Brian Leitner, Head of Wealth Management at Mariner Wealth Advisors, joined us on the podcast to kick-off our special Mariner Wealth Advisors podcast series.
In this series, we’ll be joined by team members at Mariner Wealth Advisors to discuss wealth management fundamentals including stock market forecasts, financial planning, estate planning, optimizing tax strategies and more.
Does Mariner sound familiar? Our sister company, ReAllocate, partnered with Mariner Wealth Advisors to give investors the ability to access teams dedicated to helping you build a real estate portfolio based on your personal investment roadmap and financial goals.
If you’d like to learn more about how ReAllocate + Mariner Wealth Advisors can help you build a roadmap for your real estate investments head to — BuildMyRoadmap.com.
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*If you’d like to learn more about how ReAllocate + Mariner Wealth Advisors can help you build a roadmap for your real estate investments head to — BuildMyRoadmap.com.*
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All opinions expressed by Adam, Tyler and podcast guests are solely their own opinions and do not reflect the opinion of RealCrowd. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. To gain a better understanding of the risks associated with commercial real estate investing, please consult your advisors.
Adam Hooper (00:22):
Hey, listeners, Adam here. Have you ever wondered if you’re investing in the right real estate deals? What about if you’re making the right decisions for your overall financial health? Over the last seven years of running RealCrowd, the number one question we received from investors is should I invest in this deal? Well, we’re excited to announce that we can now help you answer that question. Through our sister company, ReAllocate, and through ReAllocate’s partnership with Mariner Wealth Advisors, you can now have access to teams dedicated to helping you build a real estate portfolio based on your personal investment roadmap and financial goals. If you’d like to learn more about how ReAllocate can help you head to buildmyroadmap.com again, that’s buildmyroadmap.com.
Adam Hooper (01:12):
Hey, listeners to celebrate our partnership with Mariner Wealth Advisors, we’re launching a special podcast series where we’ll be joined by team members at Mariner Wealth Advisors to discuss everything from stock market forecasts, financial planning, estate planning, optimizing tax strategies and more. To kick off the Mariner Wealth Advisor series, we’re joined today by Brian Leitner, head of wealth management at Mariner Wealth Advisors. In this episode, we’ll discuss the ins and outs of estate planning. We covered everything from the basics of estate planning, the implications of recent tax changes and how to avoid common mistakes when setting up your plan. We hope you enjoy the episode. And please let us know what you think of this series. If you have any questions for Brian, please send us a note to firstname.lastname@example.org, and with that, we’ll get to it.
Adam Hooper (02:02):
Brian, thank you so much for joining us today. We’re super excited to talk about estate planning and a little bit more about your background and the folks at Mariner Wealth Advisors. So thank you for spending some time with us on this, what will be a very momentous Election Day.
Brian Leitner (02:17):
Absolutely. It’s my pleasure. And thanks for having me.
Adam Hooper (02:20):
So before we jump into estate planning and getting the meat of the conversation, why don’t you take a minute, tell us a little bit about Mariner Wealth Advisors, how you came to join the firm, your background before then and what got you into the space?
Brian Leitner (02:33):
Absolutely. So by way of background, let’s see, after college, I spent a couple of years on Wall Street really learning the investment channel. I mean, just that industry was always appealing to me and I grew up in New York. And so like a lot of students once they get out of college, there’s some sex appeal to working on Wall Street and trying to learn as much as you can about the investment world. That was always sexy to me. So I was on Wall Street for, literally on Wall Street for a few years. And after that somebody introduced me to this concept of financial planning. And back then it was not a household term. This was something I actually never heard about. And so somebody started explaining this to me, and these individuals who were at Ernst & Young at the time, and really educated me on the areas of tax and estate planning and all these other areas.
Brian Leitner (03:33):
And I think at the time I was 21 years old, or 22 years old, I thought I knew a lot about investments. I thought I was an investment expert, because I had my Series 7, shows you how little I probably knew at the time. And they just painted a picture of what clients are actually going through as opposed to just investment management. That there was a much bigger piece and it really opened up my eyes. And so I spent several years at Ernst & Young, really growing up in the tax and planning world. And then after that I spent several years, seven or eight years at UBS in New York City, and wore a lot of different hats. And again, I was there for the good times, and I was there for the not so good times.
Brian Leitner (04:22):
And so did a handful of different things, but at the end of the day, what I would share with you is advisors would help bring in assets, and I would help them bring in assets because at the end of the day, a lot of these folks wanted not just an investment conversation, back to my point earlier, but I have a $10 million concentrated equity position, how am I going to unwind that in the most tax efficient way, deeper conversations as it relates to planning and I would pair up with those advisors to help bring in that business and provide them comprehensive planning.
