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Today’s guest is Andrew Howell, he is the co-founder and managing partner of York Howell, 
a firm recognized as one of Utah’s top workplaces, specializing in estate planning, asset protection, and business structuring. With over 21 years of experience, Andrew’s expertise shines as he shares invaluable insights into the world of wealth transfer and financial security.
Inspired by his grandfather, a Harvard Law graduate and noted estate planner, Andrew advocates for a personalized, value-driven approach that underscores the importance of strong core values.
Andrew explains how his firm utilizes unique tools like COREnology to align family values and priorities, creating a framework for multi-generational wealth transfer that goes beyond financial assets to include legacy and core values.
In this enlightening episode, Andrew delves deep into essential estate planning strategies including asset protection, engaging family members in financial discussions, and understanding and aligning family values for enduring wealth preservation. He demystifies complex terms and offers practical advice for listeners ranging from young adults to high net worth individuals.
In This Episode
- The importance of hiring advisors and scheduling regular meetings.
- Creating family gratitude and effectively involving family in financial discussions.
- Asset protection strategies including the use of LLCs and trusts.
- Aligning family values and priorities with tools like Kornology for a lasting legacy.
Andrew, welcome to the show.
Thanks Dave for having me. I’m so excited to be here. I feel privileged to be able to be on your show here today. So thank you so much.
Yeah, 100 % Andrew, really grateful to have you on as well and, you know, I thought that, you know, your talk and, you know, having you here today would really be so beneficial for people to, number one, become aware of, you know, what is asset protection? Why would you need asset protection, right in your overall wealth strategy, and really kind of having a comprehensive framework, you know, to be able to do that because we talk a lot.
I think most people focus most of the time on, you know, wealth acceleration and accumulation is really the focus. But if you’re not careful, right, and you’re not focusing on wealth preservation as well, you know, you can take a serious hit, right, to your overall wealth and your overall goals.
So really appreciate having you on today and look forward to just really unpacking this topic that I think is quite complex for people and often really understood in the marketplace. So why don’t we begin with just telling us a little bit about your journey and how you kind of got into the asset protection side to what you’re doing today.
Yeah, sounds good. I’ll tell you my boring story, but I come from a line of attorneys. My grandfather on both sides, both grandfathers were attorneys, my dad was an attorney, my uncles are all attorney, my aunt was a judge and I kind of always knew I was going to go into the legal profession. But one of the biggest mentors in my life was my maternal grandfather, my mom’s dad, who was a Harvard law grad and he did estate planning.
He died in 2006, but he had been practicing since 1945 or something. So through all of this time where financial planning, estate planning, tax planning kind of developed, he was part of that and people still call him the Dean of Estate Planning, and I was in his office at 11 or 12 years old working in the summer as a runner, and I just watched him in terms of how he was practicing law.
He was very much of the mindset to engage us in family planning, in what he was doing professionally. He didn’t make me be a lawyer, but he definitely urged me one way or another and I can remember at an early age, was one of his clients was coming in for a meeting and it was this very, very wealthy client.
He’s passed, but he was one of Utah’s billionaires and they were talking about this new asset that this client had purchased, and I was able to come in you in the meeting and I, you my grandpa’s saying, you know, you just sit there and shut up and listen to what’s going on and the client was great. He was just, I don’t want to say his name, but he was this wonderful man and he was welcoming.
Come on in. So I watched him have this conversation about this piece of property that this person had bought and it was four miles of oceanfront for development in Santa Barbara, California. was just an amazingly huge asset, but I never remember my grandfather asking him the cost of it or you know, the value of it.
I mean, I’m sure he did. Let’s be honest. It was really this discussion about how that fit into his plan. You know, what did it mean for his family? What were his goals and how were they going to line up that tangible asset with the intangible goals, values and so forth this family was creating, and that’s how I was taught to practice law and I was, I worked for him every summer and then I went to law school and I got out of law school and I didn’t like the nepotism that it would have been if I had worked with him because everybody knew who he was.
Salt Lake is a small community in general, let alone when it comes to the estate planning community. I wanted to kind of make it on my own and I started at what’s now the largest law firm in Salt Lake and had a great mentor there as well. For six, seven years, I worked at that firm and it was different, though.
It felt different to me. I felt disingenuous, almost dishonest because you would have a process it was like this trust meal right a client would come in you’d look at what their net worth was you look at how many kids they have how old their kids are maybe ask him a few questions about whether or not their kids are drug addicts or something like this but you pump out a trust form that looked like everybody else’s and then they go right out the assembly line and you might not talk to him again you might not help him with trust funding and making sure their assets get where they need to be.
I didn’t like it so I actually wound up leaving, went out on my own for about a year and a half and that’s when I had met my law partner, David York, and co-author on our books and so forth, and David and I, for some reason, we’re yin and yang. We’re completely different personalities, but we work really, really well together and for whatever reason, his background’s different than mine, but we came to the same realization that our clients were asking for something more than what we were delivering.
They were seeing this negative effect of just dumping a bunch of wealth onto the next generation with no purpose behind it, and I know, this is a hot topic now in the financial and planning world and you want families to come up with their core values and you put that at the centerpiece. Well, David and I have been doing this for 20 years so we kind of had this meeting of the minds.
