Podcast Episode Transcript

S4E3 Transcript: Simple Strategies for Improving Your Grief Literacy with Kathi Balasek

In this episode, Cathy interviews Kathi Balasek, an empathy and grief communications coach.

Cathy Curtis: Hi Kathi, welcome to Financial Finesse. I’m really happy you could do this podcast with me.

Kathi Balasek: Well, hello Cathy. It’s a privilege to be here. I’m honored that you asked.

Cathy Curtis: Great. I thought we’d start by you telling us your story about widowhood, just to get started.

Kathi Balasek: Absolutely. So my life, I had it all, once upon a time. A wonderful husband, beautiful children, a career and until I didn’t. And in my 30s, I became a widow faced with raising five children on my own. My husband died of a long battle of brain cancer. And so, I basically went from soccer mom, to caregiver, to widow and really facing a whole lot of years ahead of me.

Cathy Curtis: So let me step back, so you were married very young?

Kathi Balasek: I was married, and three of my children were my step children.

Cathy Curtis: Okay.

Kathi Balasek: From my late husband. And the icing on the cake is that after he died, I was so afraid that I was going to lose those children, and I actually gained those children. So I raised five kids. I’m happy to know that they all graduated from college. Now I’m an empty nester.

Cathy Curtis: Congratulations.

Kathi Balasek: Life is good, but it wasn’t always good.

Cathy Curtis: Gosh, first off, so sorry that happened to you, that sounds absolutely devastating. But obviously, you’ve thrived.

Kathi Balasek: I did, because I did the work. I think anybody listening to your podcast who’s gone through grief, number one you have to do the work. You have to get into group support, grief support, counseling whatever you can do and whatever you can afford, because that process was one, two or three years.

Cathy Curtis: Did you know that you needed that back then? I mean, you were young. So did you right away join a group?

Kathi Balasek: No. Right away, I probably spent a year just getting my kids off to school and going back and going to bed, and then setting an alarm to go pick them up. That first year is just really difficult to even face, and the reality and things still need to get done, so it’s exhausting.

Kathi Balasek: But there came a point, I had a wonderful support system, I have just the rock star parents that gave me some tough love. And they said he’s not coming back, and you have to show up for these five kids. And we will help you, but you got to get some help, you’ve got to get counseling and it was what I needed to hear.

Kathi Balasek: Because when you’re grieving, the memories, you kind of wear this little grief cloak around and it’s comfortable. And the memories are comfortable, and the pictures are comfortable, and then pretty soon, it’s not comfortable, it’s debilitating. And so there comes a time where I had to face that the grief, it was okay to move forward, I wasn’t losing the relationship with my husband, that will never end. I just had to release the pain.

Cathy Curtis: Yes. And I’m sure having those children, maybe forced you a little bit more to face reality. Because you can’t be grieving, prolonged grieving around young children either?

Kathi Balasek: No, and they’re not your grief buddy. They’re dealing with their own grief. And we did a ton of counseling with my children, because they were all different ages.

Kathi Balasek: And I’m telling you, grief psychologists and counselors, especially ones who work with children, they know what they’re doing. And the one thing that I always remember from them, and I still think about now, is children will only ask what they’re ready to hear. And so, so many adults say I bet you miss your dad or I bet you do this, that’s not helpful.

Cathy Curtis: Yes. You’re talking grief language now.

Kathi Balasek: Yes.

Cathy Curtis: Which is so difficult for people.

Kathi Balasek: It’s very difficult.

Cathy Curtis: Do you miss your dad? Yes, that would be.

Kathi Balasek: Yes, like no kidding, thanks Einstein for the question.

[08:16] What people don’t always know about grieving families, and how they can talk about death better—especially with children.

Cathy Curtis: Yes. What would be the appropriate question to ask a child in that case?

Kathi Balasek: What’s really important for people to know in grieving families is to keep their dad’s name alive, talk about I loved your dad. I remember a story about your dad, I remember when you were born. Because it’s been 15 years since my husband passed away, and my adult children still love to hear people tell them about their father, and tell a memory and that never goes away. We learn to walk alongside grief, it never goes away.

Cathy Curtis: Yes. So really, what you’re saying is don’t ask questions?

Kathi Balasek: Well, don’t ask questions unless you know what to ask. I mean, you’re not allowed to ask my child an emotional question about the death of their father.

Cathy Curtis: But people don’t know that, so that’s where okay, so this is where what you do comes in. You’re a grief communications specialist or what other term would you call?

[09:36] Kathi Balasek describes her work as a grief communications coach.

Kathi Balasek: You could call it coach, consultant. I work with companies and professionals, specifically in the financial realm, who really help widows and I help them learn to communicate correctly with grieving people, what to say, what not to say. How to prepare your practice up front, before the catastrophe happens.

Kathi Balasek: All of those things, I work with companies because grief literacy is normalizing conversations surrounding grief and loss, because we live in this death denying culture where we don’t want to talk about it. We don’t want to ignore it. It makes people uncomfortable, because we don’t want to put ourselves in my shoes, because that’s somewhere that nobody ever would want to go.

Cathy Curtis: Yes. So they’re so much a part of life, it so strange that our culture has that aversion to facing up to it, it’s facing up that it’s part of life.

Kathi Balasek: Yes. I mean, I don’t remember the exact quote that Margaret Mead said something about when somebody is born, it’s like this elation. When they’re married, it’s jubilation, when they die, we ignore it. And it’s true. It’s what happens. And when somebody’s grieving, it can be very isolating, okay.

Kathi Balasek: Because their whole life changed, especially if it’s the surviving spouse, their whole life changed, their income changed, housing decisions, all of those things. Social, their routine changes, all of these secondary losses. And what happens is that becomes very isolating. And so when people don’t acknowledge someone’s pain, grief or loss, it’s even more isolating.

Cathy Curtis: Yes, and that’s where joining the groups, finding groups that are of people going through the same thing, it’s valuable, because then you won’t feel as isolated.

Kathi Balasek: Right. And being in groups, that’s like side-by-side understanding. But where grief literacy is, the overall population learning where to connect with the griever, and that’s in the language of knowing what to say.

Cathy Curtis: Is grief literacy your term?

Kathi Balasek: No, it came from Kenneth Daca, who is a famous researcher writer on grief.

[12:37] What is grief literacy?

Cathy Curtis: Tell us a little bit more about grief literacy, explain the premise and some of the terminology.

Kathi Balasek: Okay. So grief literacy, it’s. How I help professionals with grief literacy, is I kind of give them like a grief 101 course. When you don’t acknowledge people’s pain, that’s disenfranchised grief. It wasn’t acknowledged by you, by your company, in our conversations, it was just dismissed.

Kathi Balasek: We also talk about anticipatory grief. So many financial advisors that I work with have clients that are experiencing a health diagnosis, putting somebody in long-term care, being the caregiver. Well, even though the death hasn’t happened, they’re experiencing grief, and it’s called anticipatory grief.

Kathi Balasek: So a lot of things we go over is just learning about what types of grief your clients may be experiencing, and what you can do to help them.

Cathy Curtis: So valuable. I’m a financial advisor, and I work with individuals primarily. And I have many clients that have gone through these various grief stages either through death, or like you said, severe illness of a spouse, going into long-term care and it is very hard, it’s a very hard time for them.

Cathy Curtis: And I think that I’m very empathetic and I have great communication skills and all that, but this is a specialized area, it really is. So I welcome that I found you, that you offer this kind of training.

Kathi Balasek: Well, I think it’s very specific, and I think it’s very needed. And as career professionals, you’ve been doing this forever, I’ve been a teacher and educator forever. We start to see the gaps, and we start to see the needs, and when over 70% of widows leave the financial advisor within the first year, and the number one trait that widows want is communication skills, our communication skills.

Kathi Balasek: So you start to see okay, how can we help advisors become grief literate? So that they can retain clients, attract new ones, build a reputation of that great bedside manner so to speak with people, and really get prepared for what we know is coming.

Cathy Curtis: I have to say, I’ve heard that stat many times. That 70% of widows leave their advisor. And I have to say, I think it starts way before. The communication starts way before the death of a spouse, where they need to be more inclusive of the spouse in the conversation, so that they don’t want to leave after the death, right?

[16:00] Kathi Balasek explains why it’s so important for women to take an active role in their financial lives, even if their partner takes the lead.

Kathi Balasek: Absolutely. I was in that type of marriage where I didn’t really show up to the meetings with the financial advisor. I was in that, a traditional sense where I completely trusted my husband to do that. It wasn’t really what I wanted to do, so I didn’t. And then, once he died, I felt such guilt that I hadn’t taken a role. I was ashamed that I didn’t understand financial terms, which made it really difficult to show up to my advisor.

Cathy Curtis: This is not an untypical situation.

Kathi Balasek: No. Especially in the like boomer age women, that had this traditional approach, and there’s so many things that advisors can do to start having these conversations up front. Several ways to invite both parties to the party, basically. Both parties to the meetings, the events, there really should be equal representation.

Cathy Curtis: Yes. And this isn’t just for heterosexual couples, any couples, both parties.

Kathi Balasek: No, any couple.

Cathy Curtis: It is so important that they participate in the finances, and know where the money is. I can see where one person may be stronger financially than the other, maybe takes on a little bit more of a role.

Cathy Curtis: But I don’t think that’s an excuse for the other person to completely ignore everything. And I mean, that’s good while you’re living, but it can be completely devastating if you’re not prepared when one person dies. There is no doubt about it.

Kathi Balasek: Exactly. And I get a lot of questions from advisors like how do I make that happen? I’ve invited them to the meeting. Well, you have to continue inviting in a variety of different ways. Maybe it’s a phone call, maybe it’s talking to the one client one-on-one that I really want the other partner here. Maybe it’s an email, maybe it’s a women’s event. It’s not a one and done hey, I took the shot, I missed, didn’t happen.

Kathi Balasek: You have to really look at how women relate, and they’re very rapport driven, very conversational and they’re not driven by numbers, goals, data. They’re driven by how can my long-term planning affect my life and my experiences and what I want to do with this money.

Kathi Balasek: And so, it’s a different conversation, and you have to really develop those conversational topics with women, because the reality is, and the statistics say eighty percent of men die married. So the longest advisor, relationship you’re going to have is going to be with a woman and most likely they’ll be a widow.

[19:15] The current state of widowhood in the United States.

Cathy Curtis: Interesting. So give us the statistics on widowhood right now in America.

Kathi Balasek: So over a million widows per year in America, and the average age is 59.

Cathy Curtis: That’s unbelievable.

Kathi Balasek: So you’re really looking at a lot of years ahead. So you think if their average is 59, they’re probably still working, they probably have children in the home. So we have to modernize the face of widowhood, it’s not our grandmother who’s 95 knitting in a rocking chair.

Kathi Balasek: So the sooner professionals can start really thinking about this is a way I can help, but this is a huge opportunity. Huge opportunity because of this huge wealth transfer that’s coming, and widows are going to be first in mind, for that intergenerational wealth transfer, and they’re going to be dual inheritors.

Kathi Balasek: They inherited from a parent and then they’re also inheriting from a spouse. And people are like oh, that’s kind of like the Fox in the hen house, no, it isn’t. It’s being honest, looking at the numbers and you’re in the best opportunity as an advisor to champion widows.

Cathy Curtis: I agree, you can be of huge help to a woman that is, knows that they need help and does have a financial advisor. Not all people have financial advisors, not all widows do. So I mean, do you ever counsel women individually or do you do more of the professional training?

Kathi Balasek: I do two things. I work with financial or insurance professionals, somewhere in that realm and I do group trainings of both men and women. Like these are the financial advisors, I’m going to teach you how to be grief literate. And I also train with webinars and companies where we train your team.

Cathy Curtis: Okay.

Kathi Balasek: So I love opportunities where I can work one-on-one. I currently have a group course going with eight students, because I like the small group, and they’re independent financial advisors and they’re just killing it. They’re getting more clients; they’re becoming known for working with bereaved clients and they’re just building a confidence and competence of knowing what to say.

Cathy Curtis: So let us know about one of your lessons. So you’re training an advisor to become more grief literate, or maybe to prepare their women clients for the possibility that could happen, right?

Kathi Balasek: Okay.

[22:33] Kathi Balasek shares an example of how she’d train a financial advisor to prepare their women clients for widowhood.

Cathy Curtis: So give us an example of what you would tell a financial advisor to do to prepare their women clients.

Kathi Balasek: Okay, excellent. So I think I believe in preparation in everything, okay. That’s the controllable piece, right? So one thing I work with a lot with advisors of really getting a system and organizational process for all of the tasks and paperwork that you know your client is going to need to do that first year, okay. That can be set up.

Kathi Balasek: What’s in the first column, what’s in the later, what’s in the middle. And having those processes all set up, what does the surviving spouse do? And their family, which tasks do they do? Which ones need a professional help?

Kathi Balasek: And so it’s a checks and balance so we have that set up. I have them set up protocols for exactly what you would say on the phone, because you’re going to be the one of the first calls, right? So what do you say if they don’t answer the phone? What do you leave on the message? Do you go to the service? Do you not go?

Cathy Curtis: Interesting. What do you say to that? What is your advice?

Kathi Balasek: Go. So if they were your client, you go. And you can find out through either an obituary or a funeral or service home, if it’s a certain specific religion, or if they’re only taking friends and family. You can do some homework to figure out if they don’t want you there.

Kathi Balasek: But much if they were your client, you’ve reached out to them, they’ve reached out to you, go, and know exactly what to say. You say three things, you mentioned the person’s name, I’m so sorry for your loss, I loved and appreciated your husband, James. He was such a light when we would come to our meetings, and I remember a story of and then you’re just going on.

Kathi Balasek: Nothing to do with finances, right? But you you’re preparing that. Because this is very awkward, it’s like Bambi standing up for the first time, a baby deer, it’s awkward. So we have to practice and script it. So a lot of my work is practicing, scripting what you would say so it sounds authentic.

Cathy Curtis: And you know there’s nothing wrong with scripting. If it’s helpful to the client and the person, I believe in that too, I really do.

Kathi Balasek: It’s fundamental to communication, like any fundamental. I mean, Steph Curry who’s one of the best basketball players as you know because we’re in the Bay Area, he still works on fundamentals, he’s no different.

Cathy Curtis: How many free throws does he do a day.

Kathi Balasek: Exactly. So if you want to sound authentic, you have to write it in words that you would say. You have to practice it in the mirror, or try it with the family member, and really watch about your eye contact, your body language, because when you meet with a bereaved client, they’re going to remember 10% of what you say, 90% of how you made them feel.

Kathi Balasek: And when you can show up authentically, and you’re saying the right things, and you’re listening to learn not listening to solve, you’re going to get that safe space created initially with your client, and that’s really what you want.

Cathy Curtis: That’s a beautiful thing, so well said.

Kathi Balasek: Thank you. Trying to think other things, we set up some protocols for the first office visit, that’s another thing you can prepare up front, is not all people want to come to your office, okay. Give them some choices.

Kathi Balasek: We could meet at your home, we could meet at a neutral space, all of those things. Set up a protocol of this is what you could expect, send them out an email of really how that first meeting will look, you follow it up with an email of the next steps.

Cathy Curtis: Because that’s going to be the first meeting you have alone, right? With this person?

Kathi Balasek: Yes.

Cathy Curtis: Who may or may not know the details of the family finances?

Kathi Balasek: Absolutely. So it’s important to build trust, to build a safe space. Simple things that we don’t think about, when I’m meeting somebody for the first time, just eye contact and me writing notes builds trust. It’s the little things that ounce by ounce by ounce pretty soon you have a client that trusts you.

Cathy Curtis: What do you think the advent of Zoom meetings is doing to this process? Do you still think you can convey your feelings and thoughts and emotions across the screen to a grieving person?

Kathi Balasek: I think, number one, if it’s the mode of communication that your client desires, then that’s where you start. And ideally, I mean, I don’t love Zoom, I’m a college professor, I like to be with students out and I’m animated. However, I have to go where my clients need me. And so, I think that message needs to be first. The mode of communication is based on what your client needs.

Cathy Curtis: Right. Well, and also a lot of advisors now have clients all over the place, because of the pandemic, and people seem, it’s easier for clients to hire advisors anywhere.

Cathy Curtis: So they find an advisor that specializes in what they want, they hire them, it could be across the country. So you’ll have to communicate in that way. So I guess it’s learning the skills to work with the bereaving person over an electronic media.

Kathi Balasek: Well, and to be real Cathy, is like you and I just met.

Cathy Curtis: Yes.

Kathi Balasek: And yet, we spent four or five minutes getting to know one another, we already found connections, similarities, shared purposes. We care about what each other are doing, and that was done on Zoom.

Cathy Curtis: Yes, women are really good at this, what you just described though.

[29:54] The differences in how women and men communicate and why they matter for grief literacy.

Kathi Balasek: Right. Men communicate differently. There are different communication styles. One is not better or the other. I mean, I think it as the Ying and the Yang, we need both, okay. And communication styles, women are more conversational, they add more personal information, they’re very rapport relationship driven.

Kathi Balasek: Where men are very report driven, data, facts, processes, goals, vary in order. And this is not all men or women, but this is general communication style. So it’s really recognizing in an advisor scenario where your client resonates, and really talking to them in their language.

Kathi Balasek: Because I think back of your question about grief literacy, and grief is like a universal experience, but it’s not a universal language, it’s a foreign language to many of us. And so when we say things that divide, like we try to justify somebody’s death or we say oh, at least they lived a long life, or it’s it was God’s plan or all of these things that just.

Cathy Curtis: What about the, I’m so sorry for your loss.

Kathi Balasek: Okay, that’s been done, right? I mean, if you are going to be, I’m just going to put it in terms that makes sense to me. It’s I don’t take offense to what people say, people don’t know any better yet, because they haven’t met me yet.

Kathi Balasek: My charge is I’m going to make everybody grief literate. When they say I’m sorry for your loss, that is not going to encourage a conversation, and what we want is we want to say things that build connection, and further the conversation.

Kathi Balasek: And so, saying I’m sorry, that’s a sentence starter, okay. It’s not an envy, I’m sorry for your loss, it’s been said. And if you want to stand out from the crowd in your life and in your industry, you got to do more.

[32:36] Alternative phrases to “I’m sorry for your loss.”

Cathy Curtis: Tell us an alternative phrase or phrases.

Kathi Balasek: Okay. Saying things like I was sorry to hear about your mother’s death. I didn’t know her well, but I can imagine knowing you, that you had a lot of qualities that she possessed. What’s one thing that you really loved about your mother? You see I’m pulling you in, I’m showing that I care. I’m acknowledging that I didn’t know your mother. Or you say something like if you want to start, I’m sorry for your loss, because that’s a sentence starter.

Kathi Balasek: I’m so sorry for your loss. I read about your husband’s passing, and I knew him on a couple occasions. And what I really appreciated about John, was that he always put what I wanted to say first. He always made the conversation about me, even though I was there for him, and that selflessness I will never forget. You see how I am actually saying their name, I’m acknowledging the person’s loss, and I’m telling a memory. What will be remembered, that is what is supportive and it’s soothing.

Cathy Curtis: Yes. Just taking it out of the realm of the client advisor thing for a minute, even people use social media now to announce the death of somebody, Facebook, for example. And you’ll see all the responses, and a lot of them are I’m so sorry for your loss.

[34:22] How to respond when you learn about someone’s death indirectly, like through a Facebook post.

Cathy Curtis: What would be a better way to respond when somebody, because obviously they’re posting it on social media, so they want people to know and they know people are going to respond in some way, right? What would be a better way to respond in that instance?

Kathi Balasek: So when somebody dies, not everybody knows. I mean 20, 30 years ago if you didn’t read it in the obituary, you didn’t know. But now somebody dies, and that evening it’s on Facebook. So when you see something on social media, you have some options.

Kathi Balasek: The best option is if you knew that person, write them a card. Call them, private message them, okay. Grief and sending these condolence messages out in the world, it’s not a true representation of truly how you feel. So why don’t you take that opportunity of I just read that information I have this news, how about I make a phone call? How about I write a letter? How would I drop something off?

Kathi Balasek: How would I send something? It comes back to we have the information; the receiver wants to know that you actually spent some time really thinking about their loss and really doing something that was meaningful.

Kathi Balasek: We think we can just go to the sympathy card aisle, grab a card, sign our name. Well, it’s so much richer if you write from a blank note card, and you write three heartfelt sentences, sign your name. I have a whole box of my cards that I got, the ones I re-read were the personal messages.

Cathy Curtis: I so agree with you. I’ve had death in my family, and I saved the cards that someone wrote something that really touched me, and they really do help.

Kathi Balasek: They help. I mean, as fundamental as that sounds, that’s something I teach my students in my class. My advisors they don’t know what to write or if a client lost a child, or if a client got a cancer diagnosis, they don’t know what to write.

Kathi Balasek: That’s the piece of my curriculum. It’s the simple fundamental human processes that are missing that is leaving this gap in between a griever and somebody who truly wants to help them but doesn’t know how.

Cathy Curtis: Right. And it’s not, I mean, it’s not to say sending a card that already has a grief message in it is okay, but you’re losing such an opportunity to make somebody feel better and really let them know that you care.

Kathi Balasek: Yes.

Cathy Curtis: The time to do that in a deeper way, and your message is loud and clear, and I so agree with you.

Kathi Balasek: Well, when you think about it, when advisors are working with really this family’s whole life savings, can’t you spend about 15 minutes to write a heartfelt card? Because a sympathy card, nothing really nails it, okay. Nothing really does.

Cathy Curtis: It’s because we don’t know what to say, we don’t know what to say. So the sympathy card makes it easy to check that box off. But it’s uncomfortable, because we’re uncomfortable with death, it’s true.

Kathi Balasek: And completely normal, right? That is completely normal to feel awkward, uncomfortable, don’t know what to say.

Cathy Curtis: Even procrastinate on sending something. Beyond the point that you’re embarrassed to even send it.

Kathi Balasek: Yes. And so our hearts are wired for compassion, but our head gets in the way and we’re like oh, I shouldn’t say this or I shouldn’t do that or that might be helpful then pretty soon we talked ourselves out of it.

Cathy Curtis: Exactly.

Kathi Balasek: If you think they need something, like I bet they would love a case of beer. I bet they would love some juice boxes, because they have kids, just go buy it and drop it off at their house.

Cathy Curtis: I just had a client who lost his wife, and I know the casserole thing, but people need food, they don’t want to cook for themselves after somebody dies.

Kathi Balasek: No. It is kind of a running joke in our household, but it’s so helpful and practical. And I can remember one of my teenagers, this was way after John died and somebody else had had a death in the neighborhood. And my teenager said yes, wait till the casserole starts showing up, it’s true.

Cathy Curtis: Do people still do that?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: There’s a ton of like apps and websites where you can do meal trade, and you can plan on who’s giving what and all of that.

Cathy Curtis: Okay.

[40:24] Why food and practical gifts are better than flowers when someone dies.

Kathi Balasek: Food is very helpful, it’s comforting. It’s a gift card to order out, stamps and blank note cards, just practical things that people don’t think about. I recently pulled a group of widows, and I’m in several widows group, but I’m also on the advisory board for modern widow’s club. And the number one thing that widows did not want were flowers, what did we all send them?

Cathy Curtis: Flowers.

Kathi Balasek: Not only did I just see my husband die, but now you said your flowers, they’re going to die, now I got to throw them away.

Cathy Curtis: Yes. And you have to take care of flowers.

Kathi Balasek: Exactly.

Cathy Curtis: At a time when you probably don’t want to take care of anything else but yourself. You have to change the water and make sure it’s not stinky, and all that stuff you have to do with flowers.

Kathi Balasek: I think people they genuinely mean well. There are so many caring individuals, there are so many people that do things in the death and grief area that they know what they’re talking about. And I’ve learned so much from people I’ve met, research I’ve done, that that’s truly supportive to a family. And it’s basic things that you don’t really think about.

Kathi Balasek: As an advisor, you should be the best resource on the planet for your bereaved client. Who am I going to call if I have a broken pipe in the middle of the night? When you are solo suddenly, alone, female, you don’t want a stranger coming to your house.

Cathy Curtis: Yes. Your door all of a sudden won’t open, which just happened to me this morning. My husband’s away.

Kathi Balasek: Exactly. I didn’t know how to buy a car, okay. I want to come to my advisor and say who could you send me to. Who could I give your name to that would not take me at the car place?

Cathy Curtis: No. I know with my own experience that being a resource, having vetted resources for your client, as vetted as you can, is so important to clients in so many areas of their life and not just financial.

[43:07] Kathi Balasek shares her tips when it comes to recommending other professionals to their widowed clients.

Kathi Balasek: It is. So that’s a piece of my program that we really work on is that curated list, of vetted professionals that you could recommend to your bereaved clients, because it’s an overlooked thing but it’s something you could do right now in the preparation phase.

Cathy Curtis: Yes. And carry that through to all other aspects of your financial planning too, vetting professionals for your clients, but particularly in this area it would be so welcome and needed.

Kathi Balasek: Yes. I think of caregiving, okay. So how many people come to you and they need caregivers, or they need advice or professional. This is an opportunity for you to find the best caregiving professionals in your community.

Cathy Curtis: Best practices in vetting professionals?

Kathi Balasek: For me, I don’t have that a piece of my program. But my recommendation is whoever you recommend, you should have called or known first.

Kathi Balasek: And so that when you say to your client, I would like you to use my name when you call, because I know this person, and I’m referring you to this person that I trust. That’s the biggest recommendation. I mean, I have people I know, but I have people I wouldn’t recommend. And we know people in our community and we know who would be a better fit for somebody else.

Cathy Curtis: Right. What I do typically is if I don’t know the professional personally, or they haven’t worked with the client, I will refer them, because usually they’re referred to me by somebody I trust, and I’ll make sure my client knows that. I have not worked with this person before, but they were referred to me by somebody I really trust, and let them know, so they’re aware that I don’t specifically know their work.

Kathi Balasek: Right. I just think honesty, and I think women are very much a word-of-mouth type of community. I’m reminded when my kids were young, I didn’t have to go see which teachers I wanted for my children or which hairdresser to go to, I just asked around and it gets around, okay.

Kathi Balasek: If you want to go to this restaurant, this is what they’re known for, this teacher is what they’re known for and it gets around. I didn’t have to go google it or research it, we talk. And when you are an advisor, if you can get dialed in to your community of who’s the best, I mean, why wouldn’t you recommend that.

[46:05] The biggest mistake Kathi sees her clients make and the one thing she wishes people understood about grief.

Cathy Curtis: Yes, exactly. So it sounds like you’ve worked with quite a few financial professionals, what would you say is the biggest mistake that they make with a grieving client?

Kathi Balasek: I think the biggest mistake they make is they don’t invest the personal side up front. They think about all the things that have to be done, and the financial things that have to be done. And those first couple meetings really need to be just about building a safe space, listening to your client, learning about your client, helping them get organized.

Kathi Balasek: And I think they rush in with too many like we’ve got to get this done, we’ve got to get that done, what do you think about, what will you do next year. It’s like widowhood is like a thousand-piece puzzle, putting back the pieces where you don’t even know the picture on the box, okay. You can’t even picture that, okay.

Kathi Balasek: And going in with too much information, financial information up front, because grief fog is that cognitive impairment that grievers feel and it can show up in forgetfulness, confusion, overwhelm so they’re not going to remember it anyway.

Kathi Balasek: And so really invest in the trust, the communication, knowing the players. Who’s at home taking care of all of these things? Who in the family is communicating with what? And really helping them so that nothing falls through the cracks.

Cathy Curtis: Kathi, what would you say is the one thing that you wish more financial professionals or even people in general understood about grief?

Kathi Balasek: That’s a tough question, but I love that you asked it. I think the number one thing that every human needs to understand is that grief has no timeline. It’s not linear, and in all these stages, it is all over. And one person’s grief, some of the signs and symptoms might be several years, some might be shorter.

Kathi Balasek: And I think as people, we tend to go into a little bit of disillusioned expectation like hey it’s been three years, aren’t you over it yet? And it really tends to disenfranchise somebody’s grief and work, and grief never leaves us. It’s not a hurdle we get over. It was the end of a life, not an end of a relationship and grievers learn to walk alongside.

Cathy Curtis: That’s a good perspective, thank you for that. So I’m sure listeners would, I mean you have so much knowledge in this area, it’s obvious. And you’ve done a lot of research, and I’m sure you’ve got some resources that widows or advisors of widows could use. Do you mind sharing a few?

Kathi Balasek: I would love to. So again, there’s just so many people doing great things out there, it’s unbelievable. I feel privileged to be a part of the puzzle. And so number one, if you have widow clients, the best resource you can give them is send them to modern widows club.

Kathi Balasek: It is an international, non-profit, I’m actually on the advisory board, which that was a whole honor. And it’s the only widow group that is actually doing research on this demographic. And so they have research supported evidence of what helps widows move forward, helps them thrive, and they have community outreach groups all across the world, and so that you can get connected with other widows.

Kathi Balasek: You get all different types for financial, emotional, social all these things that will help you move forward as a widow. So it’s awesome, I highly recommend that. And the person who created it, Carolyn Moore is a widow herself and she and I actually shared a stage speaking at a financial advisory convention, and she’s just remarkable what she’s done.

Cathy Curtis: Thank you for that. You yourself have a resource I believe?

Kathi Balasek: Yes, I have a couple. Like if you’re a financial advisor too is anything by Cathy Sikorski on caregiving, and she talks a lot about how to talk about these difficult conversations, she’s great. Grief literacy, Megan DeVine, it’s okay that you’re not okay. These are excellent books.

Kathi Balasek: And I believe that if you get to know me and work with me, I’m going to help you grow your business. I have programs, I have coaching programs, I have an online course. I can do a webinar for your team and we can train your team of really getting grief literate, so that you can connect and engage with bereaved clients.

Kathi Balasek: I really enjoy seeing the advisors and the companies that I’ve worked with because they’re seeing success. They’re truly knowing how to show up with their bereaved clients, because it’s happening all around us. This is what we will never avoid. And we have to not practice it during the fire drill, we have to do it up front. And it’s just been a ton of fun getting great resources out to my clients that can truly support them in becoming the best advisor they can for their clients.

Cathy Curtis: So I’m going to add this to my show notes, but in case people don’t read the show notes, how do they reach you?

Kathi Balasek: So my website is KathiBalasek.com, and if you just want to email me, it’s Kathi@KathiBalasek.com.

Cathy Curtis: And that’s Kathi?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: And if they have widow clients, I also run a podcast called One Well Widow, where I help widows moving forward.

Cathy Curtis: I’ve listened to it, some of the stories are so sad, but really great podcast.

Kathi Balasek: Thank you. So that’s my kind of advocacy of helping widows.

Cathy Curtis: Okay, excellent. Thank you. I’ve really enjoyed talking with you, Kathi. And I look forward to re-listening to this podcast myself because I learned many things. So thank you for your time and what you do.

Kathi Balasek: Well, you’re welcome. It’s a privilege. I’m just so excited to meet women like you who are forging ahead and leading us all. So, thank you.

Cathy Curtis: Okay Kathi, take care.

Kathi Balasek: You too. Cheers.

Cathy Curtis: Cheers.

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S4E2 Transcript: Estate Planning with Heart with Patricia De Fonte

Cathy Curtis: Welcome to my podcast, Financial Finesse. I’m thrilled to have you here to talk about estate planning.

Patricia De Fonte: Thank you so much for having me. I love estate planning. I’m a big nerd about it, and I will talk about it anywhere to anyone.

Cathy Curtis: Okay, great. Well, I’m sure you’re in the minority about loving estate planning. But maybe you can help our listeners love it too. And so that’s going to be our goal for this podcast.

Patricia De Fonte: I love it. I love it.

Cathy Curtis: Tell us briefly what do you want the listeners to know about you?

Patricia De Fonte: Sure. So, my name is Patricia De Fonte. And I am the founder of De Fonte Law, where my team and I practice estate planning with heart. My hashtags are love is love, families belong together, Black Lives Matter, stop Asian hate, ruthless. Why do you care? You care because when you’re trying to find the right estate planning lawyer for yourself, you have to share values, you have to have a good certain vibe with that person. Maybe you don’t mind telling the person all about your own worries and troubles.

Patricia De Fonte: But you also have to tell the estate planner about the alcoholism [inaudible] You have to tell the estate planning lawyer that you’re really afraid about your mom’s spending habits. You have to put it all on the table. Otherwise, a good lawyer cannot craft a plan that doesn’t just say where your stuff goes when you die, but really takes care of the people that are counting on you now, that would be beyond bereft if they lost you, your death will have a financial impact on them. And things need to be set up properly, so we don’t inadvertently hurt somebody [inaudible].

[04:30] Patricia De Fonte explains what an estate plan is in plain English and what documents a comprehensive estate plan typically includes.

Cathy Curtis: Great. Thank you for that. So, now you’re describing what an estate plan is right there in a few sentences. But I’m going to have you step back in an even simpler language for somebody who always hears this, you need an estate plan. They may even have an estate plan, but they don’t understand it. So, what exactly is an estate plan? And I was talking to you before we started that I wish the word estate could go away because it conjures up English manners and stuff. And it’s not. It’s what you own when you die and where’s it going to go? So, let me let you take it from here.

Patricia De Fonte: Yeah. It’s so much more than that. So, estate planning, from my perspective, I have an LLM in Estate Planning, Probate, and Trust Administration. I went to night school, it’s a master’s degree. It’s a whole big deal. And this area of the law touches on every other area of the law. So, we worry about family law, and corporate law, and intellectual property law, it’s endless. But from your perspective, from a client’s perspective, from a consumer perspective, it’s really just three things. What about me? What kind of documents do I have to put in place to make sure people know how to take care of me if I can’t take care of myself if I hit my head? Or if I slide into incapacity? How do I let people pay my rent, collect my wages, make sure I don’t get thrown out of my apartment, talk to my landlord, call my employer for my disability payments if I’m incapacitated?

Patricia De Fonte: So, what about me, that’s advanced healthcare directives. You can get one free doctor, you can do it for free, do it now. You can Google it. Whatever state you’re in, Statutory Advanced Health Care Directive. Go to it, print it out, fill it out. If you’re confused by it, ask your doctor, they will be so happy to have this conversation with you. Then you just get it notarized and you give it to the people that you love and you tell them what is supposed to happen so that there is no confusion. When it comes to your stuff, it’s a little more complicated. You need a power of attorney, there are lots of different kinds. I want you to do that with a lawyer. And the reason for that is that if you don’t do it with a lawyer, it’ll probably get rejected.

Cathy Curtis: Hmm. Talk about that just a little bit, if you don’t mind.

Patricia De Fonte: Well, imagine being on the receiving end, you work at the bank or you — the bank is a good example. You work at the bank and a person comes in with a durable power of attorney and it’s not signed by a lawyer because most of them are assigned by the lawyer who prepared them. How would you feel? Wouldn’t you be a little bit afraid to give this person the money that’s in the account? You’d probably want to see more documentation, you’re probably going to [inaudible] up to legal. So, then once it goes up to the legal department, that’s a black hole. I don’t know how long it’s going to be in there. So, if you were trying, like, let’s say you’re a married couple, and you’re trying to get into your spouse’s bank account, to get the money to pay the mortgage, you’re locked out. You’re locked out.

Cathy Curtis: Yeah. This is such an important point because you’re stressed out at that point in your life, right? The last thing you want to do is deal with paperwork and then you run into a roadblock like that.

Patricia De Fonte: Exactly.

Cathy Curtis: So, that’s such a real-life situation that you just described for people.

Patricia De Fonte: And you know what? You can ask your investor advisor, your bank, your employer, hey, do you guys have a power of attorney that you guys use? Do you guys have permission slips if I hit my head to let certain people and to do certain things? How does it work with your company? How can I do this? Sometimes they have stuff. I know that when I work with clients, sometimes they bring to the signing meeting forms that their financial advisor has provided for them allowing — because their financial advisor doesn’t want our form. They want their own specific form. So, that’s number one.

Cathy Curtis: Right. [inaudible] custodians, right?

Patricia De Fonte: Yeah.

Cathy Curtis: Custodians want to use their own form sometimes.

Patricia De Fonte: Exactly, exactly. So, that’s number one, what about me? Number two is, what about my stuff? So, there are basically three ways for your stuff to pass on to someone else after you die. Number one is the laws [inaudible]. What they use as the table of consanguinity. Those are ridiculous words, sounds like a vampire branch. All it means is that in every state, there is a statute that says when you die, this is who gets your money. And it can be a little bit more complicated than that. But there is a statute that says when you die, this is the person or the people who will get your stuff. So, if you do nothing, there’s a plan for you. Oh, by the way [crosstalk]

Cathy Curtis: [inaudible] want it to be that may not be who you want it to be.

Patricia De Fonte: Right. Yeah. That’s just the rule. And by the way, there’s — Well, on what about me, if you don’t take care of this, you might have to be conserved. So, the government does have a plan for you, if you don’t make your own plan. And that plan is hopefully it’s somebody who really loves you and not somebody who just wants to take all your stuff, goes to a court and convinces a judge to put them in charge. Conservatorship, which now everybody has heard about because of Britney Spears. That’s an extreme example, but these things happen all the time. So, if you don’t take care of what about me, Advanced Health Care Directive, durable power of attorney, you might wind up being conserved. And we don’t know what that means because you don’t have your own documents, you don’t leave instructions [inaudible].

Patricia De Fonte: So, what about my stuff? Intestacy, you haven’t done anything. You could use a will. So, now you’re going to say I don’t like what the statute says. I don’t want everything to go to whoever I want my stuff to go to Jordan. Great. So, when you die, that will, and I’m a California lawyer. So, in California, when you die, the will is brought to the courthouse and the judge stamps it, and then anybody who wants to look at it and come and look at it. They all wind up on the dark web, all of them.