Brian Leitner (04:53):
And about 11 years ago we had our first son. And my wife made a strong push, we were living in New Jersey at the time working in New York City, she wanted to have the kids raised in the Midwest, and family’s in the Midwest. And somehow, through some channel, I had an opportunity to speak to the CEO of Mariner Wealth Advisors way back when, I mean, again, this is back in 2010, a completely different firm. I don’t know how many people were there at the time, but I would tell you probably 40 or 50. This is before a lot of the growth and just had an unbelievable conversation with Marty Bicknell, our CEO, and I think as Marty tells that story, the meeting was supposed to last just, I don’t know, 10 minutes, 15 minutes, I think he was doing it as a favor to someone on my behalf. And we had a conversation that lasted about six, seven hours.
Adam Hooper (05:53):
Brian Leitner (05:53):
And we painted a picture for each other, I think, in different ways. And his vision of what he wanted to build was in line with where I thought the future of the industry was headed. So I’ve been at Mariner for 10 years. And again, I’ve seen a tremendous amount of growth. And as of today, I’m the head of wealth management, which really means that I make sure that our advisors have the tools and resources they need to deliver a phenomenal client experience. And that’s where I spend a lot of my time, helping the advisors themselves grow as it relates to their overall practices and become more efficient.
Adam Hooper (06:31):
I would imagine the business itself has changed from 2010 to now. Right?
Brian Leitner (06:37):
It has. As an industry, there’s been a great deal of consolidation.
Adam Hooper (06:43):
Brian Leitner (06:43):
So there are less players, you have advisors, it’s an aging industry. So you have a lot of advisors, that are continuing to retire and they’re… Folks understand this that are in the industry, there’s this wave of advisors that, and I don’t have the statistics off the top of my head, but it’s almost a third of advisors are going to retire in the next five to 10 years. So there has been a lot of change. And there’s also been a change of what clients are asking for. At one time, it was mainly you’re an advisor, and so you handle my investments. And now it’s a whole lot more than that. Similar to what I was talking about earlier, and having that exposure, maybe at a younger age, to truly understand the planning aspect, that shift is in our industry. And I think more and more advisors are recognizing that shift.
Adam Hooper (07:33):
Well, I would imagine trading the energy, excitement, allure of Wall Street for a tax position at Ernst & Young was a pretty big transition. So what was it that pulled you into that side of the business? And again, I mean, that was early days of this shift away from just purely picking a portfolio and looking at the investment piece to more of again, holistic planning, and tax optimization and estate planning that we’re going to talk about today. Right?
Brian Leitner (08:00):
Yeah. It’s a great point. I mean, one of the things was, first and foremost, I think the people I talk to. And I think we all have people in our lives, that have truly had an impact. And a few of the folks that I spoke to over there, again, either painted a picture for me or opened my eyes to things. I also have the privilege of my father was a tax advisor turned investment professional, so that background and influence helped. He’s certainly still an influence in my life as it relates to my career as well as other things. My older brother was an estate planning attorney at the time, so had bits and pieces of exposure prior to that.
Brian Leitner (08:44):
But the other thing was at the time, I remember, you could spend X amount of time building a portfolio for someone. And at the end of the day, if the market tanked, you might have helped them in terms of reduced volatility and things like that. But you could always hang your hat on taxes. I know, if I spent 10 hours on someone’s tax plan, I’m going to add real value regardless of what the market does. So maybe the diversity of advice. Again, I think that helped me. It’s funny when you said that the sexiness of Wall Street, and I know I said that too. But I say, today I say taxes are sexy. And I know how that sounds, but it’s for the same reason. I mean, it really does provide clients a great deal of value and it’s potentially more controllable than the investment world itself. And I think especially now people are looking for certainty in different aspects of their life and so that background’s helpful.
Adam Hooper (09:45):
Well, and again, a lot of listeners to this show focused on real estate. Obviously very tax advantageous asset class. So I think the tax message definitely plays well with a lot of listeners today. So maybe let’s take just high level, when you think about estate planning and you’re going beyond just the investment portfolio, the 30,000 foot view, what is estate planning?
Brian Leitner (10:12):
Estate planning is ultimately making sure that your affairs are in order should something happen to you. So the ultimate distribution of your assets, as well as nominating people that may need to make decisions on your behalf, maybe from a financial or medical perspective, when you may not be able to. I mean, so another way to say it is, some people like to say as, who gets what, when, and how. And so it’s putting a plan together. And communication is a major part of that plan, that I think we’ll get to, that what’s the most efficient way to do this, not only from a logistics perspective, but also from a tax and wealth transfer perspective.
Adam Hooper (11:00):
And so where does that fit in with… Or is it in conjunction with retirement planning or planning for different stages of life? This is the end goal that you’re working for in that planning stage. So does that include retirement or different life transitions? Or is this just a component of that?
Brian Leitner (11:21):
It is a component of the overall wealth plan. So we all believe that we’re going to live and hopefully a very long prosperous life, and at the end of that life, we’ll have assets and wealth and lessons, which I think is critically important, to maybe pass down. Hopefully some of us will have assets to pass down. But the reality is, we have no idea when something’s going to happen to us. So this isn’t, I wouldn’t say it’s another phase retirement, I would say that I personally think everyone needs an estate plan, regardless of how much money you have, or where you are within your life. It’s a component of the overall plan.
