oh, well, I have to take Timmy, which is the great, great grandchild of this other client,” even though they’re 100% not an ideal client, right? They’re in tons of debt. The advisor doesn’t do debt management, right? And there are all of these problems and there has to be a dichotomy between these is you, as the advisor, still must be focused in your niche. You still must be delivering massive value and you also have to recognize that sometimes you were not the best fit for that child or grandchild relationship.

And just because it would be ideal to have this multi-family relationship set up, if you cannot add the most value, I don’t know, Rod feel free to push back on me in this, I would absolutely go back and say, “You know what, if I can’t really help this child or grandchild, I’m going to help them find another advisor that specializes in them to get them the most value versus me doing a half-ass job. And then all of a sudden what happens now, I’m doing a half rear-end job for Timmy and that’s going to get back to the whole family and now I’m going to have this other issue, versus if I help them find a rockstar advisor that helps just with what the issues that they have.” What are your thoughts on that?

Rod Zeeb:

No, absolutely agree. Not only that, he’s taking time that you could go with the other clients that you can do a lot of good for. I mean, so there’s the loss of opportunity on the other side of that. And so, no, I totally agree that you take the clients and you keep the clients that you can do the best work for and if you can’t do it… Well, and that also goes to when I ask the clients, “What is it that you want? I mean, what is it you really want?” And if they come up with some things on that list that I don’t do, I go help and find somebody that does it. I won’t just leave them hanging. It’s like, “Okay. I don’t do that, but let’s go find somebody who does.” And that’s exactly what you’re talking about there. “I don’t do debt things. I don’t really get this. Let’s get you the best person in the world we can get for you for to do that.” Now, you’re a hero for everybody, for him and the rest of the family.

Micah Shilanski:

I’ve never had a client come back that we’ve talked to one of their kids. It wasn’t a good fit. We helped them find another advisor. They went off somewhere else and I’ve never had the client come back and fire me, get mad at me, et cetera. It’s actually the opposite of saying, “Hey, Micah, I really appreciate you taking the time to talk to them and to help them out. It’s really meant a lot.” I’ve never had any downside to this.

Rod Zeeb: 

Absolutely. Yeah. And then one of my clients said to me one time, “You can only be an expert at two and a half things. I have no idea how you can be an expert at half a thing,” but his whole clue was-

Micah Shilanski:

An expert.

Rod Zeeb:

But the concept he had was focus on what you do, then help them find somebody else that does what they need that you don’t do. So, I real right on on that.

Micah Shilanski:

Perfect. I do want to go back and ask a little bit of another question here that’s just talking about… We talked before about who is the best person to ask these questions, right? We talked about the estate planning attorney and how ideally estate planning attorneys would be really good with this, but sometimes they’re not, and this is where advisors really need to step in. I know one thing I was just telling you when we were pre-gaming and talking about this a little bit, we brought on a new client and as we’re reviewing their estate planning, the client was a little irritated because they just paid an estate planning attorney to do draft all of these documents to do these things. Now, I’m asking what they seem is the exact same questions, when really, when we read the documents, it’s a mixed family and it was a game of first to die is going to win, right?

It’s just a lottery. Once one side of the family tree dies, everything goes to the other side of the family tree and the other side is completely disinherited. When we read the documents, we can see clearly this was not going to be the client’s intent, right? With a two-second review of this document, you know something is wrong. So that’s another great example, but how do we help discover that in the meetings with clients? So if we’re chatting about estate planning, what are some of those great questions that you like to ask to really understand where a client is at with their estate planning and what they want to see happen?

Rod Zeeb: 

One series of questions that I ask has to do with what did they ask you and what did you tell them? Because what I’ll tell the client is I have clients and it’s always… I wanted to make a general, not you, and you are bad, right? But I have clients who have come to me and they’ve gotten different advice from their accountant and their attorney and a financial advisor and a banker. They’ve all gotten different things that they should do. Generally speaking, the reason for that is they’re telling different stories to those people, because all they’re doing is asking or answering the questions that those people ask and they’re asking different questions. And so, the financial advisor is the one, I believe, who’s sees the whole picture. They can ask the whole picture idea of where it all fits and then they can help them go back to the estate planning attorney and go, “Okay. This is what I really meant. This is what the target is.”

The other issue you’ve got, especially with some of the CPAs and the estate planning attorneys, it’s become real commoditized and for them to take extra hour… I mean, I’ve got estate planning attorneys that send their clients to me and they’ll say, “You do the discovery and you do all that kind of stuff. And then give it to me and then I can play in with a laser beam rather than a shotgun, but otherwise I just got to ask the basic questions of, “How old are your kids and when do you want them to get it?’ “

Micah Shilanski:

And then I just plugged that into the software. I choose the right box and it now pops a trust and $10,000 later, right?