Cathy Curtis: It’s not private. That’s a — [crosstalk]

Patricia De Fonte: It’s not private. And so poor Jordan who is thrilled to learn that they are in line to inherit whatever from you, starts getting calls, people start coming around, grifters, everybody’s got their hands out because everybody knows not only that Jordan is going to get something, but exactly what Jordan is going to get. It puts Jordan in a terrible position. Now what if Jordan is terrible with money? Too bad. What if Jordan’s on drugs? Too bad. What if Jordan is receiving Social Services? And now you’ve kicked Jordan into an economic level where he no longer gets his services. Now you’ve ruined his life. So, you really have to be careful when you’re giving people money through a will, that you are really, really thinking about what it’s like for them to receive those assets that way. [crosstalk] At my firm, we just don’t do that.

[11:32] What Patricia De Fonte recommends using to direct your assets instead of a will.

Cathy Curtis: Right. On your website it says you don’t divvy up — You don’t advise people to use a will for doing this purpose. And you just described some very scary reasons why not? Yeah.

Patricia De Fonte: Yeah, they make me nervous.

Cathy Curtis: And so what is your preferred way, and what do you recommend?

Patricia De Fonte: Yeah. So, the third way is using a living or revocable trust. By the way, there are other mechanisms. If you have piles and piles and piles and piles of money. There are all kinds of tricky, interesting, irrevocable trusts that you can use that’s way beyond what we’re talking about. We’re talking about the basics. So, a revocable, or living trust is a terrific tool. For a married couple, or for an unmarried couple two trusts drafted correctly. When one partner or spouse dies, that survivor gets privacy, they don’t have to go to the courthouse, all their deceased spouse or partner’s assets aren’t listed for everyone to see. Nobody knows what they’re going to get.

Patricia De Fonte: They also, if it’s drafted properly, they get to do some asset protection planning, right? Maybe they’re nervous about some creditor stuff. Maybe the surviving spouse is a contractor or in a high litigation profession. They get to do some tax planning. We don’t know what Congress is going to do, we don’t know what your local state assembly is going to do, and we don’t know what the voters are going to do that is going to result in big tax problems for you down the road. So, it’s really important to have a document that’s really flexible for that surviving spouse to make really good decisions on the ground when that first spouse dies.

Patricia De Fonte: Now, when the second spouse dies, what we’re really looking at is who are the beneficiaries? And how do we best take care of them? But we also have to think about this poor person who loves you, probably, or is getting paid to do this who is the successor trustee, the person in charge of giving everybody this stuff. We need to make sure that the trust is drafted in a way that it honors them, that doesn’t say the trustee has to give everybody money right away. How about a little holding period? How about a little time for them to marshal the assets, wiggle out of paying any bills that might be doue,deal with that last tax return. Just get their sea legs because you know, it’s probably someone you’re close to and they’re grieving. And they don’t need everybody calling them and yelling at them about stuff and money.

Cathy Curtis: And by law you have time to close an — [crosstalk]

Patricia De Fonte: Yep, you have time.

Cathy Curtis: How much time do people usually take and is there an amount of time that’s not okay?

Patricia De Fonte: I think generally a year-ish. And it would depend on really like, what assets are we worried about? And was everything in the trust? Or are there all the outlying things, but I would say generally about a year. And so I like to draft a trust that says whoever’s getting anything, you’ll get it about a year after I die. Because I want to give my person who loves me and is doing this job for me some time to get organized so that they can do this.

Cathy Curtis: Do you actually put that language in the trust?

Patricia De Fonte: I do.

Cathy Curtis: Oh, okay.

Patricia De Fonte: I do. Yes.

Cathy Curtis: I haven’t seen that before.

Patricia De Fonte: And then when we think about the children, or anybody that you’re leaving really big amounts to, there’s a statistic that says that 33% of people who inherit lose it within three years. Why? Not because they’re dumb. Because people come around, because they’re vulnerable, because they’re grieving because they don’t understand what it means to have that kind of money. So, it’s really important to work with a lawyer who knows about this statistic, recognizes it and sets your beneficiaries up for success. I like to draft a trust — [crosstalk]

Cathy Curtis: I want to step in and just say something here, because it’s not only because they’re grieving, or they get taken advantage of. I don’t think people realize how fast even a relatively large sum of money can be spent down without really thoughtful planning. So, someone in here, it’s 500,000. It’s almost like they think they’ve got millions and all of a sudden they’re quitting their job. I see that happen all the time. Inherit money, quit job.

Patricia De Fonte: Yes. And it makes no sense.

Cathy Curtis: Then they think they’re going to go back to work and they don’t. And before you know what they’ve spent on half of their inheritance, and they’re starting to feel really guilty.

Patricia De Fonte: Yep. Now they’re back in therapy for guilt for not taking care of the money.

Cathy Curtis: Yeah. Yeah. [crosstalk] I’m sorry. You work with people to try and prevent that from happening, right?

Patricia De Fonte: Yes, yes. So, our trust contains a provision that says the beneficiary can use money from the trust to pay their CPA, their financial advisor and their lawyer. So, before they start taking out big sums of money, let’s help them build a good professional team, so that they understand what it means to pull money out of the trust which can be a little tax bomb, and so that they understand what they’re doing with the money. And I never like to draft a trust that says, you get your money when you’re — a really typical scenario is 25, 30 and 35.

Patricia De Fonte: Well, what if you’re getting RSUs? What if your company just went IPO, there’s a big tax black eye, and it’s a wonderful thing, but it’s a lot of tax. And then if money also has to come out of the trust, you’re not actually getting to keep a whole lot of that money, you’re going to be thrown into a very high tax bracket. It’s really important to have a trust that says, listen, at certain ages, certain intervals, the beneficiary can pull money out. I generally like to do 15% at first, and then maybe 50% four years later, and then another four years later, you can have the rest of it as kind of a…

Cathy Curtis: Okay. Let me ask. Is this just for young beneficiaries or do you recommend this for…

Patricia De Fonte: Nobody’s ever ready to lose their mother. 50 year olds will quit their job if they inherit $750,000.

Cathy Curtis: Yes, I know. Okay. I want to delve into this a little bit. So, I know you have to have standard language and all estate planning documents, wills, trusts, you know. But attorneys can craft their own documents to a degree, right? And it sounds like that’s what you do. You really thought through your client’s needs and what may happen and you’re instilling language in there — they have to agree to what you’re suggesting. But you have these documents that you’ve crafted yourself with your team to suit each client’s needs. Is that right? I mean, I don’t know if you’d call them customized, but it kind of sounds like it.

Patricia De Fonte: So, I think it’s really important to say this, we use drafting software. And I think it’s critical for attorneys unless they are at a very large firm, to use drafting software, and good drafting software. The reason for this is that the law is alive. There might be a case in a bankruptcy court in Fresno that has a direct impact on the way that we draft gifts and estate planning. So, the software company that I use, they have an online community forum, they’re constantly doing education. When a new case comes out, we get a memo. And then when they update the software, they send us an email and show us where in the software it was changed and what that means. So, we stay abreast of the law. If you talk to a lawyer, and they say, oh, I have my own forms, well, how many people work for you? And they say, no one did not work with them. It’s just not a good idea. It’s not a good idea. And the software is expensive, but it is the cost of doing business. It’s an investment.

Cathy Curtis: Okay. What percent of estate attorneys do you think use drafting software?

Patricia De Fonte: I would say a huge percentage use drafting software, a huge percentage.

Cathy Curtis: All right. You’re saying that’s a red flag if they don’t?

Patricia De Fonte: Yeah, unless it’s a really big firm where they actually part of the team is tasked with that type of work. They have paralegals and junior associates, who it’s part of their work to keep up with the law and making [inaudible].

Cathy Curtis: So, in other words, don’t hire a solo attorney that doesn’t use drafting… I mean, I know you [inaudible] but it sounds like that — [crosstalk].

Patricia De Fonte: I think it’s a good bright line rule.

Cathy Curtis: Yeah, okay. Be careful.

Patricia De Fonte: I wouldn’t do it.

Cathy Curtis: Okay. So, I’m going to step back one minute, and we’re going to revert back to what is an estate plan. So, part of it is the me stuff, part of it is what I do with my stuff. And the me stuff has more to do with when you’re still alive. You want your health care plan, and you want someone to take over if you can’t take care of your own finances. That’s the me part, the durable power of attorney, and that health care… What’s the name of it now, health care proxy?

Patricia De Fonte: The Advanced Health Care Directive.

Cathy Curtis: Advanced health care, okay, those. And then the stuff is, you still do a will, right? Even though you don’t use it as…

Patricia De Fonte: Yeah, you do.

Cathy Curtis: You still have a will and a trust, and that designates what happens with the stuff and also who does that for you too.

Patricia De Fonte: [inaudible] in charge. Right, exactly.

[20:36] The importance of choosing an executor or trustee you can trust to manage the distribution of your estate according to your wishes. 

Cathy Curtis: Yeah. One question about what you’re saying about a will not being private, which it’s not, it’s public, and a trust being private. So, there are certain protections in the public process because there’s court of law, checking off all the boxes, right? In a trust, there’s really nobody supervising that executor. So, how important is it that you pick somebody that you really trust?

Patricia De Fonte: I know, I know. It is so much fun, the first meeting with clients because they have to fill out intake forms. And in my firm, before we even really look at those forms, other than cursory, we’re asking tell me about yourselves, your parents, we want to hear about about your siblings, who do you love, who do you trust, who’s in your life, who’s the inner circle, who are your people. Oh, let’s look at your list of stuff, [inaudible] your stuff. And then towards the end of the meeting, then we start talking about, well, who’s in charge in various scenarios. And sometimes, again, we put that together, and then we say, okay, now we’re going to look at that document that you filled out, where you took your first stab at who should be in charge of different things.

Patricia De Fonte: So, many times I look at that document, like who are these people that you neither love nor trust? Oh, that’s my cousin. They’re a hedge fund manager. But while we were talking, I realized, they don’t know me, they don’t know my children, they’re not… I thought because they were money, people, that they’d be the perfect person. But once you explain that, there will be a lawyer, that the trust can pay for that, that they’ll have help, that what they really need at core is to be a really decent human being that I trust completely, who’s going to do things in my best interest because of our relationship? And if you don’t have that person, then we have to talk about a private fiduciary, then we hire a professional who, with errors and omissions insurance and you know, all of that. So, we make sure that we have that correct person.

Cathy Curtis: Right. Because it really is a private process. There is nobody telling you you have to give that 50,000 to Aunt Mary. You just do it because that’s what the deceased person [inaudible].

Patricia De Fonte: I mean, if you don’t do it you’re going to get sued. Once you die your trust is supposed to be given to everybody who’s named in the trust, all of the beneficiaries, all the charities, all the people.

Cathy Curtis: Who is responsible to do that, though?

Patricia De Fonte: The trustee.

Cathy Curtis: Yeah. Who’s…

Patricia De Fonte: But generally if someone has died and nobody’s doing anything, people will start… If they don’t do it, someone will go to the courthouse and say, well, clearly, there’s no trust. I’m going to open a probate. So, there are ways to force the issue to flush the document.

Cathy Curtis: Okay. But I still think it’s really important to drive home, you have to choose somebody that you trust and also probably detail-oriented. Although if you write the trust right, you can let the executor know they can hire people to help them, right. And you probably make that really clear. Because most people are so busy, and they have to take care of an estate and it’s hard. I’ve done it in my family, it’s a lot of detailed work. And I do detailed work so it’s easier for me. But not everybody… [crosstalk]

Patricia De Fonte: Let me tell you about my favorite. My favorite, favorite provision is the ancillary or special independent trustee. So, your person is happy, they’re doing the work, they’re working with the lawyer and the CPA and the financial advisor. It’s all happening. But then, let’s say your kids start going crazy. They start showing up at Thanksgiving demanding their money, they’re on drugs, different things are happening. So, your person, your successor trustee might say, you know, I’m happy doing all this technical work, but I can’t deal with these kids. They can not only hire somebody to do that, but if you hire someone to do it, you’re still ultimately responsible.

Cathy Curtis: Right. Right.

Patricia De Fonte: In the trust I draft, you can appoint someone to take on the fiduciary obligation for that task. So, let’s say that all of a sudden the beneficiary is on drugs. Well, that’s really a difficult scenario. You want a professional who knows how to deal with that. And so you do that. Or maybe they’ve had something happening in their own lives, and they just need to reel back. Like, oh, it’s all been going great. But now I have to take care of a sick family member. So, for six months, I’m handing this over to someone else. There have to be pressure release valves in the documents because if the worst thing happens, you die young and your children are very young, this trust can go on for decades.

Cathy Curtis: Yeah. How many trusts do you think have all of those different clauses and think through all those different scenarios that could happen?

Patricia De Fonte: I wonder, I do see a lot of trusts that were drafted by other lawyers. And I always say why didn’t you go back to that lawyer? Most of the time, it’s the person is retired, right? And they don’t have these provisions. It is kind of a new wave of thinking. I also see in the older truss, a lot of you get your money when you’re 25, 30, and 35, which is very old thinking, we don’t do that anymore. We let them pull it out. If you’re fine, and you’re not on drugs, and you’re not — if you’re okay, then you can pull out up to this amount of money. We never want to give somebody money if it’s going to hurt them, either financially, or like, physically. We just don’t want to hurt somebody with money.

Cathy Curtis: Right. It sounds to me that you really get to know your clients. So, can you just describe, someone hires you, what is the process like? They don’t have an estate plan? Let’s say they’ve not done any estate planning. They have beneficiaries on their IRAs, but that’s about it. What happens?

Patricia De Fonte: Yes. Can I jump — I just want to jump back to number three, which is what about my kids and then all due process. Okay. So, the third part of estate planning we did, what about me, what about my stuff, the trust, what about my kids? It is very typical for a lawyer, and you’ll see this on any DIY form and you’ll see it in the statutory forms that you’ll have in various states, you’d name the children and put their birth dates, sometimes social security number, [inaudible], and then the names of the guardians and their home address and their phone number. We established that will is a public document, it’s going to wind up on the dark web, bad people are going to get their hands on it.

Patricia De Fonte: Here in California, we don’t have to provide that information in the will, we can use a side document. It’s not permitted in every jurisdiction, but in ours it is. So, at my firm we have — it starts out at six pages. Who are the emergency contacts? Because your children might have to go live with someone else if you’re incapacitated. Guardianship is not only about death. And then who’s in… So, we want to list emergency contacts, who are very short-term and we want to list who are the guardians in the event of a long-term incapacity or death. And then education, religion, firearm, social media, other really important family members, other people who carry your stories. Who are the people that you don’t want your kids around ever? Maybe it’s your ex, maybe it’s their other biological parent, and you have sole custody.

Patricia De Fonte: We have to provide all this information because just you writing it down, doesn’t make it. So, a judge is always going to step in and look at the situation on the ground and say what is in the best interest of these children? You may have chosen Pat and Chris and they were perfect. But at the time that you are no longer available, Pat and Chris are getting a divorce, or Pat has three DUIs or Chris’s parents is living with them, and terminally ill, it’s basically a hospice. So, we’re not putting children in that home. So, you really have… Or maybe the person that you like doesn’t look good on paper. I’ve worked with clients where they wanted the children to live with a family member who had lupus. Well, it doesn’t look good on paper. So, we wrote pages and pages and pages about she has her own children. We are well aware of her diagnoses. We know, without saying, we know the other brother looks better on paper, we don’t like him for this.

Cathy Curtis: This is amazing. Okay. So, you do… [crosstalk]

Patricia De Fonte: That’s number three; what about my kids?

Cathy Curtis: You don’t — Yeah, that’s so important, number three. Okay. You’re saying that the will does not have to be the document that names the guardian of the children?

Patricia De Fonte: In California. In other states, I don’t know.

Cathy Curtis: And that is really good to know. Because like we said before, it’s public knowledge. And there’s all kinds of really personal info on there. And instead, what is this doc… Is there an official name for this document?

Patricia De Fonte: There is not an official document that you have to fill out. My firm, just… When I had my estate plan done about 10 years ago, the lawyer gave it to us and I wasn’t an estate planning attorney at that time. I thought oh, this is so nice. And I just thought it was difficult. I just thought that’s what everyone did. And then I started my firm, got the master’s degree, started my firm, and nobody was doing it. And now all of my friends are doing it because I keep giving my form to other lawyers saying, oh, did you know about this? Do this, I didn’t invent it. It’s not proprietary to me. It’s wonderful. Do this. And what’s really fun about that document is that it keeps growing.

Patricia De Fonte: So, I work with a therapist. And now there’s a paragraph about access to mental health. I work with a family whose child has come out and said, I’m transitioning. Great. Now we have language about that. So, every scenario…  I had a client who’s stepmother dragged them into a cult. So, our paragraph on the client’s feelings about religion, do we want religious instruction, we don’t, this, that, there’s a whole paragraph about pseudoscience that he wrote, and then it’s so many other clients, it resonates with them. So, it can really be if you just write from your heart, you can just do that, you can do this one on your own, just have it notarized.

Cathy Curtis: Be interesting to see what other states do this. I’m going to have to look that up. So, one small technical question, which ties into what we’re talking about. So, you do do a will and a trust, someone dies, does that will become a public –min the public domain?

Patricia De Fonte: It will.

Cathy Curtis: Always?

Patricia De Fonte: Yeah.

Cathy Curtis: So, it really is important to pay attention to what you put in that document and no personal… Social security number, oh my gosh.

Patricia De Fonte: Madness.

Cathy Curtis: And as little personal info as you can in, other words, and do most of it in the trust instead.

Patricia De Fonte: Yeah. Hi, my name is Patricia. I’m married. I have two children with my spouse, I have no other children. I have a trust. And then eight pages of technical instruction from the probate [inaudible].

Cathy Curtis: Yeah. Okay. Can you just see all… And then this is probably happening for decades, people combing the newspaper for who died and what public documents can I look for, blah, blah, blah.

Patricia De Fonte: One of my professors told the story of his mother in rural Alabama. Every Friday, one of her girlfriends would go to the courthouse and get all the wills that had been lodged that week with the county state. And Sunday after church, they would sit around and talk about who was getting what and who left so and so out of their… Because everybody knew everybody.

Cathy Curtis: Oh, my gosh.

Patricia De Fonte: Oh, yes.

Cathy Curtis: People’s worst…

Patricia De Fonte: This has been going on forever.

Cathy Curtis: Yeah, yeah.

Patricia De Fonte: And it used to be harmless gossip over brunch. It’s not harmless gossip over brunch anymore. Now it’s dangerous. Now it’s dangerous.

Cathy Curtis: Interesting. Okay. So, you sound like a really good estate planning attorney.

Patricia De Fonte: I’m a really happy, enthusiastic estate planning attorney.

[32:44] How to find an estate planning attorney you can trust and who is well suited to your needs and objectives.

Cathy Curtis: So, let me ask you, someone needs an estate planning attorney, what is the very best way, and smartest way to go about finding one?

Patricia De Fonte: I love this. If you have a really good financial advisor, they should have a really broad team of estate planning lawyers that they work with, lawyers who work with different types of clients and have different types of specialties and expertise. And so that’s a great place to start, is talk to your financial adviser and really tell them what you’re looking for. What kind of experience you want to have if you don’t have a really great financial advisor? Sometimes if you have a wonderful insurance person, they can also, they should also have good connections.

Patricia De Fonte: Ask your most organized friends. Ask the people in your life who really, really have it together, who have an estate plan, who have a financial advisor, who don’t DIY their insurance, they probably have good people for you. So, now you’ve probably got a list of names. I really like using your personal network so you get a flavor of, okay, who worked with who and how did it work? And then go online and take a look. Then start booking some calls. And you really, you don’t need to talk to the lawyer for more than 15-20 minutes. Because what you’re looking for is that feeling. And then you want to ask them about their process. And then there’s some questions that I want you to ask all of them all the time.

Patricia De Fonte: The first thing I want you to ask is do you use software? And I talked about that earlier why that is so important. And if they don’t, how do they make sure their documents are up to date? The next thing I want you to ask them is about other practice areas. It can be a big red flag if an estate planning lawyer, because remember, estate planning touches on so many other areas of the law. And it’s huge. There are not that many areas of law where you can get a master’s degree. That’s how epic and serious this can be. So, we want to be very careful that we’re not working with someone who does estate planning and bankruptcy and family law and real estate and on and on and on and on. Some firms see estate planning as a profit center. Oh, you buy the software, and tippy tappy, tippy…documents and money. No, that’s not estate planning. It’s just infuriating.

Patricia De Fonte: So, you really want to work with somebody that really dedicates their practice to this. It can be fine if they also… I have wonderful colleagues who dedicate part of the practice to real estate, because they’ve been doing this for so long and they’ve worked with so many real estate investors that they also know how to do the LLCs and they also have a broker’s license because it made sense. Or they also do bankruptcy because they worked with so many people who have gone through that. And so there can be natural add-ons. And you just want to ask, why do you also do that? How does that tie into your practice?

Cathy Curtis: Right. Can I go back one thing on the documents again, the software?

Patricia De Fonte: Yeah.

Cathy Curtis: If they don’t have the software, and you should ask how are they updating your documents? But how often are the documents updated? Isn’t it only and this is something I don’t know, isn’t it only when the client comes and says, I need to make a revision, can you update… [crosstalk].

Patricia De Fonte: So, those are two different things. So, you want to make sure the law firm that you’re working with has the most up-to-date documents. That their documents are right up to date [inaudible] of the law today for you.

Cathy Curtis: Right. And that’s how [inaudible].

Patricia De Fonte: Now, if things change after you sign, that’s why estate planning is not a one and done, you have to keep coming back. Every three years, you have to come back and say how are we doing? How’s it looking?

Cathy Curtis: Yeah. And also has anything changed that [inaudible] that you need to update, or you need [inaudible]. Okay. Good. Thank you. Sorry, I just wanted to clarify that.

Patricia De Fonte: So, we want to ask about software, we want to make sure they’re not doing a bunch of other different types of law, we want to make sure we have a good vibe. And we definitely want to talk about how much time are we going to spend together? My firm, four hours. Not all in a row, nobody wants to be in a four-hour meeting. But there should be a really long meeting where the lawyer learns a lot about you and you’re really not learning anything. You’re just wondering, why don’t they stop asking me so many impertinent questions?

Cathy Curtis: Yeah, that’s hard.

Patricia De Fonte: We can’t stop because we have to get to the bottom of everything, we need to know all of it.

Cathy Curtis: Do you warn them that it’s going to be a four-hour brain dump.

Patricia De Fonte: No, no, no. No, we don’t do four hours all at once. I can’t be in a four-hour meeting.

Cathy Curtis: Okay, good.

Patricia De Fonte: No, no, no. No meetings should ever be more than two hours. There should be a really good long, at least 90-minute substantive meeting about the lawyer getting to know you and your people and your staff and your philosophies. The lawyer should always send you drafts of every single document you’re going to sign. A lot of them will just send you the summary of the trust, because I swear to God, they think you don’t understand the documents. You understand the documents just fine. I promise you. If the lawyers get to drafting documents, they should be really good at explaining them to you and you should be able to read them.

Cathy Curtis: And if they’re really good draft, they’re probably in more plain English than a lot of them.

Patricia De Fonte: Exactly, exactly, exactly. I think it’s a scam if you get a document that has no headers and is single spaced. What is that? I can’t even read that. My eyes just close, it’s just depressing. So, you want to make sure you’re going to get full drafts of all the documents and an opportunity to meet with a lawyer to go over them. And not, here are the drafts, let me know if you have any questions. How rude. Of course you have questions, but you don’t even know where to start. At my firm, what we do is we highlight the parts that we really want you to look at, the personalization. And you know, start out easy. Did we spell all the names, right? Does this…

Patricia De Fonte: When we talked about what’s supposed to happen if you’re in a coma, did we get the flavor? Did we talk about your Catholicism the way that you wanted it talked about in your Advanced Health Care Directive? Did we talk about that, and we want to go over all that in the meeting, and more. We’re going to take you right through the documents and say, this is what this document does. Here’s who you put in charge. Now let’s look at all the responsibilities. Now, let’s go back to the person, is that person? Does that feel good? Okay, good. We’re done. Forget that we even did that next [inaudible]. You don’t have to hold on to it forever, but you have to hold on to it during that meeting. Right?

Patricia De Fonte: Then we let clients sign their documents, either online or in-person with a notary. So, they have that option. And you know, we’re still in the time of COVID. Many of my clients have very, very young children, a lot of older people have a lot of health concerns, they don’t want a notary in their house. I’m sure the notary is fine, but the notary goes from place to place to place to place. We don’t know what happens in these places. So, online notarization is a really wonderful tool. There needs to be a third meeting. And the third meeting is, okay, you signed your documents.

Patricia De Fonte: Now, you have this trust, and it says all your stuff is going to go to this person, you have to put your stuff in that trust. How do you do that? So, you need written instructions, your lawyer should have made you before you met with them the first time provided a full list of all of your assets. You need that list, because at the end, after you sign your document, you’re going to use that list, and you’re going to check off, oh, I put that in my trust, I put that in my trust and it’s going to make you feel [inaudible].

[40:11] Cathy and Patricia discuss some of the most common mistakes people make with their estate planning documents.

Cathy Curtis: Let me make a really clear point here that estate planning attorneys don’t necessarily do that for you, right? And they can’t do that in some cases. So, this is a step that I know gets missed because I see it with clients, they don’t put their accounts or whatever in their trust after they leave the attorney’s office.

Patricia De Fonte: You know, some firms, especially firms that work with elderly clients, they do, they will work with the clients, and they’ll get this done. My clients are younger and what I’m afraid of is if I don’t force them through this meat grinder, if I don’t make them do this, and then follow up with them relentlessly, to make sure they did it, that a few years out, they’re going to buy a house, they’re going to open a new bank account, they’re going to get a new job, and they’re going to forget, they’re just going to forget about it completely. So, another way that I like to build some structure around that is we send copies of the certification of trust, which is just a little short document that you signed under penalty of perjury, and it’s notarized. It says here’s the name of my trust and here’s the date that I signed it, and I’m the person who created it. Just very simple document.

Patricia De Fonte: And your financial adviser can use that, your insurance broker can use that for your casualty insurance, your life insurance broker can use that who give it to the CPA, also, because they see all your stuff every year. They get to see every single account that you have. And they can say, look, you own all these things as trustee, but not this one checking account at the credit union. Why is this? You need to call your estate planning lawyer. And so we write to all of our clients’ advisors, with permission, and provide this document and also a copy of the funding instructions that goes asset by asset by asset type, to provide really robust instructions.

Cathy Curtis: [inaudible] what happens if you don’t fund your trust? It’s called fund your trust, putting stuff in your trust. What happens if you die?

Patricia De Fonte: Well, if you haven’t changed the beneficiary designations on your bank accounts, whoever’s listed there gets the money. If you haven’t changed the beneficiary designation on your life insurance policy, and it’s still your ex spouse, guess who gets the money? They do. They get the money. If you forget about real estate, there are petitions that you can do your person, your successor trustee, the person who’s in charge of your stuff after you die, they can approach the court and say, Your Honor, they forgot to… But the problem with that is okay, it’ll eventually go where you want it to go to the person you want it to go to. Stressful, super expensive, and it doesn’t avoid a really expensive court process where there are all these legal fees that come out to tens of thousands of dollars, just by statute. It’s really, really wasteful.

Cathy Curtis: And time consuming, right? These things don’t…

Patricia De Fonte: Really time-consuming. Really, really time-consuming. So, I think it’s critical to work with a lawyer who’s going to spend three or four — about four hours with you, learning about you, teaching you about the documents, showing you how to make sure that your trust has everything in it that needs to be in it. And then there should be follow up. We send our clients, I think there are nine emails that go out after that final meeting, don’t forget about your digital assets. Don’t forget to share your best health care directive. Here’s a quiz for your digital assets. Here’s how… Think about sharing. There’s four different levels of sharing. What’s comfortable for you, how do you want to do it? And remember, you have your documents on paper, so you have to take care of those, and you have them electronically, so you gotta take care of that. And then we follow up every year. It’s just automated. [inaudible] is everything, okay? Call us if you are not done putting your stuff in your trust and call us if there’s been a change.

Patricia De Fonte: We offer every three years, we want to see you for free for one-hour. That’s how paranoid we are. And we catch things all the time and I want to talk about what we caught. Clients came to me, they just wanted to make a couple changes, because she had inherited some beautiful [inaudible]. Okay, fine. We’ll talk about that, but I have my agenda that I want to do first, and it turned out, how are your parents? Oh, my mother, she’s going to pass away, she was doing some estate work, she gave me $500,000. I said where’s the money? I don’t see it in your account, I don’t see an account on here with that money in it. Oh, no, we put it in this other account. I said, but that’s your stuff. Why is it in his? So, we cleaned that up. They were underinsured because their house had increased a lot in value and they hadn’t been doing their insurance audits. There were like two or three other things that we caught that have nothing to do with the documents.

Cathy Curtis: You check on that too, the insurance levels?

Patricia De Fonte: Well, I ask them, when is the last time you talk to your broker? And they say, oh, probably not since the last time we talked to you. I’m like I told you, here in the Bay Area, you have to talk to your broker every year because property values go up. Oh, we forgot. Okay. But you got that email telling you to do it. So, we know that life is busy and hectic, and it’s easy to forget. And so we really feel a responsibility to our clients to create a lifelong relationship.

[45:28] Patricia De Fonte shares some of the biggest misconceptions people have about estate planning based on her experience.

Cathy Curtis: That’s wonderful. That’s really, really great. I want to talk to you about some typical perceptions of people and estate planning. One is, people think it’s very expensive and I think that’s one reason that people put it off. Right? They think they’re just paying to get some documents. And I hate to say it, some attorneys, that’s what they do, they give the document and not a lot of personal attention and follow-up and all those things. You get that big giant binder that no — I don’t know, if you do those big… Do you have to do a big giant binder? Is that… Okay.

Patricia De Fonte: We want a big giant binder because whoever’s in charge, if you’re not in charge, they need it. They’re going to want one big giant binder that they can throw on a lawyer’s desk and say, what do I do? It’s not good if your whole estate plan is just trapped on your laptop. Nobody knows that it’s there, they don’t know how to get to it. Even if they can now they’ve printed it all out. But it’s a mess. You want this.

Cathy Curtis: A binder.

Patricia De Fonte: You want a big binder.

Cathy Curtis: Okay, I love it.

Patricia De Fonte: A big colorful one that’s easy to spot.

Cathy Curtis: That is good.

Patricia De Fonte: I had clients, their lawyer gave them documents in a manila envelope, the originals, didn’t scan them, just handed them the originals. They moved, and they could not find their documents. They had to redo everything in an emergency situation so that they could close on a house.

Cathy Curtis: Oh, dear. [crosstalk] And so how long do you keep client… Well, it sounds like you don’t disengage from your clients.

Patricia De Fonte: I do officially and legally disengage. I am not obligated to call my clients every time there’s a change in the law. Because otherwise that would be my whole job and I would go insane. But I do offer them as a courtesy, every three years I will give you, with me, one hour of my time. As the firm founder, I will give you one hour with me because [crosstalk] I love you and I want to take care of you.

Cathy Curtis: Is that something you actively engage about? Like three years, you send them an email… [crosstalk].

Patricia De Fonte: Yes, [inaudible] right to them. Yep. We chase them.

Cathy Curtis: Okay, good.

Patricia De Fonte: Because we worry.

Cathy Curtis: Yeah, yeah. Okay. So, back to this misperception about hiring an attorney.

Patricia De Fonte: Yeah, let’s talk about it. Okay. So, if estate planning is about what about me, what about my stuff, what about my kids? If you think about what about me, you’re an adult at 18. So, estate planning is not always 500 pieces of paper in a giant binder. Sometimes it’s somebody’s graduating from high school, they need an Advanced Health Care Directive. They need a durable power of attorney and maybe they need a little will. Because they have some things, they have some nice things that have been given to them by their family. Right? And it was just going to go to the parents and it’s just some stuff, it’s fine. You can just do that.

Cathy Curtis: Oh, talk about that, that parents can’t get access to health care records after what age?

Patricia De Fonte: I know definitely after 18. I don’t know if it’s sooner than that. I know I’m blocked out from my teenage son’s at the pediatricians from some things already.

Cathy Curtis: Yeah. So, they need that advanced care directive.

Patricia De Fonte: Yes. You absolutely. Everybody, 18 years old, it should be part of graduating from high school. Here’s your diploma, go sit with that lawyer, do your Advance Health Care Directive. Yes. Yeah. So, really… So, it’s not just for rich people, and it’s not for old people, and you don’t have to wait until you have a baby. It’s for everybody. And if you are a single person, you don’t have that other person who’s automatically going to go out and hustle and make more money if you become incapacitated. You don’t have that automatic other. So, you really need to create a plan that’s not just the documents. Work with a lawyer who’s going to help you figure out, oh, if I can’t work, then what happens? Well, let’s talk to your financial advisor. I’m sure she’s already talked to you about disability insurance, but let’s really push that button now. Let’s get into that.

Patricia De Fonte: If you’re an unmarried couple, you guys are legal strangers. If you don’t have documents, one of you is living in the other one’s house, the homeowner dies, I don’t know where you’re going to live, probably not there. Family might throw you out. You have to protect yourself, you have to protect each other. And that starts whether or not you have kids, whether or not you have money, and whether or not you have a house. Because people always think I have to be old, rich, own real estate, or have a baby. Sure. Those are all natural triggers. But no, you don’t. And I work with a bunch of absolutely lovely, proactive, single people who want to really feel in control and know that if they hit their head, if they’re in an accident, they know that the right people are going to step in and take charge.

Cathy Curtis: Yep. Okay. And you’re talking about a subject that’s near and dear to my heart. So, I wouldn’t mind spending a few minutes on this, single people in estate planning. Because I work with a lot of single women, that’s kind of my specialty. And one of the challenges that comes up is if they’re not married, they don’t have children, they’re an older adult sometimes so a lot of relatives have passed on. Maybe their parents are gone, and they feel a lot of anxiety, sometimes shame, all these different emotions around the fact that they don’t have, right away, specific people that they want to give their stuff to, and it creates so much anxiety. How do you counsel somebody through that process?

Patricia De Fonte: It’s really difficult. Refusing to talk about it in the first instance, because clients will come to that first meeting, and they just want to talk about who’s going to be in charge and all this stuff. And I just say, I have no idea who any of these people are, I don’t know what your stuff is. So, you, please let me do this the way that I do this so that I can understand.

Cathy Curtis: Your process.

Patricia De Fonte: And then you can shorthand everything. And then you can tell me that Francine is in charge, and Joseph gets everyday because right now I have no idea who they are. For all I know, they’re your two cats. I don’t know. And so really getting them, you know, tell me about — Tell me about your parents. What was it like growing up with them? Do you have siblings? Have they passed on? Are their nieces and nephews? Who’s the inner circle? Who are your closest friends, who do you spend time with? Who do you spend the holidays with? Really getting to a point because very often people will say I don’t have anyone. It’s incredibly rare. It’s really, really, really rare that people don’t have anyone. But because they put this… [crosstalk]

Cathy Curtis: [inaudible] they have to give to relatives, that they…

Patricia De Fonte: No. No. So, I was thinking more of like who’s in charge, right? And they always think about, I always ask, well, so what do you do with your time? Where do you hang out? Are you involved with nonprofits? Where did you go to school? You know, what’s the fabric of your life? What’s important to you? Because who are you going to leave your stuff to? Your family. You either like them or you don’t. You don’t have to leave your stuff to your family, you either love them or you do not. Or they’re rich and you don’t care and so you don’t have to do that. Your friends, you could change a friend’s life, you could pay off their student loans, you could eliminate their terror of dying without enough money, you could leave your friends money and say we always said we were going to take that cruise to the South Pole, go do it. You can do whatever you want with this money, but go to the South Pole, right? And take a picture of me with you.

Patricia De Fonte: And then charities, charitable organizations, religious organizations. And when we get to that part of the meeting, I’m saying, so you know, you talked about this person and that person, and we talked about these charities. So, that’s kind of like, there’s the bubble. Now, let’s talk about your house, let’s talk about your car, let’s talk about your stuff. Let’s talk about the cash. Let’s talk about your retirement account. So, we’ve kind of got the people, and we got the stuff and let’s start matching things up. And then we need to go fast, because otherwise the wheels start spinning. No, but maybe this, that… I’m like, no, no, we don’t do 4.2%. We’re not going to do that.

Cathy Curtis: Yeah. Okay. Let me go back to the beginning question, because sorry, I messed up a little. The first time you were talking about who’s going to be your executor, successor, trustee. That’s a biggie, and you were describing, you find out who their…

Patricia De Fonte: Who the people are.

Cathy Curtis: People are and then you get to where does this stuff go? Because both…

Patricia De Fonte: Yeah. But within who the people are, that’s also who’s going to be in charge? And who’s going to get all this stuff? And that’s what I want to know. Oh, your best friend, she have kids? Because you probably love your best friend’s kids. I love my best friend’s kids like they’re mine.

[54:42] What to do if you don’t know who to appoint as executor of your estate.

Cathy Curtis: Well, let me give you — Let me just ask you one other. So, what if they truly cannot come up with somebody that they would trust and know would do it? Because you know, a person appointed as an executor doesn’t have to say yes, right, because [inaudible]. Do you ever recommend that people hire independent fiduciaries and does that work?

Patricia De Fonte: I have had exactly one client pull the trigger on that. I’ve had lots of clients interview them, but I’ve had one client do it.