Brian Leitner (12:01):
And so unfortunately, I think a lot of folks view it as when I get to a certain age or a certain transition, I’ll go ahead and get that done. It’s almost like when people say, “I know, I need more life insurance, I’ll get it done at some point, just not right now.” And that could be you’re rolling the dice, without a doubt. And so those are some things to think about, as I think about where this fits within the overall process.
Adam Hooper (12:27):
Yeah. And so I guess that was, you answered that. I was curious, is there a stage of life, is there a net worth or income threshold? Is there a life event? Having kids, are there certain triggers, and again, listeners on the show all walks of life, we have younger college students that are listening to the program, all the way up through people that have already amassed great amounts of wealth and have begun that planning stage of life. So are there certain triggers or events throughout one’s life that would maybe make it more appropriate timing to think of estate planning? Or is it just everybody should have one regardless, period?
Brian Leitner (13:05):
I think everyone needs to have one regardless. And I’ll tell you why. And I’ll walk you through maybe a couple different examples. And there’s a big difference between estate planning and wealth transfer. And let me just maybe address that. Everyone needs an estate plan, you need an estate plan, because like I mentioned just a few minutes ago, should something happen to you, who’s going to make decisions on your behalf? Again, whether that be financially or from a medical perspective, I mean, God forbid, if something happens to me right now, and I’m raced off to the hospital, they’re going to want to know, okay, who’s going to make decisions on your behalf? That could happen at any age, regardless of what my net worth is, regardless of what my health is. So you need to have things like that in place.
Brian Leitner (13:52):
Now to your point earlier, when what happens during life events? Well, when you have children, you need to make a decision in terms of what happens should something happen to you who’s going to raise those children. And I know a lot of folks will resort back to, we’re going to name this person as the godfather or the godparents, and we’re going to do it. And I’ve had conversations with clients, especially young families, as it relates to that, and that’s exactly what they say, “No, we’ve asked Harry and Sally to be the guardians or to be the godparents.” And I might ask them, “That’s excellent. Can I see that documentation? Can I see that will?” And they’ll say, “Well, we don’t have a will.”
Brian Leitner (14:31):
Well, that doesn’t really pass muster. That’s not going to stand up in the probate courts. And so what ultimately happens is, if you don’t have the will, therefore the state is going to decide what happens with those children. And that might not be exactly the plan that you have. So I like to say to people, everybody already has an estate plan. It’s just that the state has a default option. And it’s fascinating when you look at the different states and what these default options are. Because, again, they differ state to state. For most people, as a father of two, I would say, it’s probably not the decision that you want. So I think you need to be proactive with that.
Brian Leitner (15:15):
Another is obviously, so marriage might be one you want to nominate your significant other, to make decisions on your behalf. Divorce is a big one. And candidly, it’s something I still see amongst folks that have become divorced, I don’t know, 10 to 15% of the time, they still have their ex spouse on that piece of paper in terms of either who might inherit assets, or who may make some of these decisions. When in reality, they don’t want their ex-
Adam Hooper (15:49):
They don’t want that. Yeah, that might be a-
Brian Leitner (15:49):
… in that position.
Adam Hooper (15:50):
… little bit tricky. Yep.
Brian Leitner (15:51):
It absolutely can be. So those are a couple of different reasons why you want, again, some of the basic estate planning documents. You want a will. I think if you’ve been to the doctor in the past 20 years you’ve signed a different HIPAA form. HIPAA forms are really important too, for kids. And so I was just talking about maybe young parents. But if you think about some of the kids that are off to school, some of the stories that you might hear about is, Johnny was playing hockey at the university, there was an accident, Johnny was rushed to the hospital, mom and dad find out about it, they drive up to the university. The first thing they say, of course, is, “Doctor, what’s going on with Johnny?” And they say, “Well, basically, because of his age, and because of HIPAA requirements, I’m not able to share that information with you, mom and dad. So do you have anything in place today where he has signed off?”
Brian Leitner (16:46):
So there are a variety of different ways, which is why we strongly encourage folks that are leaving for school to actually have their own set of documents to make sure that this is in place. And a lot of times, unfortunately, what you end up hearing is, like a lot of wealth management or financial planning is, “Well, no one ever told me that.”
Adam Hooper (17:02):
Brian Leitner (17:04):
And that’s too bad. And so hopefully, maybe this conversation and the podcast changes some of this.
Adam Hooper (17:08):
Oh, that’s absolutely right. I mean, I think this is a lot of… We’re excited about the work that we’re doing with you and the folks at Mariner Wealth Advisors, that’s bringing light to some of these conversations that a lot of people maybe aren’t privy to. I think it is very important, and again, thank you for coming on and talking about this. I know we’re putting you on the hot seat today, you’re usually on the other side of the podcast as the host, but we definitely appreciate you answering these questions for us.