I wound up joining a firm that he was with at the time that we were there for, I was there for about four or five years and then David and I started our firm, York Howell. When we started the firm 11 years ago now, we tried to do it as just a tax and estate planning firm and it just grew, just organically, and that’s a wonderful thing, but we never intended it to kind of get where it is at this point. But it was really an idea of we want to work with just a select group of clientele. We like high net worth entrepreneurs, professionals, high income earners.
And the reason for that is it’s more fun, right? There’s more things you can do. It’s just, you get to use your creativity. Getting up in the morning and drafting another will and testament for a client does not put a spring in my step. But sticking it to the tax man, right? Making sure the IRS gets the least amount that they possibly should get. I like that, making sure my clients’ hard work, right? That built their entire lifetime up are protected.
And asset protection to me is just a subcategory of estate planning. It’s how you’re protecting your estate and it really comes in the form of a number of different enemies. I really always tell people that I have two enemies. Number one is the IRS, right? With high income earners, you want to have income tax planning strategies in play. They typically have a state tax problems as well and so you want to make sure assets are out of their estate. But all of those things that you put in play, whether it’s trusts or LLCs or whatever it might be.
The IRS would love to destroy. They’d love to say you don’t get the benefit you were trying to go for there, whether it’s the income tax or the estate tax benefit, and then the other enemy in this world is everybody that wants to come in and take your hard work. Now, of course, we all have different risk factors, and I’m a blood sucking vampire lawyer.
Every time I speak to a client, I subject myself to liability risk. My wife, on the other hand, she’s a stay at home mom or she’d prefer the term domestic engineer and I’ll call my wife whatever she tells me to call her. I can never in a million years do what she does, but nor would I want to try, but our chosen professions carry different liability risk and because of that, I might have a different estate plan than somebody else might have who doesn’t have that risk. Maybe they work for nine to five job, W-2 paycheck, they’re not a professional, they’re not putting themselves at risk. So you have to look at all the various risk factors. You also have to look at what kind of assets do the people own.
Because sometimes you’ll buy an asset that without knowing could come back and bite you pretty quickly. Rental properties, as an example. Everybody’s buying rental properties and then you do the cost segregation, you get the tax deduction. Wonderful. I these are all wonderful tax planning benefits. But the problem when I buy a rental property is that if Dave comes on and falls and injures himself and he can’t work ever again, well, I’m going to owe him 100 million dollars.
OK, I’m the owner, so protecting yourself from assets like that could come back and harm you, but also, of course, protecting your hard work if somebody tries to sue you. We’re the most litigious society in the world. There are 30 million new lawsuits filed in the United States every year. Now, the good thing about that is that 98 percent of those lawsuits wind up settling before they ever get to trial. You have a 98 percent chance of selling a lawsuit if you were to ever get sued.
So to me, asset protection planning and all of these various things that you could do from like in my case, my wife and I owning separate assets. We’re in a separate property state here, Utah and so we have separate revocable trusts. My home is in her trust. That gives me an argument that Dave sues me, can’t go after them, or Dave can’t go after the asset. It’s owned by my wife. Is that a winning argument? I don’t know, but it’s an argument and I’m going to throw it at Dave. Dave’s going to spend years of time and money out of his pocket to try to get after that asset.
And I haven’t lost any enjoyment over the asset. My wife still lets me live in our home rent free and then you can get really exorbitant, crazy, not crazy, but let’s say complex with asset protection and put all of your money in a Cook Island Trust. Now there’s drawbacks to that, right? You pay a lot of money to get it set up correctly. You give up significant control over those assets, you move them to another country and it’s about finding the sweet spot for me for asset protection for a client.
Look at their risk factors and what kind of a structure makes sense for them. It’s definitely not a cookie cutter approach and then you add on top of that, our clientele demanding more. We don’t wanna just talk about the numbers, we wanna talk about the purpose, right? What is the ultimate legacy we’re gonna leave in our family? And it’s a hard thing to combine those. mean, definitely you’ve gotta have the team approach, right?
Everybody being involved, advisors and accountants and attorneys and so forth, working together for a family, that all needs to be coordinated. The family has to, of course, identify what they want to accomplish, which is not an easy task to do for families. But yeah, I probably went way off your tangent there, but that’s where I came up in terms of where I am now in truly believing that there is a way to align those tangible assets in your wealth with your intangible goals and your family story, if you will, and make those last in a legacy setting.
We do not just want talk about the numbers, we want to talk about the purpose. What is the ultimate legacy we’re gonna leave our family?
Yeah, no, appreciate that context. I think that’s kind of helpful to understand the ranges. But let’s try to unpack that a little bit more. So I you know, I think a lot of people again, are probably maybe unfamiliar with, you know, the topic of estate planning asset protection, they understand maybe a will or irrevocable trust, or something that you have in place.
So why don’t we kind of start with 101 on estate planning, asset protection, you know, where should people begin? Who is this really for? Is there some type of threshold people should be thinking about? Because a lot of people, you know, if they’re early on in their career, they might think, “Hey, I don’t have enough wealth built up.”
