1. Beyond Survival – Behind the Scenes in a Wealthy Family and Business Houston Planned Giving Council April 25, 2013
Ross W. Nager, CPA
Houston, Texas
Managing Director

2. Some Reasons Why Wealthy People Don’t Take Planning Advice
Fear of death
Distaste for inflexible, irrevocable structures
Cost - both tax and advisors’ fees
Concerns over children’s ability to properly manage wealth and be accommodative of each other’s interests and needs
Desire to maintain control
Uncertainties about the future of the business and the economic needs of owner and spouse

3. At the Same Time, Advisors Confront Their Own Issues…
Complexity caused by legislation (with associated professional risk)
Competition resulting in client confusion
Clients unwilling to pay for sophisticated planning
Real and perceived ethical constraints
Lack of non-technical training
Client perceptions of advisor’s (sales) objectives

4. So, what do clients receive from advisors?
Based on client interviews:
Professionals are reactive not proactive
When they are proactive, professionals tend to market and sell what they know and understand, irrespective of whether it meets the client’s needs and desires
Rainmaking by acronym
See Schneider, “Section 2702 or GRITs, GRATs and GRUTs (What Does Your Client Want?),” 26 University of Miami Institute on Estate Planning, Chapter 12 (1992)

5. So, what do clients receive from advisors?
Standard formula - basic transfer tax minimization, provision for liquidity, legal ownership succession (will, buy/sell and other documentation)
Client perspective
“Richer rather than ‘just’ rich”

6. Understanding Life Inside a Family Business
Understanding provides the basis for raising issues and developing relationships that can lead to progress

7. What Can You Do?
Invest the time to understand the family and its needs
Don’t lead with the philanthropic (or other) acronyms
Always search for the behind-the-scenes problems which may block “appropriate” planning actions
Recognize the ego and activity needs of the older generation in retirement
Understand the owner’s views of the relative importance of income security, taxes, dependence on successors, etc.
Never underestimate influence of spouses

8. What Can You Do?
Help assess realistic chances for successful succession
Continue development of your understanding of wealthy family issues
Encourage your prospects to further their education on family wealth issues and solutions
Don’t be afraid to stand up for your convictions
Integrate management succession with philanthropic and estate planning

9. Use non-threatening approaches to posing questions
How Can You Do It?
Use non-threatening approaches to posing questions
I/one of my associates had a client who was concerned about ______. Do you share that kind of concern?
I saw a study once that said 2/3 of all businesses fail to transition from one generation to the next. What do you see as the biggest stumbling block to your business moving to the next generation?

10. How Can You Do It? Ask questions like:
In a perfect world, what would you want to be doing with your time __ years from now? What would keep you from getting there?
If you got run over by a truck tomorrow, how would you like for people to remember you?
What do you see as your most significant legacy? What is keeping you from accomplishing it?
What do you want to do when/if you retire? What’s standing in the way?
How can I help you?

11. What Can You Do?
Recognize that succession planning is an ongoing need (just like estate planning)
Understand that charitable giving can be part of a plan (but it must not be forced on next generation)
Strive for empathy and understanding
Understand the importance of time