Brian Leitner (17:33):
No, it’s my pleasure. And we love to educate as much as we possibly can, because like I said, these things slip through the cracks.
Adam Hooper (17:44):
So you mentioned will, HIPAA forms, which again-
Brian Leitner (17:48):
Adam Hooper (17:49):
… that’s something new that I just learned.
Brian Leitner (17:51):
Adam Hooper (17:51):
What are some of the other basic components of maybe a starter estate plan, and then maybe some of the more well-rounded estate plans, but what do these actually have in them?
Brian Leitner (18:03):
Great question. You want to make sure that you have health care directives in place. Living wills, and electing folks to make decisions on your behalf like I said, just a minute ago. There have been cases upon cases where somebody goes to the hospital, and they don’t have their documents in place and the hospital has one policy, and the family may have the desire to do A, B, and C. And ultimately, you have a war, if you will, with the hospital administration. So you never want to be in that position. You want to stack the deck in your favor.
Brian Leitner (18:40):
And the other item that I talk to folks about, is the importance of having a trust. Now there are different schools of thought on this. And it really is specific to the state in which you live in and what probate looks like. And probate is the process, just so I articulate this, of really proving the will. And that can take time and money, and there are different fees associated with it. But having a trust in place, there’s many different types of trust can allow you to distribute your assets in a very efficient way, both from potentially a tax perspective, a time perspective, privacy perspective. So there’s a whole host of things to think about.
Brian Leitner (19:26):
What I would share with you is that I have two children, and I have a beautiful wife, my wife’s a 10, I’m probably a five at best on a good day. And we have trusts in place, not because I have an estate tax issue. I don’t have that level of wealth. But what I do know is, should something happened to me, I want to make sure that my wife is taken care of and then ultimately, maybe she… Mary’s a much better looking younger individual. And while she’s incredibly savvy and I don’t think there’s anybody who could possibly take advantage of her, if something were to happen, I have a plan in place that I’m controlling from the grave. So regardless of what happens, I know my wife’s taken care of, and the assets that I have today will ultimately go to my kids, and it’s protected from that next spouse, if you will, but it’s also protected in a variety of other ways, depending upon how you structure the trust.
Brian Leitner (20:27):
So it could be credit protected for my children. Or if you think about the divorce rate in this country, it’s still hovers around 50%. Trust can serve a really interesting, in an interesting way to protect the assets, even in divorce planning. A lot of people talk about the prenup. But there’s a lot you can do with trust planning where you don’t have to have that conversation of the prenup because, frankly, it’s already in place via the trust. And so those are some of the basic documents. And every so often somebody might say, “Well, what does it cost to have one of these trusts created?” And there’s many different-
Adam Hooper (21:08):
It’s like legalzoom.com thing or is there a better way to go about it?
Brian Leitner (21:12):
Yeah. So you can absolutely have certain documents created online. This is what I would share with you, we’re talking about major components of your life. I’ve talked about the fact that if something happens to me, I want to make sure my family’s taken care of. I don’t want to risk that and do it alone, on a website, that much I know. And while I’m not worth a certain net worth, I’m not worth today, which is $11 million, or $23 million, if you’re married, to worry about an estate tax, this is the… And again, we’re talking about the bulk of my wealth, and whatever that number is, it’s critically important to me, I need to make sure that it’s done right. I need to sleep well at night. And so if somebody is interested in doing it through an online tool, without a professional, to some degree, I think that there’s some risk associated with that. And I wouldn’t be comfortable with that. And so I wouldn’t recommend that.
Brian Leitner (22:14):
What I also don’t think a lot of individuals understand is, it’s a process, it’s not just, “I’m going to go get these four documents.” It’s almost like saying to yourself, either, “I’m going on a road trip, and I need a map.” Or in our world, it’s really, “I’m going to put together a plan, and it’s going to incorporate all my assets and all my liabilities and all my goals.” And in my opinion, before anyone can have an estate plan done, they really need to have a financial plan done. And by a financial plan, I don’t necessarily mean well, how much money should I put away for retirement each month. That’s not a plan, that’s a calculator. But having someone walk you through what’s really important to you, who are the important people in your life, ultimately having conversations that they probably never had before, to truly understand where they want to go.
Brian Leitner (23:09):
And Adam, just a tangent here for just a second, one of the things that people really need to make sure of in these documents is that they’re naming the right people in these documents. So what I mean by that, as I said earlier, you’re going to make the decision if you have healthcare directives on who’s going to make decisions on my behalf and healthcare powers of attorney. So for myself, and it’s easy to pick on me, my wife is going to make all those decisions. Hopefully, she makes the right ones. But she’s going to be that person. And as a backup, it could be, my children are too young at this point, but it’s my brother. I’ll see a lot of individuals, they’ll name one of their children. Sometimes they name both their children with 50% voting, if you will. And that’s a struggle if they’re not on the same page.