But they could be on like a phenomenal trajectory, right of where they’re going, right? So when do you actually start this process? Sometimes people I think might start it too late. So what are some of those considerations and everything that people should look at?
Yeah, so I’m going to give a really simple answer here and then I’ll explain it because it’s a great question. 18 years old, that’s when you should begin, because now you’re a legal adult. Let me frame as to why I say that. I always tell people that if we were to meet in an elevator and for some reason you looked at me and said, what do do for a living? And nobody’s done this in 22 years of practicing law because my wife tells me I have resting bitch face. I’m apparently not very approachable, but I’m a pretty nice guy. I’d say, look, I’m an estate lawyer. Horrible elevator pitch.
What I mean by that is it covers three basic areas for me. Number one is what happens with your assets when you die, but also who would you want making decisions on your behalf if you were incapacitated? I we all think we’re gonna live forever and nothing’s ever gonna go wrong, but what if you have a disability? Legal adults, and this includes your children when they’re 18 years old, they, if they don’t, spell somebody out to be able to make those kind of decisions for them.
Nobody has the right to do that. Your kids go off to college. They have to go to the hospital for some reason. You don’t automatically have the right to have access to their medical records to make decisions on their behalf. Now, the vast majority, vast, vast majority of the population doesn’t do any estate planning. It’s not fun, right? Who wants to talk about dying and all of these various things? Plus you’re raising kids, you’re running your life, you’re running businesses. Life is busy. Then you go on a trip.
Maybe you have to get a medical procedure and you’re going, is that something that I should do? What a lot of people I don’t think realize is that if you don’t do your estate planning yourself, it’s already been done for you. Every state in the nation, I don’t care if we’re talking about California or New York or Utah for that matter, we all have a law that says how your estate is gonna pass if you fail to plan otherwise. I’m a planner. I love to plan. I’m a control freak. I love to control everything I can possibly control.
I wanna make sure that I choose the right person to talk to my doctor, to be in charge of my finances if I couldn’t do it myself. So as soon as you’re a legal adult, you need to start doing this stuff. Now, going back to your question and not answering it so obtusely, of course there are varying degrees to how much estate and tax planning you need, right? Estate planning, kind of what we’re talking about now, wills and trust, providing for the family, that’s that one category. Remember, I told you there’s three.
And I actually like to start there, if you ask me, because as long as you’re on this earth, I can create a new LLC for you or a new trust in the Cook Islands, but if you pass away tomorrow and you haven’t done any estate planning, then now the probate code kicks in and it governs how your estate is going to pass. Now, the law, the probate law is trying to do what they think the average person would want to have happen. Right. Personally, I’m married with three kids. And if something happened to me, generally, this is 30,000 foot.
I, of course would want everything to pass to my wife and then we would want it to go to our kids. That’s what the probate code would say. The problem though is it’s just a bunch of words on paper. It doesn’t have any meaning, force or effect and now my wife has to go to some lawyer and go to court and go through this whole process of probate. It’s not as big of a deal as it used to be. Quite honest, a lot of time I think estate lawyers make probate sound worse than it is, but it’s definitely a nice thing to be able to avoid. More importantly for me,
I don’t want my kids getting the assets according to what the probate code would say. If you don’t do any planning and you pass away, your kids will get custodial accounts set up for their benefit managed by a court appointed custodian. And I’m not trying to bad mouth courts. think courts try to do the best they can, but I’m always going to assume that my client has a better idea of who should make a decision on their behalf than the court does.
Again, you go to court. But then more importantly, when something now happens at 18, the kids get all of the assets and, you know, I don’t care how fabulously responsible your kids are at 18. I know what I was like at the age of 18. And I like to think I was pretty responsible. I had a couple of jobs and moved out of the house, but I still had no business being in charge of a lot of money and what a lot of money is to me at 48 is a lot different than what I would have thought a lot of money was at 18.
Right, I had $20,000 in the bank when I was 18. I’m in the money, let’s go do something fun, right? If I get $20,000 in the mail today, I’m not saying that’s not a large amount of money, I’ll be happy, but I’m still getting up tomorrow and going to work. So I don’t want my kids to have access at 18. I want to stretch it out. So you get some of these basic estate planning documents with wills and trusts and so forth.
The trust provide that you can avoid probate and that now the assets pass in trust for the benefit of the kids, managed by somebody you wanted to rather than who the court chose and then held on and watched over those assets for potentially their entire lifetime. Now we can get into deeper as to why I like to do that. That’s probably getting too technical.
Yeah, no, I think that’s a good start and then in terms of, you know, vehicles that people could use, you know, I think that’s another probably confusing area, right? You’re talking about Cook Island Trust, you know, having setting up some offshore, you’ve got a domestic asset protection trust, there’s bridge trust, right? There’s so many different types, right? So how do you figure out, you know, what is right, you know, per your client?
Yeah, and I’ve already done this today, but probably one of my critiques of my profession is they just start throwing out all these tools, and we in the legal profession love these acronyms. So, SLATS, Spousal Lifetime Access Trusts, DAPs, Domestic Asset Protection Trusts. The way that I look at it is these are just tools I have on my tool bench. And I can use a domestic asset protection trust to solve this issue for the client.