Cathy Curtis: Yeah. Okay, so…

Patricia De Fonte: But one thing that does come up is, and it’s funny, because I’ve worked sometimes with, like a little group of friends and they’re all naming each other, and not necessarily giving each other their stuff, but they are relying on each other. Often what we’ll do is we’ll say okay, so Francine is going to be the successor trustee. And you know, the trust has language, she can have this independent special ancillary person to do things. But you know what? If she just can’t deal at all, if she doesn’t want to do it, she can appoint a private fiduciary. So, at that point, I’ve died. She’s sitting with the lawyer, the lawyer will have, a good trust administration lawyer will know about your private fiduciaries; [crosstalk] can introduce Francine to a few, and she can pass the baton.

Cathy Curtis: [inaudible] down the road.

Patricia De Fonte: Yeah. Well, she’s not… Yeah, you just kick it down a little bit, but you have to ask them, are you okay with this? Are you okay if name you and then when the time comes, you can pass the baton. And so as people are because often that’s where there’s all of a sudden, real money to deal with this. Because there’s a life insurance policy, right, that just all of a sudden, there’s all this liquidity and the lawyer’s happy to deal with it and the fiduciary is getting paid and it’s all very real. Because it’s hard, especially if you’re 40 or 50, you could have years and years and years. And who is this private fiduciary? And what if they die and [inaudible] stressful.

Cathy Curtis: It is stressful. So, I am asked often by my clients to take on this role, right? And you know I can’t. It’s [inaudible] 100% conflict of interest. But they trust me, I know every single detail about [inaudible] I mean, it makes sense. Right? I would be the logical person. And so I have had to come up with ideas for them that I tell them no I can’t. So, this comes up for me a lot. Who ends up being…

Patricia De Fonte: It’s common.

Cathy Curtis: Yeah, it’s a tough one. So, I’ve done online searches for independent fiduciaries. I haven’t nailed that area yet at all.

Patricia De Fonte: Yeah. There is the Private Fiduciaries Association of California. They have a website. And you know, they come in different flavors, because also we kind of don’t know what the issues are going to be. Especially if it’s a private fiduciary in the event of an incapacity, like sliding into dementia. You want someone who knows how to navigate that. Which is very different from liquidating an estate and handing out money. [inaudible] completely different skills. So, I like the idea of let Francine figure it out. Let Francine work with the lawyer to find the right person for whatever that scenario is going to be.

Cathy Curtis: Yeah. And you put a clause in the document saying that Francine has the ability and the [inaudible].

Patricia De Fonte: Yes.

Cathy Curtis: …to be able to do that. I think that’s so key. Yeah. Okay. I want to segue to how you work. So, you do the trust and deal with the house and the taxable assets. How do you coordinate in the client’s retirement accounts in the designated beneficiary situation? You look at that whole picture, right?

Patricia De Fonte: We look at everything.

Cathy Curtis: Okay. All right. Because that’s tricky and it’s so important.

Patricia De Fonte: It’s so important. So, as I said, before, we send all of our client’s advisors copies of this certification of trust, for the beneficiary designation changes. And we talked to every client about the life insurance, and we talked to every client about because… Let me back up. So, when you have the stuff that’s going to go in your trust, you can absolutely transfer your pets, your pants, your pots, your real estate, easy. Your intellectual property assets, fine. Some things you just cannot own as a trustee, you just can’t, by law. You can’t own your retirement account as a trustee. And usually, when you have a living trust, you’re not owning your insurance policy as a trustee, you’re just owning it as a person. And then you name a beneficiary, often the beneficiary is the trust, not always, but often.

Patricia De Fonte: Retirement accounts are special and tricky and difficult. It depends. And your lawyer really has to spend time with you to figure out who’s going to get this money. And it can be, sometimes it’s obvious, it’s my spouse, and when I die, it’s my kids. But if it’s not obvious that way, then you really have to look at the current strange laws that are in place and figure out who is this going to be best for. Who can I help the most with this money? And for clients who have charitable inclinations I really like using a retirement account because there’s no taxes paid by the charity. They just get the money, it’s clean, and it keeps them out of the trust. Because remember everybody who’s a beneficiary of the trust gets to see the trust.

Patricia De Fonte: And if you start saying things in your trust, like I want 20% to go to the SPCA, and the other 80% to Francine. I don’t know, Francine’s very busy today. The trust can force — No, let’s say that France is in charge and the person who’s going to get all the money is Jordan. So, there’s the SPCA and Jordan. The SPCA can force Francine to sell every pillowcase, every knife, every fork, every spoon in that house, and get it all the way, like distill everything and monetize every little thing, and then split it.

Cathy Curtis: Oh, wow.

Patricia De Fonte: It’s horrible. The SPCA is a powerful organization, but they have to do this. And that’s why you see those estate sales. That’s why you see them. If you want to leave money to a charity and your trustee, either leave them a specific dollar amount, or you give the trustee very clear permission to say, when I die, let people who love me into my house, you choose who they are, let them take stuff. Anything that people don’t take, donate it. You can donate my car if it’s not easy to sell. If I have a business, you figure out if it’s worth selling, or you just shut it down. Let the trustee do whatever it is that they need to do without having to monetize everything. Because once you get charities in the mix in a trust, they have an obligation. They are required to push for every penny.

Cathy Curtis: Yeah. They’re not being greedy. It’s just what they have to do.

Patricia De Fonte: No. Yeah, they’re not trying to be unreasonable.

Cathy Curtis: Yeah. No, that makes total sense. Okay. Stepping back on that, it is still fine to give percentages to family members?

Patricia De Fonte: Yeah.

Cathy Curtis: It’s this charity…

Patricia De Fonte: It’s a charity that’s the problem.

Cathy Curtis: Fascinating. Okay. Okay. And what about people who say, I just want to give my IRA to my estate? Can you do that?

Patricia De Fonte: You can, and a lot of people do. And let’s go back to, like, the classic nuclear family, right, it’s going to go to my spouse, but if I die, then I want everything to go to my children. Right now, that’s complicated. It used to be that you could leave your retirement account to a baby. And when that baby grew up, they would start taking the money out, whatever their required minimum distribution age would be at that time. The laws have changed dramatically. So, now, a younger person only has 10 years, 10 years from when they become an adult, to take that money out. So, now, putting it through a trust, just… There were mechanisms that we used to use that made sense.

Patricia De Fonte: Now the mechanism that we use, if we’re trying to protect people from the perils of inheritance, if we’re trying to protect people from liquidating a retirement account, and spending it all in a frenzy, it has to flow through the trust. But there are all these sometimes negative tax consequences. It is a sticky, tricky area. If you have large retirement accounts, you might want to think about having a completely separate trust just for those accounts. And you really have to think about the beneficiaries. You really… Because if you already have these massive life insurance policies that would take care of your kids, maybe the retirement accounts can go to your siblings who don’t have the money that you do. [inaudible] different way to think about retirement accounts now.

Cathy Curtis: Yeah, it’s a… [crosstalk].

Patricia De Fonte: Or you can just keep changing it. As life changes, you just keep changing.

Cathy Curtis: Yeah, yeah. So, and as part of your practice, do you help people work through that new wrinkle of having — [crosstalk].

Patricia De Fonte: What I do is I spot the issue. If they don’t have a financial advisor, I make them, I drag them to talk to a few people. And I think they really do understand that we spent these four hours together over six to 12 weeks. I want to see you every three years, and I’m here if you run into a snag related to your estate plan, but there’s so many things I can’t help you with. And the law is alive and Congress is crazy and this is a lot of money. And you might feel like I can do my own investments. It’s beyond your investments, you have to have an advisor.

Patricia De Fonte: And what if you’re in a couple, and you’re the one doing it, and you die, your surviving spouse, they’re lost and vulnerable. They don’t have someone to turn to. They don’t know how to find a financial advisor. So, I really do push my clients to interview and start some kind of a relationship with someone, so that if and when things start happening, you have your person, and someone that you can turn to with all this crazy stuff that comes out of DC. Not to mention, if you’re in California, it’s even worse. And if you’re in San Francisco, it’s even worse. So, you really need that person who has the overview of everything and can tell you oh my gosh, this article came out you better call your estate planning lawyer. Oh, my gosh, I read this, you better call your CPA. Or I want to see you.

Cathy Curtis: Yeah, this brings up a really good point. I am sure that you get asked all kinds of questions from your clients about things that you do not do.

Patricia De Fonte: Oh, yeah.

[1:05:06] Patricia De Fonte shares additional questions you should ask any estate planning attorney you’re considering engaging.

Cathy Curtis: Especially because you’ve got your fingers in everything, right? You really are talking about every aspect of their finances. But if you’re not an investment advisor, you’re not a CPA, you’re not a… So, what are the most common things that the listeners should know that estate planning attorneys do not do, and that they…

Patricia De Fonte: Yes. Yeah, we’re… Okay. Another thing that I want you to ask when you’re interviewing estate planning lawyers is, do you have a large professional network, people you know really well that you refer your clients to for other things that you won’t be able to help me with? If they don’t say yes, just walk away, because you might think you have it all handled, but it’s complicated. You might need a real estate lawyer, a family law attorney, you might need umbrella insurance through a broker, not DIY, you might need a financial advisor, you might need a money coach, you might need an organizer, you might need somebody who is a Medicare specialist. It goes on and on and on and on. You might need an intellectual property lawyer, you might need a corporate counsel, because you created a business on LegalZoom. That’s not allowed at my firm. No, we don’t do DIY anything here. We pay other people to take care of us.

Patricia De Fonte: So, you really do need an advisor. If your lawyer gives you a referral, say why this person. And your lawyer should be able to say, oh, because when you said this, or I see this in your asset profile, and when I send you the email of tips on the questions I want you to ask that person, I’ll put it in there. And you can even forward it to them. If you really want to look for a well-connected lawyer, because estate planning clients need so much, and we say estate planning lawyer, we tend to stay in our lane. We do estate planning, but we really can’t talk about all the other things. And we can spot an issue like, oh, I’m not sure about your insurance, I want you to go talk to a professional because it just doesn’t feel right that you have been doing all your own insurance, and it’s at all different companies and you’re not sure how much it is. And even if you knew how much it is. I don’t know if that’s enough, because I don’t know anything about insurance.

Cathy Curtis: Yeah. By the way, it’s similar for financial advisors. I can give only so much advice about estate planning, and then it stops because I am not an estate planning professional. Same with tax advising. I can do tax planning and I do. I know a lot about the tax law, but I don’t do tax preparation. So, everything is really, really specialized. And thankfully, there are a lot of specialists out there for people to utilize.

Patricia De Fonte: I really like thinking about building a team, creating a team. We all have a team. Whether it’s your hair, nails and makeup team. Whether it’s the team that helps you get your kid to and from school and soccer, like you know, that mom’s squad that everybody has. You’re grown, you’re 18 and up. If you need to have a good insurance person, you need to have somebody to talk to you about money, you should have a lawyer that you know so that maybe you’re going to have a landlord tenant issue.

Patricia De Fonte: Well, if you have a really good estate planning lawyer, they’ll know somebody, because they have to know real estate lawyers who know all the landlord tenant lawyers. So, we’ll get your issue, narrow it down for you and bring you to that person. We can be your hub, just like your financial adviser can be your hub. We’re going to help. And we’re all friends with each other, and we all talk all the time, and we learn from each other. So, whatever it is that you bring to your financial advisor, I’m eventually going to hear about it over lunch, and it’s going to help seven other people.

Cathy Curtis: Yeah, very good point. So, this has been so really interesting to me.

Patricia De Fonte: So much fun.

Cathy Curtis: Yeah, so much fun. You’ve given out so many gems. Tell the listeners where you are, how you can be notified if they need it, and all [inaudible].

Patricia De Fonte: Sure. Yes. And if I could, so here I am. I’m an estate planning lawyer and I’ve got a pie. And this is a little glass of champagne [inaudible] and I have this necklace, which is the apple pie tree of life. So, when I was little asked my dad, what happens to us when we die. And he said don’t worry about it. We just walk past the sun, pass the moon until we get to the apple pie tree. So, all of my clients, all my branding, here’s the pie on the binders, all my clients receive a pie. I wear my necklace almost every day.

Cathy Curtis: Oh, my God, they receive a pie?

Patricia De Fonte: Yeah.

Cathy Curtis: Where do you get the pies from?

Patricia De Fonte: Three Babes.

Cathy Curtis: Oh. Oh, I love Three Babes.

Patricia De Fonte: Three Babes. Yes.

Cathy Curtis: Oh, that’s great. [crosstalk] When do you give them the pie? First meeting, second meeting, when they get [inaudible].

Patricia De Fonte: After signing because you’ve done all the hard work, we did your estate plan, you cleaned up your insurance, I made you stop using your stupid LegalZoom LLC and get serious. Like, you had to go ask the guardians if they would do it, you talk to your parents, like you’ve done so many things. I have tortured you 18 different ways. But you haven’t felt it because everybody at my firm we deliver with heart. Right? So, it’s all been very sweet and nice. But we know it’s hard and so we always finish with pie. And you get the binder… [crosstalk]

Cathy Curtis: Were you delivering pies during COVID? Or did you — You didn’t see clients during COVID, did you?

Patricia De Fonte: No. I do not see clients at all.

Cathy Curtis: Yeah, okay.

Patricia De Fonte: Most of my clients have babies, so we do not get together.

Cathy Curtis: So, you ship the pies?

Patricia De Fonte: Babes ship the pies. Yeah.

Cathy Curtis: Yeah, okay. Great.

Patricia De Fonte: The Three Babes. My law firm is called De Fonte Law. If you ever meet a De Fonte, they are either related to me or married to someone who is related to me. So, I’m easy to find.

Patricia De Fonte: So, you can always just Google De Fonte Estate planning and I pop right up. I do a lot of workshops, so you can find me on Eventbrite and on Facebook. Come to a workshop, come learn with me. Maybe you hate the sound of my voice. Maybe you could just go one more hour and really dig into some basics. And we’ll talk more about low cost options and how to find a lawyer and like international issues. We can dig into that kind of stuff. De Fonte Law PC where we practice Estate Planning with Heart. Thank you so much for having me here today. I love talking about this stuff.

Cathy Curtis: I know. It was fantastic. Thank you so much.

Patricia De Fonte: Thank you.

Cathy Curtis: Okay, take care.

For more information related to this episode, please visit the show notes.

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S3E8 Transcript: Can’t Stick to Your Budget? Try These Money Saving Tips Instead

Hi, I’m Cathy Curtis. Thank you for joining me on my podcast, Financial Finesse. Lately on the podcast, we’ve been talking a lot about awareness, mindfulness, and creating space for what’s most important in our lives. I think these topics are so important because of how they relate to our finances, and specifically, our spending habits. When we’re not aware of where our money’s going, it’s easy to get off track when it comes to budgeting and long-term financial goals. So, in this episode, I want to focus on a few strategies to keep yourself on track that don’t involve traditional budgeting. Instead, they’re going to require you to be more self-aware, mindful of your spending, and intentional with where your money goes.

[01:37] #1: Identify Your Values to Reach Your Financial Goals

The key to better budgeting is to make it feel less like deprivation and more like prioritization. Understanding your core values, financial and otherwise, and aligning your spending with them can be really motivating. And when you feel more aligned, it tends to lead to greater fulfillment and better habits.

Here’s a few suggestions to align your new budget and spending plan with your values.

  • Create a financial plan that emphasizes your goals, whether that’s early retirement, buying a house, or taking a long, expensive vacation.
  • When you’re estimating costs, it’s always better to be conservative. Everything always costs more than we think it will.
  • Link your spending to things that you value. This may require some self-reflection work, but it will be really worth it.
  • Use visuals to maintain your motivation. Pop some pictures up on the wall over your desk or create a vision board on Pinterest.
  • Revisit your goals regularly.
  • Give yourself grace and a chance to rework the numbers or try again if you fall off track.

[02:47] #2: Budget for Your Future, Not Your Past

According to a recent Bank of America survey, 64% of Americans say their spending habits have changed since the pandemic started. In addition, 46% of affluent Americans have been getting their financial lives in order during the last 12-18 months and expect to reach their key financial goals a lot sooner than they thought they would.

That means that many of us not only changed how we spend our money, but we also developed more financial discipline during the pandemic. I think it’d be fantastic if some of us could maintain those money habits we developed, let’s face it, when we had fewer options. And creating a spending plan that reflects those habits can be a great way to keep the momentum going in the right direction.

Remember that small consistent actions over time often lead to the best results. And if you start to revert to your pre-pandemic spending habits, that’s okay. We’re only human. But here are some tips for getting back on track if that happens.

  • Print out a copy of your plan and post it somewhere that it’s visible to you, so it stays top of mind.
  • Track your spending. It’s something that none of us like to do, but it really does help. You can use apps like Mint.com, or there’s another one called YNAB that people like.
  • Try the envelope system. This may seem really old fashioned, but it works. Take an item, whether it be clothing or dining out, and put the cash that you have budgeted to spend on it in the envelope. When the cash is gone, you can’t spend any more until the next month.
  • Leave the credit cards at home. Well, that’s easier said than done because now you can pay with your phone. And who is going to leave their phone at home? No one. Try paying with cash or using your ATM card whenever possible so that you’re not buying on credit.
  • Walk away. If you’re tempted to buy an item you don’t really need, simply leave the store, walk around the block and think about it. I’ll bet nine times out of 10 you won’t buy the item.
  • Reward yourself each month that you stay within budget. Reward yourself in some small but significant way, for example, indulge in a nice lunch out, get a pedicure, order a glass of wine with a meal.

[05:06] #3: Get Your Shopping Habit Under Control

Here’s an area that I’m going to talk about, and it’s clothes shopping. But everybody has budget busters. Mine happens to be clothing, so I’ve developed a bunch of tips for myself to keep my habit under control. And I think you’ll find them useful whether you clothes shop or not.

  • Number one. Try very hard to intentionally schedule shopping trips instead of spontaneously dropping into stores just to see what’s new.
  • Number two. Don’t shop when you’re lonely, tired, frustrated, anxious, or bored. When you’re emotional, you tend to make bad decisions.
  • Avoid shopping immediately after a setback or a major victory. Again, emotions.
  • When the adrenaline kicks in, you know that feeling when you catch yourself in a shopping frenzy. Leave the store before you buy anything. Focus on centering yourself first.
  • Number five. Don’t let friends, shop owners, or salespeople convince you that something looks great on you when you know it doesn’t or you don’t like it or it’s not your style.
  • Decide what you need in your wardrobe and make a list. Take the list with you when you go shopping.
  • Number seven. Before you buy anything on sale, ask yourself whether you would buy it at full price. How many of us have gotten in the sales trap?
  • Number eight. Think quality, not quantity. Not only will the item of clothing last longer, you’ll love it longer. And this is a great way to save money on clothing over the long term.
  • Stop rationalizing. You really do not need a whole new wardrobe because you got a new job or because you now work at home.
  • Number 10. Buy things that you’re going to wear now, not for a far-off occasion or event that may never happen. Who wants to have something hanging in their closet for two years without getting to wear it?
  • Number 11. Buy clothing for the way you live now, not for the way you wish you were living. For example, buying fancy dresses when you never go to fancy parties.
  • Number 12. Avoid buying one-off pieces of clothing that don’t go with anything in your wardrobe. We all have those.
  • Don’t buy clothing in the wrong size thinking you’ll lose weight or have it taken in. Although I have to say, having a good tailor is worth its weight in gold if you do find something really great, and you can have it taken in. Either that or buy yourself a sewing machine.
  • Fourteen. Try shopping with cash, not credit cards. It’s much easier to set limits.
  • Fifteen. Limit the number of trendy items you buy to just a small percentage of your wardrobe.
  • I love this one. Number 16. Think number 10. Everything you buy should be as close to a 10 as possible. It’s a great visual.
  • Realize that a new dress, skirt, blouse, piece of jewelry are not going to make you more beautiful or change your life, unfortunately.
  • To help make better buying decisions, analyze your wardrobe to understand what your favorite go-to pieces are. What are the common themes?
  • Home in on what colors and styles look best on you to limit your choices. Remember all those women that did colors for side work? It was kind of fun.
  • Instead of going shopping with girlfriends, do something else like going for a hike, to a museum, or out to lunch.  
  • Twenty-one. The one in, one out rule. And if your wardrobe is really large, you may want to release two or three pieces for each new one that you buy. Added benefit, somebody else gets to wear your discarded piece of clothing and enjoy it.
  • Think like an economist and analyze cost per wear before buying.
  • And lastly, track your clothing and accessory spending to hold yourself accountable.

Okay, so those are my tips to try and rein in a clothing shopping habit or another habit that you have. Things that you buy too much of.

[09:34] #4: Find Your Personal Style to Reach Your Financial Goals

This next part I’m going to talk about also relates to clothing, and it’s developing a personal style, which can really help to not buy in quantity and things that you never wear. Because a lot of women buy things that they never wear. They hang in the closet with the tags on.

So, here’s some tips to identify your style.

  • Go into your closet and pull out pieces that you wear over and over again. Maybe even put them on a separate rack. This gives you really strong clues about how you like to look. And at the same time, if you have time, set aside stuff that you haven’t worn in a year.  
  • Get inspired. Go through magazines, tear pictures of outfits that appeal to you. Go on Pinterest and pin things. And you’ll start getting an idea of what you’re really attracted to.
  • Tip number three, revisit your routine. What are you doing now? What’s your life like now? Are you working at home? Are you dining out with friends? Did you join a new gym? What is your current lifestyle? And our lives have changed, so this could look completely different than it did two years ago.
  • Here’s a great tip. It’ll cost you money, but it will save you money. Hire a professional stylist. If you find it really hard to go into that closet and do it, have somebody else go in there and help you. I’ve done it. It’s great. And it’s a lot of fun too. You can also employ somebody to help you shop. I think it’s worth it. This is sometimes. Where it’s worth it to spend the money.

All right, there’s how you’re going to figure out your style and save some money that way.

[11:17] #5: Go on a Decision Detox to Reach Your Financial Goals

Another way to keep yourself on track financially and reach your financial goals is to give yourself a little bit of a break. Sometimes it’s difficult to stick to good habits, and it may be because of decision fatigue. When you get there, your ability to consider the long-term impact of a decision goes out the window.

So, there’s nothing wrong with you if you have trouble accomplishing your goals. It just means you may need to go on a break. So again, here’s some strategies for reducing decision fatigue and boosting your mental energy.

Number one, anticipate routine decisions. Do you find yourself wasting time on similar decisions every day and get really bored with them? Like what to wear, or what to eat for breakfast, or what to eat for dinner? The fewer decisions you make earlier in the day, the more energy you’ll have for later.

So, the solution is to plan. Choose the outfit the night before, plan your meals on Sunday night. Paying bills. So automation is key here. Put all your monthly bills on automation and also your transfers, like transferring to an emergency fund or retirement savings or even to your financial goals account, like if you’re saving to buy a house. Automate everything.

Another tip: set healthy boundaries and learn to say no. This can sometimes be referred to as people-pleasing. If you tend to agonize about how to respond to invitations or requests, this is tiring. And what it really means is setting healthier boundaries. It’s totally not easy. So many people suffer from it. But it can save you valuable mental energy.

There’s a great book about this called Essentialism. And I highly recommend reading it. It will get you focused and thinking about what’s most important.

Another tip, and we talked about this within the clothes shopping area. Avoid making decisions when you’re tired, hungry, stressed, etc. When you’re feeling emotional, just don’t make any decisions. It’s just not good. You’re in survival mode, and you’re likely to make a bad decision. So instead, spend a few minutes meditating, go for a walk, take a few deep breaths, connect with a friend.

Tip number four. Designate times to check email, texts, and social media. I don’t know how many times I’ve tried to do this, but I think it’s so important. We’re bombarded all day long with communication. And it’ll surprise you how much more you can get done when your phone isn’t distracting you. Even just turning off the pings and dings that you get when an email or text comes in could be really helpful.

Number five, don’t be afraid to delegate. Just because you can do it all doesn’t mean you have to. Our time and energy are finite. So sometimes reaching your goals means asking for help. And it can be at work, at home, in your financial life. Wherever you feel like you could delegate and afford to delegate it, do it. It’ll bring you more joy, it’ll be worth it.

So, there you have it, my five strategies for making better financial decisions without creating a traditional budget or tracking your spending. And if you want to go deeper into these strategies and create a spending plan that’s aligned with your values and financial goals, please visit curtisfinancialplanning.com/resources and download The Happiness Spreadsheet, a fresh inspiring approach to budgeting.

And as always, I’m available at Cathy@curtisfinancialplanning.com. And please look at my website, curtisfinancialplanning.com. Thanks for listening. See you the next time.

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S3E6 Transcript: How to Calm Your Mind and Experience Life More Fully

Cathy Hi, Nichole.

Nichole Hey, Cathy. It’s good to see you.

Cathy Welcome to Financial Finesse. It’s great to see you too.

Vanessa Yeah, I’m so happy to be here.

Cathy Yeah, it’s been a couple of months in the planning, but I’m glad we connected. So, Nichole and I met by serendipity. She was looking for professionals, right? Financial advisors that work with women to support her clients if they needed it. Is that right?

Nichole Yeah, exactly. I was looking to build up my own referral list of women who are working in really powerful ways to support my clients. And I work with women who are working on, you know, learning to live in powerful ways. So, I met you, I found you on the internet, and I really loved your website. And I was like, I want to talk to that lady. So here we are.

Cathy The power of a good website. And good SEO.

Nichole Yeah.

Cathy You Googled and found me, and so I’m very, very grateful for that. So, to get into today a little bit. I want to bring up your website tagline because that is, some of the things you do are so interesting and so important to living a more fulfilling life. And your tagline is: Present. Embodied. Empowered. Because your life is worth showing up for. And I’m sure you took a lot of time to pick those exact words.

Nichole Yeah, well, I labored over them many sleepless nights, actually.

Cathy I’m sure. I know that it’s, just to come up with the right words, to really let people know what you’re about is not an easy task.

Nichole Yeah.

[04:57] What it means to be present.

Cathy And one of the words that really resonates with me, and I want to talk about, is present. Being present. That present word, and which I’ve had so many people tell me live in, why don’t you live in the moment, be present. And personally, I find it really hard to do that. I find myself looking towards the past or worrying about the future. It usually involves worrying too.

Cathy That’s the problem. Because I think there can be positive spins on revisiting your past in the future. But a lot of it can be worrying, which is not good. And I want to ask you, what do you, what is it to you to be present? And do you think it’s hard to reach that state?

Nichole Yeah. That’s such a good question, Cathy. And I have a few answers. So, is it hard to be present? Yes. And no. So like, right now, for example. Can you just feel your feet touching the ground? And can you feel the feeling of your feet touching the ground, or the floor? Probably, unless you’re sitting outside.

Nichole And so right now, you can be present, feeling that present moment feeling of your feet connecting with the floor. So in that sense, it’s pretty simple. Or it could be that like, oh, I just touched my hands together. And like, oh, yeah, my fingertips, feel my fingertips. So that’s bringing me into the present moment. And that’s really useful, because as you know, and probably lots of the women who are going to be listening to this, it’s so easy to not be present.

Nichole And so that really is the next part of your question. You know, how do we get there? And is it easy to stay there? And I think, you know, we live in a world where our attention is commanded by so many things all at the same time. Whether it’s, you know, the mothers who are listening, are thinking of their various children and all the things that they have to be tracking to take care of their family. Or maybe it’s the businesswomen out there who are like, oh, well, my direct reports need to get to me about these things. And I need to go talk to my supervisor. And all of these things.

Nichole And so we’re constantly tracking so many things. And then with the advent of technology, which is great that we can be here. But let’s say, you know, we pick up our phones, for example, and we just scroll and scroll and scroll. What it’s doing is it’s overloading us with information. And, you know, that’s in addition to just the normal things that we would be attending to just because we’re living our lives. And so, when there’s so many things commanding our attention, we’re really not present. We’re not here. We’re not feeling our feet on the ground.

[07:58] The importance of being more present in our daily lives.

Cathy Okay. I know that feeling your feet on the ground is a metaphor for it. But why? Why is it better to be? What benefit do you get?

Nichole I mean, sometimes people say like, I don’t want to be present because I don’t want to have to feel my feelings. And that’s a really legitimate reason for not wanting to be present, especially if you are dealing with anxiety or stress or grief. Like, they’re uncomfortable feelings. So on the flip side of that, the question is, so what’s the value of being present? Well, think about all the beautiful moments of life that we miss because we’re so busy thinking about the future, or we’re so consumed fretting about what went wrong in the past.

Cathy Or looking at our phone. You should be looking at the beautiful forest, not thinking, oh, that would be a great picture.

Nichole Yeah. And what comes to mind is this. I don’t remember where I saw this. But it was this image that I saw on social media, and it was this picture of a big crowd. And I think it was this crowd was watching either a competition or a race, or maybe they were watching an important figure pass by. Everybody was taking pictures. And then there’s this one, and they’re all facing looking. I don’t know what it was that was going on over here. And then there’s this one woman in the foreground of the picture., and she’s just there.

Nichole And I thought, wow, that image is so telling of all these people are busy taking pictures of it. And being with it. Or, for example, when I was in Paris a couple of summers ago, I went to the Louvre. I remember getting to see the Mona Lisa, which is this just divine, like masterpiece of artwork. And everybody was taking pictures. And I looked around, and there was like me, and maybe like one other person who were actually just looking at the Mona Lisa. Because of the way it’s set up, we only had like, five minutes, and then they usher us out so the next group can come in. And so, I think of like those, those divine masterpiece moments of life.

Cathy Yes. And they’re in there everywhere. My husband, I don’t know how he, he has learned this art of being in the moment and being present. When we travel, he doesn’t, guess who takes the pictures? I do. And, if I can’t think of any other way of not being in the moment, it’s always thinking you have to take a photo of something. He doesn’t. He just takes it all in. And when we’ve traveled in groups. And I’ve noticed, that’s always the case. There’s some people that that’s all they do is take pictures, and others that just soak in every moment. And I’m always very envious of the people that just soak in every moment.

Nichole And I don’t want to dismiss taking pictures, because I’ll tell you, I took lots of pictures in Paris. But you get the point. And I just want to add one more thing to this part that feels really essential, is it’s not just about being there for the beautiful moments. It’s also about being there for the difficult moments. So, if I’m, let’s say in a moment of grief, if I’m choosing to be present with my grief, it’s more likely that I will go through a full and complete grief process, allowing that grief to actually heal.

Nichole And then to also really connect with, for example, what is it that I’m missing? So, if it’s the loss of a loved one, by being present with the grief, but also being present with the love that we had for that person. And so it allows us this, this present moment, awareness, this cultivation of being in the present. It allows us to have a richer relationship with our lives. So whether it’s feeling grief and sadness, or joy and pleasure, by being there, we’re really there.

Cathy That makes so much sense to me. And that’s really different from living in the past or focusing on the future. That’s truly experiencing, not shoving down the difficult emotions that come up at certain parts of life. Yeah, yeah. So, when you work with women, do you recognize right away if that is their issue? Or do most people that come to you not struggle with that?

Nichole Yeah, that’s an interesting question. So a lot of women have already determined for themselves, like, yeah, I really struggle with being present. I’m really distracted by the past and really anxious about the future. So they’re able to self-report like, yeah, I’m needing help with this.

Nichole And then other women, you know, when they come in, they’re not maybe as able to articulate exactly that. Often, they’ll report things like struggling to feel their feelings or feeling anxious about all the things that they need to do. And so that, to me, will often signal we might need to do some work around building a new relationship with the present moment. So how can I support them in learning to be with the experiences of their lives as those experiences are rising?

Nichole And sometimes that does include saying, yeah, I think these emotions might be a little too big right now. Let’s put them on hold and come back to them. And maybe just start with basic level mindfulness. How to begin to feel the sensations of the body or the breath or whatever it is that’s appropriate to them and where they are.

[13:39] How to manage anxiety through mindfulness and acceptance.

Cathy Okay. So, I’ll give you a good example. I’m in a mastermind group with some other advisors. In fact, we just met this morning. And one of the women was talking about this exact thing, how anxious she’s feeling. And you were describing some of the women and their struggle. She’s a mom and a business owner. You know, working with clients and juggling all these things, just came off a vacation, is feeling overwhelmed.

Cathy So, let’s just roleplay. So let’s say I’m that woman, which I have to admit, that happens to me. Because I am a business owner. And I’m not a mom. I’m not a mom. But being a business owner is like having a baby. Continually. And I told you that I’m struggling with this anxiety that I’m never doing quite enough. That’s a typical thing for me. Am I doing enough for the people that are relying on me in my life? And what are some tools to overcome that feeling and become more calm about it? And then do something about it, but in a really calm way? Reasonable way?

Nichole Yeah. Well, often what I really like to begin with is just recognizing that anxiety is there. And so oftentimes, what I noticed is that people come in, and they say, I’m anxious, and I want it to go away. And I say, yeah, I totally support in building, in growing tools and resources to support you in alleviating the anxiety. But we also want to spend some time exploring just the simple fact that it’s there.

Nichole And so this, this acceptance is a really important piece of the work that we do. And so, okay, so anxiety is here. Well, how is it showing up in your life? So, I might ask you to identify, you know, what are the ways that you notice anxiety showing up in your life? How is it affecting you? And so we’d begin to unpack it a little bit. And as I then get to know you and get to know, like, what are some of the stressors in your life or some of the things that are causing or exacerbating the anxiety. From there, we would work together to then grow or do practices or cultivate different tools that would help support you in managing the anxiety or in learning how to work with it.

[16:15] How Nichole’s training in somatic experiencing helps clients alleviate the effects of nervous system trauma.

Nichole Also a big part of what I help women with, in addition to doing a lot of work in the mindfulness realm, I’ve also been trained in a modality called somatic experiencing. It’s a modality that has been designed to alleviate the effects of trauma on the nervous system. And anxiety is a very, can be a very, can be a source of trauma, as well as result from trauma, and it can be very uncomfortable. So what I would also be helping someone like you do is, you know, explore ways of creating our nervous system regulation.

Nichole So looking at like, what are the bigger questions of your life that’s leading to the anxiety? What are the conditions of your life, where maybe there’s not enough resource, where maybe we need to build and grow more resources? And then bring in this element of nervous system regulation to support your nervous system in navigating what’s occurring in your experience? And then also, you know, this is where some of the coaching would come in. Is like, how do we ask some of these bigger questions that may be in the direction of, are the things you’re doing in your life ultimately supportive of a better quality of living? And do some decisions need to be made about how life is being lived? Or how work is being conducted? So, you know.

Cathy There’s very many disciplines, isn’t it? It’s not, this is not simple, in black and white, and it’s very individual.

Nichole It’s very individual. And what I’d say is it’s simple, but it’s also complex. It’s simple in the sense that it doesn’t need to be this big, massive undertaking of radically restructuring your life. It’s simple in the sense that it begins by asking the question, you know, what is happening in this moment right now? How am I relating to it? How is my nervous system responding to this?

Nichole But it’s complex in the sense that it might lead to a lot of deeper questions. And my hope is that as we dig into these deeper questions, that the women that I work with really become willing and interested in exploring deeper answers.

[18:28] Why Nichole believes meditation is key for building a life that feels useful and manageable.

Cathy One way that I found that I get present is through meditation. I’d imagine that’s one, a powerful tool that you use. In fact, I read on your website that you do a Monday morning meditation session, right, is that true? You can log in, yeah, I want to do that.

Nichole Yeah. And everybody’s welcome. It’s free. I do it by donation. And it’s Monday morning at 9am. And I’m happy to send you the link.

Cathy Yeah, please do. And so, I love being led in meditation. I do do it on my own. It’s one of the commitments to myself. I’ll do it for at least, even just five minutes. I don’t care how little, I always feel more grounded after I shut, you know, slow down my breath. The thoughts are flying around, but I do manage to have a few moments of peace. And it feels so good. Just that short little moment of peace is a big deal.

Nichole Yeah, yeah, I think meditation is a really key component to building out a life that feels useful and manageable. I know for a lot of people, meditation or getting started in meditation is really challenging. And I think there’s a lot of misconceptions in the meditation world that like our minds should be totally calm and clear. My take on meditation, after many years of my own practice, and many years of working with students, is that it’s not so much that the mind needs to be clear. And that if it’s not clear and calm, you’re doing something wrong.

Nichole It’s more that in the practice of meditation, even if thoughts come, can we just practice bringing the attention back to what’s real. Maybe you’re focusing on that sensation of the breath. Maybe you’re feeling your feet on the ground. And so, we’re just practicing building that strength and capacity of the mind to come back to the present moment and come back to the present moment.

Nichole And I think the net result for many people is that even though there might be thoughts, many people, myself included, have that experience of feeling more calm and restored through that ongoing cultivation. And then there’s also just the breathing, the diaphragmatic breathing. Breathing in and breathing out does actually help create a little bit more calm in the nervous system.

[20:51] Nichole explains the “right” way to meditate.

Cathy Oh, it does, just simple breathing alone. I so agree with you. Well, I’ve read enough books about meditation and articles about it and practiced it enough, where I forgive myself if I don’t reach that perfect moment of Zen. Because it is hard to get there. For me, it’s enough that I actually sit. And I feel, I’m happy about that. I’m not beating myself up over doing it.

Cathy And I really believe that’s the way that you have to go into anything like that. It’s like building muscle, you know, you don’t go to the gym and get big muscles, it takes a lot of hard work. It seems to be very simple. And the reward is so great to have more peace of mind.