Rod Zeeb: 

Right. It’s amazing how that works. Somebody asked me one time, “How long did it take you to do a trust?” And I said, “Well, it took hours to get figure out which boxes I wanted to click, but once I knew the boxes, it’s on the computer. You’re just picking the boxes.” Yeah.

Micah Shilanski: 

What happens when we’re as an advisor and we’re working with an estate planning attorney who is a little bit hesitant inside of this process, or isn’t super excited about having the financial advisor on the call walking through this? What are some good ways we can be old rapport with the estate planning attorneys or really helping this process and be active?

Rod Zeeb:   

The way I’ve approached it with the other estate planning attorneys is to say, “Okay. I’m going to ask all these questions, which may or may not help you at all, but they may tell me something that they didn’t tell you, that you then can use to do whatever you want to do it.” We were actually demonstrating this one time with an attorney, who’s pretty well known, and said, “Okay. So let’s pretend that Dave and Marsha are your clients. I’m working with them. Dave calls you up and says, ‘I want you to talk to Rod.’ ” I said, “How you feeling right now?” He goes, “Not very good.” There’s probably somebody out there that’s going to say I did something wrong or whatever. I said, “So, how about if I start the conversation with, ‘As you know, I’m working with Dave and Marsha, who are your clients, not my clients, your clients, who are your clients, and we’ve been doing all this discovery about what it is that they want.’ “

I said, “Okay. So now we’ve got to have this implemented. Who do you trust and who can do that? And you’re the guy. So I’m here to give you all the information that I’ve got and they want you to look at it and then call them up and let them know, is there anything we need to change or not? And if there is, what’s going to cost?” I said, “How do you feel now?” And he goes, “You’re my new best friend. I mean, number one, you told me my clients like me. Number two, you’re bringing me more business.” It’s me that’s telling the client that they need something, not you who’s telling the client that they need something different. So bringing them in as a team member as opposed to, “I’ve looked at this and you’re wrong.” Really, with the advisor, it’s usually pretty easy with the estate planning attorneys just to say, “Okay. This is what they told me. Did they tell you this?” And the answer is almost always no. Okay. Well, does this change anything? That’s up to you, but does this change anything? So, it’s almost always yes.

Micah Shilanski: 

It is yes. I really like the way you do that. There’s other example that we have with this estate planning attorney, which we would say there was an error made somewhere in it, where we’re disinheriting half of the family, right? Something was miscommunicated. When I called the estate planning attorney, the conversation was very similar. It was just deferring to him, because he is the estate planning attorney. I’m not. I didn’t go to law school, right? And so, it’s asking these open-ended questions and definitely not attacking them.

Rod, I love the one that you brought up that was just talking about saying, “Well, this is what they told me. Is this what they told you?” Because you’re giving the estate planning attorney, one, an early and easy out. More than likely, the client, didn’t say they wanted to disinherit the other side of the family, right? More than likely that didn’t take place and you’re allowing them an easy way to say, “No, that’s not our conversation at all.” “Okay. Great. Well, I’m glad we’re chatting. Then how would you suggest we fix this?” and really deferring to them to help come up with that solution.

Rod Zeeb:

Right. In that particular case, it’s really easy to say something like, “Okay. When I first ask them the question, they want to make sure they took care of each other and then they start talking about the kids. Did they get to that part with you, or did they just say, ‘We want to take care of each other.’ ” Because if you come to the estate planning attorney, “I want it all to go to them,” whoever dies first, they want the other one to get it all, “Okay. Cool. I can do that.”

Micah Shilanski:

Right. That’s the first box. We check that and we click print and we’re done.

Rod Zeeb:

Yeah. The thing for the estate planning attorney, they’re doing exactly what the client told them. They just didn’t get deep enough into what… That’s a function of asking those right questions.

Micah Shilanski:

Guys, advisors listening to this, that was actually key thing that Rod just said. Listen to that. It’s the attorney is doing exactly what the client asked for, but it may not be what the client wants. That’s our job coming in and not doing exactly what the client asked, but doing what the client wants. We have to help them discover that, right? That’s the same thing if we change the scenarios a little bit. A client says, “Hey, I’m leaving in a federal service. I’m leaving an employer. I’m going to roll over my 401(k).” Are we going to roll it over? No, we’re going to do a transfer. I don’t care that they use the wrong term. We are going to do it correctly, right? So this is the exact same thing, just with estate planning. We have to hear what the client actually wants and sometimes be a good intermediary in a couple of different areas.