But I first got to find out what those issues are and with my clients, I have at least an hour meeting before I start even telling them what I think they need to do, where I really try to find out what their goals are. Because if I put an estate plan together for somebody without knowing that, it’s like me building a house without any blueprints. I don’t know what I’m building. I don’t know why I’m building it for. So when I hear a client, look, I have a lot of liability risk. I run an investment fund.
I’m high profile, right? I work with celebrities and professional athletes. Well, maybe they do have a reason to get more complex. A client of mine, was $70 million client in New York. He really wanted some protection for some life events he was expecting. He set up a trust in Nevis. He was willing to go through that rigmarole. So again, it’s all dependent. Now, a lot of times people don’t have to go to that level.
In fact, most of the time people don’t need to go to that level and we can solve issues with LLCs in Wyoming or Nevada or Delaware. So to me, those are all just tools and they should not, we should not start with the tools. I’m happy to go through them if you would like for this purposes of the podcast. But when you’re working with a client, you first need to find out why you need to use those various tools. Now, let me make something probably clear for the audience. Cause this is a really confusing thing right now. There’s so much information out there, we have Google at our fingertips.
I would bet a lot of your audience are self learners. They like to read books and so forth. I do it myself and trusts are a hot topic. Everybody’s talking about trusts. People use bridge trusts, all these fancy terms. They don’t mean anything to me. It’s some planner like me has coined a phrase that they like to use as really a marketing tool.
A trust is really an agreement. That’s it and it’s an agreement to between three people. The creator of the trust who we call the grantor, the settler, the trustee of the trust who who’s in control of the trust, and then the beneficiary of the trust who benefits from the assets inside of the trust and with Cook Island or Nevis, it might be me setting up a trust with a Nevis trustee for the benefit of my family.
And there’s all these various reasons to do those kind of trusts and other types of trusts, but it doesn’t make a whole lot of sense to pay too much attention to the type of trust that’s being called. I mean, I can name
I mean, I can name a trust anything that I want. It’s the fundamental nuts and bolts and what’s going on within a trust. I can make a trust have the income tax go back to the person who created it. I can have the income tax burden go to the beneficiaries, I can have the income tax burden paid by the trust itself. And so all of these phrases that when people use like legacy trust, dynasty trust, all of those things, they don’t mean a whole lot to me because I can call it whatever I want.
And I hope maybe that’s more confusing, but I just wanted people to understand that a lot of times it’s a marketing tool used by a planner to say, “hey, I’ve got the best trust out there.”
Yeah, I think that’s a great approach, Andrew, to really, you know, it is very custom and unique to that individual and their specific needs and I think, you know, to your point, oftentimes, it is marketed as a strategy or the strategy, you know, you should use, but maybe it’s not necessarily right for you. Given that, are there any, you know, typical scenarios that you see more often than not so that you know, people could be familiar with some strategies.
Yeah, so I do think these things build on themselves. So number one, and they don’t have to be done one after the other. They can all be done in conjunction. But, you I do think families really need to concentrate on getting their basic foundational planning done. Wills, trusts, power of attorney documents. Now, kids, like I said before, who are 18, they don’t, of course, need all of that stuff, but they probably ought to have just a solid last will and testament. Power of attorneys for health care and power of attorney for finances so mom and dad can still make their decisions on their behalf.
We call that a young adult plan or going to college plan, whatever. So that ought to be done for the family. So you can kind of take that deep breath and go, okay, well, now we’ve solved that issue in terms of what happens if something happens to us tomorrow. But given the fact that we’re gonna be on this planet for many, many years, now what? Now, most of the time, my next step for people is to look at a family partnership type of a structure. Now we use LLCs, taxes partnerships.
I sometimes see limited partnerships still being used. Usually it’s in a kind of a real estate deal where you buy limited partnership interest and it makes some sense there. It doesn’t make a whole lot of sense, at least in my mind, based upon statutes these days for families to have limited partnerships. LLCs, in my personal opinion, are more protective than limited partnerships. We can go into detail, but I don’t think that’s interesting maybe. But what that now allows us to do, like when my wife and I started to grow our structure,
The first thing we did was form an LLC in Wyoming, Wyoming and Nevada and Delaware. Some of these states that you hear about have better laws, quite frankly, when it comes to creditor protection and my wife and I started out just owning that partnership 50 50. So I own 50 percent of that LLC that we call Silver Fox Enterprises. We used to call my grandpa the Silver Fox, and so it was meaningful to us. So I own 50 percent of Silver Fox Enterprises. My wife owns 50 percent of Silver Fox Enterprises.
Then we pull, we put our assets underneath there. We own some real estate, you know, I have some investments and things like that and that’s all underneath in a structure of that, that LLC in Wyoming. Now what’s beneficial about that is I commit malpractice Dave and you sue me. Well, under Wyoming law, under the LLC, at least all you’re going to get after you spend years of litigation coming after me and hundreds of thousands of dollars in legal fees is a charging order against my 50% interest that I own.