Adam Hooper (24:03):
Brian Leitner (24:03):
Or they’ll name uncle Joe. And one of the questions I’ll ask is, “Well, tell me about uncle Joe.” And a good percentage of the time it’s uncle Joe died three years ago. Because these estate plans, one of the mistakes I see is not only do people name the wrong people, but they don’t update them enough. I think a lot of us listening are probably familiar, we should probably have our car taken care of every 3000, 5000 miles or whatever is required. But these estate plans, they’re huge documents. They represent a great deal of planning and strategy. And a lot of individuals just throw it in their closet, and once it’s been created, it sits on a shelf and they don’t look at it again. And the reality is people’s lives change. Yes, people die, but people go through different life events. And the markets change. And specifically tax laws change, which is critically important to stay on top of.
Adam Hooper (24:57):
Brian Leitner (24:57):
So none of this is a set it and forget it. But again, the people-
Adam Hooper (25:00):
What is the frequency that people usually should be reviewing it? Again, is it an annual thing? Are there again life events that would trigger a review of the plans? What do you see there?
Brian Leitner (25:13):
So absolutely life events. So whether that be a marriage, new child, divorce, death. But other than that, I would say every two to three years, if there isn’t a major life event, because every couple of years, the tax laws change. So that’s number one, you want to understand the impact of that. And I’m happy to get into that, because frankly, we’re dealing with that as we speak.
Adam Hooper (25:37):
Brian Leitner (25:38):
So that’s really important. But also things, I think that because planning is so integrated, what people may not know is that they may create an estate plan, and then do something that disrupts that without even knowing it. So what I mean by that is, two key examples might be, I have an estate plan, it’s all set up, everything’s terrific. By the way, I just started to open up another investment account, or even a checking account, and I did it in my own name. And that doesn’t reflect the estate plan we put in place. So oh, by the way, I may have just messed something up. A big one we see with clients, or with with folks that come in to speak with us, is that obviously a lot of folks on this call are real estate investors.
Brian Leitner (26:25):
So think about real estate, even think about your home, we’ll see older parents maybe widows and widowers say, “Look, Johnny, ultimately you’re going to get this house. And so I want to avoid probate, I want to make it really easy, I’m going to put you on the deed. And maybe as a 50% owner or something like that.” What ends up happening is, technically, they just made a gift to their child of half the value of the house. And there’s only a certain amount that we can gift in a year, it’s called an annual exclusion. And just to take a sidebar for just a second, I’m able to give you $15,000 a year. Since I’m married, my wife and I can combine that to $30,000 a year and give that to you without paying taxes or without impacting our estate planning or gift tax situation. But what they just did in that example, depending upon what the real estate is, they just went well above that. That gift may impact. It will impact another aspect of their estate plan but they didn’t necessarily mean to do that. So everything is really integrated.
Brian Leitner (27:34):
So what we try and do is we want to be the first call to all of our clients. And so if there’s something you’re thinking about doing, you may not understand the ultimate applications. And some of this can’t be redone. So we’re obviously having conversations with our clients on a regular basis. And every so often, maybe it could be annually, depending on the situation. But it’s probably every couple of years that we take a deep dive on the estate plan and make sure everything’s titled in a certain way. That’s really, really important.
Adam Hooper (28:05):
Yeah, this just, I mean, it me reminds me one of our episodes we did forever ago on the tax side was if you’re embarking on a new investment strategy, and you’re going to be doing it with the intentionality behind it, make sure that you’re working with a team to get it set it up correctly at the beginning, because it can be incredibly challenging to unwind things further down the road if that foundation isn’t set quite correctly. So for someone that’s looking to either again, revisit or maybe uncover if they’ve made some of these mistakes, what does that process look like either to get started or to review and maybe uncover some of these pitfalls that they might have fallen into unintentionally with their estate plans?
Brian Leitner (28:46):
So a lot of it, it’s a great question, a lot of it can be fixed. I think the very first thing people want to do is sit down with a certified financial planner, sit down with an advisor, that will walk them through what their current situation is. So let’s take a look at everything you own. Let’s take a look at your goals. And as your plan is written today, again, whether you have a plan or you don’t have a plan, we’ll look at the default option if you don’t have that plan. Let’s see how things flush out and where things go. So you may end up with an estate tax situation, you may end up, your gifting schedule, maybe you’re gifting X amount of dollars to the grandkids every year. How does that impact things? Because maybe you’re going over the threshold that I referenced earlier.
Brian Leitner (29:31):
One of the things too, that I think people are surprised about is when they say, “No, I have an estate plan, it’s done.” Okay, well, when was it done? And generally it’s years ago. And then when we take a look at what they own, it’s very important for us to receive the flush documents. I’d like to see every statement. Because a lot of people will say, “I have a revocable trust and have an irrevocable trust and I’m not really in this business. And so maybe I mixed those up.” Or, “I’ll take a look at my brokerage statements and maybe they’re in their own individual name,” yet their trust documents talk about a living trust and how everything’s supposed to be held by the living trust. And all the sudden that is completely out of sync. So those are some things that we’ll think about. And a process we’ll take people through, as it relates to where do they get started, or if they have a plan today.