Number one, with the estate planning attorney, let’s make sure we’re reading these documents together. Let’s make sure that we’re having a very good communication. I’ve learned a lot working with the great estate planning attorneys over time of reading something and not really understanding what it meant and the estate planning attorney having to explain it to me, great learning opportunity for me, but there’s also another opportunity that we have on the multi-generational side about having family meetings. Sometimes, especially when we have a blended family, we, as the advisor, really need to come in and help guide client meetings. Rod, I don’t know if you would mind just running through your experiences a little bit with that of, let’s just say, we have a blended family and we’re not treating all sides equally, right? We’re going to treat people fairly, but we’re not treating them equally. How do we discuss that, number one, with the parents and then as it goes down throughout the family tree?

Rod Zeeb: 

With the parents, I usually start with, “Okay. So if you were them, if you were the kids-
Micah Shilanski:  That’s a good question.

Rod Zeeb:  

… would you rather hear it from your dad or from the attorney and not be able to ask your dad any questions, your mom or dad any questions?” They always go, “Yeah, but I don’t want to.” I get that. But now, if you were them, where would you like to see this? Could it be misunderstood? And so, that’s a good way of getting them to say, “Okay. Maybe I do need to have the conversation out what’s going to happen.” Because that doesn’t happen, that’s not a big issue normally if it’s going to be equal rather than fair. If everybody is getting equal, then nobody questions.

It’s when you’re talking about fair, now you’re starting to look at, “Okay. There’s some subjective things here. Do the kids know that? Do they know where your heart is coming from?” It’s fascinating. I’ve never seen a case where the parents had the family meeting and explained, “This is what we drafted up and this is why,” where it ended up in litigation, because number one, you just eliminated all the question about whether they really thought through this and is this really what they wanted. They just told not only that person, but the other kids in the family too. You got all these witnesses saying, “Well, this is what they wanted.”

Micah Shilanski:

Boy, I’m just going to pause right there. What you just said was so powerful when you’re working with a client. You have never heard of a case or seen a case where you’ve had a family meeting and the parents have described exactly what’s going to happen that’s gone to litigation. This is huge, right? Because what parent wants their kids fighting at the end of the day. Nobody wants that. Everyone’s heard these horror stories and everyone’s worried, especially in an unequal distribution scenario. Parents are worried about this. What’s going to actually happen? And just that little bit of peace of mind of saying, “Hey, anytime we’ve actually gone through this, it’s never gone to litigation.” Yes, this is uncomfortable conversation to have, but that’s a great little nugget that you can use to really help encourage these clients to move forward in this process. Sorry to interrupt. It’s huge.

Rod Zeeb: 

No, it is. Because if you ask the client, “Okay. Would you rather have some discomfort now or you rather have them suing each other later on?” that’s a pretty easy answer for them. It’s, “Yeah, I’d rather have a little discomfort.” I told one client, I said, “Okay. Do you want to pull the bandaid off really slow and then have somebody rip your arm off at the end, or do you want to just get it done?” It’s true. I mean, it is uncomfortable. The kids may not be happy that it’s not equal and all that kind of stuff. But if they hear it from mom and dad, there’s really not much they could do at that point, and especially at the whole room full of people are there. “This is what we’re doing and this is why we’re doing it and this is our wishes,” kind of hard to get past that in litigation.

Micah Shilanski:

Now, Rod, I’d love to go to through how we go through it with our clients. Again, we took a lot of this from you guys from The Heritage Institute, but I’d love your comments or critiques or what things can we do better? Is that okay?

Rod Zeeb: 

Sure. Sure.

Micah Shilanski:

So, first, we’re going to go through just with the parents, right? What are their estate planning wishes? What do they want to see? Terminology I often like to use is parenting from the grave, right? Because that’s really what we’re doing. And maybe inside of a trust, any type of controlling aspects, we’re just parenting from the grave if we weren’t here. Once we got everything flushed out, then we start prepping them for the family meeting that we’re going to have. One of the things that I like to talk to the parents about is saying, “Look, this is not a deliberation, right? This is not a negotiation as to what’s going to take place. This is a discussion about what’s going to happen. So we’re not negotiating terms when we go here.” Depending on the family relationships, it may be great to have us there. It may be great to have the attorney there as well, really, depending on it. We really got to be careful in the attorneys because I’ve seen those go south sometimes. So again, you got to have a good team members.