And that charging order is an order from the court that tells Silver Fox Enterprises that if you ever make a distribution to Andrew, it’s going to go to Dave as his creditor, and then Silver Fox Enterprises, which is managed by Andrew and Candace, my wife, we say, “okay, we’ll remember that. If we ever make a distribution to Andrew, it’s going to Dave.” And now magically distributions go to Candace and now Dave y,ou’re left holding this charging order that is not ever going to get paid.
Now, Wyoming, Nevada, Delaware, those states, this is why we like to do them there, say that’s as far as a creditor can go. Get that charging order, hope that I slip up, pay myself and it has to go to Dave. So that’s always a really good starting point and then we can use that as a foundation for future planning. If I pulled up my structure, what you’d see is Silver Fox Enterprises is now owned by an asset protection trust in Nevada.
Now my wife and kids are the beneficiaries of the trust. I can be a beneficiary if I want to, but 98% of Silver Fox enterprises is not mine. You sue me, all you’re going to get is a charging order against my 1% that I still own in that company. Well, we just pay everything to my wife or pay everything to our third partner, the Domestic Asset Protection Trust. The Asset Protection Trust pays for our mortgage. My wife’s the beneficiary, so there’s all of these things that build on top of each other.
The Bridge Trust, just as an example, there’s a promoter out there that I actually know and I’m not gonna mention names, but he promotes this Bridge Trust idea, which is you form a trust in Nevada, typically is what I’ve seen from reviewing the trust, and then if something happens to you, the trust springs magically and automatically to the Cook Islands, and now it’s offshore. First of all, when I do offshore plans for people,
I like them to go offshore and just start there and do it the right way and it’s expensive. I mean, it’s $40 to $50,000 to do an asset protection trust in the Cook Islands or Nevis doing it the right way and that’s in terms of legal work. So it always worries me because I know this guy doesn’t charge that much. Plus, he always does it for people or a lot of times does it for people who don’t need that.
I mean, one of the reasons that I like irrevocable asset protection trust is you can use it for estate tax planning purposes. But right now, the vast majority of people don’t have to worry about the estate tax. Now, I’m talking at the federal government. Various states have their own death tax. But the federal government right now, which is still the Trump tax reform, at least in terms of the tax laws, it’s 13.61 million that every U.S. citizen or really every U.S. resident can pass at their death estate tax free.
So married couples can give twenty seven point two two million a state tax free and then every dollar above that would be subject to a federal tax of forty percent. Now this might change. Who knows what’s going to happen in the elections? The Harris and Trump debate was just last night. I don’t know when this is going to air.
Probably dating it. But it was an interesting. So who knows what’s going to happen? But let’s say that Kamala Harris becomes our next president. Well, Biden a couple of months ago mumbled, stated what he would do with the federal estate tax and what he would like to have happen is in 2026, he wants the Trump tax reform to go away, like it’s set to do.
That’s what the law says right now will happen if Congress does nothing. Now, if Trump is elected president, then I think what’ll happen is he’s gonna extend the Trump tax reform and it’s gonna go beyond its expiration date of 2026. Some of you who are gray enough might remember some of this is amnesia.
This was the whole fiscal cliff debacle with the Bush era tax cuts ending in 2010 and 2011. So anyway, this is gonna happen again. Now, if that happens and we go back to the Obama days, it’s gonna be a $5 million amount that will be adjusted for inflation. So it’s like more like 7 million per person, but that’s now 14 million as a married couple. And then every dollar above that would be subbed to a 35% tax.
And then of course, this pendulum of politics is going to continue to shift throughout our life and Democrats will be in control, Republicans will be in control. And Bernie Sanders, just as an example, I’m not trying to sway anybody’s vote, but Bernie Sanders would only like you to be able to give three and a half million away a state tax free with a 55 to 77% tax on anything over and above that and the way things are going, at least in my opinion, I don’t think the government’s going to need less money in the future.
I think taxes are going to go up and so I worry about a lot of my clients having this federal estate tax problem, even though they might not have it now. Now, in my case, in terms of the planning that I’ve done, let’s say that Silver Fox Enterprises, my company, our family holding partnership, it has a hundred million in assets underneath it. When something happens to me, 98% of that is owned by this trust out of my estate.
$98 million will not be subbed to my estate for estate tax purposes. So it’s another way to do that estate tax planning, protecting from that one enemy, one of our creditors, the IRS. If you don’t think the IRS is one of your creditors, you need to think back, think again. And then of course, being in an asset protection trust, it’s as well protected as we can get here in the United States. Really the only thing beyond that is going offshore and I’m not trying to bad mouth going to one of these offshore locations.
Again, I’ve done it for clients. I like it for certain ancillary benefits, but most of the time clients have to get really comfortable with moving their assets to another country, spending that much money to do it and giving up significant control and enjoyment over their assets. So again, it’s just a game.
Yeah, one of the things I’ve found, Andrew, is that, you know, creating the structure is really just your starting point, right? So you’ve determined your risk, you’ve determined, you know, where you want to go, what your legacy is, you kind of start to put some of that estate planning and asset protection in place. But then it comes the management and compliance of that.
