03/18/20 Episode 40 Putting Your Trust in a Private Fiduciary During a Transition with Barry W. Finkelstein


Welcome to the women and Welt podcast with Esther Szabo. Esther is a respected leader in the field of personal financial advice with over twenty five years of experience after going through her own significant and challenging life changing events she overcame fear and self doubt to launch her own successful advisory firm now. Esther is ready to share her practical and personal experiences to help other women. Clear there hurdles and brave. Life's transitions in this way. She inspires women to lead. Fulfilling and confident lives. Hello and welcome to women and wealth. Esther Saba from gates pass advisers. Today Esther has a special guest in studio and that is very Finkelstein Berry is the owner of the law office of Barry Finkelstein which is a full service Estate Planning Law Office Providing Estate Planning Administration and fiduciary services to clients throughout the San Francisco. Bay Area Barry Specializes in comprehensive collaborative estate planning a State Administration and professional fiduciary services which include virtual family offices for high net worth estates. Good Morning Esther and Berry how are you well? I will go first We are doing well today. It's it's a time where currently and maybe all resolved by the time this comes out. That would be lovely but the markets are in a lot of downfall because of the corona virus. And there's been more concerned nationally about it but right now everyone is doing great. And I'm so excited to talk about this topic and why we're here regardless of whatever is going on in the market in the world and Berry how're you doing. Good thank you. You're welcome. I'm excited to have you here. Thanks for being here and you said you're excited about the topic. But I'm kind of in the dark hair Ester. Why did you bring Barry on well? Berry is as you mentioned. Berry is an estate planning attorney and he creates the documents that are all important for us to have about not just where we want our assets to go when we pass but what about when we possibly reach a point where we're not able to make our own financial decisions our own healthcare decisions and these are difficult things to consider in think about and for women transition what they often find even if they're not in a period of transition maybe they're adult parents are in a period of transition where as family members we start to notice You know mom or dad or both are not quite as sharp as able as they used to be in these times most of the women that I work with regardless of whether or not they have children or not of course if people have children that creates another layer of you know wonder and also responsibility. Most people don't have time to stop and ensure for that. Their parents are getting all the services that they need and. Berry is an excellent. He's very informed experienced and a wonderful resource in this area of well. Then what do you do in? So that is what we're talking to Barry about today. We're not talking about estate planning per se but we're talking about his services of being a public fiduciary and what that means all right. Well I'm here to learn Okay Berry Actually I. I'm going to ask you to define. What are you as public fiduciary? Tell us about that. So a fiduciary is someone who acts in the best interest of others as it relates to estate. Planning the basic estate planning documents are the trust the power of attorney the advanced directive so the successor trustees of the trust and the agents. The power of attorney are fiduciaries and as you alluded to not. Everybody has people that are appropriate to put in those positions so as a as a fiduciary is a private fiduciary I will step in and serve as a trustee of trust I will serve as agent on a power of attorney and the agent on the advance health care directive and. I must have been a spoke. You're not a public fiduciary your private fiduciary. Tell us the difference. It's just a term of art so when it comes to who you have as a possible. Successor Trustees either corporate trustees. There's individual friends and family and then there's a category of individuals who are licensed by the State of California to serve in that capacity and we're just referred to as private professional fiduciaries. So I imagined this position requires an awful lot of clarity and understanding and is also extremely critical because I and I know you have examples to share with us of when you might step in when there's abuse and when you might step in when there's not abuse there's just not ability for whoever is named to take on those responsibilities. Can you share some of those examples with us? Certain and you know to be clear. Being someone's trustee or being someone's agent underpowered attorney. It's not an honor not a privilege. It's a job. It's a hard job that most people are just not qualified to do well. Statistically the burden of caring for Mom and dad tends to fall to the adult daughters so there are other options out there. Some of the downside I have seen one case in particular whereas we're mom was an alcoholic and daughter was agent on the power of attorney and it was a power of attorney that was effective immediately. Didn't become effective when mom became incapacitated effective when mom's signed it well the daughter assumed that. Momma drink yourself to death so the daughter started spending mom's money. The problem is mom's sobered up and discovered what the had been doing and it wasn't as though the daughter was taking the money and investing in courant's she was paying bills and spending the money so that was one situation where a trusted daughter abused moms. Trust another situation that I'm dealing with currently is dealing with the family of the ongoing family dynamic. One of my tagline is that I protect rich widows from children and this is an example of bad children who relying on mom and dad for care and support and then when dad passed away the sun got more aggressive and more users with the money with the family business with writing personal checks with paying personal checks out of the company credit card and when mob has backup information his his line was. What's a matter? Mom Don't you trust me? I imagine that must be an issue that comes up so much that sensitive area that that one can put that manipulative statement to a parent and then it creates just this. Gosh