Brian Leitner (30:24):
The other thing that we spent a good deal of time on is reviewing again, what they’ve currently implemented. And so we’ll see a lot of estate plans that have either been poorly drafted, or like I said, the assets themselves haven’t been retitled, so regardless on whether they’ve paid X amount of dollars for an estate plan, if that hasn’t been retitled, it’s as if it doesn’t exist. A lack of flexibility. The name of the game is flexibility, especially as it relates to your estate planning situation, because you really don’t know what’s ultimately going to happen. And then I hit this for just a second, but communicating to loved ones what that plan is. I’ve seen more fighting take place, not over the cash itself, but the personal assets. Grandpa’s watch, or grandma’s dishes. And assets like that.
Brian Leitner (31:15):
And so I like to think about a lot of people don’t want to talk about money and assets with their family, as money is still taboo to some degree in our society. But it eliminates a lot of issues. And the way I describe this is, I think about money and the conversations that we have with our loved ones as a light switch. And there’s a dimmer on it. As long as that light switch is on, they’re probably in a good place. And that’s what they’re comfortable with. But you could adjust that depending upon the relationship that you have, and how much you want to talk about.
Brian Leitner (31:45):
So as advisors, a lot of the times we’re brought in to have the conversation with the children. And sometimes we’ll walk them through the estate plan with all of the numbers, and this is what you’re going to get, and you’re not getting X and here’s why, here’s the plan. And we’ll do this with mom and dad or without mom and dad. And other times, we’ll just talk on the percentages themselves. The two kids are not going to get 100% of the estate, because we want to take care of other individuals or other entities and institutions.
Brian Leitner (32:14):
And so there’s a variety of different things there. And just maybe to finish that up, planning is very different maybe than it was years ago, as a relates to mixed marriages. And there are differences between the states and how that works. And another big gap that I see is not planning or not accounting for someone that might be relying on those individuals as it relates to special needs planning. And again, those are big conversations that we have with our clients to make sure that they have considered or at least thought through what that plan might look like.
Adam Hooper (32:54):
Do you ever see any pranksters throw in some twists just to create some chaos when the estate plan is enacted?
Brian Leitner (33:02):
I don’t know about that. I do see-
Adam Hooper (33:05):
I’m sure you’ve seen some-
Brian Leitner (33:06):
I had [crosstalk 00:33:06].
Adam Hooper (33:06):
… pretty wild scenarios.
Brian Leitner (33:08):
Yeah, I’ve been part of family meetings before. And unfortunately, there’s amongst a lot of families, substance abuse is a real issue. And that could be children, that could be the adults. And sometimes those conversations are beginning to unfold. Some of this is really emotional. And frankly, that’s one of the reasons I don’t think people get to their estate plan or want to talk about it, just the [crosstalk 00:33:34]-
Adam Hooper (33:33):
It’s a tough subject, yeah.
Brian Leitner (33:35):
… of it all. It’s very tough. And for a lot of people, it’s new, and they don’t know how to have that conversation. But they know they need to, and all of a sudden, other conversations begin to take place that were probably not necessarily planned for. But they’re coming out. And frankly, it’s better to have those conversations and as advisors, we want to be involved in those conversations.
Adam Hooper (33:57):
Yeah. I know, you’ve mentioned taxes a few times. And that’s maybe more on the wealth transfer side of the estate planning ledger there. We’d be remiss if we didn’t talk somewhat about that. Again, we’re recording this on Election Day. Two very different tax scenarios ahead of us.
Brian Leitner (34:13):
Adam Hooper (34:14):
Are there any maybe universal steps that people can think about when they’re looking at the tax implications of this wealth transfer and maybe some paths on either side, whichever way it goes. Are there things that people should be looking out for or paying attention to, as it relates to the wealth transfer, part of the estate planning process?
Brian Leitner (34:36):
Yeah. So again, great question. And just from background, so every individual has between $11,580,000 today, you can double that and call it $23 million if you’re married, that’s the amount that we’re able to shield if you will, from state taxes that we’d have to pay the government and that starts at a tax bracket of about 40%. So it’s really, really high. And that exemption has gone up over the years. I remember when I graduated from college or a few years after it was about $600,000. And especially if you live on the coasts, or people’s homes themselves, really threw them into an estate tax issue. This number is set as of today, to go back, to revert back to about five million per individual. Again, that’s in 2025, and that’s already written, that’s current law.
Brian Leitner (35:35):
So depending upon what happens, people have talked about, well, if President Trump wins, they’ve talked about the idea of that staying where it is. And then I’ve heard on the other side, of course, is, if Joe Biden wins, that number may come down even further. And so we’re just not sure what that looks like. And so this really provides us an interesting time to reflect on where our assets are headed, what that number is, and what our ultimate goals are. Because there’s a real advantage to begin, depending upon what your net worth is, but to leverage the number that you have in place today and that you’ll have in place through 2025, as it’s written today, at least, to begin to transfer assets.