Do you have any recommendations or tips or structure that you have yourself to really help clients figure this out? Because again, we’ve got spouses involved, we’ve got multiple generations, who’s in what trust, where is money flowing? How do you try to make that process seamless?
Okay, so two things there, maintenance, obviously we wanna talk through that and what are some ideas there, and then getting the family involved, making them aware and don’t let me forget those points, because I, as you probably tell already, I talk in paragraphs. So maintenance, maintenance is critical. When somebody has a structure like this, it has to be maintained, because again, the two enemies, the IRS and your creditors would love to say you have not maintained it.
Now, the IRS will use an argument that is called substance over form, that they can look through the form of your structure. Like, Andrew, we don’t care that you have Silver Fox Enterprises. Something tax abusive is really going on there substantively. And therefore you don’t get it. You don’t get the tax benefit. Maybe you go to prison and then creditors like to do the same thing, which is say you haven’t given credibility to your structure.
Their argument is what you’ll hear called corporate veil piercing that the creditor will go through the company and be able to get after the asset or go through the company and get directly after you as the owner. Well, creditors get to achieve those credit or the corporate value piercing arguments again by all of these problems and people are not very good at maintaining their companies.
A lot of times our clients are great at whatever they do. They’re great at making money in whatever profession they sell at or whatever product they’re selling or whatever service they’re providing to the world. Right. They’re great at that but they’re not good company managers. So if you’re not gonna dedicate yourself to do it and get all of the Excel spreadsheets for the companies and keeping separate books and so forth, don’t try to do it.
Hire somebody to do it, right? You want a bookkeeper and all of your advisors, I’m your clientele listening to this, all of your advisors should be paying for themselves at your level, right? I should be paying, I should be saving you much more in taxes than I ever charge you in legal fees decimal point degrees. I mean, it’s just crazy. Your accountant should be doing the same thing.
Your financial advisor should be doing the same thing. So again, I told you was going to go off on a tangent, but use those advisors and make sure that you have quarterly meetings. I love quarterly meetings with clients. Now, my wife pays me to not talk, so clients don’t necessarily want to meet with me all that time, but I at least want to meet with you twice a year or at least once a year just to make sure everything is run correctly.
One of the benefits of tax planning, at least in my mind, is that it’s always one year backwards looking, right? You haven’t reported anything yet to the IRS and you can clean up a lot of things before the end of the year. So regular maintenance is a really important thing. The other thing, and I remembered, getting the family involved. David and I wrote an article for Trust in the States Magazine in 2017 and it was called Grats versus Gratitude.
Okay and this is for our nerd lawyers who like all this estate stuff, and a grant to us is what’s called a grantor attained annuity trust and it’s a type of tool, like we talked about before, used to pass money from one generation to the next. So the point of our headline or the title of our paper was, what are you doing when you’re crafting an estate plan? Are you trying to just give kids money or are you trying to create a feeling of gratitude within the family? And as we were preparing this legal paper.
I’ll never do one of these again, they’re horrible. They’re reviewed and you have to annotate them. It’s horrible, but one of the things we thought was incredibly telling is one of the most important factors of a family getting along a year later after the matriarch or the patriarch or the family dies. Because we have this saying in the estate planning world, you never truly know a person until you share an inheritance with them and but one of the most telling things was was how open the family had been.
And that’s another generational shift, right? The silent generation was called that for a reason. They did not like to talk about money. In some ways it was taboo, right? Don’t ever discuss it. Don’t ask me about it. I hate that. I was not brought up that way. Again, as I mentioned, my grandpa, he had us under his wing. We were in financial meetings with our financial advisors, our accountants and so forth. Again, when we were 11 or 12 years old, we were told to sit there and be quiet, although we could ask questions.
But by the time I was 18, 19 years old, I don’t know how many meetings I had sat in on and I was way ahead of my contemporaries, and I think that’s an important thing. We really do believe that beneficiaries, a person within your family that’s gonna benefit, has to have three expectations made clear to them.
Expectation number one is you need to understand and expect what it means to be part of the family. Like just as a really kind of corny example, but we have this small ranch up in Southwest Montana that we love and it’s a place for us to go up and be together and the family knows that they can go up and use it as long as they play by the rules and treat it nice and clean it and all that kind of stuff, and that’s a benefit.
They can expect that from being part of their family as long as they live by the rules. They also need to know what they can’t expect from being part of your family, right? Just because you’re my son doesn’t mean that you have any money.
In reality, you’re broke. I’ve got money, you need to go make it on your own. They need to have those expectations laid out to them and then they need to know what’s expected of them, and I haven’t done the best job of this. I try to, but do you kind of lay, look, if you wanna be part of the family dynamic here, you’ve gotta engage. We expect you to be part of it.
Get off your device, right? So those are all things that are important for that family dynamic to last, not just the legacy in terms of maintenance, the nuts and bolts and the IRS keeping at bay, but also the kids and the family being able to maintain it through future generations.
Yep. Andrew, if you could give just one piece of advice to the audience about how they could really start with their estate planning and asset protection today and get out of the gate, what would it be?