you're right and I feel terrible and then there's also this feeling of lack of power about what my options are. So how did you become involved in that situation? You know like most of my cases it was referred to me by a trusted advisor in this case it was referred by their CPA. Who had been seen this ongoing behavior and hearing her client complain about the situation but really not knowing what to do about it. So I was brought in. I was able to support mom who has capacity. That was not an issue but what she needed for. Lack of a better term was a backbone. She needed someone to backstop her. And say you know what no you're right you're fears and suspicions are correct and this is how I will address it. We Will Confront. The situation will discover the depth of the bad behavior and take actions to correct it. Because this wasn't something happened overnight. Like an employee that was embezzling since her son and this is an ongoing behavior that escalated so in a normal situation we would have. Someone may be arrested or other legal issues. But there's also a family here so as the do sheer. I'm able to come in and go. Okay how can we keep the family? How can we change the behavior? Stop the abuse. Make amends over time but still keep the family dynamic from breaking down because in the long run. They're still family here right. And that's what I appreciate so much about who you are as an individual and not just about the service. The service is critical. But you're very respectful of all parties. Tell us more about this particular situation. How did you do that with the sun? I'm sure the son wasn't really pleased to see you. how did you and also. How did you win the trust of the mom at the end of the day? It's all relationship based you know anybody can sell you a car. Anybody can sell your refrigerator but when you have these interpersonal dynamics it really is about. Is this person. The right fit so I tend not to sugarcoat. I tell things the way I see them and for most people that's what they want. They want to hear the truth so talking with mom and her. Cpa We're all onboard. We all agreed you know at the situation has gone on too long. It needs to change it. Just mom didn't have the strength to do it on her own so we had a family meeting and we just told The Sun. What was so that you know? This is what we have found that this behavior is not appropriate and it is going to change mom. Having capacity made me six co-trustees. She made me the agent on the power of attorney and it was nothing that the sun could do about it so when faced with the with the truth of you know we're taking the credit cards away. This behavior is going to stop and it was very interesting because several times. He was told me that you know. He's not happy with me but he knows he has to work with me. So oftentimes when you confront the situation. The person's confronted gets it. They know they've been getting away with wrong. So just a matter of shining the light on it and being consistent in the application of behavior going forward and tell us a bit more to about those situations where somebody is losing capacity. I had a perspective client. Refer to me in this past several actually before performs about three months ago and as. I have been talking with her and meeting with her. We're the we're the same way. I know you'll talk about this a bit later but we do a fair amount of complementary meeting and reviewing with the perspective client before we move forward into anything where we're charging because we WANNA make sure we have a very clear understanding of who we are what we do and how will work together. And as I was speaking with this gentleman I realized that although he came in the first time and seemed pretty together and an on top of things it actually is. We went through and went deeper into more technical discussions strategic discussion. It really he was unable to track into follow and the biggest issue really was that he's primary caregiver for his wife and that he's in his seventy no he's in his eighties and his wife is in her nineties and that was really all he could handle and I couldn't say it was a dementia issue. I don't have those skills or knowledge but I know you've come across issues of dementia. I know you're not an expert on dementia but you brought some information about dementia. Can you share a bit of of how often dementia could strike and a family? Statistically about one out of Hen Individuals over the age of sixty five is going to experience. Some form of dementia about seventy percent of is Alzheimer's. Which is as everybody knows the scariest of all diseases it's One of the ten causes of death of people. And it's the only one that's not preventable or curable Thirty percent of dementia is some type of vascular dementia. Some kind of trauma or something. That can be Treated or cured or recovered from the opportunity. Here is if someone is losing capacity if they're aware of it they have the opportunity of stepping aside of really transferring their authority before we have to have them declared incompetent and I've had a couple cases in my state planning career One in particular where the husband knew. He was having a loss of mental cognitive ability and he just chose to resign as trustee. He had the worth to you. Know What my wife's GonNa take over and then our children are gonNA take over. I don't need to be here. And it was such a blessing for the family because if someone has incapacity in order for the successor trustee takeover or the agents on the power of attorney to take over. We typically have to have. That person declared incompetent. And how is that done Typically it's done by two physicians not related by blood or marriage Because Alzheimer's has come to such prominence over the last couple decades. There are very specific test for mental capacity so we know the difference between eccentricity versus a true lack of capacity but being declared incompetent. It's the scarlet letter. It's a branding and it has a negative effect so if we have the ability to talk to someone so you know it's time for you to step away. They maintain their dignity. They haven't been declared incompetent. They've just chosen to let them take over. Which is always the better approach if we can go there otherwise we will use the heavy hand in have them declared and take the checkbook away and the car keys and those things but yeah you work in such a sensitive area With this just