Brian Leitner (36:19):
And you can sell assets to a trust for the benefit of loved ones, if that was of interest, you can take whether it be real estate, like a lot of folks have, that are listening to this and transfer that via different trusts. And they can, depending upon what that looks like, maybe they can use additional leverage in the form of discounts as it relates to that piece of property and structure it with given voting rights where you can make a gift for X, but the reality is, it’s valued at something much less than that. Your opportunity is to do that.
Brian Leitner (36:53):
And then on a very basic level, I just mentioned a second ago, the annual exclusion allows individuals to give up to $15,000 a year to as many people as they want, without any gift tax situation. And so if you’re married, that’s $30,000. If you have a few grandkids, all of a sudden, I mean, you add those numbers up, and you can get a significant amount of money out of your estate every year. It all just depends on what your objectives are, and truly being proactive with this, look, which is probably critical in any part of your life, but certainly your financial plan.
Adam Hooper (37:30):
Yeah. I mean, it sounds it can get pretty complex. With some more nuanced holdings in different businesses and ownership of different entities and real estate investments. What does the team look like to make sure that this is going in the right direction? Is it a tax advisor? It’s a financial planner, like you said. What does that team look like to be able to execute a good estate planning process?
Brian Leitner (37:56):
Yeah, I think everyone needs an advisor that can speak to all areas of one’s comprehensive plans and make sure that they’ve identified blind spots, that no rock is unturned. And then that one individual who’s probably a certified financial planner seasons, they need to bring in their expert as well. So the way we’ve set this up at Mariner is that every client is surrounded by a wealth team. There’s a senior wealth advisor, there’s a wealth advisor, and there’s a client service associate. And then the advisor is then supported by a lot of internal resources. So we have 85 CPAs at the firm, because we know that tax plays a major role inside of people’s plans. We have trust and estate attorneys on staff to help people understand what their current documents say, and then suggest different strategies to improve I whether that save money or whether that’s structure something a little bit differently, so that they have the result that they’re ultimately looking for. So again, we have those folks on staff as well.
Brian Leitner (39:11):
And then other things as it relates to the financial plan will pop up. So for example, a lot of individuals that might be listening to this are business owners. And a lot of business owners work in their business and on their business, that old adage and we have a boutique, M&A business valuation practice, that our business owners will spend time with those individuals to talk about their business. And I think a lot of business owners almost think about their business life and the business itself a little bit differently than the rest of their personal financial assets and the government doesn’t.
Brian Leitner (39:43):
And so tying those together is really, really important. From a risk management perspective, that’s something maybe we didn’t hit. But ultimately, people are trying to grow and they need to protect their wealth and what do they have in place from an asset protection or risk management perspective? And I think a lot of times that slips through the cracks. And we work with a lot of people that are in careers such as doctors and have potentially, targets on their back or careers with some liability associated with them, what are they putting in place? No different than folks listening to this, hopefully they don’t own real estate in their own name. And maybe rent out that property or hopefully, they’ve sat down with someone and if they haven’t, they absolutely should, to say, “Well, how should this be titled, so I can protect myself for A, B, and C?” And so again, that’s the asset protection side.
Brian Leitner (40:34):
So again, surrounding those individuals with a team is critically important. And what we’ve done is we’ve built out that model all in-house to make it really easy for our clients, so they’re not going to three and four and five different professionals. And you think about all those meetings they’d have to have in a given year and things slipping through the cracks between this firm and that firm. So I’d say from a client experience perspective, it’s real smooth.
Adam Hooper (40:57):
And so what is the first step for someone that maybe hasn’t thought about this? Maybe they don’t want to think about it, because it’s a hard topic to bring up. How does someone start that conversation? What’s the first step that someone should take if they hear this, and they’re thinking, “Well, I’m under planned here.” What should they do? What’s their first step?
Brian Leitner (41:21):
I would suggest their first step is to have a phone call. And it’d be terrific if individuals want to have a phone call with us, we’d be more than happy to sit down with you, and walk you through where you are today, what’s important to you. Because I think a lot of individuals, I think they have an idea of where they want to go, but they don’t necessarily know how to get there. And through a conversation, I think, we’d maybe just give them our perspective that we’ve had with clients that we’ve worked with, that these are some of the conversations that we may bring to light just based on our own experience. And most of the time, it’s, “Wow, I never thought of that.”
Brian Leitner (41:59):
So having a conversation with one of our advisors, we sit down with folks all the time and just review what they’ve currently done, we really call it just a second opinion, no different than you would have, if maybe you were having some major medical decision that you wanted to have made. And we’ll sit down and just simply walk you through all the things that we see based upon where you want to go and how you’re currently set up and areas that we might find for improvement. And if someone would like to move forward with us and become a client of ours, that’s terrific. But there’s no obligation to do that.