I was like, because usually my last advice would be to reach out to an estate lawyer. there’s plenty of fabulous estate lawyers, technically speaking, that do a really, really good job and of course, I’m always welcome to speak with one of your listeners, and if they come to me as a referral from you, they’ll just get an hour long free consultation and we can just talk about these things and we can get to know each other. Because we always like people to identify what they’re going to build first.
This is kind of going back to what gets me up in the morning, this idea of legacy and the books that we’ve written and our company, Cornology. In fact, you my high net worth clients, if you’ve got say more than $30 million and you want to work with me, I’m going to really encourage you to go through Cornology and what it will do is it will force the family to understand themselves.
It identifies the five core values of each member of the family, It identifies the collective five core values of the family together, it talks about what the family’s priorities are, husband’s priorities, wife’s priorities, collective, no, 10 priorities and I just think that’s so powerful to me as an advisor, as a tool, because I meet with you.
I have a 65 page report that I have gone through and I know what all of your core values are. I know how to direct that meeting. I’m not gonna sell you on an asset protection trust if that doesn’t come into line with what your core values are gonna be. So I like that. mean, and I know it’s not answering your question directly, but if I was a family starting out now, I would first have a discussion and say, “look, how is the family dynamic?”
I’m not going to sell you on an asset protection trust if that doesn’t come into line with what your core values are going to be.
And this could definitely start between husband and wife or husband and husband, wife and wife. I’m not trying to be, you know, uninclusive here, but it really, you know, family dynamic and the definition of family is so broad these days. mean, a nuclear family, two and a half kids and a dog and parents that have been married forever is really not the norm.
It’s blended families these days, but really understanding what those dynamics are and starting the discussion. A lot of times husbands and wives have never had that conversation and it’s not fun to have. Now, I do facilitate that conversation. I make them have it, right? I never get into their assets. I never talk to them about their net worth.
It really is starting off, tell me about you guys, tell me about your marriage, tell me about your kids and I want them to go. I really want them to just tell me all of the wonderful, amazing things and, you know, people, frankly, they love to talk about themselves if you let them and you create that safe environment for them to be able to do so and that’s what I love, and then I can hear what I think their dynamics are. mean, they tell me, look, we have children from different marriages and we might want to treat them in a different way.
All right, already I know I need to put that on issue of discussion when we start talking about the nuts and bolts. So if you can find a planner that is willing to do that and kind of sit down with the family and help them through that first part of the discussion, I think that it would be great. Now, the other thing I should say is I’m thinking of high net worth individuals here.
Everybody ought to do their estate planning before and I get asked, as I said before, and I get asked all the time, Andrew, what do you think of legal Zoom and Rocket Lawyer and now ChatDBT and AI that’s all coming out? I love it. I absolutely love it. I think everybody ought to do this, right? If you don’t want to pay for a lawyer, go on legal Zoom and do a basic estate planning for your family, because at least you have done it. But most of the clients that I work with have outgrown that.
They want to have more personalization, more dynamic. They need the more dynamic tax planning and then they also want that team approach, and you can’t do the team approach with legal zoom. Not bad mouthing it. I don’t think it does a bad job for the average Joe.
Yeah. Now, I really appreciate those insights, Andrew, and just really love the fact that, you you focused on creating this product called Cornology that focuses on core values for a legacy, right? Because it’s not just financial capital that we’re leaving behind to other generations, and even it’s really how, you know, you hold yourself today.
I found with my ever increasing family, you know, that keeps getting older, right? It’s these core values that, that really cut through some of the differences that we all have, because we’re all trying to do different things, we’re different people. But just just really foundational, I think, to the family and when you look at the statistics, you know, it’s it’s sad, right? Its over 75% of wealth is actually lost at G2.
It gets up to 90% by G3, so how can we reverse those statistics? So you can be on the right side of that with your next generations and your legacy. And so I really like your approach of just focusing on those core values, focusing on the family, focusing on what’s really important to the clients.
You have to, so in Entrusted, the first book we wrote, we lay out these principles that families that successfully navigate wealth transfers, you know, that last more than three generations, the wealth, what do they seem to do right? And the very first thing that we lay out in Entrusted is in principle one, entrusted families know who they are and what they believe, and that all boils down to core values, and then know, in riveted our second book we wrote, we go deeper into the connection between core values and life experience.
I mean, all of my core values are based upon life experience. All of your core value, Dave, are based upon your life experience and I would list out my five and you would think they’re admirable. You would list out your five. I would think that they’re admirable, but there is a one in 15 million chance that you and I have the same top five core values.
As an example, one of my core values is honesty and that sounds really dishonest coming from a lawyer, but I mean it, and it’s because early on in my life, there was a member of our family that was really dishonest with us and it caused problems in the family that in some ways we’re still dealing with today in terms of the dynamics and kids go to Thanksgiving and why is this person not talking to the other, those kinds of things.
We all have that stuff going on in our family doing cornology with my family and I’m able to identify that honesty is one of my top values and I can say, “okay, this is why I can trace that back.” Well, what I’m doing with my family is I’m telling them family lore. I’m telling the history of our family. This is what went on. That explains why Thanksgiving dinner can be uncomfortable sometimes, but they’re also learning about me.