it's I keep trying to get my i. I know how I work with clients and we have had family meetings here and talking about the issues of dead does not appear to be as healthy as he was but dad fights it and says No. I'm just fine. And this is an obviously. It's a very difficult thing for any of us in our best minds to admit. Gosh you know. I'm just not a superstar at this and to let go. How tell us more? I just think gosh. How does someone go ahead and make this transition? It is challenging to bringing you in. It's never easy and especially with men because if you've ever known an older man retired and then had a deterioration men in particular not to exclude him. But I will stereotype a little bit men in particular we identify with what we do. You ask them what they do. They don't say well. I like to Gardner like to ski. It's like I'm a CPA. I'm an engineer. So our identity is tied up with our activities with our control with being able to drive so it really is understanding that when we're approaching this topic we're talking about a core issue of the individual their competency their ability to interact and be powerful. There is no easy way to have this conversation. You just have to have the conversation you have to broach the subject. There's never a good time for it sooner rather than later let it be uncomfortable. Let it be messy. Let the emotions come out. And you have to work through it and you. Hopefully the person will voluntarily cede their control but they're actually doing harm to themselves to their finances to their wellbeing. Then we have to be able to take the next step and have them declared and go through the process of removing all control and that can also mean changing the mail because if they get a credit card application even if they've been declared incompetent the credit card companies don't know that so they can still apply for credit cards. They can still do damage. Isn't that amazing? You would just think that okay. Those will stop but of course they don't stop we get tons all sent to us all the time so changing the mail. What would just sticking that for a moment? So changing it to changing it to be address of the person who is now the trustee in the agent It's not a simple fix. It really is like with children. It's taking complete control over the important aspects of their life and they may not be happy about it. You know chances are they won't be but again. That's where the fiduciary comes in at acting in the best interest of others even if at the time they're not in agreement what that that is. And that's probably the hardest heartbreaking part I can imagine I mean I can completely understand that it would be with obviously again. We'll circle back to this issue of trust because trust of you or whomever they may choose is in is incredibly paramount. How how does someone validate that you are or someone else? Serving in the private fiduciary is actually skilled competent and able to be trustworthy in this way. a couple of things one obviously at its first impression. That's why my consultations or complementary until I got to put pen to paper so that we build report we build a relationship also and I think most importantly everything we do is transparent. Trustees provide an accounting and especially in today's Day and age with the electronic paper trail. I can't even buy an extra cup of coffee at starbucks on a client's account with outage showing up so it's the level of transparency that we have it's the check and balance you know either the sole trustee we can also be a CO trustee. So now there's another person. Maybe it's the family member WHO's acting as check and balance on the activities of the trustee and again at the end of the day everything is accounted for and I imagine also even beyond that you are an estate planning attorney. You are a member of the Bar. You do have a obligations there as well. So you're not just someone who put out a shingle so to speak and says I can do this exactly. I've got a lot at risk being a fiduciary and early on you my ethics just say no client has anything that I want. That's worth me risking My Bar ticket And for some of those cases as well I can also be bonded. And if you're not familiar with that you know if you have a contractor work on your house they're typically licensed and bonded and a bond is an insurance policy in case they break anything well. Fiduciaries can be bonded and quite often. We are in our higher net worth states. Just in case we do do something untoward toward. There's an insurance policy to back up any losses that we may intentionally create. So there's always some checks and balances always security for the client. And I know in times I have certainly have had a client who because of his dementia. When his wife passed away he became very aggressive and he focused that aggression unfortunately on his two adult children who only wanted to do what was best for him only had their his best intentions at heart so a fiduciary was brought on and I know I was engaged with this person with the fiduciaries. Well which was fine. Showing an reviewing with the family with the fiduciary what was happening in the investment portfolio what we were navigating in terms of cash flow out to the client how that was working etc so often someone in my position works with someone in your position. So there's a whole team available for the client. Yes and part of the fiduciaries opportunity obligation. It's not just working with decline. It's working with the Family. So in that case the kids are going through hell because this man who was there loving father is now this angry aggressive person. Who's saying things at them and it's not the same person but it looks the same so it has a deep impact. So as a counselor outlaw. I can talk with the children as well and help them be with the situation and that might involve outside therapists because there are issues coming up. This is not a non emotional situations very emotional situation and as I like to say you know. Mom and dad are the glue that holds family together and when mom and dad are gone. What's keeping the siblings together? So everything we can do to maintain that from an emotional point of view is on the table needs to be addressed and opportunities that are there to keep the health of the family going. And I appreciate what you've talked about that. There's no easy way to discuss. If somebody is waiting I'm just going to wait for the right