Nichole Yeah. And one thing that I say to every person that I work with when we start is that there’s no right way, and there’s no wrong way. There is just simply the opportunity to be curious about what’s happening in our minds, and to be willing over and over to come back to that present moment. And then over time, most people find that it does yield a greater sense of overall well-being.

Cathy And it brings you back to the present, like looping back to our original discussion. What a great way to bring you back right into the present moment. If your mind is wandering, if you get control over your breath and your mind, you get right back there. It’s an amazing tool.

[22:24] The relationship between being present and having presence.

Cathy So, and another thing, reading through the work that you do, you also talk about presence. So being present and having presence. And I imagine they’re related. Because how can you really have presence if you’re not in the moment. That would be kind of a powerful way of being present. I’ve always thought and admire people that walk into a room, and you feel them. They are confident, or they’re standing tall, or whatever it is. And I think that’s part of your practice, too. Talk about that a little bit.

Nichole Yeah, that’s a great question. So I think of mindfulness in three ways. Initially, it’s a practice. So I practice mindfulness, I practice being present. And then it becomes a state. So the more I practice states of mindfulness, or sorry, the more I practice the practice, I experience more states of mindfulness. Or states of being present. And over time, when people practice enough, it becomes more of a trait. So they just have that general quality of presence about them.

Nichole And like you said, like, we all know that we’ve all had that experience, or we all know that person where we walk into a room and we’re like, they’re just so present. They’re just so, like, there’s a quality of real presence about them. And I think some people just have that very naturally. You know, like some people just are really talented at sports, people just have that quality. And then other people through practicing mindfulness and practicing cultivating ongoing states of being present. They cultivate that trait. And it is, it’s very much that quality of like, they’re just, they’re there with you. Like the kind of person that maybe when you’re talking to them, you really feel them with you.

Nichole Or, or I think about a lot, especially, you know, in the work that I do with women. Many of the women that I work with have either some history of abuse or trauma in their background, or maybe they’ve lived with chronic sickness or illness. And so they are not as embodied physically in their body anymore. So there’s maybe some way or, through the stress and anxiety, there’s maybe some way that they have, maybe not fully, don’t live in a fully embodied way. So in some disconnection, either emotionally, spiritually, or physically.

Nichole And so what we’re doing is working together to help them create that sense of presence. So that sense of like, really being there and showing up in their own lives or really occupying the ground that they stand on. Like, oh, here I am in my body. And obviously, this is an ongoing cultivation. And you’re right, we don’t have that experience from the very beginning. We grow it over time.

Nichole But just like you, in your own work, have developed a certain acumen, you have developed a sense of really knowing what you do. I think it can be kind of saying like, that sense of presence is that knowing I’m allowed to be here in my life. Knowing I’m allowed to take up space. And then choosing to take up that space in a way that acknowledges yes, here I am.

[26:00] How to cultivate more presence and truly connect with others.

Cathy Yeah. What a powerful thing for women in particular, who, many of us didn’t learn how to own our own space when we were going through life. It is kind of like an alien concept in some way. I’m sure the training, the combined training that you have with somatics and then the mindfulness is really important to that helping women, especially that have experienced physical trauma or illness or whatever, into having, developing that presence and feeling good in their own bodies.

Nichole Yeah, they’ve been extremely helpful. I think primarily, they’ve been helpful in the sense that, through these same modalities and practices, I have actually cultivated more presence in my own experience. Now that allows me to be really present and available to them. Have you ever had that experience or that feeling when you’re in the presence of someone who just has a lot of presence, like someone who’s really there with you? And have you had that feeling of feeling strangely at ease, or sociable, or like you matter, because they’re so fully there with you?

Cathy Exactly. That’s the quality I admire most about people like that. You feel like you’re the only person in the room. They’re paying attention to you. They’re listening. They’re not looking over their shoulder for the next person. You’re connecting. It’s really powerful when you meet someone like that. It’s not that common. And they tend to be better listeners because they’re okay with not doing all the talking. That seems to be part of that person as well.

Nichole I think being really present definitely aims, or yields, like being a good listener. Or a better listener.

[27:55] Nichole’s personal journey that led to her becoming a mindfulness coach.

Cathy Yeah. Tell us a little bit more. I’m curious myself on what your personal journey was in getting to this place of being a mindfulness coach.

Nichole Yeah, that’s a really thoughtful question. And thanks for asking. A journey it has been for sure. So I’m now in my mid 40s, and I started on this, I’d say the first real moment of inspiration, I think, really struck when I was probably in adolescence somewhere. I think there was just this, like, very early sense in me of just seeing the harm that was caused in society and family and culture when people weren’t present. And really, whether it’s, you know, seeing people who were harmed through other people’s addictions or people who were harmed by other people’s just unavailability, just not physically being there.

Cathy Yes. Workaholism.

Nichole Yeah. And I think what I saw from a very young age is a lot of harm and grief are caused by not being present. And so, and then I think that paired with I had a very strong like call to spirituality from a very young age. Like, I think I was like, 10. And I was like, Mom, will you please take me to church? And she’s like, ugh. But, okay.

Nichole And that was what I knew of spirituality. And over time, what I found later in my teens, when I was in my late teens, I was much more drawn toward Buddhism. And more like, historical European, like wisewoman spiritual traditions.

Cathy Where were you exposed to that? Because I wasn’t. I was raised in a Catholic environment, and I wasn’t exposed to other religions very early.

Nichole You know, that’s a really good question. Where was I exposed to it? I had an aunt, who, she was really into yoga. She taught yoga throughout my childhood. And then my mom, she actually was really good at, she had a very diverse friend group. And I remember going to like spiritual channeling events and like, weird, strange stuff. So that really planted that. And my grandmother was also, she was reading books about, like, past life stuff. So it was just in the air.

Cathy Yeah, all the women in your life.

Nichole All the women in my life. Yeah. There was also a lot of, you know, like, Judeo Christian influence, as well. And in my early childhood, so I had a lot of just influence in a lot of different ways. I have, my mom is one of five sisters. And they all have very diverse and different spiritual beliefs. So that was my imprint from a very young age.

Nichole And then so, by my late teens, I think what I realized, I found myself very drawn into Buddhist practice. There was also, you know, I think the reality why a lot of people go in the direction of spirituality or meditation, in my case, is there’s a lot of suffering. And there was also, you know, I experienced a degree of, you know, difficult experiences in my childhood and teen years. And I saw, you know, kids I grew up with getting into drugs and alcohol, and that just didn’t feel like a very good option for me.

Nichole And so I went pretty heavy into a meditation practice, and throughout my 20s, that really grew quite a bit. I found myself going on meditation retreats at a pretty young, early point in my 20s. And they lived, I lived in a community of people where we were all engaging in some spiritual practice. I had the privilege of traveling to India several times in my 20s and 30s.

Cathy Did you practice yoga there when you went?

Nichole You know, surprisingly, I didn’t actually do much yoga. I was doing more practice at Buddhist monasteries in Bodh Gaya, which is where, was known for the Buddha to have attained enlightenment. Bodh Gaya is up in northern India. And then I spent, I’ve traveled a lot through Thailand going to Buddhist monasteries. It just, it really, like the fire was lit, and it raged powerfully in my life for a lot of years.

Cathy Did you do your travels on your own?

Nichole I did most of it on my own. I did a fair amount of it with other people. But it was all like my own inspiration, my own desire. And then, you know, there is a, I think, another stretch in my 20s, where I experienced some pretty challenging life experiences. And I knew that my meditation practice was such a refuge.

Nichole And so in my later 20s, I actually dove in even more deeply. And I lived at a Buddhist meditation center for many years—not many years—for a stretch of time.

Cathy And that’s more communal living, right?

Nichole It was more communal living. Yeah. And then even at one point, I spent a year and a half traveling. This is in my early 30s. I spent about a year and a half doing extensive ongoing retreats to just continue to deepen my practice.

Cathy I am like, surprised to hear this. I’m so glad I asked you this. I had no idea. But you know what, I’m not surprised. Because you have that presence we were talking about. You really do. Even though I haven’t met you in person, I feel it over Zoom.

Nichole Thank you. That’s a really, that’s a lovely reflection. But to wrap up the response to that question, how did I get to this point of coaching? You know, I think, you know, when I moved to the Bay Area, there was the big question of what am I going to do for work? And I actually moved to the Bay Area right on the heels of this year and a half long meditation sabbatical. And there was this question of what am I going to do for work?

Nichole And I thought, well, I know how to teach because I’ve worked in teaching capacities. I know how to facilitate because I’ve been facilitating groups all of my 20s. And I know meditation, and I know mindfulness. And so I first landed a really fantastic opportunity at UCSF to teach Mindfulness Based Stress Reduction, which I’m still teaching many years later.

Cathy I saw that on your website.

Nichole Yeah. And, and then from there, I pursued the somatic experiencing trauma, trauma therapy training. The two then really solidified in how I work with women, I really integrate the two. So that has led to, you know, just a lot of opportunities to facilitate programs, where I’m teaching trauma awareness skills, as well as mindfulness skills. And a lot of my initial early clients came out of my MBSR programs.

Cathy And now, what does that stand for?

Nichole Mindfulness Based Stress Reduction.

Cathy Okay.

Nichole Yeah, sorry, I didn’t clarify that earlier.

Cathy Oh, no, that’s okay.

Nichole And so very, not to say unintentionally, because I certainly, like, had aspiration and ambition. But very organically, I’d say this practice of coaching has, it’s just grown very organically. And it’s grown very much from my love of these disciplines and my love and deep commitment and passion for supporting women in their own growth and awakening. So now I do one-on-one coaching and counseling and mindfulness work, but I also do a lot of group programs. And that’s really like my love. I mean, I love doing one-on-one work, don’t get me wrong. But I love group programs a lot. And I have a few of them happening.

[36:00] The group coaching programs Nichole offers clients and newcomers.

Cathy Tell me. Describe a group program and what a day would be like, if they are a couple of days, or a day, or?

Nichole Yeah, most of the group programs that I teach are either six or eight-week programs. So we meet weekly for a few hours. And then one, for example. So one is the Mindfulness Based Stress Reduction classes where we meet every week. And I’m, you know, walking them through a curriculum that I didn’t create myself. Jon Kabat-Zinn created it, and I teach it through UCSF. But there’s another curriculum that I have created, which is more of a trauma awareness and mindfulness-based program for women who are wanting to go through kind of their own healing and awakening process.

Nichole And so we’re looking at mindfulness practices through a trauma informed lens. And then another one, which I’m really excited about, which I’m going to be launching in the fall. It’s called purpose and presence. And it’s geared more for entrepreneur, entrepreneurial women, or just high achieving professional women who are wanting to learn just self-regulation skills, mindfulness skills, emotion regulation. But to also use these to explore, what is my purpose? How do I be of service in this entrepreneurial or professional capacity in a way that’s in alignment with what feels right and true? But also utilizing their powerful skills and their, the things that they know and do really well in the world?

Nichole And one of the things that I hear most common from women who are working in these capacities is like, I feel overwhelmed, I feel anxiety. I feel like I need to constantly be good enough for constantly achieving. And so what I’m hoping will yield from this is women who feel in alignment and in integrity with their work and their values, and feel that sense of presence, but also feel very connected to their purpose.

Cathy Yeah. Because you know, it’s very human to have those feelings of anxiety. It’s common and there’s nothing wrong with you if you have them. If you can learn to manage them, think just how much more joyful whatever you’re doing will be. That’s extremely valuable. That sounds, your programs sound really wonderful.  

Cathy So if someone wanted to reach you, let’s share your, whatever you would like to share. Your email, your website, are you on social media, do you have a Facebook group? Any of those things, and then I’m going to ask you one more question after that.

Nichole Yeah, sure. So um, you know, the usual social media suspects. So you can reach me on Facebook at Presence Mindfulness Coaching and Counseling for Women, or on Instagram, it’s @presencemindfulness, or my website is presencemindfulness.com. That said, I actually have a new website in the works, which should be released in August, and it’s going to be NicholeProffitt.com. But my current website will direct over to the new website when it’s up and running. And then as far as email, you can reach me at nicholeproffittpresence@gmail.com.

Cathy I’ll include all of these in the show notes, which I’ll post on my website, so people will know where to go. Okay, so I have one last question. If a woman has never done any kind of like, if this is all new. It’s so common now. But what if you’ve never even tried to meditate or get mindful at all? What do you recommend would be a first step?

Nichole Yeah. That’s a great question. Well, I have new people come into my programs all the time, who have never done anything in the way of mindfulness or meditation. But they just have that sense that they need to try it. And I love, so I love working with people who’ve never done this before. You know, one way to begin is, I like to do what I call a meditation walk or a mindful walk, which is just to take a walk through your neighborhood. And what I recommend you do is just take a stop every 10 feet or so and just stop and look around. See what you see. Hear what you hear, feel what you feel. Feel your feet on the ground, take a breath, and then take another, you know, 10 to 15 steps, and repeat that.

Nichole So feel your feet on the ground, take a breath, see what you see. And what I mean by that is like really see it. Not just like, oh, yeah, I know what that fern looks like. But like, no, really see it, the colors, the shapes. Hear what you hear, oh, I know, it’s just a car, but no, what is the sound? What’s the sound of the car, and so on. And feel what you feel. What is the feeling of delight, joy, relief feeling like?

Nichole So that’s a beautiful place to start. And I also really, I say to allow them to keep it simple. So five minutes. And for some people, five minutes can feel like torture. I remember in the early days of my meditation practice, in my like late teens and early 20s, sitting down for five minutes felt like torture.

Cathy It is a long time when you’re just sitting there.

Nichole And all you have to do, all we have to do is just note that in these five minutes, you don’t need to do anything. You don’t need to be anywhere. You get to be here with your breath, feeling the inflow, feeling the outflow. And then in five minutes, you can go back to what you’re doing.

Cathy Right. Great, thank you. Those are two perfectly powerful tips.

Nichole And I promise you it, the torture diminishes over time. At one point in my practice, when I was really like just exclusively devoted to meditation, I was sitting for about two hours at a time.

Cathy Oh my gosh, I was going to ask you that. How long do you sit for now?

Nichole You know, these days, my meditation practice is really varied. It depends on the day, it depends on what’s going on, how my body feels. Some days, I’ll just go on a mindful walk. Some days, I’ll do a practice outside where I sit with my eyes open and I see what I see, hear what I hear, feel what I feel, etc. And then other days, I’ll do a formal meditation practice where I’ll sit anywhere from 30 to 45 minutes.

Cathy Oh, gosh, that must be, that must feel amazing when you open your eyes.

Nichole I mean, this is, I just want to normalize it. Like even for me, I’ve been doing this for years. It’s still challenging sometimes. And that’s the point. It isn’t so much that we want the challenge to go away as, can I grow the ability to be with the challenge? So if grief or sadness come up, the idea is not to always feel happy. But can I grow the capacity to be with the grief or the sadness as equally as the joy and the happiness? Which is why we call this a practice. We are constantly practicing.

Cathy Right. You’re never done.

Nichole Yeah. We’re always growing, we’re always learning, and we’re always practicing.

Cathy Okay, well, thank you, Nichole. I totally enjoyed this conversation.

Nichole Yeah. Cathy, I just want to say thank you so much. I’m so grateful to be invited on, and I’m really excited to do some work together.

Cathy Definitely, Nichole. You have a nice weekend.

Nichole You, too. Take care. Bye.

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S3E5 Transcript: How to Make Room in Your Life for What Matters

Cathy Hi, Lis. Welcome to Financial Finesse.

Lis Hi, Cathy, I’m delighted to be here. Great to see you.

Cathy It’s so good to see you too. I know we saw each other pre COVID, maybe two years ago or so. That seems like 100 years ago.

Lis It really does. Such a different world.

Cathy Yeah, thank God, things are changing. We’ll have to see each other in person soon. Because I know you’re in Oakland too.

Lis I would love that.

Cathy Yes. So um, let’s get into it. I want to ask you some questions about what you do. You provide a very valuable service to people in your organizing business. And I know you do way more than just organizing. But for somebody who has a very short amount of time to listen to this podcast and just tunes in because they are not organized, and they really want to know how to get organized, what would be your top three words of wisdom for somebody who wants to be a more organized person?

Lis Oh, that’s a great question. Well, the first thing I would say is, don’t organize your life based on what you see in a magazine or on Instagram or on TV. You should really organize your life for your real life, for your real habits. And if you’ve been struggling with disorganization your whole life, don’t expect things to change overnight. New habits take time to develop. So being patient with yourself and forgiving with yourself, it’s, you know, learning to organize and learning to develop organizing habits is not unlike learning any other habit. It takes time to assimilate them.

Lis And then for a lot of people, they’re under the belief that sorting and categorizing is organizing. It’s not. It’s an important part of it. But it’s only the first part. It’s only the part that needs to happen to make everything else fall into place. But it’s all that sorting and categorizing that people do in place of true organizing. They make piles. People make piles. They make lots of piles, and then nothing ever gets done with the pile. So the hardest part in organizing is not sorting and categorizing as much as it’s important.

Lis The hardest part in organizing, especially if you’ve got more stuff than you have space for, is what I call curating. It’s making those tough decisions about what you want to keep and what you’re willing to let go of. And if it was all about putting things in pretty containers, I’d be out of a job and, you know, everybody would be able to do this so easily.

Lis So it’s, you know, there’s a saying in my industry that clutter is nothing more than delayed decision making. But I’ve often asked myself, well, why? Why is it delayed? And this doesn’t seem to get addressed very much. But it’s delayed because people don’t know what questions to ask themselves to help them decide whether they want this pen or not. And that’s where my experience comes in as a professional organizer, is that I don’t have an opinion about what they keep or toss. You know, I really don’t, but I have a very strong opinion about helping them meet their goals.

Cathy Yeah, so I’ll just chime in here because you’ve got a great blog post about how to be organized, you don’t have to be the perfect Instagram post or this beautiful home. It’s really more how you are with your life. And you gave a really great example of people who want to put all their recipes in a binder, laminate them and have it all organized.

Cathy And you know, I know how much time that would take. And your point is really well taken. I know me, I have a laminated recipe folder. Do I ever get it? No, I go to the internet, or I go to my array of cookbooks. And I have a lot of books. And I get a lot of joy in going to my cookbooks because I feel like I’m using them. That gives me a lot of pleasure. So, just think of the time wasted in doing that collating and everything else.

Lis Exactly. It’s, you know, there’s so many things that we want to do in life and there’s so many, you know, competing priorities. If I hear clients say to me that they are wanting to, you know, go through this big process of, you know, pulling out the three-hole punch and putting things in sheet protectors and finding the binder.

Lis I’ll ask them. You know, that’s a lot of homework for you. Is that really worth your time? And a lot of my clients know that this is something I will ask them over and over again. Is this really worth your time? Now, for some it may be. I’m not the one to make that decision. But I am going to ask that question. Because people confuse their real lives with this kind of Instagram life that they imagine having.

Cathy Or the Martha Stewart image, right? And everything has to be perfect, and you do these intricate little projects, and it’s very satisfying. Really, they take a lot of time.

Lis They do. And if you have the time. And you don’t, you know, and it’s something that gives you joy and pleasure. You know, and you’re not, you have to be careful not to let this small stuff get in the way of the big stuff. So if you’re surrounded with, you know, by a house full of clutter, and you’re spending your time doing little chalkboard labels, you know, it’s gonna be a challenge for you to get through all the other things.

Cathy I’ll give you another great example, in my own life. I used to collect business cards, like we all did, right? I don’t even do business cards anymore. Nobody does it. Isn’t that interesting? That’s a thing of the past.

Lis For some people. Some people still have quite a collection.

Cathy Okay. Interesting. So then I started when I, I would ask my assistant, enter this contact into my contact management system, right. And then I realized a lot of the time when I’m trying to find someone’s contact information again, I do a Google search. So now I’m not having them all entered. I’d have my clients entered, because I use my tools in a way to communicate with clients. I’m talking about random people I meet; I don’t even do that anymore.

Lis That’s a perfect example. Yeah, that’s an example of, so what do you do in real life? So people will save the business card. But in real life, what you do, Cathy, is you go on Google. So that’s part of my role as an organizer is to help people connect the dots between, you know, the object and what they do in real life.

Cathy Exactly. I love that. That’s just the perfect concept. So, I just want to get into the mechanics of what you do just a little because this fascinates me. So you go into someone’s space, right? And there’s all this stuff to be organized. Do you literally pick up everything and go, “Is this really useful to you?” I mean, how long do sessions last for and how do you get through it when someone has a lot of clutter?

Lis One piece at a time. So here, here’s what happens. It doesn’t really matter if it’s a junk drawer or your garage or your entire home, the process is going to be the same. So what we do, for example, we’ve got a client coming up who has an attic that you know, full of things. It’s an attic that takes up the entire floor plan of her home. So it’s a big attic, and it’s stuffable. And she’s moving and she has to go through all of those things.

Lis So what we do is we’ll have some of the items, she’s going to take care of having all the items brought down from the attic and stage them in her backyard. We’re gonna go in, and we bring all of our own tools and tables and bags and boxes. And we basically set up like a reverse shopping trip. We throw everything out and we sort like with like. So stuffed animals with stuffed animals. Christmas items with Christmas items. Office supplies with office supplies. Wedding paraphernalia, you know, everything is, you know, friends with friends, or like with like.

Cathy Kind of like the Marie Kondo approach, but you did it before her, right?

Lis Marie Kondo was not even a concept in her mother’s womb when a lot of my colleagues got started. You know, but all credit to her for having a great marketing team. But the sorting is very important because I can tell you, it’s very difficult to make decisions about things when they’re all jumbled together in boxes. It’s much easier to say, oh, I have 16 pairs of black pants and I don’t need 16 pairs of black pants. You know, I like these, but I don’t like these. Are these ripped or not, you know.

Lis So it’s an opportunity. It’s also kind of a wakeup call for clients when they see all of their stuff spread out in, you know, a large space. It’s kind of a wakeup call to them like, oh my God, look at all of this stuff I’ve accumulated and never even looked at or used.

Cathy Or I really do have 20 white t-shirts that look exactly the same. It’s, I know, I believe me. So do you do a lot of closet work too?

Lis We do any space where the clients are really wanting to have, you know, make it more functional. We don’t do installations, you know, but we might recommend, depending upon a client’s preferences, aesthetic budget, we might recommend a different closet system. But what we will do is advise them along the way on how to make that work.

Lis So for example, you know, if they produce a particular closet system, we can tell them how much long hang space they need, how much short hang space they need. And that comes from sorting. So we sort everything, like I said earlier, sorting or categorizing is not organizing. But it’s critical to get to the next step, which is purging or parting with, or what I call curating.

Cathy I love the word curating so much better than purging.

Lis Yeah, because curating is about having a vision for your stuff or your life, that, you know, everything fits. It’s like having a personal mission statement. If every time you come up with something, if it doesn’t fit your personal mission statement, you can let it go. If something doesn’t fit your vision of how you want to live your life, you can let it go. And what you end up left with are the things that really are meaningful, useful.

Lis I mean, you know, I can’t say that everything’s going to spark joy in your life. You know, your Clorox is not going to spark joy, but you’re going to use it, right? So they’re going to be things that you use, they’re going to be things that you love, they’re going to be things that you’re sentimentally attached to, and can’t let go of, or don’t want to let go.

Lis You know, there’s a whole series of reasons that people hold on to stuff. But there’s also a whole series of reasons that people can let go. And that’s what happens during the curate or purge process. And then it’s about assigning a home to everything. Just like you live in your home, you don’t go to the home next door. Everything in your home should ideally have a home.

Lis And if you have kids, this is a particularly appealing concept for kids, because it’s a way to get kids involved in the whole process of organizing. When you ask your child, for example, you know, where does this doll live? Let’s bring him or her back to his home. And so everything in your home has a home. And if you don’t, if it doesn’t, what ends up happening is it just gets dropped on the first horizontal space that’s available, which is what a lot of people do. So one of the habits that I try to impart to my clients is the concept of assigning a home to things, not based on conventional wisdom, but based on how they really live.

Cathy One concept you talked about that I find really interesting is the personal mission statement. What if someone doesn’t know what their personal mission statement is? And maybe that’s the reason that they’re not organized in the first place. This is where all the psychological and emotional components of being organized come in, right? I mean, it’s not just the physical act of organizing, it’s what’s in someone’s head, and then how can they turn it into a habit, right?

Lis Yes, well, you know, I use the example of a personal mission statement because that’s a piece of the other work I do. The work that I’m doing more one on one with folks, but it’s a great metaphor. For helping people decide, you know, let’s say your kids have all grown and they’ve left, and you don’t really do a big Christmas decoration anymore. That’s not part of your current life. Then when you come across all the Christmas decorations, it’s a lot easier to say, oh, well, this, I’m not going to do this. I’m not going to put up all these 8 million decorations because that’s not my life now. It may have been my life before, but it’s not my life now.

Cathy And there may be some grieving around that too, right? There may be a little grieving process and things like that, but people can let go.

Lis Trust me, there’s a lot of grief that comes up in this relationship. I work with clients who’ve just lost, you know, who’ve recently lost family members, spouses. And, you know, this is the point where you really have to stop and give time for the client to grieve. Because every item, every piece of paper, every object is going to elicit a memory. But just because it elicits a memory does not necessarily mean it honors the person’s memory.

Lis So there’s a very gentle process that has to take place for the client to decide, is this going to be part of my life now? Am I going to, does this honor the memory of my loved one by keeping this? Would they want me to keep it? Would I use it? Or would I just, you know, how is it going to honor them if I just stick it in a container and stuff it in my basement somewhere?

Cathy Right. This is where your clinical psychology and therapy background probably really comes in with the work you do with clients, right?

Lis Yeah. And my experience just doing this for 12 plus years.

Cathy Talk a little bit about I know you’re pivoting to a little bit different way of doing business, or you’re adding on a business. Talk about that a little bit, because it seems to me the two would really work well together.

Lis Well, you know, I’ve been doing this for 12 years, now. I have a team of six employees and six contractors, and most of the work that we’ve been doing has been these kind of large scale projects that are prompted primarily by something like a move. And so we have to get in there and in a short, relatively short amount of time, downsize and, you know, get somebody all packed or manage their moves.

Lis And I had found over the past couple of years that I was really missing the chance to work more interpersonally with my clients, like I had when I first started and like I had years and years ago, when I trained a marriage and family therapist. And I was really missing that. But I knew I didn’t want to do, you know, clinical work or weren’t going to work in mental health anymore. I wanted to work with people, you know, who might have come to a point in their lives where they wanted to make some changes, but they were, you know, they couldn’t get the clarity that they needed. Or, you know, things were kind of still out of focus.

Lis And they, you know, wanted to work with someone who could ask them the right questions and help them get some clarity on, on not maybe just future dreams, but how to deal with day-to-day situations. I had a client who was holding on to some, you know, uncomfortable thoughts about a family member, and it was really kind of bothering them. And it was. And so we worked on how to objectify that voice in their head and helped them work with how to sort of shift their perspective on it, you know, if you will, because the work I do is really perspective work. And it’s about helping people look differently, kind of shifting the view of things so that they can kind of be freed up to see things differently.

Cathy And so working with the client on a typical organizing project, would you find yourself getting into these conversations?

Lis Not really, no. Because it took me some time to figure out that that was where I wanted to go. And it’s really funny that you should ask that question because what this trend, what this new service I’m offering, which is really more about helping create more joy in people’s lives, came out of my own, I would say, my own impatience over what I was missing and what I couldn’t initially kind of get some clarity on. So I sought the help of a coach, and over time, got very clear about what the work was that I wanted to add on to my existing business.

Lis So it’s basically the focus of where I’m going next with Let’s Make Room because I found that after 12 years of doing onsite work and managing these large-scale jobs, I was really missing more of the interpersonal work. And I wanted to work with people who had goals and dreams that they wanted to achieve and help them find their way towards them. So that was, I call myself a personal advocate. And this kind of brings in both my background in psychology and consulting and a newfound interest in mindfulness. So I’m not a therapist, and I don’t pretend to be, but, you know, often people experience this work as therapeutic.

Cathy Yes. And you know, you don’t have to change the name of your company. Let’s Make Room can be taken so many different ways. Let’s make room in your home through organizing. But let’s make room in your mind for what you want to bring into your life and so many, it’s just a great name for the business. It really is.

Lis Thank you. Yeah, well, that’s why right now, it’s actually as part of my website, as part of my overall business model. It’s, you know, I didn’t get into this business because I was a born organizer. I got into this business because I started to see the value of how making room in one’s life enabled them to discover or untap parts of themselves. So in a way, I’ve sort of come full circle. But initially, it was very tangible in terms of, you know, stuff in space. But now it’s kind of coming more around to the person. And that’s very, very gratifying to me.

Lis And you know, before I forget, I just wanted to mention, you had asked me in the beginning of our conversation about tips. The one tip that I didn’t mention, that I think is really important, is don’t make your stuff more important than you are.

Cathy Hmm, that’s a great one.

Lis I’ve seen this happen. People have pushed themselves out of their own home offices or out of their own rooms because they haven’t been able to let go of things. And they can’t actually get in there. They’ve made their stuff more important than they are.

Cathy Yeah. And well, I guess the extreme is the hoarder. Right? Where stuff takes over your home. But do you find there’s lots of iterations in between?

Lis Absolutely. We all have a little bit of that in us. Everyone does. It’s just, it’s on steroids for someone with chronic hoarding disorder. I don’t work with that population because it is a mental health issue. And it takes a really specialized, interdisciplinary approach to work with people who’ve got that mental health issue. But when it does come up, yeah, I can recommend people.

Cathy Let me ask you. I know this is a podcast that interviews women. I think I have a lot of women listeners. I love having men listeners, too, by the way. But I’m just curious, because I know in my practice as a financial advisor, women clients communicate differently than men, for example. And they have, for me, they’re more open. They let me know about themselves earlier on in the process, so that I can help them. You know, the more I know about my clients, the better when it comes to creating financial plans. And I’m wondering, you probably work with a mix, right? You work with men and women? And is there any difference in in the way they interact with you?

Lis You know, strangely enough, not really. But the differences is that often men don’t ask for help. It’s their spouses that will ask on their behalf. I will say, well, is this for you? Or is this for your spouse or your husband? And they’ll say, well, my husband’s the one with the clutter issue. And I’ll say, well, is it a problem for him? And if it is, if it is a problem for them and they want to talk to me, that’s fine. But if it’s not a problem for them, and it’s only a problem for the wife, there is nothing I can do.

Lis Because, you know, why would you want to change something that’s not a problem for you? So it’s, they get their motivation from, you know, wanting to please. So if they’re, often, you know, a man will come to me because his wife is very frustrated and they’ll want to make things better. Or because they recognize that there’s a cost to themselves that they really care about. But it’s actually, you know, the model that we use is very straightforward. It’s, we can get into the emotional content of things. But often it’s just, you know, it can be a very simple process.

Cathy Yeah, it’s very systematized, I’m sure. You probably have a checklist: we start here, we do this, we do this, we do this, right?

Lis Yeah. And I, you know, find that when I demonstrate the process that we use in our initial meetings, there’s a lot of, there’s sort of a, I can almost feel in the air the sense of relief that comes from, you know, the spouses of, you know, the husbands of the clients. Because they go, oh, this makes sense. This, I can do this. And they’re often, you know, great advocates if their wives or their partners are struggling. Sometimes one person in the couple can help influence the situation.

Lis Now, that being said, I have a very strong rule, which is that if you were the owner of the decision on, you know, this stapler, you don’t get to tell the other person, oh, I want that stapler. Or why wouldn’t you keep that stapler, you’ve had that stapler your whole life? It’s like, no, that’s where my therapy background comes in. You don’t get to, there’s no crosstalk. Whoever owns the stapler gets to make the decision about the stapler.

Cathy I’m sure you run into that a lot.

Lis Yeah. So I just set that rule up from the start.

Cathy And do people follow it?

Lis Yes. I find it a relief actually. Because I think they’re sort of, you know, they realize that they don’t have to take control of that situation, too.

Cathy Right. I’m sure you’ve got some real success stories with clients that what you do is transformational for them. Can you share any of those?

Lis Well, you know, of course, they would be the best ones to judge that. But, you know, there are very pragmatic sort of transformations that happen. So for example, we recently worked with a senior couple, who after 30 plus years of living their home in Oakland had decided to move to the East Coast where both of their children lived. Especially because one of their daughters was about to have a baby. And so there was a time, there was some time sensitivity. That baby was going to be coming in mid-May. And we met this couple, I think, at the end of February. Maybe the beginning of March.

Lis So what we did for them was we first, you know, basically decluttered and downsized their home, room by room. And then we set up an online sale of all the things that they didn’t want. And we sold them through a platform called Max Sold. If you’re familiar with Max Sold, it’s an online auction sale for selling really everyday items. It’s not for super high-value, although sometimes there are high-value items, but it’s a great way for our clients to minimize the cost of moving and hauling and that sort of thing.

Cathy I’ll add that to the show notes. Do they buy like old China sets and old silver sets and things like that? That’s always an issue with people.

Lis Well individual people bid on things. So Max Sold puts it online, not unlike eBay, and people bid on them. So somebody might get a beautiful China set for $1. But it depends on what the competition is, especially close to the end of the sale. We made our client about, well, the sale made almost $8,000, of which more than $5,000 went to the client.

Cathy Was this on this website that you’re talking about that?

Lis Yeah, it is. And it’s used by a lot of professional organizers like myself, who want to help clients downsize their homes but really are uncomfortable with the idea of donating everything and would prefer it getting in the hands of somebody who can use them, even if they don’t end up spending that much.

Cathy Yeah, and who uploads all the, who does all that work? That’s a lot of work.

Lis Yours truly. Yours truly and my crew. We create lots of things, so like items like collectibles or China, or it might just be individual pieces of furniture. We photograph them, we describe them, we catalog them in Max Sold’s app, and then the sale goes live. And a week later, the sale closes, and all the buyers come to us with my team. And they’re there to come pick them up. And they’re all scheduled, you know, and it goes fairly smoothly. And the things that don’t get picked up, often we give away for free, or we find a way to find homes for them on the same day.

Lis Yeah. So it’s a great situation. So this couple, we did this for them. And then afterwards, I managed their move back-to-back to the East Coast.

Cathy Describe that. What did you do for them?

Lis I had to research and find the right movers for them and negotiate the contracts, make sure they weren’t going to get ripped off. And, you know, working with movers, especially interstate movers is really, can be a challenging situation.

Cathy I hear that all the time.

Lis Yeah, and it really all comes down to two things. It comes down to the driver, and it comes down to the local agent, because the local agents are the ones who do the packing and bring in the interstate company. And so it’s knowing how all of this works behind the scenes and knowing how to make sure that things get done. And that, you know, I mean, I had to negotiate the, I went to two different movers, and had to kind of get the best situation for my clients.

Lis And then once that’s done, then the movers come and I’m there on pack and move day to make sure everything gets done according to plan. And the funny thing was in this particular situation, the load day, the actual load on the truck day, happened the same day I was scheduled for my second vaccine. So I had to get it. It had to be done. I literally ran out of there to go get my second vaccine and then came back to the house to just make sure, you know, there wasn’t any lingering issues.

Cathy Which vaccine did you get?

Lis Pfizer.

Cathy Okay. That had, I think that had less side effects on the second. I got Moderna and the day of it, I was fine. That evening, I went down. So I did things all day long until the evening, and then I was sick the whole next day.

Lis Right. That’s fairly common. So anyway, I just, so the upshot of this client was that they are now back east, their daughter had the baby, and they’re getting ready to move into their new home.

Cathy That’s an incredible story. So you handled the whole thing from start to finish. You and your team. That’s really a service that a lot of people would find valuable. Just switching a little bit. I know these are the big situations, right? Like, they’re one-time big situations. You’re helping somebody move. They got a new job that’s in another state, they’re moving to be closer to their grandkids or things like that.

Cathy So you work with people who like, they want you to do an organizing project in their home because it’s out of control, somewhere their kitchen or their office, or maybe many rooms, and they hire you for an engagement. And I’m sure it’s some time frame that you have that you work with people. How do you know that they’re not falling back into old habits? And do you check in with them? Do you have some kind of ongoing service? Or how does that work?

Lis It’s a really good question. And I would like to say that yes, we do check in. I do check in as part of my, I mean, that’s just part of who I am. There are certain, you know, my clients are very special to me. And I often find myself thinking about them and just shooting them an email and saying, just thinking about you, how’s everything been since we were there?

Lis But I recognize that for a lot of people, this is a big behavior change. And when we come in and do the organizing, as much as we’re, we try to impart what we know. It’s not as if I’m working with them one on one on a long-term basis and teaching them. So what often happens is people do slide back and, you know, imagine you’ve lost, you know, some huge amount of weight or something, which I can speak very personally about this, and you gain it back. And so there’s a lot of shame you feel about it, and you may not want to bring somebody back in again.

Lis I really do try to minimize the amount of feelings around that. But people just feel that way. And so we offer an opportunity to do maintenance if they wish. You know, it depends on the client. There’s some clients who hire us sort of on a long-term, you know, weekly or monthly basis to help them with different projects. And I would say those clients learn the most from this experience.

Lis So long-term relationships are so valuable because you have a chance to get to know one another. You can help them create habits, because, you know, habits are hard to develop. And you can flop but you can get right back on the bandwagon and keep trying. But you need to, you need to have some catalyst to remind you of that.

Lis And that’s actually sort of what got me into this new work that I’m doing. You know, to help people take more of a deeper look into what’s keeping them stuck in the same habits, whether it’s an organizing habit, or, you know, they’re not getting enough done, or they are just frustrated with some aspect of their lives. But you know, my business model primarily, up until recently has been more like a contractor. Get in there, do the work and get out.