We go through with the client exactly what’s going to happen. We try to put together a one-page flow chart that’s there. And then what I really encourage our clients to do is not to reference documents at all or try to talk in legalese, because I’ve seen this go south, where they try to bring up some legalese and they’re not attorneys. Legalese is cold, cruel language. It’s not warm and compassionate, and that’s the whole meeting that we’re trying to have as a family is a warm family meeting. I really want to them to explain what do they want to see happen, not who gets what, what do they want to see happen and what are they going for at the end of the day? I want them to talk about the family unity, about being together, right? What are those real intrinsic values that they have that they’re trying to express with money because our carrot and the stick is the dollar sign, right? But what are those things that we’re trying to convey? And that’s where I want them to focus 90% of that relationship. What are your thoughts on that?

Rod Zeeb:

That’s the conversation. We call it the alignment conversation now, 20 years later, but we call it the alignment conversation and really what it is it starts with, what are your desired outcomes? Now, you notice outcome, not what are your goals? What are your hopes? What are your dreams? What are your outcomes? Well, outcomes are something that’s measurable. So what do you want to see happen and how are you going to know that we’re getting there? Now, if they go and talk to their kids in that language of, “This is really what I want to see happen and this is the reasons why we’re doing that,” it’s completely different than, “I’m disinheriting you and giving it all to your disabled brother or whatever.” Yeah. Yeah.

The more you can get away from the legalese, the more you can get away from the documents and get to the heart, get to the what’s the concept here? What is it that we’re look looking to accomplish? And if they understand what they want to accomplish and particularly if they’re talking about, “I don’t want to see you guys fighting. That’s why we’re having this meeting. I wanted you to hear from me, not from some lawyer at the end of the day that’s going to read you something that may not make sense to you, but this is my heart. This is where I’m going. This is what I’d like to have accomplished.” And having them all in the same room. Don’t do this separately.

Micah Shilanski:

Great point. Yes, don’t have 10 separate conversations because everyone will remember this differently. They all have to be together.

Rod Zeeb:  

Yeah. That’s Doug Carter’s thing about you see an accident, 10 people see an accident and the police ask, “What did you see?” They’re going to get 10 different stories and maybe more because somebody will hear something that somebody else says and change their mind, right? So you want them all in the same room at the same time, not individual conversations, because-

Micah Shilanski:

Great point.

Rod Zeeb:

… that’s the telephone game.

Micah Shilanski: 

Do you ever have updates on these conversations as well? So, you do this and, say, clients are in their 60s. You know what, there could be 30, 40 years before they pass away and you’re going to update this document along the line anyways. What are some triggering mechanisms to have these conversations again or new alignment conversations?

Rod Zeeb: 

Well, one triggering is always when the next generation starts showing up. Okay. So when all of a sudden, you get grandkids and then great-grandkids, it’s a different world as you’re doing there. Also, as you get older, the conversation then can include those next generations, because it could be that the kids have all that they need and want and you’re just going to create a bigger tax problem for them. And so, if the two of you are talking, if you get the parents and the kids talking about, “Okay. So, what do we want to the grandkids? And then what’s the best way to do it?” now, nobody is planning at other people, they’re planning with other people.

You have to do it periodically because there are changes in both the beneficiaries and in you. Now, let’s look at did any of my desired outcomes change? If not, has any of the things changed that we’re underlying this when we made this decision? But I’ve seen that a lot, where we’ve talked to the kids and are going, “I don’t want anymore money. I mean, I’ve already got a problem,” which isn’t a huge problem right now, but probably will be in a year.

Micah Shilanski:

Right. What are they solving for, right? They don’t want mom and dad’s money. Now, sometimes they say that and they actually do want mom and dad’s money, but that’s a separate conversation. This is where it’s really going to be beneficial for our backstage pass and Invictus members to use that beneficiary report. One of the things that we like to do is we put together a beneficiary report every single year with a client, kind of a death worth statement, and to dollar amounts, where does everything go in your estate plan? This is really important because sometimes they’re just thinking, “Great. I have IRA with a million dollars and I got three kids and each kid is going to get $300,000.” Yeah, that was only one asset. And now we start adding everything up. Do you really want Johnny to get 2.6 million? Because you’re not just giving them 300 grand, you’re giving him a much larger dollar amount. So, this is where the beneficiary report really is going to come in handy in the planning and seeing great who is really going to get your money when you pass away.

Rod Zeeb:

And when and how.

Micah Shilanski:

Yes.

Rod Zeeb: 

That’s a big deal, is the when and how are they going to get the money?
Micah Shilanski:  Perfect. Boy, I could keep going on and on about this so we might have to have you back on this Rod. I really appreciate it. But this podcast is all about action items. I know I was taking notes during this. You asked some amazing questions, but I guess I’ll kick it all off to you for the first thing. What would you say would be the first action items our listeners should take this week to improve their game, to add more value to their clients?