time to bring this up to mom or dad or my children. How would you respond? You know again. If if they're talking to me than they've already taken the first step they've already said you know what? There's an issue here that we need to address. We don't know how to address it but we acknowledge that there's something here then let me be the bad guy. That's the other reason for making a third party of the trustee or the agent. Let's leave the children in that child parent relationship with mom and dad because once the children become the trustees had become the agent it changes the dynamic and especially if they have to be trustees over their siblings. Let's make a third party that trustee. Let's keep the sibling relationship together. So let me be the one to come in. Let me break the bad news. Let me be the focus of all the anger because then the children get to come in as you know what we love you Mom Dad. We're trying to support you. This is the issue we're thinking about. It's easy for me to deal with it. I've got the resources I've got the experience I've got the vocabulary to be able to explain it in a way that might be more impactful than the children who are coming from a place of love but just don't have the vocabulary to express it as powerful as it needs to be and I think in both of the work that we do. It's very common when we're talking about Basically life planning life goals. There's a number of steps to take and have you encountered this also that that people can get overwhelmed into paralysis because they're thinking. Oh my Gosh I. Was this going to change that going to change and I can't deal with all of this. How how I appreciate that. You're there to say okay. If your mom or dad or child is upset I will be the focus of that. How do you in Help them move forward. I think we do it in a similar way but tell tell us about how you do it throughout my career. I realized that I'm also an end of life counselor and I'm a certified death Dula and what that gives me is three hundred sixty degree view the entire process. And I think that's what's important here is keeping what's happening now in context with the bigger picture so I think more to your question we have to look at. What is the next step? What's the next thing to do? Let's not worry about ten steps down the road. We'll get to step ten after we've gone through step nine eight seven and six right now. We're at step two. Let's get step to taken care of. And that really does create the opening for step three and now we can shine a light on four and five so it's moving methodically. Clearly one step at a time and not trying to solve the entire problem in one meeting right not trying to eat the elephant all at once but one bite at a time so berry. That's been so wonderful to speak with you. It's just so enlightening if somebody wanted to connect with you How would they do that unless with having a very unique names if you Google Berry Finkelstein I show up on Google? My website is W. F. E. S. Q. DOT COM and I provide complementary consultations? I do house calls. I do evening and weekend appointments. So I've never felt it was fair to charge someone to find out if they had a matter that I could charge them for so pleased. There's a lot of information that everybody needs. And if at the end of the day spent an hour with someone and they choose to go somewhere else. I've done my good deed for the day so I'm happy to talk with people. I do document reviews and just I counsel people because that's really what's important so that when they move forward they're doing it powerfully so reach out to me. I'm not that hard to find and I've got a blessed life. I get to give back to people that I know that I'm doing well wonderful. Thank you so much berry and if anybody is interested in your we focus on as we know women in transition so if those one to reach out to me here at Gates Pass advisers the easiest ways through the website gates pass advisors dot com. I can help create a meeting where it's burying me meeting with you together and just talking about your situation. Happy to do that. And the main thing is regardless of what's happening in the market if the Dow drops and other thousand points another thousand points serious but for many many families there are so many issues going on that we help navigate in this broad picture and bring on the good resources to help support so that we navigate your lives volatility as well as the market. So you can live a confident and fulfilled life so please don't hesitate to reach out and let us know how we can be helpful to you. That is fantastic. Berry Esther both of you are so generous as far as you know meeting with people and just really getting to the heart of what's going on in their life and so I i WanNa say thank you for that and I learned today I. This is near and dear to my heart because a family members that have been through Much of what? You're talking about as far as dementia and Alzheimer's in the cognitive issues in the states and it is so it's a minefield it really is a minefield and to have people on side that can help you navigate. That is so vital importance of thank you both for your time and I just berry. I wish you the best. I hope you a comeback as a guest some time and kind of give us some updates on the work that you're doing thank you. Erica was a pleasure. You Bet Esther thank you for bringing Barry on what a great connection very good. Thank you so much you bet and to the audience. Thank you all for listening to the women wealth podcast with Essar Szabo. If you've not subscribe to the podcast please. Click the subscribe now button below. This esther comes out with a new podcast. It'll show up directly on. You're listening device. This makes it much easier to share this podcast with your friends and family again. Thanks for listening today for everyone at Gates Pass Advisors. This is Eric Johnson. Reminding you to live your best day every day and we'll see you next time. Thank you for listening to the women and wealth. Podcast be short. Subscribe to the podcast so you receive notifications of new podcasts. As they become available check out the website at www dot gates pass advisors dot Com for more information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed a material provided for general information and should not be considered a solicitation for the purchase or sale of any security.

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