Cathy Yeah, I think your pivot is going to be really valuable for people. It makes so much sense with all the background, all the experience, that you’re going to do that, it really does.

Lis It’s been a challenge, because I’ve also had to shift a lot of the way I have been working. Because when I’m working with clients on like, get in there, get it done, get out projects, I’m much more directive. Whereas when I’m working with clients one on one, who are dealing with, you know, trying to sort of clear the weeds out of their lives, and we’re more of a field guide, if you will, I’m more about eliciting from them what’s getting in their way so much. It’s more of an exploratory or a collaborative relationship, where I’m reflecting back to them what I’m hearing and helping them gain clarity themselves, rather than me saying, you know, being more, you know, directive.

Cathy There’s so many parallels to what I do and what you do. Doing a one-time planning engagement, it’s almost like you have to be directive. Because, you know, they’re going away, and you’ve got to impart everything you want them to know in that short amount of time, right? Whereas a relationship, it can develop over time, and you can really help change habits and things over time. It’s so, so similar. And I find the ongoing so much more satisfying than the short-term, where you’re done and then you’re kind of left wondering, what happened? Did they implement these changes, did they not? You don’t really know unless you have a way to check back in or re-engage. Right?

Lis For me, it’s a different level of satisfaction, it’s very satisfying to go into a person’s home, you know, this is why I got into the business originally, because I wanted to do tangible change. So it’s wonderful to go in and be able to organize, you know, a space, a closet, whatever it is, a kitchen, and know that when you left, it was beautiful. Right? So it’s a different level of satisfaction. But then the kind of satisfaction I get from working more interpersonally with clients and not so much about their physical stuff, but more about their, you know, I don’t want to even say psychological stuff, but the thing is, their thoughts and dreams. That’s a whole different level of satisfaction.

Cathy We all evolve in our work and sometimes you get bored, you do one thing too many times. You want to branch out and test your skills and do other things, too. And it sounds like that’s what you’re on the path to do.

Lis Exactly. Yes, exactly. There’s a, you know, we all grow in our work in some way. And for me, this was the logical next step.

Cathy Yes, it sounds, definitely. So, let me ask you this. Do you think that people who are organized, who have reached some level of, you know, organization in their lives are more successful than other people? And conversely, do you think a disorganized person can reach their goals and be successful?

Lis You know, that’s a really interesting question. I think it certainly doesn’t hurt. It helps a lot. It depends upon the person. Sometimes a person’s environment is a reflection of their inner environment, of their inner world of what’s going on inside. So, it may be that, you know, therapists tend to work from the inside out, organizers tend to work from the outside in. And this new kind of work that I’m doing is working kind of alongside, you know, at this sort of parallel.

Lis You know, there are lots of different ways to get to the same result. I’ve known plenty of very successful people who were very cluttered and disorganized. And, you know, it’s not a problem for them. Maybe they have a system, or maybe they just, that’s what sparks their creativity or their productivity. I think that it’s when it becomes a problem for them that it becomes a problem, you know. You can be an extremely organized person and still be dealing with life issues. It’s just that you, it might just be that at that point in your life, you have the space, the room in your head, so to speak, to maybe finally, you know, confront or look at, or explore those things.

Lis So I can’t really say that, you know, across the board that if you’re organized, you’re going to be healthier. If you’re disorganized, it’s gonna be problems for you. Like anything, I think it’ll help in certain situations, it’ll facilitate you getting to the next step of what you want.

Cathy But it’s a lot less stressful. Like, I even think, just an example, if I clear off my desk at night, you know, make everything neat and clean, put the papers away. When I go in my office in the morning and look at that it feels worlds different than when I’ve left everything out, you know, an old coffee cup with coffee in it and papers all over the place. It just is, mentally, it’s not as motivating. And it adds a little bit of stress early in the morning.

Lis Right. And for you and for many people, that’s true. And I would say for, you know, a cohort of people there are, you know, they’re used to a certain degree of clutter. But I would say if you find it uncomfortable, then yes, it’s always great to come up with new habits and new behaviors and ways to minimize. I mean, life is stressful anyway. But there’s this tug of war that happens between wanting order and needing peace in our lives and needing to feel the sense of calm that comes from things not being all in disarray. And the struggle, you know, that’s balanced against the people who, either they’re overwhelmed, or they want to hold on to things or they have too much, there’s too strong a relationship. They’re too identified with stuff. So it’s not a cut and dried situation.

Cathy And you’re making the point: everyone’s so unique. There are general principles about organizing, that makes sense, but how we apply them is, you know, all up to our own unique selves. You know, we’ve been through you know, the COVID year. I’m wondering, did your business blossom more?

Lis You know, it didn’t because we couldn’t work, we couldn’t work in people’s homes. Here was the silver lining that came out of it, though. I discovered through this very early on that if I wanted to survive, in addition to benefiting from, you know, PPP loans and so forth, that I had to make it available to people virtually in any way I could.

Lis So I actually discovered through the pandemic that virtual work, a way of working with people virtually, was something that I could do, although I wasn’t sure how it was going to eventually look. And that’s how my personal advocacy work, you know, helping people with their life issues, suddenly there was an opportunity created for this.

Cathy That makes so much sense. So that was a silver lining for you. It kind of pushed you into something that you were already interested in anyway.

Lis Exactly, exactly. And I have actually worked with people around organizing virtually. Often it works very well with people who are stuck in paper clutter. So people who are really challenged by paper piles is something I can do virtually, as well as in person.

Cathy How do you do that? They hold up the paper?

Lis No, I don’t even have to know what’s on the paper. That’s the beauty of it. I have my own system that I teach, called the ACT system. It stands for action, contain, and toss. And it’s basically a decision tree. So I don’t even have to know what’s on the piece of paper. I just made up, you know, I asked the client, you know, is there an action you have to take with this? Is there something you have to do with it that doesn’t include filing or reading? And if not, is it likely you could find this information again somewhere else? And if you could, you know, if you could find it online, you know, how easy would it be?

Lis And if it’s easy, then I ask them, so what do you want to do with it? I never make a decision for them. They come to that on their own conclusion. And often what I’ll do is I’ll have them take the piece of paper and put it behind their backs. And I’ll say, okay, imagine that piece of paper just disappeared. Could you find the information on it again, if you needed to easily, and they would think about it. And so you’re activating a problem-solving part of their brain. And then they would go, oh, yeah, I think I can. I said, well, great, then well, what do you want to do with it? And they usually say, well, I can let it go. And ca-ching, every single time a piece of paper goes into the recycle bag, it’s like, virtual money in their pocket.

Cathy Oh, yeah. That’s great. And so do you do that on an hourly basis?

Lis Yeah. Virtually somebody could schedule through my website at letsmakeroom.com. There’s, I have a calendaring link where people can schedule both a free initial 30-minute chat with me as well as one, two, and three-hour work sessions, either to work on organizing or to work on more interpersonal things that are coming up.

Cathy Okay, yes. So I love that. So what if somebody had a bookcase full of, okay, I’m talking about me. Okay, I love books. And I have a really hard time letting go of books, even books that I’ve never read. And then I have ones that I’ve read and I’ve loved. Do you? Would you do that? Would that be something you would do virtually? Go through books and find out why are you keeping that book?

Lis I would never ask the question, why are you keeping that book? I would want to know, first of all, I would want to know, what your intent was. Like, what your goal was in trying to curate the books that you had. Some people have to do that, like my clients who moved back east, they had thousands of books, literally thousands. And they couldn’t take them with them.

Lis So it has to, you know, why are you, what’s in it for you? I would identify that. And, you know, books. You know, I come from a family of readers and writers, and books are very meaningful to people. So we have to create what I call decision tools. A decision tool basically works like a sieve, you know, like a strainer. And the decision tools are the things that help you decide whether the thing comes through the strainer or stays in the strainer.

Lis So for you, all of those decision tools are going to be very personal. So you mentioned a moment ago, it’s a book that I loved, and I can’t imagine parting with it. So that’s a decision tool right there. That’s okay. If you can’t imagine parting with it and you love it, well, then that’s there’s no decision. I mean, it’s obvious. Then there’s going to be the books where you’re like on the fence, I don’t know.  

Cathy Oh, good example. So someone recommended a book and said, oh my god, this is the best book I ever read. And I read a few pages and could just not get into it. I put it on the bookcase. And I can’t get rid of it because it’s supposed to be such a great book and I’m supposed to love it. So it sits there. That’s a good example.

Lis Well, given what you know about yourself in your life, what’s the probability that you would pick up that book again?

Cathy Probably not a good one. I’ve got so many things to read for my work and everything. So very unlikely.

Lis Okay, so in that case, what would you want to do with it?

Cathy Probably give it up.

Lis Give it up to somebody specific?

Cathy Oh, well, usually I donate books, or I trade them at the local bookstore.

Lis Is that worth your time?

Cathy Good question. I get a lot of pleasure out of it. I like doing it, yeah. So that counts, right?

Lis So there are a lot of options. You’ve determined already that it’s not likely you’re going to read it or look at it again. But you would like to find a new home for it, where somebody else could appreciate it. And there are different ways of doing that depending upon what’s worth your time. You could have a box or a bag ready for all of the books that you’ve decided to discard. And, you know, put them by your front door. And next time you are on a, you know, out running an errand, take them outside with you and drop them off.

Lis If you have an enormous collection, you might, you know, arrange for a pickup of them, right? Because there are a lot of charities that will take books, most Friends of the Library of various libraries want books. Goodwill will take books, though, as well. Salvation Army will take books. But if you want something that’s more personal, if you want to get it to a specific place, if that would make it easier for you to let go of, then you know, is it a senior center that your thinking, is it a friend? And so, a lot of people what they do is they get hung up on not so much do I want it or not, but where should it go? But you’ve clearly made the decision like, nope, I have lots of other books I would rather read and this one I think would be appreciated by someone else.

Cathy But I do feel guilty that I’m not reading it. You know, there’s so many, there’s so many things.

Lis Ok. And then I would probably, so you feel guilty. You know, I’d probably want to explore that with you. Because it came from a friend who recommended it.

Cathy And, you know, yeah, or maybe I’m not intellectual enough to get this book. You know, there’s so many, so many things in there.

Lis Yes. And we probably have to unpack that a little bit. And so, because you’ve got some emotional attachments for why you’re holding on to it that have nothing to do with the book. I mean, absolutely nothing. The fact that you feel guilty, or you’re questioning your own intellectual capacity, that has nothing to do with the book. That’s a deeper dive.

Cathy So, you know, this is a perfect little mini microcosm of what you do, right?

Lis Exactly. Right.

Cathy That was great. I love it.

Lis So what’s your decision about the book?

Cathy Oh, um. I think what I would do after talking to you is I would think about another person that might enjoy it. And I’d try and get it to them. And really do that thoughtfully, not just want to give the book away. Really think about, who would love this book?

Lis And that’s worth your time.

Cathy Yeah.

Lis Ok. Done. If you had to do that, for all your books, though, that could take some time. So that’s the decision tool that I was talking about. There’s going to be books that will be like that. That’ll be like, the decision tool will be called, I want to get it to the right person, versus I just want to donate it. And so there’ll be two piles. I want to get it to the right person. Just plain old donate.

Cathy Yeah, I love the idea of putting the bag or box right next to the bookcase. And every once in a while, going in and starting the sorting process. That’s a great tool.

Lis Good. Yeah. And there has to be a motivation. Because if you don’t do it, is there any cost to you right now? If you know, moving is one of the reasons people do this.

Cathy No, the cost though, is that books are all over the place now in my house. I keep finding new places to put books. Something’s gotta give.  

Lis That falls under what I said earlier about don’t make your stuff more important than you are.

Cathy Very good. You’re hired.

Lis Anytime. Call me up.

Cathy You know, unfortunately, I could talk to you so long about this. I love this topic. I really do. But we got to cut it.

Lis Me too.

Cathy Yeah, I know. It’s great talking to you. But I want to make sure, you’ve mentioned already your website name but let’s repeat these things so people can find you, and I’ll also add them to show notes. I noticed that you’re not on Twitter, right? You don’t do social media marketing, right?

Lis I don’t do a lot of it, you know, for better or for worse. A lot of people, most people find me through Google, strangely enough, and through word of mouth. Because most of my clients tend to be, I would say, not all of them, but most of them tend to be in their like 40s to 70s. And those folks are more likely to get recommendations from going online or from asking friends. If they’re going to use any social media at all, they’re going to use Facebook. They don’t, they’re not big Twitter users. They’re not big LinkedIn users necessarily.

Cathy And so you are a Facebook user? Do you have a business page?

Lis Yeah, there’s a business page for my company on Facebook. So my company is called Let’s Make Room. And I’m at letsmakeroom.com, and my email is info@letsmakeroom.com. And I spell Lis with an s not a z. Rhymes with his and spelled the same way. It’s short for Lisbeth. So Lis McKinley.

Cathy Okay, great. And I know one other question people are probably thinking about. We won’t go into it too much now, but the fees, are they based on hourly, project? Or how do you do that?

Lis For the big projects, it’s based on the project. So it might be a daily fee or a flat rate. For working individually with me, it’s an hourly rate. I do charge for my initial on-site consultations because it usually takes about two to two and a half hours, because it includes a demonstration of how I work.

Lis If it’s physical organizing, or if it’s paper organizing, I’ll take them through a demo. And it’s a way for them to actually, it’s a way for clients to actually see how I work and get a sense viscerally of like, this is somebody I would trust to be in my home. It’s also a way for me to see how they make decisions.

Cathy So it’s kind of, you want to see if you want to work with them, and you want them to see if they want to work with you type thing.

Lis Yeah, more the latter. Yes, I want them to really understand what this is about. And that it’s not just, like I said, putting things in pretty containers. Although that’s fine, too. We’ll do that if they want it.

Cathy Yeah. Okay, great. Well, it’s been a pleasure. Thank you so much. And I think our listeners are gonna find this to be really interesting and engaging. So thank you for being here.

Lis Thank you. It’s been so wonderful for me as well. It’s been great to see you again. And, you know, if there’s anything I can do to help, for your listeners, please feel free to, you know, reach out.

Cathy I will. Like if you have any published tip sheets or anything, I might ask for those and I’ll put them in the show notes.

Lis My brochure is available for downloading and a free downloadable moving guide that came right out of my head. It’s not the typical one that you see on like, you know, licensed moving sites where it’s the obvious, but it’s things that I know from my own experience of the other things that nobody would consider.

Cathy That’s invaluable. Thank you.

If you found this information interesting, please share it with a friend!

S3 E4 Transcript: Understanding the SECURE Act and Inherited IRAs


Hi, I’m Cathy Curtis. Welcome back to the Financial Finesse podcast. And if you’re a new listener, welcome. I am this podcast’s host and also an acting and working financial advisor. My firm, Curtis Financial Planning based in Oakland, is an independent firm. And the firm is unique because we specialize in the unique needs of women—particularly women who take the lead in their household finances and are looking for a fiduciary financial partner to help them with their current finances and to secure their future, so they get more enjoyment out of their money today.

In this episode, I interview Megan Gorman, Founder and Managing Partner of Chequers Financial Management, a high-net-worth tax and financial planning firm in San Francisco. An attorney by training, Megan is passionate about the problem-solving required to work in the world of complex financial planning. She is also a senior contributor at Forbes and writes on personal finance and income tax.

As you listen, you won’t be surprised to hear that Megan is an adjunct professor at Golden Gate University in San Francisco as well. She is a very clear communicator and a great educator. And I’m happy to call her a friend, too.

Megan’s expertise is invaluable for today’s topic, inherited IRAs, which is why I’m so excited to have her on the podcast. Specifically, we’re talking about how the SECURE Act of December 2019 changed the rules for certain beneficiaries of inherited IRAs, creating a potential tax headache for some, unfortunately, including tax rates possibly jumping in the years the inherited IRA’s being distributed, and the fact that if you don’t follow the rules, you could get hit with a 50% penalty tax. No thanks.

I think everyone can benefit from this info whether you have an IRA or expect to inherit one. Many who are affected will want to review their current estate plan to ensure it’s still the best plan for all involved. We cover a lot, and it can get dense. So, if you have specific questions about after listening, please don’t hesitate to send me an email. And as always check the show notes for more information and resources related to this episode. You can find more information about me and my firm at curtisfinancialplanning.com. I hope you enjoy the podcast.


Cathy: Hi, Megan.

Megan: Hi, Cathy. How are you?

Cathy: I’m great. Welcome to the Financial Finesse podcast. Thanks so much for agreeing to come on as my guest.

Megan: Oh my god, I’m so excited to be here. I’ve watched a few of your episodes and they’re really, really informative. We can talk about some interesting stuff with IRAs.

Cathy: Oh, we certainly can. Believe it or not, there’s interesting things about IRAs. I first wanted to say where I first noticed you was on a Citywire cover in about 2019. You were profiled, and I was so impressed. And you’re in my area—you’re in the San Francisco Bay Area. And I thought, why haven’t we met yet?

Cathy: And one quote that I really related to, I’m just going to read it real quick. “The thing that I’ve had to get comfortable with over the course of my career is that being a woman with a strong sense of ambition and a strong personality, the best system for me was one that I created on my own.” And I so related to this, because I founded my own firm, and I know you founded your own firm, Chequers Financial Management. And I know it was hard in the beginning, but you’ve been doing it for six years now, is that right?

Megan: We just had our sixth anniversary. Yeah.

Cathy: That’s great. Congratulations.

Megan: Sometimes I wish I’d done it earlier. When you made your career transition from marketing to finance, you just jumped in. And I love that sense of courage and how you took on your practice. Because I think a lot of what we do on a day-to-day basis with clients, is really try to give them the confidence to jump in and embrace their money and embrace what they do.

Megan: It’s hard. It really is. I mean, when people ask me what I do, I often say, look, a lot of times, I’m doing a lot of coaching. I might know the technical rules, but it’s really about pushing you in the right direction for the answer that’s appropriate for you.

Cathy: And you know, that combo of having the technical skills and that other skill set of being able to listen and support is really powerful. And that’s, that’s really what we do as financial advisors. We combine those two things. And personally, I know on the technical side, you are a whiz. Because the other times I’ve seen you is when you’ve been on podcasts, explaining the CARES Act, and you have a really great way of making things understandable—very complex things, which most tax things are—very understandable. So that’s why I’m really thrilled that you’re here.

Cathy: Before we get going on the technical stuff, though, I wanted to ask you. So, Chequers Financial Management—and I know Chequers is the prime minister’s summer residence, right? I wanted to ask you this before. Is there a story behind you picking that name for your firm?

Megan: Yeah, so I’m a British History major, and always focused on the history of England. And when I went to name the firm, I wanted to pick a name that had a couple of meanings. So the term Chequers, the Chequers House was built in the 11th century in England, it was the Chancellor of the Exchequer, his house, the CFO. And for 800 years, it passed through family wealth transfer. And then at the early 20th century, men were starting—and unfortunately not women—but men were rising in society, self-made men, and they needed a place. You know, originally, the country had been ruled by the aristocracy. And they needed to have a place where they could entertain and do business. So the last owners of Chequers House donated the house to the country, so that self-made men would be able to do business. So, it’s an intersection of family wealth and self-made wealth,

Cathy: Right.

Megan: It’s interesting, when you have a firm, you start to attract a certain type of client. And so my, a lot of my clients—not all of them, but I would say that 85% of them—are self-made. I don’t know if it’s because of, you know, my own background. I love stories like that. But I’ve always found the clients I’m working with tend to be the first generation with sizable wealth.

Cathy: Oh, I love that. And so that’s why you named the firm Chequers. It completely fits. And I have to tell you, we have something else in common. I wasn’t a British History major. But I was fascinated by British history when I was younger, and I read everything I could about it. So that’s so cool. I’m really glad that I asked you about that.

Megan: Yeah, no, I love British history.


Cathy: Okay, so let’s get down to talking about the technical stuff. So, the reason I want to talk about the inherited IRA, specifically, is because I have a lot of clients who are inheriting IRAs and/or are growing large IRAs that they are going to give to their heirs. And I’m beginning to realize—you know, the SECURE Act changed the rules about distributions starting January 1, 2020—and that this needs to be paid attention to. Because of the changes, tax bills could really go through the roof. And there are things you can do to mitigate. And I thought, who can I talk to about this? You came first in mind.

Cathy: And so, we’ll start with the basics, so everybody understands where we’re going. Let’s start with what is an inherited IRA? What changed? And we’ll go from there.

Megan: Yeah, so a good place to really put this in context of why this is becoming such a big issue for a number of Americans is, pre-pandemic, Fidelity did a study. And they found that over, I think it was close to a half a million Americans, have IRAs that have balances in excess of a million dollars. Now, they were just doing a study, but put into context is the fact that this is a big issue.

Megan: And so, you know, an IRA is an individual retirement account, whether it’s your traditional one or a Roth IRA. And when you put money into the account, you’re saving it for your retirement. But the thing is, most people don’t spend their IRA down to zero. And so when they pass away, it passes to a beneficiary. And so that’s what we’re talking about here, is when you have your IRA, passing it to the beneficiary, they are inheriting an IRA. And that’s sort of the tricky part of planning. And why I say that is, when we think about estate planning as a whole, we think about our assets—our houses, our brokerage accounts, our jewelry, our cars, things like that. But one of the biggest assets that most people pass on to their family members or friends, and so on, is their IRA.

Cathy: So true.


Megan: The planning you do with your IRA is key. Now, if we go back to before the SECURE Act, and it’s funny, because the SECURE Act came into being in December of 2019, so less than 15 months ago. But truth of the matter is, it feels like a lifetime ago because of the pandemic.

Megan: And it made two really important changes to IRAs. The first is it changed required minimum distributions, the age at which you must take your distribution from your IRAs. It was at 70 ½, and it moved to 72. So that was the first thing it did. The second thing it did is it eliminated this concept called a stretch IRA.

Megan: So, what was the rule before? So basically, let’s say, Cathy, I had an IRA, and I named you my beneficiary, and I passed away, and you inherited my IRA. Before the SECURE Act, you could do something called a stretch IRA, which is, you would be leveraging the IRA tax deferral by just taking the IRA required minimum distributions. You’d take it out over a long period of time, stretching out that IRA. And so, if you lived another 40 years after I passed away, you could be taking distributions over those 40 years if you handled the IRA correctly.

Megan: Now, Congress didn’t like this. And the reason they didn’t like this is Congress wants to get paid. And if you think about it, with an IRA, we put money in pretax, it grows tax deferred, and when you get the distribution, you pay ordinary income tax on it. And so if you inherited my IRA, and you lived another 40 years after I died, right, you might not be paying all the income tax till 10, 20, 30, 40 years after I die. And Congress was like, well, that’s not cool. That benefits rich people.


Cathy: That is so not true, it just blows my mind. Because everybody, like you just named that stat about IRAs. In America, it’s not only rich people.

Cathy: So, you know, I want to give an example. I talked to a client today—just to talk about what you’re saying, to illustrate it—he’s going to inherit, he’s going to split it with his brother, a $500,000 IRA. Under the old rules, he would have to take about $18,000 a year.

Cathy: Under the new rules, he’s going to have to take about $50,000. Although you don’t have to take it each year, you could take it—well, you’ll get into that. But if he did take it each year, it would be $50,000. So think about the difference between $18,000 and $50,000 in tax, and also adding that on to your other income, what’s it going to do to the tax bracket you’re in, etc.

Megan: So I mean, and that’s the—you’re hitting the nail on the head. So that’s what the big change is. So the law was previously, you could stretch it out. And it was, I thought it was a great thing for a lot of Americans because it gave them measured income, like in your example, where the $18,000 a year.

Megan: So Congress changes the rule. And after January 1, 2020, the new rules apply. So for anyone who had an IRA that they inherited pre-January 1, 2020, old rules still apply. People who got, who were now going to inherit after January 1, 2020, what Congress did is basically what you’re talking about. They’re saying, except for a certain group of eligible designated beneficiaries—which we’re going to get into in a moment—everybody else who inherits has to inherit and take the money out over 10 years. They don’t care how you take the money out over 10 years, but 10 years after the date of death, IRA has to be done. U.S. government has to get its money and be paid its taxes.

Cathy: And that is a difference. Before it was a required amount every year. So the difference is now they’re not requiring you to take out an amount every year, you have to just empty it by the 10th year.


Megan: Correct. And so one of the things that’s going to be really key here, right, is the fact that, you know, you need to think about who your beneficiaries are going to be. Because this 10-year rule applies to a lot of beneficiaries. But there are a group of beneficiaries that Congress and the IRS have excluded from the new rule, okay. And so it’s really important to focus on this.

Megan: So the first group, which is sort of obvious, is surviving spouses. So if I have an IRA, and I walk outside, and I get hit by the proverbial bus, and my husband inherits the IRA, he can still draw it out over his lifetime. In fact, spouses have two ways to take a distribution from an inherited IRA. The first is, my husband could step into the shoes of me and withdraw the balance over my life expectancy. Or he could just roll it into his IRA and get sort of a fresh start with it.

Megan: Okay, so for spouses nothing has changed. And that’s important here. Because for a lot of people out there with their IRA planning, the original beneficiary, the primary is going to be their spouse, and the rules are the same. It’s going to be on the contingent side. But let me give you the other groups of people that are given sort of this special designation now. Eligible designated beneficiaries, EDBs.

Cathy: EDBs, let’s call them that from now on.

Megan: Okay, so EDBs. We’ve got the surviving spouse. We’ve got the IRA owner’s children, or child, who are under age 18.

Cathy: Minors.

Megan: Yeah. Just to give you more clarification, if I had a child who was 13, and I named them as my beneficiary, and I walk outside and get hit by the proverbial bus, they could inherit my IRA. And they could stretch it until they hit age 18. And then the 10-year rule applies.

Cathy: Right. And it does depend on the age of majority in the state, right? In some states it’s 21, and that would be the date then. Is that true?

Megan: You know what, I believe it’s 18 because this is federal law. So I don’t think there’s anything different about that.

Cathy: Okay, good to know.

Megan: Now, keep in mind, if you’ve had a grandchild, they do not come under the child provision. So this is child only. The other groups of EDBs are disabled individuals, chronically ill individuals, and any individual who is not more than 10 years younger than the deceased. Okay. And really, that is siblings. Okay. They’re trying to say siblings without saying siblings.

Cathy: Or parents. But that wouldn’t make any sense for a lot of reasons.

Megan: No, because they’re not 10 years or less in age, unless the parents are really precocious.

Cathy: Right.

Megan: So, if you think about it, right, it’s a very specific group. And the two groups that make the most sense, right, are the disabled and the chronically ill. Because if you think about it, they’re trying to add protection there. The major groups—surviving spouse, child under age 18, and an individual who is not more than 10 years younger—you have to really think about this group. The group is a very small group of people.


Megan: So I think the thing that we’ve got to be thinking about here is, how do you want your estate plan to flow? Right? Because what I find when we do estate planning is we do a nice little flow chart when it comes to the will or the trust here in California, right? How it all will pass, how will the assets pass. But I think the beneficiaries, right, you need to be doing the same thing.

Megan: So for instance, if I was to take my situation, I would look at my situation holistically. And I don’t have children. But I have two brothers. One is two years younger than me, and one is eight years younger than me. And in my estate plan, I do want them to have some of my assets. But if I was to look at the whole thing, right, to look at my entire asset base and figure out—how am I going to slice up the pie?

Megan: And I know I want to give a piece of the pie to my two siblings, and I know that they’re less than 10 years younger than me. What I might do is say, well, because they can stretch it out, I might name them as my contingent beneficiary to my husband. Because they can still take advantage of these stretch IRA rules, right? Other people in my estate plan, right, like my mother, my best friend, some of those groups, right, they might not meet the stretch IRA definitions, and they might be better served taking under my estate plan.

Cathy: Right.


Megan: I think the thing is, and I know Cathy, a lot of people who listen to this are, you know, clients of yours and also advisors. I think that given the changes in the law, the first step everybody really needs to make is pull it all together holistically between the estate plan and the beneficiary designation. And really think about mapping assets.

Cathy: And let me let me stop for a second because I think I want to clarify something. So, for the listeners, when you’re talking about the beneficiary designations of the estate plan, the estate plan includes anything that isn’t an IRA with a beneficiary or a life insurance policy with a beneficiary. It’s your taxable assets, your house, things like that. But those are the things that go in your trust. And then on the other side is the IRAs and the life insurance policies that have designated beneficiaries. So, Megan is saying you need to have a holistic plan to combine those two. Just explaining the term estate plan.

Megan: Yeah, no, I think that’s really helpful. And I think one of the things that’s happened over the past decade is estate attorneys have gotten more focused on beneficiary designations. So, you know, I think for everybody, right, the best way to look at your estate plan in general is that it’s a living thing. I always tell clients that this is living, breathing estate plan. And anytime there’s a life event, we should get back in front of the attorney, right? Whether it’s you’ve had a child or grandchild or you got married, all of those things bring us in front of the estate attorney. But the SECURE Act and the changes to the beneficiary rules is also a good point for us to then reach out to our advisors.

Cathy: That’s a good point.

Megan: This is the time that maybe we should refresh this. And I think one of the things that the advising community has gotten very good at is doing a whole balance sheet approach. So Cathy, I’m sure with your clients, you know all of the assets, even if you’re not managing it, right, and I think that’s so important. And I think the ability to go through the balance sheet and say, okay, this is covered by my trust, but this is covered by beneficiary designations is really important. Because I’ve always been surprised at times to realize that people don’t understand how powerful beneficiary designations are.

Cathy: They don’t, they don’t. And so are you saying that you think estate attorneys didn’t focus on that as much, and now they are helping clients more to figure out that holistic approach?

Megan: I think that they’ve always been helpful on it. But what I’m seeing more when I get client estate plans is there’s often a great letter or a summary in the front of the estate plan, and you probably see this as well. You know, saying look, retitle your assets this way, but also say, listen, for your beneficiary designations, this is what it should likely read. And copy that on there.

Megan: But here’s the thing. For a lot of Americans, right, naming the spouse followed by their children might be the easiest solution. But for people who have these very big IRAs, this is where you really have to get into the planning, get into thinking about how you want it to work and how it’s going to flow. Because things sometimes don’t flow the way you think they might until you map it out.

Megan: My first piece of advice here is, because of this change, it’s a great time to connect with your advisor. Go through the balance sheet, understand what goes by the trust and what goes by beneficiary designations, and then work with your advisors to refresh the beneficiary designations, to really, really look at them and make sure it makes sense in context to the balance sheet.

Cathy: Love that advice. Perfect.

Megan: So that’s sort of the first thing because the problem we have, right, is we get into a weird world of taxation. And, you know, I think one of the things that’s been so overwhelming for people is this idea that if they inherit an IRA, right. So if I inherit an IRA from my mother, I have to take out the distributions over 10 years. And it’s a complex rule, because I’m facing income tax consequences when that comes down the path, and it’s how do you manage that? Are there certain tricks out there or ways to think about it that will help you manage the tax piece of it?


Cathy: Let me interrupt for one second. And I totally agree that I want to go into the taxing. So, you’ve been talking about what the owner of the inherited IRA should do, right? And one of them is definitely look at the estate plan and look at the beneficiary designation as a whole. Before we get to the inheritor, the heir, the beneficiary, is there anything else that the IRA owner can do before they die, to reduce tax for their heirs? And is that a wise thing? Do you think that’s a wise planning move to do?

Megan: It’s funny you bring that up. I think that when you, one of the things that you have, as you build your asset base, you have to figure out is what are your priorities. So I have a large group of clients, that the priority there to mitigate taxation, regardless. They just want to make things easier for their children and grandchildren. And then I have other clients that sort of say, look, my spouse and I, we’re protected. It is what it is, whatever happens plays out. So I think there’s a little bit of developing a philosophy on what your priorities are in your asset base.

Megan: Now, if you are one who said, look, I want my kids and my grandkids to inherit. I don’t mind if I have to take some of the pain up front. Some of the things that they should be thinking about is, can you convert your traditional IRA to a Roth IRA? Now, what does that mean? So, as we said, a traditional IRA, you put in pretax money, it grows tax deferred and comes out as paid at ordinary income tax rates. Roth IRAs, you put after-tax dollars in, typically, I’m just giving the broad scenarios. The money grows tax deferred. And when you take your distributions, it comes out tax-free. So if you’re sitting on an IRA, and you’re looking at your beneficiary saying, I don’t want them to pay a lot of income tax down the line. I don’t mind paying the tax. I might convert my IRA to a Roth IRA. Meaning I might pay all the income tax upfront, so that the money in the account becomes a Roth.

Megan: That doesn’t mean we get around the stretch IRA rules, the 10 years. But what it does for your beneficiaries is they can keep them, you know, if you pass away, and your children who were over 18 inherit, the money can stay in the Roth IRA for 10 years growing tax deferred, and then in the 10th year, you can take it all out and therefore mitigated some of the income tax over time.

Cathy: And this is assuming that the person that’s Roth-ing their IRA can afford to pay the tax. That’s why it really depends on what your goals are with your money. Do you want to pay the tax for your kids or your heirs? Or can you afford to do that? Do you need the money to support your lifestyle or whatever?

Megan: Right. Now, I’ll tell you my own personal situation. I mean, obviously, I’ve named my husband. But I’ve named friends. And my attitude is, look, you’re inheriting this. So what you have to pay the tax? It’s more than you had, right, like you’re lucky to be inheriting it. And that’s my sort of personal philosophy on it. You know, you don’t have tax practitioner.


Cathy: You don’t have kids, though. I know I’m thinking of some clients in particular, if you explain this to them—what’s going to happen when their kids inherit. They’re going to go, oh, really? And so then I start thinking, this is the next thing to think about. Who’s in the higher tax bracket? The person with the IRA that might do the Roth, or the kids? Are they high income earners? So, it always gets very complex, these types of decisions, in the end.

Megan: It’s very specific to the to the personal situation. And I just want to add one more element to that. I had someone do this in 2008, during the crisis. But sometimes the best time to be doing this type of planning for whether or not you should convert an IRA to a Roth is when the markets are down. So a year ago right now, right? We were almost at, I mean, right now we’re in April. But last March, March 2020, markets at an all-time low there—that would have been a brilliant time to convert your IRA to a Roth. The thing you got to think about is timing matters.

Megan: So if you’re one of these people who are sitting there saying, look, I’m going to be passing my IRA on to someone who’s not a spouse, who doesn’t qualify as an EDB. And I want to make sure I mitigate all potential income tax for them. And I want to convert my IRA to a Roth, and I have the money to do so, I’d wait till the market dropped.

Megan: In 2008, I remember we did it. I think we did it in like January—it was like December of ’08, January of ’09—and the market, as you know, hit bottom on March the 9th, 2009. And today, we’re at all-time highs. In retrospect, it was a brilliant move because he paid the income tax on a very low amount. But at the time, it was sort of like, I remember him asking me if I lost my mind. And I was like, no, because if you believe the markets will rebound, which you know, I think a lot of investors do, you know, at this point, moving it to a Roth over time, right now, saves you tax dollars down the line.

Cathy: And if they invested it, if they invested it right away in the Roth, they got to participate in the recovery fully, you know?

Cathy: Yeah, timing is super important. I mean, you can’t predict what’s going to happen with that. But you can certainly watch and be ready.


Megan: I would make the argument, you know, part of our job right now is when the markets are on a tear, we need to be talking about planning ideas with clients for when the markets drop. So next time we have a March of 2009, or a March of 2020—weird that it’s always iin March—when those moments happen, you don’t want to be paralyzed in your decision making. You will have wanted to have thought this through.

Megan: So I would challenge you to say if we went back to where we were on March 27th 2020, which was the bottom of the pike, technically, the bottom of the market when the CARES Act was signed. You know, looking back now, do you wish you had converted your IRA to a Roth and paid those tax dollars on it, given the growth in your IRA? And these are the questions people have to ask.

Megan: I don’t want to lose track of the beneficiary designation. So if you’re an IRA owner, my advice is flowchart out how your IRA is going to pass. Remember, if it passes to your spouse, you’re still under the old rules. If your contingent is not in the group of EDBs, then you really need to think about that group. And think about what is your philosophy on taxation? Do you want to pay the tax for them? Or do you not? Do you even care? I mean, are you saying, look, you’re inheriting something. God bless.

Cathy: And there’s nothing there’s nothing wrong with that attitude, by the way.


Megan: Right. Now, the tricker thing is, the person who inherits it. So you know, we’ve been using a scenario, right, where if you inherited my IRA, Cathy, you’re going to have a whole host of decisions that you have to make when I pass away. Because you get told, okay, you’ve inherited an IRA, what do you want to have happen? And this is where, as the beneficiary, you really need to work with a tax professional or another advisor who can lay out taxation for you. And to sort of map out the next 10 years, what does it look like, right?

Megan: Because you might be working for the first five years of the 10 years. And the last five years, you might be retired, and so your income bracket might be changing. And so what you want to be doing is roughly mapping out where you think your ordinary income tax bracket is going to be.

Megan: Now, some people would say, look, if your bracket’s going to remain the same the whole time, you just might want to take a piece out every year, and so be it. Other people might say, look, wait till the very end, wait till the 10th year, and then take it all out.

Cathy: There’s the other factor that predicting tax rates, like, right now we have an administration who might raise taxes. So you have to think, will I be taxed at a higher rate later, in that 10-year time frame? Or should I take it now? That’s another thing to consider.

Megan: Because there’s also a third group, right, of people who are trying to, they might have a high tax bracket, then a low, then a high, then a low. And you can intersperse the distribution that way. But I think, what I tell people about retirement planning is—we talked about me being a history major—I think of things on a timeline. Seventy-two, as we talked about. If they start taking the RMD before 62, they might still be working, but 62 to 72 is usually that first sort of decade of retirement.