Rod Zeeb:

Talk less and listen more. I mean, like I said, one of my mantras is what they say is fact, what we say is opinion. So if you ask the questions and let them tell you, now it’s a fact that they’ll do something with. And so, that’s a one thing is know what you’re going to ask. And then I think you hit on it earlier. I mean, the other action item is don’t start with the tools, start with the vision and then go to the tools. But we get so used to we’ve got certain things that we like to do. What’s the old saying? If you’re only tool is hammer, every problem looks like a nail.

Micah Shilanski:

That’s right.

Rod Zeeb: 

So, the action items are ask the question, but then ask the follow-up question, “Where would you like to see that happen?” We were talking earlier. I had one advisor and he said, “I always ask my clients, ‘How much do you want in retirement?’ ” I said, “Great. But that’s the wrong question?” Because I said, “Probably, you’re getting a million dollars or some round number.” And he goes, “Well, yeah.” I said, “The question is what do you want to see? What do you want to do in retirement? And let them just dream. Let them tell you all the things they want to do. And then it’s up to you then to monetize that, figure out how much money you have to have to have that and say, ‘Okay. If that’s all the things you want, here’s our target.’ “

Micah Shilanski:

And that’s such a powerful conversation, right? Because now it’s not some, “Oh, well, you’re not on track for a million dollars,” just because what does a million dollars really mean, or 10 million or whatever or 50,000 a month or whatever number we’re solving for, but now it’s a values conversation that’s there, just say, “Great. If you choose A and B, we’re not going to be able to do X, Y, Z in retirement. Okay. Do you want to do A and B?” Sometimes, “Oh, I want to go buy a second house.” “Great. That’s going to jeopardize A, B and C goals in retirement. Is that what you would like, yes or no?” Now, you, as the advisor, aren’t the bad guy in this conversation. You’re not tying it to the stock market being up or down in something we can’t control. It’s great. Your actions here are going to affect these goals over here. Is it worth it? Guess what, if it’s worth it to the client, perfect, now we can realign their goals because this is more important. You’re empowering the client with these decisions. I love it.

Rod Zeeb:   

When you’ve got them thinking in terms of their goals rather than in terms of a number, your value proposition changes. They’re not calling every time-

Micah Shilanski:

Huge.

Rod Zeeb: 

… the stock market goes down. All they want to know is do I still have enough to do the things I want to do? So, it changes the discussion. You’re not having all these calls about, “Oh man, the market went down. You made a correction. It might still be good.” Do you care if it’s a million or a million-one or 600,000 if you’re only going to spend 400,000?

Micah Shilanski:

Right. Right.

Rod Zeeb:

Yeah. For them, for the clients, it takes a lot of their angst, because they get really nervous about seeing this stock market go up and down. They don’t understand the market in the first place and now it does things that I can’t control. But if they say, “This is what I want to do,” and you can say, “Okay. We’re still good.” That’s all they want. I mean, that piece of mind is huge.

Micah Shilanski:

That’s it. As you transition into these conversations more and more, we don’t have market conversations, which is great, because we’ve made this transition years ago. It’s a beautiful place to be on the other side. All right. Last action item I’m going to leave everybody with, practice. This is not something you can hear in one podcast, then go out and roll out like a rock star in front of clients. You need to practice these questions. You also need to practice shutting up, being quiet and listening in these different modes as well. This is really, really important to do. If you want to transcript, I started writing down a lot of these questions that Rod is bringing out, which is great, so we’re going to go ahead and post that to our website, theperfectria.com. You’re also welcome to email Shelby at lifestyle@theperfectria.com to get more information. And then the last thing I’m going to send out there, follow Rod. You have some great information that’s out there. So, how do they get more information about you, The Heritage Institute, and what you guys keep going on?

Rod Zeeb:

It’s www.theheritageinstitute. You have to have the the in there, or you get some school that teaches you how to drive or something. So, theheritageinstitute.com. We’re just in the process of updating our resource library and stuff. We have podcasts. We have articles. We have all sorts of things that are on there. But the other thing is send an email to me if you really got a question and we’ll set up a time and I’ll answer the question, because it’s usually not a long conversation. I mean, in half an hour, we can cover a lot of… Well, we covered a lot here in half an hour.

Micah Shilanski:

We did. Well, it’s perfect. Thank you so much for being on the podcast. We’re going to have to have you on again. I really appreciate it.

Rod Zeeb:  

Sounds good. Thank you very much.

Micah Shilanski:

Guys, till next time. Happy planning.

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