Adam Hooper (42:30):
How do you… You bring up the second opinion, the medical line there. It seems like for a new relationship to start, I mean, this is foundational trust that you have to build with whoever that advisor or planner is, that’s going to be taking a look at this. How does that relationship go with the clients? Is their trust building? Is that a phase of it? Or is this more transactional? In just creating the plan?
Brian Leitner (42:55):
Yeah, it is absolutely not transactional. I mean, our goal is to build a relationship with that client and their family that last generations. And that’s really been our track record and our client retention numbers show that or demonstrate that. So the first step is always the hardest. I think that individuals should go out there and speak to a good handful of advisors and understand how one firm is different than another and how they would actually… What would resonate in terms of the services that they offer. What is the value proposition, if you will, why one firm might be better than another. And it’s about personal connection.
Brian Leitner (43:40):
And so one of the things that we do is that we try very hard, we actually, it’s a longer conversation, but we have folks that they go out and they meet with prospects, and working with them, they decide or they understand what is that person interested in, and who they might want to work with. For example, they might want to work with a female advisor. They might be highly analytical, and they want to work with someone that is analytical as they are. Or just the opposite.
Brian Leitner (44:09):
And so if we can get that match right, we always talk about putting the client first. I mean, it really does start with that first conversation and introduction. And then what we end up doing is we introduce them to the right advisor. And that’s been a great opportunity for us as opposed to they’re just going to go meet with any advisor that one may not have the same capability, the same expertise and same view of the world, and they just don’t click together. So the first step is simply to I would say, speak to a couple of different firms, interview those firms and ultimately have a conversation, know what you’re getting into, before moving forward.
Adam Hooper (44:47):
Perfect. Brian, that is a wonderful, wonderful overview. Again, we really, really appreciate you coming on the show today. Is there anything that we didn’t touch on that we should be discussing or that listeners should be thinking about as it comes to estate planning?
Brian Leitner (45:02):
Pleasure to be on the show. One thing I would share with you, that just doesn’t get a whole lot of attention is there’s a new Tax Act that was passed just a couple of years ago, and it’s referred to as the SECURE Act. And there’s a lot to this act. What I would suggest to you is, if anyone’s listening to this, and they have an estate plan that they believe is up-to-date, I would strongly encourage you to reach out to us to review your current estate plan, because, because of the SECURE Act, it’s made changes with inside of a lot of different trust documents. And I don’t think that’s getting enough coverage. And it could impact one’s overall estate plan in a major way. So that’s one thing to think about.
Brian Leitner (45:47):
The other thing to think about is COVID. COVID has changed estate planning too. And so a lot of us may have heard, somebody went to the hospital, and their significant other went with them, but they weren’t allowed in the room. And they weren’t allowed in the hospital during this pandemic, and that still was taking place in different areas. And so they couldn’t sign the document or they couldn’t get the legal documents in place. Because it didn’t account for email signature or digital signature. Or even when people say, inside of some of their documents, they may say, “What I don’t want to live on by artificial means. I don’t want to be on a respirator.” Well, I think a lot of us know this COVID disease attacks the lungs, and so they do put people on ventilators to save their lives. And so maybe we want to rethink what’s currently in there based upon this pandemic and what we’ve learned from it.
Brian Leitner (46:42):
So I know there’s a lot there, and there’s a lot to think about. Frankly, it’s just a lot to digest. So I strongly suggest and I would encourage listeners just to have an initial conversation to lay things out. And perhaps get some peace of mind because maybe you are in great shape. Or maybe there’s room for improvement.
Adam Hooper (46:59):
And how can how can listeners learn more about what you are up to at Mariner Wealth Advisors?
Brian Leitner (47:04):
Yeah, I would go to the website, it’s marinerwealthadvisors.com. On there, on the insights, we have our own podcast, we have five minute interviews, where I’m interviewing our advisors because we’re getting questions from either prospects or clients and just something we wanted to share especially as a lot of us are working from home as a society. And we wanted to make sure that we had enough information out there so we have a newsletter that they can sign up for, we have the podcast, as well as these videos.
Adam Hooper (47:37):
Perfect. And we’ll have links down in the show notes for all those different avenues, Brian. So again, thank you so much for coming on today. Really appreciate you taking the time to chat with us.
Brian Leitner (47:46):
Thank you very much and keep up the great work you guys are doing on the real estate side. We appreciate it.
Adam Hooper (47:50):
All right listeners. That’s all we’ve got for today. If you’d like to learn about how ReAllocate and our partnership with Mariner Wealth Advisors can help you build a real estate portfolio that meets your risk tolerance and financial goals, head to buildmyroadmap.com. Stay tuned for more special episodes with our friends at Mariner Wealth Advisors and again head to buildmyroadmap.com. And with that, we’ll catch you on the next one. (Silence).