Megan: And what a lot of them experience in that decade of retiring is they might be taking Social Security, but a lot of their income might be coming from their investment portfolio. And they might be municipal bonds, which are tax-free, or qualified dividends at preferential tax rates. And that might be the sweet spot to pull down a lot of the income to fill in the gap.


Cathy: Let’s repeat that, because that’s a really important point.

Megan: Yeah, I mean, I think the thing is, when you’re working with your advisor, they typically do a long-term cash flow. I think it’s the best tool out there. And Cathy, do you use them with your clients?

Cathy: Oh, yeah, I do this kind of planning, where in that that period you’re talking about—where you’re looking at—right when you retire before you take RMDs. It’s a really critical planning time.

Megan: It is, and it’s where your income tax, you know, if you do that sort of long-term cash flow, you typically can see between ages 62 and 72, there’s a reduction in taxation. Because most people go from paying a lot of ordinary income tax to preferential tax rates, right? They have municipal bonds that are tax-free, they have qualified dividends, and they often have Social Security, but their brackets drop.

Megan: And that’s where layering in IRA distributions can be incredibly powerful because you’re going to get more money out, but at a lower tax rate. And where I think anyone who’s inheriting an IRA really needs to think through sort of when they take it, and when they can take advantage of certain tax rates.


Cathy: Yeah. Could you talk a little bit about the whole Medicare and IRMAA charge thing, too? Because that’s something else that people need to think about.

Megan: Yeah, so there is a surcharge for Medicare. And I always find it, you know, it’s frustrating, because people don’t expect it. Medicare will surcharge you if you make a certain amount of income on your Medicare payments. So that’s frustrating for people, because first of all, Medicare looks back two years on your tax returns. And they add back any municipal bond income that you had. They’re really trying to figure it out.

Cathy: You know, the point you just made is so true. Why does—no one knows that. Everyone thinks that it’s that bottom line, monthly Medicare fee. And it’s not. And people are always surprised that they’re paying more.

Megan: I was on a call with a client yesterday. And I mean, she’s now 71. And I’ve heard for six years about the Medicare surcharge, because they add back for muni bond income. Because she’s like, look, I did the right thing. I structured my asset base appropriately.

Megan: But I think the thing is, those are the nuances you have to add in. And look, I’m going to be honest, sometimes tax is tax. You can’t mitigate it. And if you can’t mitigate it, you want to think about all the other planning levers that are around you.

Megan: So, one of the big things out there—and I know you’re a big fan of it—are donor-advised funds. So if you’re going to have to take the distribution, either over 10 years, or in a couple of years, from an inherited IRA, you may choose to take the distribution in a year that you can make a donation to charity. Or fund a donor-advised fund, where you put some of the money right to charity and mitigate the tax bill that way. And that might be another way to handle it.

Cathy: Another point with the donor-advised fund is for the IRA owner, if they decide to Roth part of their IRA, is to do a donor-advised fund contribution in that year. That would mitigate some of the tax on that Roth conversion.

Megan: There’s not a one size fits all solution. There’s a lot of different options out there, and you have to work through them, depending on your personal financial situation, and who you are as a person. What are your values, your value proposition?


Cathy: It’s so important that you’re bringing that up. Because, you know, when I wanted to do this podcast, I was really focusing on how can we help our audience save, learn how to save tax, given this new rule? And the truth is that paying tax isn’t really the worst thing in the world, you know. You’re paying tax on income, so you obviously have income coming in. And it really does depend on your own personal philosophy.

Megan: Yeah. And, you know, I’m sure you use investment policy statements. And I think whether you work with an advisor or not, you should have an investment policy statement for your asset base that lays out the mandate.

Megan: And we try to put in ours what people’s tax philosophy is. So, you know, I’ve got things like they hate refunds—they don’t want the government having that loan from them—to do everything possible to mitigate income tax and estate tax issues. And it’s trying to find that balance. Because, you know, anytime we have a law change, it might close one door, but it opens another door. And what’s why you want to go down that path of doing that type of planning.

Megan: And I have a lot of clients who have very complex situations, and they do complex planning. And then I have another group of clients where they’ll say, there’s elegance in simplicity. I’m not going to overthink it. I don’t know where tax rates are going to go. I’m going to let my beneficiaries figure it out.

Megan: But the beauty of the changes in this rule here for beneficiary designations is both the IRA owner and the inherited IRA beneficiary all have planning choices to make. Everybody is able to control some of the controllables. And so, the thing is, when you inherit an IRA, what’s really, really important is to seek advice. To reach out, get help, because people like you and me, we’re trained in thinking through these parts of the problem and understanding in context of the bigger picture. That’s important.


Cathy: Yeah. And some real mistakes can be made, like the contingent beneficiary. I mean, there could be some huge tax owed if people don’t understand how the beneficiary thing works and who’s the eligible designated beneficiary and who’s not. Someone doesn’t take anything out of their IRA dies and then their beneficiary ends up paying tax on a huge IRA.

Megan: Things like that can happen. It happens all the time. And yeah, you know, these are in a weird way—if you inherit an IRA, it’s a bit of a champagne problem. It’s a good problem to have, right? You’re working through it. But I also would say to people who, to all of us who have IRAs and 401(k)s and 403(b)s, this is the cheapest estate planning you can do, right?

Megan: Because in California, when we do an estate plan, we have to go out and get a revocable trust. But beneficiary designation planning, if you set your beneficiaries up, and in five years, your life has changed. Maybe you were married and then you got divorced. Or, you know, you’ve determined that one of your children doesn’t need the money, but your other child does. It’s all about just changing a form. And that’s the thing I like about beneficiary designation planning. It’s quick and easy to fix.

Cathy: I have some of my clients with simpler estates use transfer on death beneficiaries for their taxable accounts instead of doing the trust for that very reason. Because it’s simpler.

Megan: Yeah, I mean, I’ll tell you here in California, you know, when you get your revocable trust, they’re like change your bank accounts. And I’m like, oh, God. The first time you go to the bank and try to do that, the practical aspect of it is difficult. People inherently like to procrastinate on this.

Megan: So like you do, sometimes I’ll say just make it TOD or POD account at the bank. It just makes it easier than getting into the trust, because it’s, it’s just, it’s difficult.


Megan: Now, I do want to mention a couple other planning ideas. Because, you know, one of the things that people talk about was with stretch IRAs, you were creating this unique estate planning tool for your beneficiaries. Right? So one other idea out there—and it comes with a cost—is the IRA owner can also choose when they’re taking their RMDs. If they don’t need the RMD to live off of, they can pay for life insurance, and that life insurance can then go to the beneficiaries of their death. And they don’t have to deal with this income tax issue.

Megan: And that’s one of the things out there that people are starting to use to replace it. It’s not my favorite technique, because I find life insurance at times can be too expensive. But if you’re really, really caught up in making sure your beneficiaries get a certain amount, and get it income-tax-free, life insurance is one of the levers you can pull in your financial picture to make that happen.

Cathy: Yes. Yeah, that is a little more complicated and more expensive. But again, it depends on the person. For the right person, that could be the best strategy.

Megan: And I think that’s the thing where, you know, the beauty of working with an advisor is our roles are to bring to the forefront things that we don’t want to deal with. We force conversations that people put off. And I think one of the best conversations we should be having—and we do have—with clients is how does this all flow? How does it all play out? And I found when I start to show clients how the estate plan flows out and the dollar amounts, it can sort of take them by surprise.

Cathy: Yeah. And they’re certainly not thinking about that. You know, who spends time thinking about these things? I’ll give a good example of another planning technique that just came up today around inherited IRAs. One technique to reduce the IRA before the person dies—and if they’re older, this kind of makes sense. If they’re taking their RMDs on a monthly basis, you may want to take the whole RMD as early as possible, just in case. You know, if they’re in their 80s or 90s? So that the money is out of the IRA.


Megan: Yeah. That could work. You know, and also, you could just choose to take larger distributions. You’re in your 70s or 80s. And your main sources of income are your IRA and your Social Security check, right? Maybe you start taking larger IRA distributions. I mean, there’s no harm in it. Again, work with your advisors to make sure from a tax perspective you’re not getting burned. But it might make a lot of sense for a lot of people, you know. And how to do and how to structure it.

Megan: I can’t emphasize enough, you know, tax planning—and I know Cathy, you use a tool with your clients that you have found really effective. But, you know, I agree. Planning is so key as you project ahead, because there’s power in that knowledge in trying to be tax efficient. I can’t tell you how many times people are like, “woulda coulda shoulda.” If I’d known that’s how it was going to play out tax-wise, I would have done this differently. And so working with advisors like Cathy, who have those tools, I think it’s so valuable.

Cathy: I do too. You know, I always do tax planning. But I tell you, it was a lot of work when you were using spreadsheets to do it. And there’s new software available to financial advisors that’s incredibly powerful where you could do scenario planning for years out. And, I find in my role as a holistic financial advisor where I do financial planning and investment management, and I know everything about the client, that is so helpful and powerful for them. And because tax accountants, I don’t do tax returns, and many accountants don’t know the whole thing. So it’s really good to have somebody that does to help you, especially with these kind of issues.

Megan: Because you can then say, look, even though we’re going to take a larger distribution, let’s donate to charity more. I know you’ve been doing more to your alma mater, right? Things like that. And it’s that little nuance there that can make the difference.

Megan: And I think it’s important to quantify the tax savings, right? And remind people when we’ve done a strategy—over time, what has that strategy added to your portfolio? It’s like, I told you the story of my client who converted his IRA in ’08, ‘09. I mean, here we are 12 years later. I mean that’s, for him, a seven-figure difference. That has value.

Megan: It’s painful paying the tax, but a certain point, you cross over where you’re winning. And that’s so important when we’re managing our finances is—you want, I want clients to feel smart and clever about the choices they made. And even if the choice is, like I’m saying, I don’t care if you inherit my IRA, and you pay the tax. Good luck. Have at it. That’s a proactive decision. You know, look. Ultimately, the SECURE Act, I think it hurts more Americans than it helps.

Cathy: Wait, wait, what does the acronym stand for? It makes me laugh.

Megan: Setting every community up for retirement enhancement.

Cathy. Right! How is this enhancing? I don’t see—it enhances the coffers of the government. I’ll tell you that, you know.

Megan: So, but here’s the thing. What if the opportunity had been different? That if you inherited an IRA, you had an option that it was, you know, it was almost like a pension to you. And you got to, you know, talk to an advisor, who explained this thing could be like a pension for the rest of your life. Don’t pull it all out.

Cathy: Yeah. Which it was. That’s really what it was. It was an excellent tool for people.


Megan: Yeah, I’m disappointed that they did this. You know, I think that unfortunately, we live in a day and age that when they’re setting tax policy, there is such a need to be punitive to people who have been financial success. Right? That sometimes the typical American, right, the average American who have worked so hard to save this money. And they’re sitting there, and they have five, eight, $900,000 in the IRA. They’re getting penalized because there are a few wealthy people that also got benefits.

Cathy: Right. You know, good point. Because we didn’t, we haven’t talked 401(k)s in relation to IRAs. But you said people have big IRAs. One of the reasons is they’ve been saving in their 401(k)s their whole life or their 403(b)s or whatever. And then they retire, they convert it to an IRA, and then someone inherits it. I mean, that’s the way a lot of, in some cases, that’s the only way people are saving money. So, it really is penalizing a broad swath of people in the United States, not just uber-wealthy.

Megan: It is. And you know, I think the other thing is it’s one of these things where there’s also planning that can be done while you’re building the wealth, right? So, I have a lot of clients where one spouse is working, and the other one doesn’t. And we still fund an IRA for them. And if we can, we convert it to a Roth.

Megan: And a lot of times we’re doing it because, you know, one, it gives us the chance to create a vehicle that’ll create tax-exempt income. But also, two, even though they name their spouse as the primary beneficiary, and maybe their children as the contingent, they also are making the decision that the spouse could eventually disclaim the IRA, the Roth IRA, if it’s inherited, and go right to the kids. Granted, the kids have only 10 years to take it out. But it’s tax-free money, right? It grows tax deferred.


Cathy: Okay, let me let me ask you something. I thought about this before we talked. If someone disclaimed an inherited IRA, and it went to EDB, would they get to take it over? I mean, they get to stretch it?

Megan: So, yeah. If it was an EDB, like if my husband disclaimed it and it passed to my brothers? Yeah, they can stretch it.

Cathy: Okay. That’s interesting.

Megan: That’s, that’s some of the nuances there. Yeah. I think you know, it’s one of these things where, know who you want to give to in your family. Right? How far out do you want to give? Nieces, nephews? You know, and you might do nieces and nephews in your actual trust, but you do your siblings in the IRA because of the stretch privileges.

Megan: And that’s some of the stuff you just, and you can see just even in this podcast, some of it is just sitting around and kicking the can around. If you have a beneficiary who has spending issues, you might be better served putting them in your trust, in your estate plan, your trust part of it, and not give them access to an IRA. But that’s also problematic.

Cathy: Right. They might drain it all in the first year, right?

Megan: Yes.

Cathy: Yeah. And you can set up trusts where they get the money at a certain time. And you can’t do that with an IRA. It’s their money.


Megan: The other thing is, when you’re the IRA owner, think about dead—I love the term from the law—dead hand control. How much dead hand control do you want on your beneficiaries receiving something? Because if you had two siblings, and one of your siblings had a drug issue or spending issue and your other sibling didn’t, you could say, look. I’m going to give you my IRA. You’re going to have to pay some tax on it, right, but you’ll probably be able to stretch it.

Megan: I’m going to give our other sibling money in the trust. And they might get less from the trust than you’ll get in the IRA, because net-net, you’ll get the same after tax. That’s the type of nuancing that you want to be thinking through.

Megan: And estate attorneys, financial advisors, CPAs—these are all great people to have the debate with. And, you know, sometimes get them all in one room. You know, get everybody in one room and say, look, I want to do my beneficiaries. And I really want to think through this. Let me tell you about all the people I’m thinking about, and what I’m concerned about with each of them, or what I’m not concerned about with each of them.


Cathy: Right. Oh, I have a question for you. Nondeductible IRAs. If someone’s eligible, even a very wealthy person, would do you do those?

Megan: Totally. And I file form 8606. Which records the basis and tracks it.

Cathy: Do you put it into the same IRA? You don’t do a separate IRA for the nondeductible contributions?

Megan: In general. I mean, I keep it in the same IRA. And it depends, because some of the people we’re doing it with have such large pretax balances that they can’t do a Roth conversion. But then I have a group that every other year, we’re funding it and doing the Roth conversion.

Megan: And look, I’ll say this for what I have found—and maybe it’s because I’m a woman—but I will often run into situations where, you know, the husband is the working spouse and the wife has stayed at home. And I think it’s incredibly important for women to have their own money. And it might not seem like a lot at first putting the $6,000, or $7,000 away if you’re over 50. But, you know, as I say, over 10 years of doing that, plus the growth, that turns into six figures pretty quickly.

Cathy: No, I agree. Spousal IRAs are—definitely. So, you take advantage of any tool that is out there, no matter how small. Like with the deductible IRAs, it’s only six or $7,000 a year, right. But then those earnings grow tax free. If you keep it in, if you keep it in the nondeductible IRA.

Megan: What I tell clients is, look, if there was $20 on the floor, I’d pick it up before I left the room. You know? Every little bit. Because if you max out your 401(k), and you fund your IRA, and then you add to your brokerage account, and maybe you fund your kids’ 529, and you add it all up, all those little things become a big number.

Megan: And we need to celebrate that more, because it is so hard to save today. You know, I always tell people, what’s fascinating to me is the government determined that upper middle class starts at income of, I believe, $127,000. That’s where the government feels like you should be set. And I’m sitting here in the Bay Area, and that is still tough living on $127,000. How do you save?

Megan: And the system since the 80s has been made to work against you. So, if you are a beneficiary of an inherited IRA, it’s a blessing. And you need to think through it because it can be one of those things that makes the difference between a financial challenge and a financial success over the long term.

Cathy: Right. Because it is a gift. It’s a gift, right? An inherited IRA is getting a gift, and you want to take care of it.


Megan: And you know from all those studies. You know, Merrill Lynch does a study every year on this, the focus is on family. And I believe what the study has found is that there are so many boomers and Gen Xers who are building their entire retirement strategy on inheriting because they can’t fill the gap and they’re all living so long. So, that’s the tough part.

Cathy: No, it really is. Well, this has been just as interesting and thoughtful as I thought it would be. You’ve given me some new ideas around this topic. I really appreciate you coming on. Is there anything else you want to add on the top? I mean, we could probably talk forever about this.

Megan: One last thing I would just say to anyone who’s doing this is engage in your planning. These are big dollars. Whether your IRA is $50,000 or $500,000. It’s big numbers, and you want to have some control on how it plays out, so really get engaged. And talk to your advisor. It’s well worth it.

Cathy: I agree. And so, let’s tell our audience where they can find you. I know you write for Forbes, and you probably do some other things. So please, yes.

Megan: So you can find me at Forbes at www.forbes.com/MeghanGorman. And then you can also find some of my other planning pieces at thewealthintersection.com. So you know, I love to do webinars and write about this. I think my role in this space is about helping people thrive. It drives my husband a little crazy, because we’ll be out and about, and I’ll be trying to give people advice. But I love this stuff, though. If you want to read my articles, feel free and feel free to reach out.

Cathy: And give people your Twitter handle for those that are on Twitter.

Megan: Sure. It’s @megan_e_gorman. So feel free to reach out on Twitter as well. But thank you for having me on. This was great.

Cathy: I want to do this again on another topic, okay?

Megan: You got it.

Cathy: To be decided.

Megan: You got it. Sounds good.

Cathy: All right. Take care.

Megan: Take care.

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S3 E3 Transcript: Learning to Think Like a Breadwinner

Welcome to the Financial Finesse podcast, where we’ll be discussing tips on how to handle your money and life with skill and style. Your host, Cathy Curtis CSP has been helping make finance accessible and intriguing for women for almost 20 years. You will get savvy actionable ideas, listening to her conversations with some of the coolest and smartest women on the planet. And now, here’s your host, Cathy Curtis.

00:50 Cathy: Hi, I’m Cathy Curtis, host of the Financial Finesse podcast and founder of Curtis Financial Planning, an independent financial planning firm that specializes in the unique financial needs of women. As a CERTIFIED FINANCIAL PLANNER™, I partner with women who take the lead in their household finances, and I help them secure their futures while getting more enjoyment from their money today. So whether you’re single, the primary earner in your family, or simply take an interest in personal financial management, this podcast is for you. 

With April being National Financial Literacy Month, my conversation with today’s guest is even more meaningful and relevant. Jennifer Barrett is an award-winning financial journalist and digital strategist with more than 15 years of experience in print and digital media and a passion for personal finance. She is currently Chief Education Officer at Acorns, a growing financial wellness startup with more than 9 million subscribers. 

But more importantly to today’s podcast, she’s the author of a new book called Think Like a Breadwinner: A Wealth-Building Manifesto for Women Who Want to Earn More (and Worry Less). This book is available starting April 6, anywhere books are sold. 

In this episode, we focus on some of the most important concepts Jennifer writes about in Think Like a Breadwinner, including the financial literacy gap in this country and its impact on women, specifically; the importance of dispelling the myths that prevent many women from making good decisions with their money; and the one mindset shift that will not only give women a more active role in creating their own future, but can also create a positive ripple effect on every aspect of your life. 

I think Jennifer’s message is so important, and I encourage all of you to read her book as soon as it’s available. I promise it will change the way you think. With that, I hope you enjoy my conversation with Jennifer Barrett as much as I did. And be sure to check the show notes at curtisfinancialplanning.com for more personal finance resources.

03:02 Cathy: Jen, it’s so good to see you. I think it’s been, I don’t know, eight years. I’m reading your book. And I think I knew you back when you were in financial journalism at CNBC here. And that would have been six, seven years ago. And then you’ve changed jobs. And about your book, Think Like a Breadwinner, I love that you weaved in your own personal story and that you are so vulnerable about the things that you’ve experienced in your journey to be a breadwinner and feel power around your money. 

Jennifer: Yes. Yeah, it’s definitely been…there was a learning curve there.

03:54 Cathy: Was it hard to do that? Did you think twice about doing it that way? To be that vulnerable? 

04:04 Jennifer: Yeah. A little bit, but I think, I didn’t want it to be a preachy kind of book or the kind of book where it sounds like I’ve got it all figured out, and I’m going to tell you how to do it. It I really wanted it to be more authentic in the sense that I’m not just an expert, I’ve lived it. So, I can speak from both perspectives. And I just thought it was important because so many of us feel so uncomfortable talking about money. And a lot of women feel such a lack of confidence around managing their money, you know this. 

So I just think it’s important for us to admit that we don’t know everything, too. And we’re learning, too. And, you know, we’re all kind of part of the same journey and hopefully the destination. To get control of our finances and feel really good about where we are financially. 

05:00 Cathy: So, yes, I agree with you being relatable. And women don’t want to feel bad when, you know, they don’t want to read a book and go oh, my god, I’m terrible. I’m not doing anything right. 

Because money is so complicated. I mean, when you think about all the little acronyms you need to know, and all the tax laws that have “if yes, then do this, if no, but if that happens, do that.” And learning about all the different retirement plans, it’s a lot. So nobody needs to feel bad because they don’t know it. 

Although I think it could be better in our country, if we had more financial literacy classes, like you hear that a lot. And it never seems to happen. 

Jennifer: Oh, I completely agree. And we still have not made a lot of progress there. And I think there’s so many people who care passionately about that, and really are trying to get that implemented in school curriculums, and I have a feeling the pandemic may have put some of those efforts on hold. 

But I don’t know, either. Everyone seems to be in agreement that this is a life skill that we all need to learn. And yet I think it’s only 17 states that have it as a requirement in their high school curriculum. So yeah, there’s a gap for, you know, there’s a financial literacy gap, period. It’s not just a matter of whether you’re a woman or a man. 

But we do know, I mean, there’s research that shows that parents actually do speak to their sons differently than they do to their daughters about money. And so I think that plays into it, to where they are more apt to talk to their sons about investing and building credit. And they are more apt to talk to their daughters about saving and spending smartly. 

Cathy: And this all goes back to budgeting. 

Jennifer: Yes. And it all kind of goes back to this. You know, this old conventional model where the man was the breadwinner, the woman was the caregiver, took care of the house, you know. So being able to budget and clip coupons and count your pennies was really important if you were in that role. But those skills don’t translate as well anymore, because now women are moving into the breadwinning role. And regardless, we need the skills to build our own wealth. 

And so, there’s a lot of work to be done there, I thin—in terms of the messaging, and not just the financial literacy piece of it. 

Cathy: Yeah, that’s still stuck in the 50s. A woman at home with the apron, but managing the budget, getting an allowance. My mom was right there. She got her little allowance, and she managed it really well. You know, but my dad handled all the finances. 

But why are we still stuck in the 50s? How many years ago was that now? Really?

Jennifer: The conventional breadwinning model rose to prominence in the 50s and 60s. So it’s been like 70 years, and we’re seeing a paradigm shift in the model itself. But our attitudes have not caught up to that. Our culture has not caught up to that. Our corporate policies have not caught up to that. And so, you know, we have some ground to cover, I think, there. And it really just starts with the way that we talk to women and the way that we message them around money. 

And so, I’m not surprised at all that a lot of women actually don’t think that they need to have these skills. They think that, you know, they’re going to get married, and the man will take care of a lot of this stuff. 

08:10 Jennifer: You know this, right, because a lot of women are also really wary of investing, certainly investing in the stock market. And that is probably one of the best places to put your money in order for it to grow. And so if you are already wary of doing that, you think it may be too risky, too complex, whatever the reason is, so you put off doing that. And on top of that, you’re sort of thinking, “alright, I’ll get married, and my husband will probably be the one to manage the finances anyway.” 

Cathy: That could be an unconscious thought, too. So I want to read you a few things about how women are different from men that, as I’m reading your book, I picked them out. And women listening, I don’t mean this to be depressing. But research backs up every single one of these things, and Jennifer, you did a great job pulling in all this research out there. It’s so appreciated. I’m going to use it as a reference guide, I know it. 

09:17 Cathy: Women…

Earn 20% less than men for the same jobs in nearly every single occupation
Have lower levels of financial literacy
Higher credit card debt
Less likely to ask for a raise or promotion
Lower average credit scores
More afraid to say no to projects at work
Concentrated in the lowest paying master’s fields
Career tracks are usually things like human resources
Have less money saved at retirement: one in five women have nothing saved for retirement.
40% more likely to live in poverty in old age
Carry more student loan debt
Not invest, leave money in cash

A lot of women are more likely to tap into retirement accounts early, even though there’s penalties and tax. 

Jennifer: And I did that, like in my 20s. 

Cathy: Are less likely to take any finance classes in school. And I didn’t even write down the stats in the caretaker chapter about how many women take the caretaker role and leave work for children or older parents and therefore get retirement savings interrupted and all that. So I couldn’t help it. I read the book, and I was framing it. And I thought, there’s a lot of not good stats about women and wealth in this country. I don’t know what it’s like everywhere else. 

Jennifer: It’s not all that much better. I think Nordic countries have it a little better. They have more egalitarian policies that have held. 

Cathy: Yes, like childcare and all that. So anyway, as I’m thinking about this—I’ve been a financial advisor for almost 20 years. And I work mainly with women, and I work with a lot of single women. So I see many of these things happening. And I just keep asking my question over and over. When are these statistics going to start turning? 

And yeah, writing a book like you did with, you don’t only have the stats, you’ve got action steps in almost every area. That’s really important. So anyway, I want you to be able to talk. Talk to me more about, I know your personal story inspired you. But let’s talk a little bit more about that. 

11:41 Jennifer: Sure, well, I had my own wake up call. And that was really the genesis of the book. I was in my early 30s, I was an editor at a national news magazine, and I had a great job. You know, from the outside, it looked like I had it all together. 

But I was sharing a one-bedroom apartment with my husband and our toddler at the time. And I remember one night, when he woke up, I was kind of pacing back and forth in our bedroom trying to get him back to sleep. And I just had this moment where I looked around and I thought, we are in a completely unsustainable situation. And I don’t have the means to help us get out of it. 

And it was such a crushing moment. I mean, honestly, when I still think about it, I’m like, because I had thought I’m such an independent woman. I have a 401k, I have a little bit in a savings account. I’m paying half the bills. You know, I had credit card debt, but I was paying it down. And I thought I was sort of doing everything right. And it was in that moment that I realized I had missed a huge piece of the puzzle, which was, I was not investing for the midterm. I did not have the kind of savings that would help us buy our own place. I didn’t even have enough set aside to help us really afford to have a second child, which I badly, badly wanted. We both did. And here we were in a situation where we were about to outgrow our apartment, and I wasn’t even sure we could afford to rent a bigger place. 

Cathy: Let me stop you right there. Because what it sounds to me like, is that you realized that you had these super important goals. Having a second child and having your own place to live, which are pretty important things to me, really were at stake. And somehow those goals became paramount. So your epiphany was, oh my God, I’m not going to ever have this unless something changes. 

13:38 Jennifer: Yes. And to be fair, my husband, when we first met, his income far exceeded mine. He worked at a startup; the startup went under and he went back into journalism. So our incomes were much closer together.

And so, you know, he was contributing as well. But it did occur to me that neither of us were really prepared to buy this house. And there was no way that I could slough that off on him or assume that he would be the one to do this. What I really realized was, I had left myself in an incredibly vulnerable position, where the things that were most important to me, were now at stake because I had not taken a proactive approach to my finances to make sure that they came to pass. And that was just a huge wake up call for me. 

And then the next question was, why in the heck did I make these money choices? Like why would I ever have made money choices that leave me in this position? And as I started to really think about it, the turning point question was, I asked myself if I had been raised to think like a breadwinner. Like so many of the guys that I had dated in my 20s, who were all about, like I need to buy a house, I need to save money so I can get married, and all these things. I thought if I had been raised to think like a breadwinner, how would that change the choices I made with my money and even my career? And that was literally the turning point because I realized I hadn’t been thinking that way at all. 

15:00 Cathy: And also, you mentioned that you realized you were getting resentful towards your husband, that he wasn’t taking on the traditional bread winner role. And you realized that there’s two of you, it’s your goal too, and you decided to take the reins. I couldn’t help but thinking too when I was reading the book, that “think like a breadwinner” could be replaced by “think like a man.” And then I thought, no, that’s not it. It’s: think about how men have been raised in our culture and in our institutions and the things that they have been taught, versus the things that women were raised to think about and prioritize. 

Jennifer: Yeah. 100%. A man sort of grows up thinking, what do I want in my life? And how am I going to get it? And we may think that way about our career, but I think we’re still not brought up to think that way about our life in general. About like, this is what I want my life to look like. How much money am I going to need to make to support this lifestyle? I know that’s a question that I didn’t ask. 

I certainly, I mean, I went into journalism, no idea how badly it paid. There’s lots of men in journalism, but it’s more, there are a lot of women in journalism, and you see more men in management in journalism than you see women. I mean, women tend to be more on the reporter side, the writers, the writer track. That’s shifting, obviously. Now, there are a lot more women in management. But certainly when I first got into journalism, there were definitely more men at the top of the masthead, and those are the jobs that pay well. Or they were on the business side. And those were the jobs that paid really well. I only learned that later, of course. 

16:56 Jennifer: I moved into management shortly after I had that epiphany. And that wasn’t the only reason why, but it was a big reason. I realized, you know, these things are so important to me that I don’t want to put them at risk. And I need to get a job that pays well. And initially, I thought, well, this will be a temporary situation. I’ll move into management, and then maybe I’ll go back to writing. But once I was in that role, and on that track, I found I really enjoyed it. I loved the challenges. I loved how it sort of stretched my idea of what my capabilities were. 

It was very interesting how it actually started to shift my mindset even more in terms of what I thought I was capable of and how I envisioned my career. So in a lot of ways, that was a big step as well. 

17:47 Cathy: I think that happens to a lot of women that step up. I mean, that’s true for me. I think if women could get into more of a wealth mindset mode, breadwinner mode, combined with their personal skills that they already have in spades, right? The good communication skills, the caretaker skills, all those things, they’re gonna be unstoppable.

This is a challenge. And going back to your mindset growing up was not that you were going to be this person to build the wealth. And I’m thinking back to my childhood, because I had a little different trajectory for some reason. Wealth has always been important to me. I can’t figure out why. I’m thinking about it now that I read your book. 

But I do remember one message from my father. He always told me, Cath, you could do anything you want. He always said that. That was one of the key messages from my father, you know, the dominant male figure my life. And I’m not sure how many women are told that when they’re young? So my answer could be that my upbringing created the groundwork for me. But I know that’s not typical. And in the things I just read, the statistics about women are showing that that is not typical. 

Jennifer: That’s true. I interviewed a number of women who did have a breadwinning mindset from the beginning. And I can think of one in particular where she told me her dad actually sat down with her, taught her how to invest. He invested in real estate. So he taught her how to invest in real estate. He told her what capital was, he told her that when you have anything outside of your paycheck, that’s capital, you don’t touch it, you invest it. You leave your investment alone until you need it. 

He taught her how to separate her money into different piles for savings, charity investing, you know. So very early on, she got these lessons from her dad. And she was the oldest of three girls, and part of me thinks that maybe he was imparting the lessons on her that he might have done with a son.

20:00 Jennifer: In other cases, I talked to women whose parents divorced and the mom had been quite reliant on the dad. And after the divorce, they saw the impact on their mom and consciously decided, I am never going to allow myself to be in a vulnerable position like that. It wasn’t that they disrespected their mom, there was nothing like that. It was more like, oh, my poor mom, she ends up in this situation because she stopped working, because she wasn’t involved in the finances. They saw that unfold in front of them and how painful it was for their mom. And so they consciously decided, I am not going to do that. I’m going to take care of myself, I’m going to have my own money. And so they made very different decisions. 

And I would say I mean, my parents, I grew up in a middle-class household. Both my parents were professors of accounting at one point, so yeah, I did great in math. It wasn’t like a lack of skills. I knew about the stock market. But there was a disconnect for me between sort of knowing the stock market existed and realizing what an incredibly powerful tool it was, and building wealth from the get go and how important that was. 

21:10 Cathy: Yeah. Let’s talk about that. Because that’s a really key thing for women to understand. Because I still see women who are really afraid of investing and who keep way too much money in low interest-bearing bank accounts. And you have some stats about that in the book that that’s a true phenomenon. And, so you talk about compounding and all that. I mean, the book is such a great resource. If a woman read that chapter on why investing your money is so important, even if you just simply put it in an S&P 500 fund and let it sit for years, if you just did something as simple as that, it will change everything. 

Jennifer: Yes, because there’s no comparison. We know that, on average, the S&P 500 Index rises about 7% per year, right, on average. Obviously, some years it goes down. But you take an average 7-7.5% return, which is what it is. And then you look at a savings account, which right now is paying .05% for a traditional savings account and only like 0.4 or 0.5% for a high yield savings account. 

So we’re talking about a difference of 6.5 to nearly 7%. There’s no comparison. And when you run the numbers, and you look out five or 10 years, you’re talking about the difference sometimes of tens or hundreds of thousands of dollars, depending on how much money you have. And that accounts for a lot of the difference between what men have saved and what women have saved a lot of times. 

I don’t know where that comes from. But I did interview a lot of women who say that they take comfort in knowing that the money is there and accessible at any time and, so there’s definitely something in there that’s more emotional and more psychological. 

23:02 Cathy: You know that’s a really good point. When I talk to women who have that fear, they don’t understand that investing is very liquid. There’s this myth. And this is a financial literacy piece. Some people think if you put money in an investment account, you can’t get it back easily. When I realized that myth exists, it makes it a lot easier to explain that no, it’s completely liquid. You might sell when the market’s down. But you know, you can get your money out whenever you want. And you write about a lot of the myths of investing in your book, which I think is really helpful, because they’re out there and they persist. 

Jennifer: They do. We still have this idea that it’s complex and risky. And to me, I mean, I tell people this—I think you may agree—is I think it’s more risky to leave your money in savings for too long, because you don’t give it the opportunity to grow. And so if you want, certainly put some in savings. Enough to cover, you know, we usually say three to six months of expenses. 

But if you’re not investing the rest, you are missing out on all this potential growth and putting yourself at a disadvantage. I mean, right now, savings accounts pay less than the rate of inflation. So your money is actually losing value sitting in a savings account. And that’s, it’s really hard to wrap your head around that. And I get it, and I say if you’re nervous about the stock market being down, then invest in bonds or bond funds, but really almost anything has a better return than savings accounts right now. 

Cathy: Well, you know, and maybe the other thing too is, we’re talking about the now and investing now. The reason you invest is for when you can’t earn a paycheck anymore. And in this country, we don’t have as many safety nets anymore, right? The companies don’t have pensions. You know, what’s that old saying? A man is not a retirement plan? 

25:06 Cathy: Your dad is not gonna be around anymore. And so you have to think about it. And then for some women, younger women, that may seem way, way far in the future. But it takes years of compounding to get quite a chunk of money that you need to live out that—who knows how long it’s going to be, because we’re all living longer—30, 40, 50 years where you may be earning nothing or a fraction of what you’re earning in your prime working years. And so that’s that stuff that, unfortunately, women end up living in poverty. The bag lady syndrome is real still. I don’t know how many years it’s gonna take for all those trends to like, start reversing.

26:07 Jennifer: I’m determined in our lifetime. I mean, that’s my goal. I want to do everything in my power. I’m sure you do, too. I mean, to your point too, time is one of the most important factors in investing. So even if you’re investing $25 a month, if you’re 22, I mean, that money compounds. So it’s like, if you’re living paycheck to paycheck, or you perceive that you are and you think you can’t afford it, I would challenge anyone who says that to just put aside 5, 10, 15, $20 in investments. 

And the psychological, you know, just the benefit psychologically of seeing that money grow is so incredible. And then it serves as such an incentive to continue to do that. And you can actually see how people shift their habits. And we see this at Acorns where people sign up for roundups, and they’re usually at about 30 to $35 a month that they invest. So they sign up for just roundups, nothing else. And then they see that money start to grow. And we see after 3, 6, 9 months, they start putting more and more money in because they understand, you know, the power of compounding and the power of putting your money in. 

And also, they realize, you know, I don’t miss that. I don’t miss that spare change. I don’t miss that $35. So what’s another $5 here, or $10 there? And that is so beneficial to you to learn that lesson early on and then just start piling more money in as you can. It’s just huge to start early and have the advantage of time and compounding. And I know you know this too, but it’s like one of those things that drives me nuts when people feel like oh, no, no, I have to have a lot of money to invest. And I’m like, no, no, no, you won’t have a lot of money unless you invest. You’ve got it backwards.

27:43 Cathy: Okay, I have a story to tell you about Acorns. So I teach a personal finance class in the summer at a woman’s college here. And these are all college age and graduate level. And I’m teaching really basic personal finance, and they’re learning all new things. And one of the women told me, we were talking about savings apps and Acorns came up in the conversation—that she really likes using that app to save. 

And the other tool that I like talking about with women is Roth IRAs. You know, they fit the fear mentality perfectly for women because it’s a way to start getting invested because it’s a retirement account. So theoretically, you don’t touch it till retirement. But you can withdraw what you put in any time, without penalty and without tax, and you can invest it. And so I think it’s important to pick out things that are really easy to understand and explain the concepts and speak to those fears about not having access, or I’m going to lose it, or I’m never going to get it again. 

And the other financial literacy thing that drives me nuts is some people think an IRA is the investment. If you have an IRA, you have an investment. 