They’re learning why if they wreck dad’s car, which just happened last week and I always use this as an example in presentation and I knew it was gonna happen. I calls myself karma, but if they lie to me about it, I’m gonna go nuclear. If it happens, it’s an accident. You tell me about it, we’ve got insurance, not a big deal. So, and if you think about doing that with five of your core values and then every member of the family doing it on their five core values, and then you can even play it in the reverse, right? I’ve done it where I see these five core values in my wife.
What an incredibly empowering conversation, right? I see you, I, loyalty. These are the things that you have done throughout our relationship that have exemplified loyalty. It is just an amazing conversation and it really does get that juices flowing. I did a presentation for a mastermind group. I’m sure a lot of listeners, maybe David you’re aware of these, The millionaires, they get together, hold themselves accountable, talk about our feelings.
But I was asked to come in and speak about core values and I had made the group, I think there’s 40 men that were gonna join this, they each went through a very brief cornology survey, and it gave me with their number one top core value and this one gentleman who is gonna be a participant, his top core value was forgiveness, okay? I have never in now 4,000 people that have gone through cornology, I have never seen forgiveness be the number one value.
I’ve seen it in the top five, but never number one. So I called him out and he had agreed and everybody agreed that, know, kumbaya, we’re going to talk about our feelings. So I said, “sir, your top core value was, was forgiveness.” and I just told them a story that I told you guys, can I ask you why? And he told us this just amazingly heartfelt story. People, these grown men are starting to tear up about how a number of years ago he had been unfaithful to his wife and he’d been on a business trip, whatever it had.
It had been and it caused obviously a horrible scenario. He came clean to her. They went through therapy and she wound up forgiving him and and he said it was the most amazing gift anybody have ever ever had given him, and she didn’t need to do it. He would have totally understood if she had not. But she did it. It kept their family together. mean, just all of these amazing benefits that he just started listing off, listing off, listing off. He said and then on the flip side of that.
Because it was so meaningful to me, I started forgiving everybody else that I was holding a grudge over and that was a powerful experience. So it’s just the power of that and then I said to this guy, I said, “look, that’s an amazingly powerful statement that you just made. You have three gentlemen here crying. Have you ever told that to your family?” And he said, “no.” And I said, “well, why not?” So I don’t want my kids to get involved and I said, “well, how old are your kids?”
You know, they’re in their 20s and 30s. I said, you don’t think they know? I don’t you think that this would be better to bring into the family dynamic and discuss it? So, cornology, we really feel is a tool for families to start this discussion. It requires them to do it. It’s totally non-confrontational, it’s just basically a survey that every member of the family spends 45 minutes filling out.
The report gets produced and it’s a learning software. My kid’s college fund is invested into all this stuff, but I’m not trying to sell it. I’m a true believer of it and there are a lot of groups around the country that are starting to license it from us. we think it’s, we don’t have a, we don’t know a product like it in the market to help families deal with this, this need and, quite honestly, the demand that they’re asking from us advisors now.
Yeah, no, that’s really awesome, Andrew. And it is the, you know, it’s the intangible side, right, the soft side of things that are really hard to communicate and as we said, you know, you have to decide what is your legacy going to be today? Right? What is it going to be? And then how can you really try to instantiate that and bring it forward?
So it’s really fantastic that you’ve created that. I think it’s very powerful. So appreciate what you’ve done there. If people would like to connect with you, check out your books or learn a little bit more about estate planning, what’s what is the best place for them to connect with you?
Yeah, books are both on Amazon as well as Audible. Unfortunately for everybody out there, if you get entrusted on Audible, it’s my horrible voice reading it for four and a half hours. Riveted on the other hand, one of my clients is an Emmy award winning voice actress and I got her to read it and it actually is pleasant to listen to.
But they’re on Amazon and then in terms of if you want to talk to me, I’m happy to talk to any of your clients, Dave, and what I would want If you just reach out to us via email, the best email for me is team Andrew. And that’s just [email protected]. That goes to me, goes to my paralegals and assistants and then I don’t miss an email, and then what will typically happen is we’ll just get an hour long call schedule. There’s zoom or if you’re in Utah, I’m happy to meet you face to face.
Just sit down and talk, get to know each other, an open book, answer any questions you might have about me, but really dive into the client, what they’re trying to do and see whether or not I’m the right guy to help them with it. I’m really forthcoming on fees. I will never bill you unless you know I’m going to. I always like to bill by the project right after I’ve heard how complicated a plan is gonna be. I like the client to know what they can expect hourly billing to me is the best way to ruin a perfectly good relationship, but that’s typically how I work
Yeah. Fantastic. Well, thanks so much for coming in today, Andrew, and sharing all your wisdom with us on this really important topic that I encourage the listeners to really, you know, put on your list, right? I mean, this is something that has to be done. It’s not an if or maybe. This is really essential, you know, for yourselves, for your legacy, for your family. So reach out to Andrew, he’s been a phenomenal resource for us and check out his books and cornology as well. But thanks again, Andrew.
Absolutely my pleasure. Thanks so much for having me.