29:13 Jennifer: Yeah, you have to invest the money you put in. I actually had a conversation with someone not that long ago, where I had told her about the Roth and I was like, you should do this, you qualify. You know, like we checked her income because there is that income threshold. But then she said, oh, I had put all this money in my Roth. And I said, great, how did you invest it? And she said, I didn’t know I was supposed to invest it. It was just sitting in a money market fund. 

Because no one ever explains the second part of that. You’re like, I want to open a Roth IRA, and Fidelity or whoever says—or, you know, Acorns, we do it but we invest it for you, so we’re a little different—but in most brokerages, you open it up and they’re like okay, we’ve opened your account. And they send you on your way. And they don’t tell you, you have to invest it yourself. 

30:05 Cathy: Like the 401k. Now, there’s a default, it has to be invested. Right? It’s almost like that should happen with Roths. 

Well, let me let me ask you something. So your message is so strong in this book and so helpful. What is your plan to get the word out and the book out to as many people as possible? Are you gonna, you can’t be on the road right now, right? 

Jennifer: Okay, this my little studio, my makeshift studio. We actually just did the audio book, and I had to create a studio in our closet, which was funny.

30:42 Cathy: So you read the whole book? How was that? I’ve always been curious about that. Was it fun? Was it a drag?

Jennifer: It was fun. I mean, I’m an editor at heart. So there were parts where I thought, oh, I could have streamlined that. Or, you know, it’s hard to turn that part of you off. But it was a much more intimate, you have a much more intimate relationship with the book, when you’re reading it. And it’s like you’re talking to someone, you know, as you’re reading it. So that was a really incredible experience, because I was on with a producer and with an audio engineer, and they kept saying, you know, just imagine you’re talking to someone, you know, you’re telling them this. And so then you really kind of get into it, and you’re absorbed in the material. 

Cathy: Oh, that’s fascinating. I think this would be a great book to listen to on Audible. But I also think it’d be a great workbook where you actually write. You know, somebody that’s learning about finance actually buys a book and writes notes in it. I mean, I’m gonna buy it for me, because I want to use it as a reference guide. 

Jennifer: Yes, write in it. I encourage you to. 

31:58 Cathy: Your point about reading and editing—that’s why it’s so important. Anything you write, you read it out loud, right? 

Jennifer: So yeah, also, there were a number of things that I actually didn’t know how to pronounce. So many names. But no, it was a great experience. And so I’m doing that, I’m doing podcasts. And I mean, I’m trying to get the word out as much as I can. 

And I’ve joined some initiatives with some other women primarily, and some men who are in the space of really trying to advocate for paid leave and some of these policies that will help women better. So that’s a part of it, too. And I’m going in and speaking to companies about this, speaking to women’s employee resource groups, about this kind of stuff. 

You know, I was passionate about this before I wrote the book, but I hope that this book gives me the opportunity or the excuse to talk about it even more, though.

Cathy: It will. You have a platform now, which I’m so grateful to you for taking the time to write this because really, it’s like a manual to start growing wealth. It replaces like, I remember, there was this really thick book written. Now I’m not gonna remember the name. But I mean, it was, you know, a bomb of a book. And your book is still quite a long book. But it’s organized in such a way. And the storytelling in it about your life, and about other women and their money journeys, makes it an interesting read, which is not easy to say for a lot of finance books.

33:38 Jennifer: Thank you, I appreciate that. I did try to weave in as many stories as I could. And also the mindset piece, I think makes it more interesting, because it’s a message that a lot of people haven’t heard before. 

And just to go back to what you’d mentioned at the beginning about people being kind of embarrassed about money or not comfortable talking about it, I think we do a lot of money shaming. And so one of the things I really wanted to do with the book was to not make anyone feel ashamed of the money choices they’ve made. And help women understand that so much of it comes from the cultural conditioning that we’ve gotten, and the messaging that we got as kids. And so even if we know what we’re supposed to do, those, you know, this kind of conditioning can get in the way of that, and in a really subconscious way. 

It’s really hard to see that sometimes, you know, to understand like, why am I making these money choices, and not those money choices? A lot of us don’t stop and question that. And if we did, you know, it might take some digging to realize, oh, I put my money in savings because I’m terrified I’m going to lose it. Because maybe their parents had, you know, maybe their parents lost money or they had some experience, they were exposed to something, and so that has lodged in their brain. And so they’re afraid of investing themselves. 

So many of us carry around these stories, whether you’re a man or a woman, and it’s so important to examine those, especially if they kind of get in the way of your wealth building efforts. And it’s hard to do that on your own. 

35:00 Jennifer: I think you probably have tons of stories of people you’ve talked to because that’s part of what you do, right, is unpacking that. 

Cathy: You know, I really read your chapter on values and goals with great interest because I actually have an e-book called The Happiness Spreadsheet. And I have an exercise almost exactly like yours, where I list the 100 values. And I’m trying to get people to really think about what they want in their life. So I can so much relate to that. 

I laughed, though, because I was thinking about my book. It kind of is a budgeting book. That made me think it’s not an investing book. But one of the values is growing wealth. And I do interweave that in there a little bit. But I laughed at myself when I read that. But so I think that’s the core work for women. It’s worth figuring out where you got your money mindset from, and then doing the work to let go of that stuff. And realize who you are now. 

So many of our values could be from our parents. I mean, I even think about why I went into business, because I did the exercises in my own book. So I think I went into business because I love, my dad was on a pedestal, he was a businessman. And I turned it into a success. But as I was doing my exercises, I thought, would I have chosen a business career if it wasn’t for my dad? 

Because I love creativity. And you can make this work creative in certain ways. And that’s what you do. You compensate, once you get somewhere, because your point in the book, too, was choosing a career that can make you a living. 

36:56 Jennifer: Yes. Right. Yes, that piece is often missing in the advice that we give to women. And I love the idea of you can be anything you want. But a lot of times, and there is actual data around this, is that girls are less likely to have conversations about how they’ll be compensated in the careers that they’re interested in than boys are. 

So I mean, it all comes back to the same thing. We are still not thinking of women as breadwinners. We are still not setting up women to succeed in that role. Even though more women are moving into that role than ever before. More than 40% of moms in the country right now are the main or sole breadwinners for their families. 

So it’s happening. Whether or not they’re prepared, women are moving into those roles for a variety of reasons. We are still not preparing them for that role. And we’re not thinking about women being in that role or about their income being so critical with the policies that we have and the perceptions and biases that get carried into the workplace. And so you see that sort of play out in all these ways. 

38:00 Cathy: In your opinion, do you think that, given there’s a new administration, that there’ll be more focus on family policies that help women breadwinners? 

Jennifer: That’s the hope. Yes. We’re advocating pretty hard for that. And I do think, I mean, Biden did push for paid leave in the stimulus bill, and it didn’t end up in the bill in the form that he had proposed, which was kind of a mandatory leave. Now it’s an incentivized leave around with tax credits. And it’s really tied to the Coronavirus, not the kind of blanket paid leave that that we’re really advocating for. But I think he’s open to it. He said he’s open to it. You’ve got a lot of senior lawmakers right now talking about it. So I’m hopeful. 

Cathy: We’re the only country in the world that doesn’t have it—the only industrialized country in the world. 

Jennifer: Yeah, the only industrialized one. It’s so fascinating to me, because I studied Norway, and we’re where Norway was in the 1970s. So they implemented these policies in the 70s and men didn’t take paternity leave. So 20 years later, they completely revamped those policies and made it mandatory for men to take a certain amount of paternity leave. Or it was sort of a use it all or lose it policy. 

And they started this whole public awareness campaign to try and shift the perception of men as caregivers. And now they have one of the highest participation rates in the world for fathers and mothers. I mean, it has completely changed the game. And we would be smart to learn from their experience. But we’re still having the conversations they were having in the 1970s.

39:32 Cathy: Because we have a patriarchal society. It needs to shift.

Jennifer: It really needs to shift. And it’s good for men too. I mean, there’s so much research around the importance of men having that time to bond with their kids. Being able to be caregivers without feeling stigma or anything like that. It’s really, this is not just about women. 

40:00 Cathy: No, I know a lot of my peers in the financial world are men with young children. And one of the things I hear the most is how happy they were during COVID. Because they had to be at home, they got to see their kids and bond with their kids more. You know that must be so awful, to feel like you have to leave the house every day early in the morning, and you don’t get home till late. And you miss out on so many things that happen with your children. Good family policies are good for everybody, not just women.

40:37 Jennifer: I’ve seen it play out with my husband, because as I moved into the breadwinning role, I took jobs that had me traveling and were a little more demanding. He started working from home, and he was able to spend more time with them. And I saw how he bonded with our two sons. And I just thought, I don’t know. I was so grateful that he has that relationship with them. 

And I had this moment, this one phone call where I called my dad, I mentioned in the book where I was really stressed out, I was working really long hours in this one job. And I felt like I wasn’t getting a lot of time with the kids. And I was describing it to him. And he said to me, now you know how I felt. And I just burst into tears. It was the first time I really realized what a sacrifice he had made, certainly in his own mind that he thought would benefit us, and that we’d appreciate down the road. But he really was not around very much when we were kids. 

And you think like, I’m so close to him now. But I didn’t really get a chance to build that relationship until I was already in college and then spending like long amounts of time with him. And I just think, gosh, what he missed out on, you know, as a younger dad. 

Cathy: And what the kids miss out on not being able to get close to their dad. You cannot do that in two quick days, you know, a weekend. It takes more time than, you know, a week vacation in the summer. So all of the things we’re talking about are really good for everybody. The whole family system. So I love that. I mean, I could cry thinking about how little time I got to spend with my dad. And that creates its own set of issues where you miss somebody all the time. It’s just not, it’s not a good thing. 

42:32 Jennifer: No, and I think about, we have the opportunity now to change. That is really what it comes down to. I see how my kids are with my husband. And we’ll flip flop. I mean, I will not always be the main earner. Probably, who knows. I mean, it’s fine if I am. But I mean, just because you move into the main earner role doesn’t mean you’re there for life. 

And certainly, during the pandemic, we’ve shifted back to almost a 50/50 caregiving model, which has been wonderful. So I know what your colleagues are talking about. But I had plenty of time with them too. I feel like each of us are really getting the opportunity to bond with our kids and spend a lot of time with them. And that they really know each of us well and know that we’re accessible to them. And that’s so important. 

And watching that in contrast to how it was when I was growing up. Or even my husband and his dad. His dad was a pilot. He was never around. So I feel like we just have a tremendous opportunity here to ship that for the next generation. 

Cathy: I do too. You know, it could be so great if it was a partnership, not this, you know, the woman is the breadwinner in a marriage but also has to do all the housework. 

Jennifer: Yes. Which is what’s happening now if you look at the stats. It was happening throughout the pandemic too. And even when women earn more, as you said, they’re still doing more of the housework, the childcare. 

And it’s not all the men. I will say I will say this, that part of it is yes, the partner needs to step up as well. But I can speak from my own experience that letting go of the caregiving piece of it, even like letting go of the idea of yourself being you know, being the main caregiver. For me, my identity was so intertwined with that as a mother. I felt so deeply like that was my responsibility, that actually letting go of being the primary caregiver there for a few years was tremendously hard. 

Cathy: Really hard. And I get it in a lot of women to feel that way. I know that they want that role. And you know, there’s nothing wrong with being a caregiver. 

Jennifer: No, I mean, I think the whole problem is we aren’t valuing caregiving enough in this country. Right? And we and we pin it all on one gender, which doesn’t, you know, it’s a disservice to everybody. 

44:53 Cathy: I think it is too. You know, in my own experience, I switched careers and started from scratch. My husband was a breadwinner in those years. I built up my career, he wanted to retire because he’s older than me. I said, fine. Now I’m the breadwinner. It works so well, it’s great. Everybody gets what they want, and it creates a more loving relationship, more trusting, and it sounds like you navigated your own situation really well. And I’m sure it wasn’t easy at times. And you’re very open about it too. Because I know your husband’s read your book. So he’s fine with having a more equal paradigm in the marriage?

45:32 Jennifer: Yeah, I had him read the book proposal before I ever submitted it, because I wanted to make sure he was okay with it. And my whole point for him, too, is that this was not in any way meant to make him feel bad about not earning more. That’s not even what the book is about, at all. 

Cathy: No, it’s really about portraying a marriage that was working towards more equality so that you can both reach your goals. And give up on the princess mindset.

46:07 Jennifer: I didn’t even think of it as that. But it’s true, deep down. I don’t think I would have admitted it. But deep down, I think I was just assuming that. And he learned to embrace a childcare role, which I love. 

Cathy: I love this, what we’re talking about right now. This, it really came out in the book. So I don’t want to make this too long, or we’re gonna lose our listeners. I could talk to you all day about these things. So let me ask you this. So tell me about your role at Acorns. And also give info on how people can access your book. And any other, if you have a blog, or those kinds of things. 

Jennifer: You can go to jenniferbarrett.com. There’s a lot of information on the book there. There’s a form you can fill out if you have questions. I do coaching too. I’m just getting my performance and leadership coaching certification. So I started coaching primarily female startup founders and senior leaders. So I do some of that as well.

Cathy: I want to hear more about that. Let’s just talk about that for a couple of minutes.

Jennifer: Sure. I mean, I’ve always been interested in coaching, and I took an intensive last year. And then as I pulled back on my hours to work on the book, of course, I have to immediately fill them with something else. So I signed up, I applied for this. It’s Brown and ACT. It’s a joint program. And it’s really focused on performance and leadership coaching, grounded in neuroscience. I thought it was a really fantastic program. And I’ve just finished all the requirements for that. 

I actually thought even if I didn’t end up coaching, it was really fascinating to do that work as I was going back and kind of looking at the book, because so much of what I talked about was mindset. So I was really fascinated to see, how do you really help to shift somebody’s mindset? You know, first you have to make them aware that they even are holding this mindset that may not be benefiting them. But then how do you actually shift it? So that work was fascinating. And I figured there’s no downside to having that. 

Cathy: I love that, how much work is being done in brain science right now. That’s fascinating. 

Jennifer: Well, so often it comes down to that, right? Because we sort of know what to do. But then why aren’t we doing it? I mean, with our health, with our money. So it’s not necessarily a lack of information. Sometimes it’s the lack of knowing where to go for the right information. But so often, it’s a behavioral issue. It’s there’s some blocker, some mental blocker that is keeping us from taking the steps we know we need to take. And so I thought it was really important for me to dig into that. 

Cathy: You’re gonna write another book. I know that. You’re gonna solve the problem of how to get the breadwinner mindset.

48:59 Jennifer: I sure hope so. I don’t know that it’ll be fixed that quickly. It may be years in the making. But yeah, I would love to see that if more women start thinking that way. 

Cathy: Okay, great. And then your book is on all the platforms, I saw. It’s not available quite yet, right? 

Jennifer: April 6, but you can preorder it on Amazon. And I mean, on any bookseller, really. Barnes and Noble, my publishers Penguin Random House, there’s a page there too you can preorder from. So if you want it, you can preorder it now. 

Cathy: Excellent. Well, I can’t wait to delve into the book even more. It’s a wonderful, wonderful book. And thank you so much for writing it and for being on my podcast. 

Jennifer: I’m thrilled to be here. 

Cathy: So great to see you. 

Jennifer: So great to see you too. Cathy.

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S3 E2 Transcript: The Link Between Self-Awareness and Financial Success

Welcome to the Financial Finesse Podcast, where we’ll be discussing tips on how to handle your money and life with skill and style. Your host Cathy Curtis, CFP® has been helping make finance accessible and intriguing for women for almost 20 years. You will get savvy actionable ideas listening to her conversations with some of the coolest and smartest women on the planet. And now, here’s your host, Cathy Curtis.


00:51 Cathy:

Hi. I’m Cathy Curtis, host of the Financial Finesse podcast and founder of Curtis Financial Planning in Oakland, California, an independent financial planning firm that specializes in the unique financial needs of independent women. As a CERTIFIED FINANCIAL PLANNER™, I partner with women who take the lead in their household finances to help them secure their future while getting more enjoyment from their money today. So whether you’re single, the primary earner in your family, or simply take an interest in personal financial management, this podcast is for you.

In this episode, I interview Joy Lere, a licensed clinical psychologist and behavioral finance consultant with a practice in Napa, California. Joy previously served as an Associate Clinical Professor of Clinical Psychology at George Washington University and has held clinical and research positions at Children’s National Medical Center, Penn Medicine Princeton Health, and the Department of Defense.

One of the reasons I find Joy so fascinating is because of how she describes her clients: thoughtful, curious individuals who often know the “right” answers but find themselves repeatedly pulled into familiar, problematic patterns that hold them back from achieving their full potential. In many ways, her work goes hand in hand with the work I do as a financial advisor, since so much of our money habits and decisions are tied to the beliefs and patterns we developed at an early age that no longer serve us.

During the interview, Joy and I discuss the parallels between our psychology and money habits and why self-awareness is so critical for getting out of our own way as individuals and financial decision-makers.

Specifically, we touch on…

How setting clear boundaries for ourselves and living our lives authentically can actually improve our financial outcomes.

Why spending our time and money in line with our personal values makes us happier and more fulfilled.

And the psychological reason budgeting is so hard for so many people.

I really enjoyed my conversation with Joy, and I hope you do, too.

03:05 Cathy:

I am continually struck by how much what I do as a financial planner/advisor and how much what you do as a clinical psychologist intersect. For example, when I asked you who you do your best work with, you said that a crisis or distress usually brings a client into therapy. But after you get over the storm, then is the real opportunity to help somebody with their life and to help them up-level their life.

And I find this is really true with being a financial advisor as well. I call it a trigger, there’s usually a trigger that brings a client into my office. And sometimes they’re panicking over whether they’re going to be able to retire when they want or they received an inheritance and they have no idea how to invest it. There’s a lot of emotions tied around inheritance. Sometimes it’s some other issue, they don’t know how to budget. And after we do a plan and put their mind at ease about that particular crisis or trigger, then I can do the deeper work over the long term of making someone feel really comfortable around their money and help them use their money to create a life they really value.

But given that I’m not a clinical psychologist, sometimes some behaviors are hard to change. And, for example, an over-spender, or someone who has total inertia around money and delays getting me what I need to create a plan, or they don’t want to look at their budget. And if they do set a budget, then they forget about it. So I’m wondering, what tools do you use in situations like that with your clients on an ongoing basis? How do you help them?

05:00 Joy:

So I think you’re so right about something, Cathy. The conversations that clients are having with me in the therapy office are very similar to the conversations they are having with you in the financial planning office, because people are coming in, and they’re talking about their lives. And money is inextricably tied up in so many important aspects of who we are, our work, really creating a legacy, our purpose, these are deep issues. And as I think about the work that I do with clients I know, I really think that there is, there’s a lot of value in understanding how your history has come to shape and inform who you are today, how you show up in the world.

I think there are a lot of things that people copy, paste and carry forward in their lives—attitudes, beliefs, roles, behaviors, tendencies and patterns that they have—that they don’t even realize have their roots back in their very earliest experiences in life. Now, what I think is wonderful and marvelous, and creates hope for everyone is: you are not your history. Now, brain science even shows that as we move through our lives, experience then shapes and modifies even the structures in our brains. So who you have been, where you have come from, that is not prescriptive of where you are going.

So one of the things that therapy is really about, so it’s understanding your history, and then it’s developing, really developing, strengthening self-awareness. So understanding who you are, learning to pay attention to what is going on inside of you, being able to begin to label your emotions, have language for that, because all of our feelings have functions, they’re providing us with information. Now, sometimes some of the things people do in response to their feelings are problematic. So then the work is okay, when you can notice something happening internally, step back and ask, okay, what is this feeling? What is this trigger telling me? And then kind of lengthening that space between the stimulus and the response, or the action or reaction to the situation, whatever it may be, so that there’s more freedom to choose in that gap.

07:48 Cathy:

Right, and what you’re saying can be applied to money behavior, but it’s really about any behavior that someone is finding problematic in their life, right?

08:03 Joy:


08:06 Cathy:

Well, I think God, and what’s happening in the markets, right? I think that work is so important because we are all so different when it comes to our money. I call it money personality, that’s the term that I use. And, and our personality and experiences are based on what happened in the past, but I think there is more than one way to have a successful financial life.

You do not have to be a certain way to be able to live well, enjoy your money, retire successfully. You don’t have to be rich, you can have a moderate lifestyle, you could have moderate income. I think, and I know you agree because you’re a behavioral psychologist, that certain behaviors allow someone to be more successful than other behaviors. And I listened to some podcasts and read some of the things you’ve wrote. And you talk about the “no muscle.” And I really am a believer in that. Saying no, to yourself, is a really helpful thing to develop. Not so easy, though.

09:12 Joy:

No, it’s not. I tell people, I think everyone would be healthier, wealthier, and a lot less stressed out if they said “no” a whole lot more often. And there are two sides of this. And saying no is setting a boundary. You know boundaries are a big buzzword right now. But to have boundaries with ourselves and with other people. And I think there are complex reasons that people are compelled to, in the moment, favor their present self and kind of indulge that person in the moment and not say “no, I’m not going to do this right now.” And there are a lot of complex reasons that people have some difficulty saying no to other people. And if you think about both of those things, financially, they can have very costly consequences.

10:07 Cathy:

Yes, definitely. Another behavior that you talked about—and I agree with you on it, and it relates to the no muscle—is not being afraid to live your life your own way.


Yes, not being afraid to be different.


And what I think has to happen, though, is to understand yourself really well. To figure out what you most value as you are now, not what someone told you to value when you were young. Not what, you know, the comparison thing with other people is a big issue, right? It’s hard to not compare. I think we’re kind of hardwired to compare. You let me know if you agree with that.

10:57 Joy:

Absolutely. We don’t like to talk about comparison, or jealousy or envy. But those are inevitable parts of being a human. And social media only amplifies that in some ways. And I love what you’re saying, Cathy, because I absolutely agree. Like anything, your financial life—a successful plan—it’s not one-size-fits-all, in the same way that nutrition is not one size. There’s not one thing that’s going to work for everybody in every situation.

And I know you do a lot of work with women, and this idea of really getting square uncomfortable about, what do you want, and why do you want it? And I think it’s challenging when we talk about values and priorities. I love some of the work you do with your clients, even like listing out, okay, when you look at these values, what’s most important to you? And some values sound really socially acceptable, but no, just be honest and own what you really want and don’t apologize. And I think this idea of what your life should look like or is supposed to look like versus what it actually is or what you want—this is such complicated water, especially for women.

12:27 Cathy:

I think it is, too.

12:30 Joy:

I’ve done this as a working mom. I remember thinking before I had children, I can’t fully predict what I’m going to want or what I’m going to think I want my mom/work life configuration to look like. I may have an idea based on what I know of myself right now, of what may be the best fit. But I don’t know. So I’ll see what happens when I get there. It turns out when I got there, what I wanted and what felt right was about what I predicted. Now, that’s not the case for every woman I meet.

But what happens if you think about this, whatever you choose in life, there are going to be far more people who are choosing something different. Choosing a life that looks different than yours. So you need to get really comfortable and square on: this is right, and this is best for me. And I do not have to defend my life choices to anyone.

People are going to inevitably offer their unsolicited commentary on what you do with your life, especially when you’re in a public facing role. At times that’s far more a projection about their stuff. You don’t have to take that in, and you don’t have to defend yourself. You need to live your life and, “no, no, this is what’s best for me and what’s best for my family.

14:07 Cathy:

Let me ask you something. So, you know, my clients come to me and I try and help them with this issue, right? I even wrote an ebook called The Happiness Spreadsheet in response to the hatred of budgeting. You know, people don’t like to write down every single penny of what they spent and take a hard look at it. It’s emotional. It sometimes creates feelings of shame. But I try so hard to tell my clients: please, I’m not judgmental. I make no judgments on how you choose to spend your money. But I think it’s still hard for people to take that hard look.

And so I thought: how can I make this more fun and more interesting? And I also know that people who really think about what they most value end up spending their money in smarter ways. So The Happiness Spreadsheet is actually building a budget after you have really thought about what you value, and what your beliefs are. It’s actually a document that is created, and I think it’s a really helpful way to look at money. It seems to resonate with women a lot. And getting them to do that work, I think, is really powerful. So that’s one tool that I’ve tried to use to help people figure out this notion that they can use their money to build a life that is aligned with who they are.

And I think there’s so many instances where values don’t align. Like in what kind of house you buy, what kind of car you drive, where you choose to go on vacation. If you really think about what you most want, where you are right now may not align.

16:16 Joy:

I tell people, you can tell me all the live long day what you value. But let me look at your calendar. And let me look at your bank account. And they’re going to show me where your priorities really live. And really some of the work I do with people in therapy is helping people align your professed priorities with the life you are actually creating for yourself.

I’d love to circle back to, I think, what you brought up about budgeting and people bristling at that. I think that’s very much a natural reaction. I think sometimes people can associate budgeting with restriction. And whenever there’s any kind of restriction, often as a response to that is going to be a kind of feeling constrained. And people, humans are hardwired not to like that.

So I like even sometimes reframing it, not as budgeting, or a spending plan, either. Our language is so powerful, and even doing something like that can be useful for people. Like the work that Sarah Newcomb has done with behavioral science at Morningstar. And she wrote this tremendous book Loaded. I highly recommend.

17:38 Cathy:

Okay. I don’t know that book. Thank you.

17:40 Joy:

One of the things she talks about is when developing a more tactical plan, as you think about your spending, understanding that when you go to buy that cup of coffee, what is the real need behind the purchase? When you are buying clothes, what is the need? What is the desire? And then thinking about, okay, these are my needs. I need to continue to have these needs met. Now, are there other ways that I can still have those needs met, that I’m still going to feel satisfied, but are not creating financial problems for me now or in the future?

18:30 Cathy:

So this is so true. Okay. I’m going to use myself as an example of a couple of things you just said. One is that we hate to be restricted. And when someone tells you you’ve got to cut back on buying something, all of a sudden, you’re in a panic. Oh my gosh, I’m never going to be able to do that again. It’s probably kind of like someone telling an alcoholic they can’t drink anymore. I’m sure it’s the same kind of panic feeling, right?

I’ll use myself as an example. Ever since I was a little girl, I’ve loved clothes. And it’s really hard for me—except, not so hard now, because of the pandemic, I have to tell you. I’m not buying anything because where the heck can you go? But before that, I am so motivated to look good and have, not trendy, but chic clothes. And I have to admit I’ve probably spent more money on clothes than I should over my life. And I’ve tried many times to cut it down because I feel like I shouldn’t be doing that. And I’m married and my husband’s very frugal, and you know, there’s lots of reasons. But every time I try and shut it down, it creates the opposite reaction. I want to go out more and shop more than I did before. It, like, totally backfires on me. What is that about?

20:06 Joy:

It goes back to, as soon as something is unavailable, our mind becomes a little bit more preoccupied. And I think sometimes that has to do with a sense of control. And, you know, that happens with financial behaviors, like I said, that happens with food. It’s how the brain just responds to that constriction. And certainly, there are certain personalities who struggle with that even more. You told me, “I’m not going to.” Well, you’re just saying that, then it’s going to fire me up and give me an idea. And now I need to show you that I’m going to do this.

20:48 Cathy:

Yeah. You know, in my case, it hasn’t become destructive, probably because I love personal finance since I was in my teens. And so I’ve been able to balance it out. But for other people, those kinds of habits can be destructive. And those are the kinds of things that as a financial advisor, when you see that happening, there’s a different skill set for dealing with that.

Now you do some work with advisors, right? Can you talk about that a little bit? Are you helping advisors work with their clients in those ways?

21:29 Joy:

Yes. So I have some advisors in my therapy practice, okay. We believe that everyone needs to really be in a good solid place personally before you can do your best professional work. So I do behavioral finance consulting. And I’m just so excited about the direction things are going in the industry, because I think more and more people are beginning to understand that finance isn’t about economics or economic theory.

And especially for planners and working with clients, you need to be creating an experience. This is not just about numbers and spreadsheets, it’s about people’s lives. It’s about death and retirement and changes and identity conflicts with couples. It’s about really messy things that a lot of education doesn’t prepare advisors for. You are not trained in psychology. So it’s exciting for me to be able to step into this world and offer a perspective from my discipline, that advisors more and more are wanting. And recognizing this is essential to begin to integrate into my practice to really have the business that I want in the future.

23:05 Cathy:

I know certain types of advisors, for example, the fiduciary, RIA-type advisors. Most of them are doing financial planning work in addition to the investment work, and the skill sets you need for financial planning are completely different than what you need for investment management. And you are dealing with people’s emotions, feelings, so many important things. And so you are dealing with their past money life, their money, personalities, or money history, and it is a different skill set. So I’m personally really happy to know the industry is going in that direction.

We have people like, I know Daniel Crosby is really involved in the RIA world and helping us to do this kind of work with our clients. And I just think it’s so important. And I’m so glad that I met you on Twitter. We were having a little tweet chat about couples and money as I recall. So in your practice, you work with, it sounds like, a lot of young professionals, right? And mostly couples, women. And how often is money the key motivator in someone coming to see you?

24:33 Joy:

So very rarely is someone coming into therapy because they are financially anxious. I tell people, there are some people who do specific financial therapy, and that’s not what I do. That’s not what I market myself as. I’m helping people with their lives. But an important part of sorting out our lives and really experiencing success is attending to that pillar of financial wellness. When we think about wellness, we need to be thinking about what that means physically, what that means psychologically, what that means spiritually. And all of these pillars have a knock-on effect on the other. So to neglect one and not talk about one is, you’re missing something really important.

25:29 Cathy:

And you wrote that generally, money comes up no matter what. I mean, no matter what people come in for, at some point, money’s going to come up.

25:45 Joy:

Yes. So I can tell you I’ve worked internationally, with bright, intellectually curious, very accomplished people, and they’re having conversations with me behind closed doors that they aren’t having with anyone else. I tell people, I have the best job in the world. I absolutely love what I do. And it struck me as I progressed in my career that time and time again, regardless of what someone’s presenting concern is—which is kind of shrink speak for “what is the symptom that is bugging you enough to say, maybe I need to talk to someone?” So maybe you’re feeling anxious, you’re feeling depressed, you’re struggling to fall asleep. Maybe you are starting to struggle and have conflict in your relationship.

Regardless of what that presenting concern is, over time, as I got to know people’s stories, this idea of the topic of money comes up in some way, shape, or form. Because it’s something we have to have a relationship with every day of our lives. It’s like food. We don’t get to opt out. We don’t get to unsubscribe from it. And the thing with money is, either you learn to manage it, or it manages you. And when we think about even emotional health, there can be a complex interplay between, like I said before, the emotional health and the money piece in someone’s life.

27:25 Cathy:

You know, I find it to be such a shame that money is such a topic that creates such powerful emotions, and usually a lot—well, not all the time, but a lot of the time—negative emotions. And this is what I attribute it to partially. I’d love to know your opinion. So we all grow up, go through school, go through college, and none of us, unless we’re interested in personal finance, like me, learn anything about the practical sides of money.

And it’s complicated, because Congress and the IRS create policy around money and create products with all kinds of complicated rules—like Roth IRAs, health savings accounts, 529 plans, 401k plans—and if you go on the IRS website and read about Roth IRAs, it’s three pages long. Didn’t you know what all the rules are? And how is anyone supposed to know about that stuff if they’ve gone through their whole life never taking a class or, you know, being forced to learn about it really? I think that’s what creates a lot of the anxiety around money, is that people aren’t educated. And they don’t understand. And then they get to be adults, and they get so busy with their own lives and building careers in other areas that they don’t have the time to delve into it.

28:59 Joy:

Yes, there’s a real paucity of financial literacy across the country. And when someone doesn’t have that scaffolding early on, if money isn’t talked about, or talked about in the home you are raised in, then you enter the marketplace, you enter your negotiations, you sit down the first time you’re faced with the opportunity for a 401k match, and you’re like, I don’t even know what this is. I think in high school, it would be far more practical to be having classes on basic financial literacy than it is about trigonometry. I know I need the Pythagorean Theorem. But if I can understand a little bit about investing, that’s going to be far more practical in my life.

29:52 Cathy:

Well, maybe engineer types would disagree with you, but…

29:57 Joy:

The engineer would probably push back against that.

30:01 Cathy:

But I agree with you, I think we agree on a lot of things. So I’m so happy that we connected and were able to have this conversation, and I hope that you and I stay connected in the future. I know that we will. I wanted to just ask you a couple personal things. I read through your bio, and I’m amazed at how many places you have lived in your life. Fascinating. You’ve moved around a lot.

I know your husband’s in the military, or was, and that’s one of the reasons, right? And have you enjoyed it?

30:38 Joy:

Absolutely. There are lots of challenges that come with being a military family, but I knew what I was signing up for when I walked down the aisle. So I went in with eyes wide open. And as someone who likes predictability and a sense of control in my life, sometimes it’s difficult, really. The government gets to decide where I live as well.

31:08 Cathy:

That would be hard.

31:12 Joy:

And sometimes plans change at the last minute. So there’s a lack of predictability because of it. You know, I’ve gotten to live and work some incredible places. I spent several years in the UK, lots of time in DC. I’ve been in Princeton. I was raised in the Midwest, and now I’m here in this horrible place outside Napa, California. I feel so honored and privileged to have had many of the experiences I’ve been afforded because of how I’ve gotten to see the world. And I think our world opens up. And our ability to connect with people deepens when we form real relationships with people who have very different lived experiences than we do. So that’s something I’m so grateful for.

32:15 Cathy:

That’s wonderful. And do you see most of your clients via video? Have you always done that? Or did you do personal face-to-face?

32:26 Joy:

So, right now I have a telemedicine practice, and my consulting practice is all online. I’ve done work as a staff psychologist and consultant for the Department of Defense. I did some of that here while we’ve been in California. I worked with a group practice, a lot of private practices while I was in Arlington. I worked with Penn Medicine, Princeton Health up in Princeton for a while. I worked in inpatient and residential treatment settings while I was in the UK. So I’ve had the honor and privilege of working with lots of people in lots of different settings.

33:07 Cathy:

Fantastic. So if someone wanted to get a hold of you, can you tell us how that would happen?

33:14 Joy:

Absolutely. So there are a few places you can find me. So my website is my name: joylere.com. I also love writing, words are like oxygen for me. So I also put some of my thoughts on Substack. I have a newsletter for them: Freud and Finance (joylere.substack.com). I also hang out on Twitter and Instagram. My handles are the same, @joylerepsyd. So it’s my name and my degree. And also I’m on LinkedIn @joylerepsyd.

33:58 Cathy:

Excellent. Thank you so much for your time, Joy. I really enjoyed our conversation.

34:01 Joy:

You, too. Thank you for sharing your mic with me Cathy.

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S3 E1 Transcript: What Every Woman Needs To Know About Long-Term Care Insurance

Welcome to the Financial Finesse Podcast, where we’ll be discussing tips on how to handle your money and life with skill and style. Your host, Cathy Curtis, CFP® has been helping make finance accessible and intriguing for women for almost 20 years. You’ll get savvy, actionable ideas, listening to her conversations with some of the coolest and smartest women on the planet. And now, here’s your host, Cathy Curtis.

00:53 Cathy Curtis:

Hi, I’m Cathy Curtis, host of the Financial Finesse Podcast, and also founder of Curtis Financial Planning, a financial advisory firm that partners with women to manage their financial lives.

Today, I’m looking forward to talking with one of my favorite people in the industry, Liz Eshleman, who is an independent long-term care specialist. Not only does she know her stuff when it comes to long-term care insurance, she’s also a delightful upbeat personality.

Maybe that comes partially from her background as a singer and performer. She spent 16 years at Mills College in Oakland, teaching music theory and and teaching voice education. And she even started an advanced vocal ensemble program at Mills. She’s been an educator for 30 years, which really helps her in educating people about long-term care, which can be very complicated.

So how Liz and I work together, I’m a financial planner. And I work with my clients to build comprehensive financial plans. A very, very important aspect of financial planning is the fact that you’re going to live a long time, and that you need to save your money for your retirement years. And what happens when we get older, is we need more medical care. And a large percentage of us are going to need long-term care of some kind. In fact, about 70% of people will need some kind of long-term care.

And that is what I call a risk in a plan. Do you have enough money saved to handle that long-term care issue and cost. So that’s why I partner with long-term care specialists like Liz when I see a need with my clients that they might need to have that extra long-term care insurance policy to help them out. So Liz and I are partners in that. And I trust her completely to take care of my clients and educate them about only what they need. She never sells more than someone needs. And she is a really great consultant.

So then on long-term care, I want to add one more thing. It’s sort of a women’s issue, because as we all know, women live longer than men. 64% of Americans with Alzheimer’s are women. And the statistics of the number of women in nursing homes are also huge. 68% of people in long stay and nursing facilities are women. And in addition, women end up being the caretakers if their husband needs long-term care. So this ends up being a really big issue for women.

So I’d like to get into the weeds with you, we’re gonna try and keep it as easy to understand as possible, because long-term care can be complicated. And one issue that always comes up is the issue of eligibility for the insurance. And that’s why I want to start with that. There’s nothing more disappointing than somebody decides that they want to buy a long-term care policy, they’re willing to learn about it and make the commitment to buy. They talk to an agent and they find out they aren’t eligible for whatever reason, like medications they take for a condition they have had.

And Liz is really expert in how these insurance companies view people and their medical conditions. And the first step is she has a conversation with you to screen and figure out whether you will be eligible and if not, how she can counsel and coach you to become eligible. So I’m going to start talking and I’m going to let Liz take over on this eligibility issue.

04:57 Liz Eshleman:

Great. Thanks, Cathy. And thanks very much for having me today, it’s a pleasure always to work with you, and happy to help your clients in any way I can. This issue of eligibility is thorny, because people don’t realize that, in fact, some of my most healthy clients overall, for instance, my athletes, clients who are runners or skiers, even swimmers, if they have an issue, for instance, a chronic tennis elbow or a bad shoulder from swimming, or, you know, any kind of what’s construed as a mobility issue, they’re not insurable. So I’ve got really healthy clients, who for a time, if it’s not chronic and ongoing, can’t get coverage.

Now, what do I mean by chronic and ongoing? Well, just what it sounds like, if it’s a short-term issue, they’re in physical therapy for three months or six months, I’ll be able to help them after they’re done with their physical therapy. But there’s a waiting period. And if the problem doesn’t go away, which is often the case with a back problem, you know, or a knee problem. I mean, and if surgery is indicated, forget it. They’re not going to be able to get this coverage, perhaps at all.

06:21 Cathy Curtis:

Let’s say someone has a knee injury from a ski accident. And it keeps bothering them, it and they they’ve gotten an X rayed and MRI. And it’s not something that can be operated on, but they need to do PT, so they get referred to the PT person, and they start going and with that kind of thing be considered non eligible. And you would say, go through the physical therapy, come back to me in six months when you finished it. And then we could talk.

06:54 Liz Eshleman:

Yeah, and in fact, not just when you finish, but wait three months, because the company won’t cover you until they’ve seen that you’ve been off of physical therapy for at least three months. Every company’s underwriting guideline is a little different. But pretty much across the board, this issue of mobility is a concern, because they see that turning into the need for long-term care down the road.

07:15 Cathy Curtis:

Got it. Okay, talk about what conditions are absolutely not, cannot be covered by long-term care if you’ve got a condition like diabetes or…

07:29 Liz Eshleman:

Right. Diabetes is possibly insurable, depending on the agency really. So, you know, I won’t go into too much detail about exactly, but let me give you an overview of some. Of course, this past year with COVID, we’ve seen that become an issue for people. Now, a diagnosis of being positive for the COVID-19 virus has created a waiting period, that companies are insisting that the client has to wait. And it’s different with every company again. But right now, that’s looking like it may actually turn into complete un-insurability if you had COVID.

Yeah, because they’re seeing cognitive problems with some folks. They’re seeing ongoing pulmonary issues to difficulty breathing. I mean, there’s so many unfortunate long-term implications from having had COVID that companies are very wary. So that’s the thing about underwriting and we’re seeing it this year, it can change when companies find out that things are more troubling than they thought, and in unexpected ways.

So yeah, for now, it’s discovered that the long-term effects of having COVID aren’t that great. It may be something that isn’t an issue anymore in eligibility. That’s not, it’s kind of fluid, right? It’s a very volatile situation right now with COVID. So I don’t mean to lead with that, except that it’s just, you know, what’s on our minds right now.

08:58 Cathy Curtis:

So topical, I’m glad you brought that up.

09:01 Liz Eshleman:

Some of the issues that create un-insurability will be, and these are ones that I, there’s many issues, but I chose these to speak to because I think they’re not always, we don’t always think that this could be a problem. Like unexpected weight loss. Maybe it’s not an issue, but maybe it is. Having more than four drinks a day is uninsurable. Back pain that requires narcotic medication, or it’s just a disabling back pain, uninsurable. Any chronic pain, as I was mentioning, is going to be an uninsurable condition, and that’s probably not going to change unless the person has some really unusual change, you know, change in their health, because usually, if something is disabling, it’s hard to get back up and running.

You know, if it’s a bad back pain, and folks are a little bit older, it’s not usually getting better. Frailty, a head injury. I had a client, unfortunately, recently, who had forgotten that she had. She had rented a car, and the guy was showing her how the trunk worked. And he slammed the trunk down on her head. Well, that’s a whole separate thing. But she’s now in trouble because the MRI showed something else, something else in her brain matter that indicates memory loss. So any MRI is really tricky territory.

10:28 Cathy Curtis

Let me interject sorry. So this is a good example. So when you have this initial phone call with a potential client, long-term care buyer, you will ask them all these things?

Liz Eshleman:

I do I tell people, per day, do you smoke? Do you have any chronic pain? Issues? Are you taking any…

Cathy Curtis:

And you ask about any medications? Depression, antidepressants, things like that?

10:57 Liz Eshleman:


10:58 Cathy Curtis:

Tell me about that. Because a lot of people take antidepressants for years to handle, you know, anxiety or whatever. How do the companies consider that?

11:08 Liz Eshleman:

That’s a great question. You know, it’s a little counterintuitive. They actually, the company underwriting departments, like what they call stability. So if a person has been on a medication for 10 or 15 years, the companies don’t view that as a negative. As long as there have been no hospitalizations for depression or no serious episodes. If it’s just the maintenance of well-being and the medication’s working, the companies actually like that, because they see that this potential issue for that person has been handled.

What they don’t like is a new diagnosis. So let’s say something happened, a person lost her spouse, and she fell into a depression. And she had to have medication that was increasing in dosage. They wouldn’t like that. Or she got on her feet, she was feeling better. Now she decreased her dosage. They also don’t like that. They don’t like volatility in a person’s health history. They want to see stability.

12:10 Cathy Curtis:

Okay. Okay, so you find these things out?

12:14 Liz Eshleman:

Yeah, I asked my clients, I tell them, you know, please bear with me, but I’m your advocate. And there, they tell you everything, open kimono, so to speak. And then you know, the insurance company. So you will say I think we can apply given what you’ve told me or you say, you know what, either you’re not going to be eligible at all, or this is a course of action I think you should take, wait six months. See if, you know, see if you’re off the medication, whatever. Or maybe in the case of a widow who just starts taking an antidepressant, if you’re on it for how many years before you come back.

And you know, it’s not that it’s not that difficult. For instance, usually a depression like that is situational, and does kind of abate over time. So as long as, even if they’re on the medication, that’s okay. But it has to be for a period of time, usually three to six months, at least, before the company will then take a look at whether or not they want to underwrite you.

13:17 Cathy Curtis:

Okay, got it. So this brings up a thought in my mind. I remember when I used to, when we first started to work together, I’d have a client and I’d say this person probably needs to buy some long-term care insurance. I don’t think their assets are going to last, or it could insure the assets they have, you know, there’s a couple of reasons to buy it. And I’ll call you and go, could you just give me an estimate of what you think it would cost for this person. You’d say, you know what, I really can’t give you an estimate. There are so many factors that come into play, I really need to talk with the person to find out about their health history. And now, I understand why. Because it’s like you’re the gatekeeper, to figure out whether someone will be eligible or not, and to help them.

14:01 Liz Eshleman:

Yes, and I never want to give a person a false indication of whether or not they can get coverage. If I don’t have the, if I don’t know about their health history, I really don’t know. Not only whether they could get it, but if they can get it, what would be the proper rate to quote, because there’s different rates for this type of insurance, just as there are, you know, rates for life insurance. So, you know, it makes it sound like this is difficult to get, you know, it kind of is. Yeah, it’s kind of hard to get long term care insurance.

14:31 Cathy Curtis:

Exactly. That’s that. Okay. So that’s a good summary of the eligibility issue is it’s hard to get. It’s worth talking to a long-term care consultant to find out, but don’t be too disappointed if they’re, you know, there’s some roadblocks there or you might not be eligible. Okay, so we’re gonna move into the types of products that are out there because this industry is ever evolving, as a lot of industries are, as they figure out what’s profitable and what’s not. Particularly in the last would you say, five years, there’s been a lot of change in the types of products out there.

15:14 Liz Eshleman:

Yes, I would say that traditional long-term care insurance began in the 1970s. And it’s just like every other insurance product we buy to protect, you know, a car, an automobile accident or a hospitalization. Or you know, a fire in a home, we buy this kind of insurance where, if something happens, the claim is covered. But we never get a return of that premium, we just had that risk covered, we had transferred that risk onto the shoulders of the insurance company.

That’s what we call pure insurance. And traditional. That’s the model. And I’ll go into more detail about that momentarily. The other model that has become very attractive, especially to my clients of high net worth, is the hybrid, where in fact, you’re not just really covering that long-term care risk. With that pure insurance, you actually are doing a couple of other things, you’re buying life insurance, whether or not you want life insurance isn’t really the point. By buying the life insurance with this product, that’s called a hybrid, then you’re locking in your rate. With additional insurance, your premium could change as it does with car insurance, with health insurance, it usually goes up. That could happen with the traditional insurance product. With the hybrid, the rates are guaranteed. That’s one major difference.

The other thing that’s very different with a hybrid is if you wanted to, you could pay it off, in a lump sum, or over 10 years or 20 years, there’s more flexibility with the payment options. With the traditional coverage you pay ongoing every year until you’re on claim, meaning you need the benefits, then you’re done paying. So that with the traditional leaves a question about how many years am I gonna pay. The other thing, of course, is that if you never need long-term care, the money you put into a hybrid would return to your estate to pay to a beneficiary as a death benefit. You can also get money back if you decide, you know what, I don’t want to play this long-term care insurance game anymore, you can get a return of premium with the hybrid.

18:00 Liz Eshleman:

Yeah. And one more very significant fact is that with the hybrid, there’s one company that offers what we call unlimited meaning, you know, heaven forbid, you have Alzheimer’s, and it lasts 10 or 15 years, this hybrid coverage would continue to pay benefits, as long as you needed to receive those benefits.

18:24 Cathy Curtis:

Okay, you’re bringing up a good point about the average amount of time most people will spend with a severe long-term care need, or let’s say, in a nursing home. And yeah, what I’m reading is for, oh, by the way, there’s a great study that Morningstar puts out every year or the last couple of years, about long-term care statistics. And I’ve pulled some stats from that. And for women, the average is 3.7 years in a nursing home. And for men, it’s 2.2.

So right, so I like to know about those numbers, because that tells me as a financial advisor, if a client doesn’t have the resources to buy more insurance, like these unlimited policies, which you want an unlimited policy, but they’re expensive. So if you could at least get the average amount of years, you’re getting help to cover the cost. You know, you don’t have to have it fully covered, you’re getting help for it.

19:25 Liz Eshleman:

Absolutely. And as I like to say to families or to my single clients, you don’t have to crisis manage on day one. If you have a long-term care event, and you have a two-year plan, there’s two years where your family, your friends, your loved ones are helping figure out if your need will be more ongoing, longer than two years. They’re helping figure out, how are we going to pay for that, you know, whatever it will be, and you weigh in on that if you’re available to do so. Right? But people sometimes think, well, if I can’t get unlimited, why would I buy this at all, which I think is missing the point of the stress of trying to navigate a long-term care event with no plan in place.

20:15 Cathy Curtis:

Yeah, I agree. Also, the mechanism of when you initiate a claim of using the money is something that a lot of people don’t understand. They think it’s a daily benefit, which it is, but then there’s actually a maximum in most cases. Could you explain that? And do it based on the traditional long-term care where you’re paying every month for so many years?

20:41 Liz Eshleman:

Okay, sure. So let’s say your daily is $150. So, I’m going to speak to it from two directions. And I hope this is helpful in answering the question. If you need to spend more than $150 a day, then you have to come up with that additional amount from assets. But if you need to spend less than that daily amount, because maybe you only need a little bit of home care, and it’s only $100 a day, then the amount that you purchased will roll over. And so your daily is, it’s a maximum. You can’t get more out of your policy than the daily that you structured when you bought the coverage. Is that helpful? Is that what you wanted to know?

21:32 Cathy Curtis:

Yeah, but then most people are also purchasing, let’s say they can afford three years of coverage. So it becomes $175,000. In total, once they’ve reached that $175,000, it’s the pot, you don’t have any more money. So it’s a daily maximum, but it’s also a bucket of money that is finite.

22:01 Liz Eshleman:

Yes, that’s right. And, you know, maybe it would be helpful to actually talk about a particular plan for a minute. To illustrate what you’re getting at. Okay, so I structured a plan with a company. It’s Mutual of Omaha, right now their pricing is terrific in California. They’ve upped their prices around the country, but California, they still have, I think a more affordable plan. And I structured it to be a $200 a day benefit. So that $6,000 a month, that will more than cover homecare, that will perhaps cover almost all of assisted living. And I structured it to last two years, to our point about something’s better than nothing.

So the bucket of money is $150,000. Now $6,000 monthly benefit, bucket of money, $150,000 is terrific today. In 20 or 30 years, it won’t buy as much. So we need to add an inflation factor, right. So this benefit will increase. I don’t want to get too much in the weeds. But just to know that if a 55-year-old woman buys this policy today, she can count on it for her money to have doubled. Her $6,000 monthly benefit will be $12,000 monthly benefit, her $150,000 pot of money will be $300,000. It may last longer than two years. The two years is not a factor we should focus on. It’s just a factor in an equation. We multiply the monthly by the two years and we get the bucket. As long as there’s money in the bucket, you’re good to go.

23:47 Cathy Curtis:

Yeah. Okay. And so going back to my earlier point, if so, you’re saying that would be $6,000 a month, right? You’re buying $6,000 a month? If the costs are higher than that you pay those out of pocket? Correct?

Liz Eshleman:

Yeah. Okay. But it’s likely, I don’t know, California can be expensive. And it also depends on the facility. You can pick a premium facility and you’re fine with that. You go, okay, my long-term care insurance is gonna cover this much of the cost. And then I’m gonna pay the rest out of pocket because I want a nicer facility. And that’s perfectly fine. At least you don’t have to raid your retirement income at the rate of in current dollars, $72,000 a year, that’s not hemorrhaging out of your retirement.

24:30 Cathy Curtis:

Right. Exactly.

24:32 Liz Eshleman:

This plan that we just discussed for a 55-year-old woman is $275 bucks a month. Yeah. Which really, if you think about you get $6,000 a month for $275 a month and the $6,000 is growing. I think it’s a pretty good deal right now.

24:48 Cathy Curtis:

Yeah, you just have to understand that that may not cover all your costs.

24:54 Liz Eshleman:

That’s right. And that’s something that we look at when I talk with my clients. We go into detail about, I pull up a cost of care survey that we look at together to look at the current costs of care if they’re in San Francisco, or if they’re up in Sacramento, or if they’re, and I work with folks all over the state. So sometimes, I just finished helping a client up in Clearlake, much less expensive up there to receive care. So we look at that and figure out where do you want to go? Where do you think you’ll be? And if it’s an area, of course, it’s going to be some of the most expensive care, but $6,000 a month will help greatly even if you have to supplement.

25:34 Cathy Curtis:

Okay, and so this example you’re giving, I take it that this 55-year-old woman is getting the best rates. And so that means that she has really good health.

25:44 Liz Eshleman:

Yes, if she didn’t have terrific health, if she was on a blood pressure medication, let’s say, instead of $275 a month, it would be $325 a month.

25:54 Cathy Curtis:

Okay, got it. So you’re quoting the best case scenario with that first quote. Okay. Now, that makes complete sense. Okay, I want to talk about some of the other benefits. And we should probably talk a little bit about why you might not want to buy a policy so you know, so that people can have both sides.

You’ve often spoken to me about the benefit of having a care manager, right? Can you describe how that works? And do all the insurance companies offer that?

26:29 Liz Eshleman:

That is such a good question. Depending on the company, it might be a consultation on an 800-phone number. But with Mutual of Omaha, it’s an actual licensed health care professional, who will meet with the client, his or her family, and figure out a plan of care based on their needs. They don’t work for the company, because there’d be a conflict of interest, right. The company would want to keep it low, or, you know, assess the person as not needing as much care. So it’s a third party.

But I do think it’s so important, because even people who have really a terrific retirement portfolio, very well to do, if they don’t have someone help them access their money and help them figure out how they’re going to spend without selling what stock or liquidating what asset. See the care coordinator functions almost at the person, you don’t have to do that asset depletion. And now she or he is going to help advise which agency is a terrific agency, or which facility has a bed. When my mom needed care, I was running around trying to figure out what facility would be able to accept my mom. Oh, and I had to do all that research.

27:44 Cathy Curtis:

Okay, so when you choose a company, you’re thinking about that for the client? Do they offer that?

27:52 Liz Eshleman:

Absolutely. And I talk about that at length, because it’s not just a bucket of money you’re buying. You’re buying an infrastructure, so that you actually have care that can be managed by this care coordinator. And let’s say you don’t like your caregiver. You went through a particular agency, the person there’s a personality problem, or you don’t like the way the companies run the agency. You call the care coordinator, you say, I need a different agency entirely. No problem. That becomes what that care coordinator puts in place for you. So I cannot stress enough Cathy, how stressful that can be when your parent is failing, or when you yourself are failing. You don’t want to have to wonder, how am I going to get care?

28:41 Cathy Curtis:

Let me just bring up something else. And because there’s a lot of good, there’s a lot of myths about, oh, I’m not gonna buy long-term care, because when I need it, they’re gonna say you don’t qualify. So did you know what that whole thing? Does that person help you navigate that?

29:02 Liz Eshleman:


29:03 Cathy Curtis:

Let’s talk about, well, a lot of people know this. But when do you qualify? You buy your policy, you’re 80 years old. All of a sudden you’re not well, and you can’t take care of yourself. So when would you go, maybe I should initiate a claim. Go through that. And does that consultant help with that?

29:28 Liz Eshleman:

Yes. Okay. So I will give you a real case scenario from my last six months helping a client. And I think you’ll be surprised at the profile of that client. But let me speak more broadly first, that I believe a person who feels in any way frail, they’re just a little unsteady on their feet, or they have bad arthritis. It’s hard to button the buttons on a sweater. It’s worth calling the claims department. You call the company and they’ll put you in touch with this care coordinator, who will then talk with you. And more likely than not, people, especially if it’s a couple where the spouse that might be a little more robust is helping the frailer spouse, they don’t realize over time that that frail spouse could have been on claim.

So that’s why you want to call the claims department immediately and open a claim. There’s no harm, you don’t have to take the money, but at least you get the assessment. And the care coordinator is talking with the doctor, your doctor, accessing records so that they can see, has there been a deterioration in their memory? Or has there been, you know, a risk of falling in the tub because they’re just not steady on their feet? The care coordination is not so much to bar you from receiving benefits with the companies I represent. Really this care coordinator is to help you access the benefits, right.

And I would like to give you the case scenario, a 55-year-old woman this year, you know, trying to get out and get some exercise during our lockdown, took a bike ride up on Grizzly peak in Berkeley. She wasn’t even up there yet. She was just getting out of her driveway. And she fell. And you know, the way she fell and the way the bike and she interacted, she really badly mangled her knee. And she’s 55 so I think that is very young, that’s younger than I am. And she was on claim for six months, because she had to have surgery. And she could not bathe herself. She needed help getting dressed, pulling on pants, it’s you know, when you can’t stand up, you can’t do very much at all. Her husband was trying to help her. He called me kind of in a panic. And I said slow down, Jim, you need to call the company. Well, they did, and the care coordinator worked with them to assess she needed help. And she went on claim. And it saved, I wouldn’t go so far as to say it saved her marriage, but I’m sure it helped a lot with frayed nerves.

32:23 Cathy Curtis:

Okay, couple of industry speak things. On claim means that she bought the insurance probably a few years ago. This was an incident that was covered under long-term care, they made a claim and they’re getting the insurance to cover it.

32:41 Liz Eshleman:

Yes, on claim just means now you’re receiving the benefits that you purchased when you bought your insurance. Now you’re accessing those benefits.

32:49 Cathy Curtis:

Okay, so another point is, and there’s a lot of misunderstandings here, is that long-term care insurance is just for old age care. And this is a perfect example of where it’s not just old age care. It’s also the rules, or tell us the rules about the things that you have, you can’t do, you know, just give us the basics about long-term care. So this is important.

33:13 Liz Eshleman:

Yes, it really is important. So the need for care has to last for 90 days or more. And the need for care is defined by needing help with two out of six activities of daily living (ADLs). And those six ADLs, the first two that tend to trigger a claim, meaning that the money you want to come in from that big bucket that you purchased is available to you. If you need help with two out of six, those first two that tend to trigger that and allow you to get your money are need for help with bathing and need for help with dressing. Not because you can’t wash yourself. Because you’re at risk of falling from, for instance, this client who hurt her knee, she couldn’t even take a shower. She had to do sponge baths.

I mean, okay, so bathing, dressing. The next two of six are toileting and transferring, which are somewhat similar in that they require the core muscles if you can’t stand up on and off the toilet. Or if you can’t get in and out of a chair or a couch or a bed. Because there’s just something where you can’t get that energy to get yourself to rise up. Usually that’s a paralysis or a frailty. Or you can stand up but now you’re dizzy and you could fall, you need that arm to lean on. That’s the need for help with transferring.

Okay, okay, and then the others are incontinence, if you have to wear a diaper, or eating, which is usually end stage if you need help actually feeding yourself, right? That’s not usually a typical first activity of daily living that you need help with. Okay, now one more thing, you could be quite robust physically. But if you, and so maybe all of your ADLs are fine, you can bathe yourself, you can dress but you have a severe cognitive impairment. In that case, you’re also eligible for the benefits, right? As long as the need lasts 90 days or more.

35:18 Cathy Curtis:

Okay, and I’ll just throw in a real-life example. My mother qualified because of mental impairment. She was, she stayed pretty physically robust. Okay, well into her 80s. But she was starting to forget things and she wasn’t taking her meds because she would forget. She wasn’t turning on the heat. The house was freezing. So that’s why she qualified.

Okay, good. So yeah, those are some of the basics. I’m really glad you went over that so well, so people know what triggers a claim. Doesn’t have to be when you’re old and are about to go into assisted living or nursing home. It can also be when you’re younger, and you have an accident.

36:06 Liz Eshleman:

Yes, this client of mine who had the bike accident, you know, was always at home.

Plus, shouldn’t we talk about the real reluctance people have now to actually go into facilities to receive care?

Yes, that is a huge deal. I mean, a large, large percentage of COVID deaths are still in nursing homes, or assisted living facilities, both patients and caregivers. I do know somebody who was going to move into an assisted living facility and pretty independent this year. And the main reason she doesn’t want to do it is because she may not be able to see her friends and family, because of restrictions. Now, I know that’s starting to lighten up with the vaccine, but there’s no way she wants to move in somewhere and not be able to see people.

36:59 Liz Eshleman:

And another thing to know is that typically, people who have long-term care insurance policies are receiving their benefits at home. I believe that only 12% are in nursing facilities. It’s between 7 and 12%. It’s a low percentage of people who have long-term care insurance policies who are in nursing facilities.

And the reason for that is because the families are not burning out, providing care at home without having that respite care that’s provided with a caregiver coming in. So if you have a plan in place, rather than the family immediately thinking, they are the caregivers, you know, you have money to buy caregiving from an agency. And you know what, you should just do that. That’s why you buy. That’s why we purchase long-term care insurance, is so that we save our families from the burden of having to provide care 24/7, potentially. So they can stay at home, they can still be with their loved ones, they don’t have to go to a facility. With my mom, in my own instance, mom had to go to a nursing facility because I couldn’t manage the care anymore. Because caregivers were quitting. And my doctor was worried about my health. That’s what happens with families providing care.

That kind of care is so hard. It almost has to be 24/7, because accidents happen. Yes, other people fall they break bones. And that’s so typical, that it’s almost a responsibility to get that care for your family.

Cathy Curtis:

That’s a really good point. And I’m wondering, I’m just curious, how many people buy long-term care insurance for their parents? Do you ever see that?

38:51 Liz Eshleman:

Yes, I do. I’ve had adult children purchase for a 75-year-old mom that they’re just worried about, that maybe their father just passed, and the mom is vulnerable and she’s fine, she can get coverage. But you know, they’re doing it so that in a way they protect themselves in this way. They want to be able to visit their mom, they want to be able to be with her, but they just don’t want to have to give up their entire life. Right? They might have young children. And that’s what happens in families is now you have to choose between caring for mom or going to your son’s soccer game. And it’s just a non-issue if you have a plan. It’s horrible. And it doesn’t have to be part of the equation at all if you have a plan.

39:42 Cathy Curtis:

Do most companies offer all home care, assisted living care, or any other type of care?

39:56 Liz Eshleman:

For instance, adult daycare, which is a place sometimes that folks with dementia will go during the day when a family member is going to work, that’s covered. Hospice is covered if you need it. So all the companies I represent cover every conceivable living situation in the United States, except you can’t take your caregiver on a cruise. I did have that question once.

40:29 Cathy Curtis:

Oh, that’s too bad. That would work, wouldn’t it? Okay, so we’ve talked about a lot of the benefits of it. Do you see, what are the downsides? I mean, I’ll bring up one. Of course, it’s not cheap insurance. And so affordability is an issue. And then the chance that you’ll pay premiums for all those years and never need it. Or you buy one of the hybrids where you put a huge chunk of money in and don’t ever need it. In that case, there are some ways to get your money back through insurance, or you’ve mentioned refunds. And I don’t know how often that happens where you don’t use it. Do you know?

41:19 Liz Eshleman:

I don’t have stats on that. You know, this is what I think about your question, Cathy. It’s a really good one. This is not for everyone. Long-term care insurance is only for people who want the peace of mind of not wondering what if, because to your point, it’s possible that you could pay a premium for 20 years or 30 years and never need care and die in your sleep at age 92. If that bothers a client, that they might never see a return on that investment in that plan, I tell them don’t buy this. This is for people who are worried and starting to think, I don’t know if I want to handle that risk.

So I always tell people, I don’t think there is a downside for the client for whom this is keeping them up at night, that they’re just not wanting that portfolio they’ve worked so hard to create, and those retirement savings, they don’t want them subject to this devastating risk. But there are some people, for instance, the very wealthy, they don’t need to purchase long-term care insurance. They can self-insure.

I do tell them, make sure you have a care coordination plan involved in your own estate management, right? If you don’t want your children saddled with it, make sure you get a very astute and much younger financial advisor. So if it’s a 70 year old, I have a guy, actually, he’s quite wealthy, and he’s buying a policy because he doesn’t want his kids to fight. But you know. But to not buy it is a completely legitimate choice. I just think it’s important to weigh why you’re not buying. And I think for most people, it’s just they don’t see themselves needing care.

43:08 Cathy Curtis:

Okay. A couple thoughts about the financial aspect. I want to clarify one term because I get asked about this a lot. Self-insure. Self-insured just means that you don’t buy insurance to cover all the costs, and whatever comes up with your long-term care needs, you pay yourself with your portfolio, or nest egg.

Okay, this is right on the same topic about the financials of buying long-term care and the way a financial planner looks at it. So I’ll do a financial plan for a client and one of the modules I look at is the need for long-term care. And what that really means is, if I think if they have a long-term care need, and I work with mostly women, so a need for expensive long-term care, can they afford it? And I’ll build that as a “what if” into their financial plan using my software tools. And if I see that, yes, they will, it’ll really negatively impact their plan, I start thinking about whether they could afford long-term care or not.

So that’s one aspect, the person who has you know, saved a good amount of money, but not enough maybe to cover a catastrophic expense of long-term care. That’s one example. The other example is a high-net-worth person who has plenty of savings, and when I put those numbers in the plan, and there’s a catastrophic health care need, they can pay for it and not run out of money. Okay, there’s that person, but they do spend a lot of their estate on long-term care. Maybe they have other ideas that they want to use there as well. For other than paying for long-term care, and that insurance and long-term care insurance policy can be a way to ensure that they don’t spend their estate down.

So I think that would be a need for someone of high net worth, who could probably afford to self-insure. And I think that’s a legitimate use of long-term care. And sometimes the numbers work out surprisingly well, especially with the hybrid policy. So the real sticky issue is the person who really needs long-term care insurance, but really can’t afford it. That unfortunate. And, you know, things change over time, maybe there will be more products that come out or more services that come out to help those people. But for right now, that’s, that’s kind of where it is.

And so I help people work through that affordability issue. And then the next step I advise on is to talk to someone like Liz, to find out about eligibility, get the quotes on cost, find out what it all covers. Then they come back to me, we go over it together. So you’ve got an advocate, you’ve got a long-term care consultant, and you’ve got a financial advisor that’s going to honestly tell you is this in your best interest or not to buy this long-term care policy. And, that’s how it goes on the financial end.

46:29 Liz Eshleman:

And Cathy, I think that to really underscore what you’ve said, as a long-term care consultant, you can tell I’m passionate about it, I believe in it. But I’m never going to say to a client that they should buy it. I’m only going to try to help them uncover whether they really feel they want and need it. And then you and I talk together about is it affordable, and you ultimately can weigh in on that for them.

So I just want your clients to know that it’s almost a fact-finding mission, right, as to whether or not this is appropriate for them, suitable for their finances, that they can afford it. And if they like what they see, I’m happy to help. But I never want to feel that. Even though I’m passionate about it. And I think it’s a really important topic to look at. I never want to feel that I’m pushing it on anyone, that it’s simply getting the information in their hands so they can decide what they want to do.

47:33 Cathy Curtis:

Exactly. Okay, so this has been so great. I hope we didn’t leave out any key information. Is there anything else you want to add about long-term care insurance?

47:50 Liz Eshleman:

I think we covered so much today. And honestly, if there’s something we didn’t cover, let’s revisit it. If your clients can call you, and then give them my number if they want to call me.

48:03 Cathy Curtis:

Okay, well, for the viewers who aren’t my client and listeners, tell us how a person could get a hold of you if they wanted to.

48:12 Liz Eshleman:

Well, I have a website. And I’m happy to receive a text or phone call, and all that info is on the website. And my email is liz@eshlemaninsurance.com.

48:51 Cathy Curtis:

Okay, great. And I will include that and your website in the show notes, as well as that Morningstar study, which I think is fascinating on the statistics about long-term care. And then Liz, if there’s any other brochure or any articles that you think are pertinent, I’ll add those to the show notes as well.

Okay, everyone, thank you so much. I think this will give you a really great primer on what long-term care insurance is about. Feel free to contact me at cathy@curtisfinancialplanning.com if you have any additional questions.

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S2 E3 Transcript: Estate Planning Must-Haves For Single Women


Hi, I’m Cathy Curtis. And this is Season Two, Episode Three of the Financial Finesse podcast. In this series, I’m talking about what keeps you up at night when it comes to your finances. And today, I’m going to discuss what estate planning documents every single woman needs.


This year has highlighted to all of us how precious and fragile life is, and also how important it is to have financial plans. Just as important as a financial plan for your life now is to have a plan for when you’re no longer here. This is called an estate plan.


If you don’t have an estate plan, the people you leave behind will have a much bigger job on their hands. First off, how will they know how to find all your different accounts,


who you want your things to go to, and things as simple as how do they get into your house? In addition, your assets, property and belongings that make up your estate may not go to who you want them to. Because if you die intestate, which means without a will, your state’s laws will designate beneficiaries for you in an order that you may or may not want.


Usually, first is children, then siblings, parents, grandparents, aunts, uncles, great uncles or aunts, nieces, nephews, cousins, etc.


If you don’t have any family at all, your property will go to the state. This doesn’t happen very often because the state will do all they can to find even distant relatives.


But the key point to remember is if you want a significant other, close friends, or charitable organizations as your beneficiaries instead of those before-named relatives, it won’t happen unless you execute a few documents. In addition, with no plan, the court will appoint an executor to manage your affairs after death. And this may not be a person you would have chosen.


So there’s two key documents that will transfer assets to your designated heirs—a will and a revocable trust, sometimes referred to as a living trust. I believe that everyone needs a will, while others will need both a will and a trust. You can do some things with the will that you can’t with the trust, such as name a guardian if you have minor children or forgive personal debts. A will can also have a pour-over provision so that things you forget to transfer to your trust will pour into the trust after your death.


In a will, you name your personal representative called an executor, who will manage all your financial affairs after your death.


So there’s two key differences between a will and a trust that may help you decide which is the right choice for you. One is that wills are always probated, meaning that a court of law is involved in supervising the transfer of your assets and payment of your debts and taxes. Revocable trusts, on the other hand, do not go through probate. The assets you have placed inside the trust while your living will go to who you want them to with the help of your successor trustee. This is another individual who you appoint. Probate takes time, requires many steps, and be and can be more expensive.


Secondly, the probate process is public, while trusts are private. If you have an interest in keeping your affairs, your estate content, and your inheritors private, a will isn’t your best option. Every legal will is made into a public record after it is accepted by the probate court. And this means that everything you own, pass on, and who you leave things to also becomes public record.


And if you have private sentiments or last wishes, these two will be made public.


As far as cost, wills are cheaper to get prepared, but trusts will save money later and make things much simpler for your chosen representative and heirs.


Okay, so hopefully, all of those points will help you to decide whether a will and/or a will and trust are best for you.


If you have a more complicated estate, many beneficiaries, you own a home, I would say a will and a trust are better for you. You may be able to get away with just a will if you have a much simpler situation.


Alright, so next I’m going to talk about assets that are not transferred by the will and trust. Not to complicate things, but there are several assets that are not transferred that way because you name a beneficiary, when you open the account, or you buy life insurance, or sometimes when you buy property. And the assets that aren’t transferred by will or trust are the following: life insurance proceeds, any asset or account that you hold in joint tenancy or tenancy by the entirety with somebody else. Like, let’s say you own a property with a friend in tenancy by the entirety, that’s already predetermined how it’s going to go after you die. All IRA accounts, your 401k or other company retirement accounts, funds in a pay-on-death bank account that you’ve set up, stocks held in a transfer-on-death account, or real estate or vehicles held with the transfer-on-death deed or title document. Just for example, you could go down to the DMV and add a transfer-on-death document to your vehicle. It’ll go to wherever you want it to after death, if they just present that certificate and their ID.


So, you need to coordinate all these things that aren’t transferred by will and trust with the things that are to make sure that your estate plan is how you want it.


So the most critical advice I can give for these assets I just mentioned, that aren’t transferred by will or trust, are to be sure and review your beneficiaries


at least every other year or when your life circumstances change. For example, there are many horror stories about ex-spouses getting assets that they weren’t meant to, because someone forgot to update the beneficiaries on these accounts after a divorce. So you want to make sure you look at those on a regular basis.


Okay, so the assets that do get transferred to your heirs by will or trust include just about everything else, your residence, second homes, other real estate that you own as a single person, business interests, bank accounts, investment accounts, stocks, personal property, pets, all these things transfer by will or trust.


In the will or trust, you’ll list who will receive each asset or the percentage of each asset. If you decide to create both the will and trust, your will can be very simple because most of the instructions will be in the trust. With your trust, you can dictate that your estate be distributed as soon as possible and closed out, or it can last for years if you decide you want to distribute your assets over time. This is where the term trust funders come in. Trust funders are people where trusts have been set up for them by parents or relatives, and they are able to get money out of them but not all at once. That’s what a trust fund is.


When you have a will created, you will need to appoint an executor. And when you have a trust created, you will need to appoint a successor trustee. This person can be the same person. And you could name more than one for each case, the will or the trust. In the case of wills, the executor takes over when you die. With a trust, if you aren’t able to take care of your own affairs, your successor trustee can take over while you are still living with your permission, and then manage your estate when you die. For example, I was the executor and successor trustee for my mother. And she was getting elderly and really didn’t feel like handling all her financial affairs anymore, paying her bills and managing her accounts. So she signed over


to me to be her successor trustee while she was living and then I was able to manage them while she was alive. And then when she died, I just continued to do that until I closed her estate.


I have found for many single people that trying to decide on who their executor and successor trustees are going to be, can be more difficult than a married couple or domestic partnership who just name each other, which is what most people do. So here’s some smart guidelines to follow when you’re trying to decide who these individuals will be.


It goes without saying, choose someone you trust. And you want someone who you know to be organized and detail-oriented because it’s a lot of paperwork. It’s helpful if they live near you, not completely necessary, but someone who lives in another state might have to travel to execute documents and things.


Try and think of someone who has the time to devote to the job because it can be time consuming.


And consider putting in writing in your will or trust that your executor or successor trustee can hire professional help if needed. It’s pretty much assumed that in a trust that they might need to hire professional help, but not necessarily in a will.


If you have a large, complicated estate with lots of beneficiaries, like I mentioned before, you may want to hire a corporate trustee, especially if you want to set up a trust account that your beneficiaries will get in future years.


So with less complicated estates, most people choose relatives or friends. But you can also find estate attorneys or accountants who are willing to do this job for hourly rates. There’s also professional trustees that are individuals with smaller firms. Hiring a professional trustee may be the way to go if you’re worried that your personal acquaintances or relatives won’t be up to the job, or you’re worried about conflicts of interest.


Both executors and successor trustees are bound to act as fiduciaries, which means they’re to carry out your wishes, and keep the beneficiary’s best interests in mind at all times, not theirs. But while the probate process pretty much supervises executors in handling the will portion, a successor trustee is not supervised. And so that’s something to keep in mind.


Revocable trusts are pretty much private affairs.


Another thing is, it’s really important to be kind and helpful to your chosen representatives, your executor and successor trustee, because it really is a big job, and you want to be organized and not leave them to have to figure out a lot of things. So here’s some tips on what you want to do once you get this all set up, is that you keep an updated list of your assets and debts including bank and investment accounts, insurance policies, real estate, everything, you let your executor know where your original will is in the asset list and how to access them or give them copies.


You let these people know the name and contact details of your attorney, attorneys, agents, financial advisors, etc. in case they need help.


Let them know your wishes for funeral or memorial service. Because yes, they do get involved in handling that, and give them copies of all your important documents.


Another question that many people have is, do you pay your executor and


successor trustee? And it becomes kind of complicated when these people are family members and also beneficiaries because a lot of people do appoint their beneficiaries as their representatives. Now, I feel like people should get paid because it’s a tough job. And it takes time, it’s a lot of responsibility. Some people who are beneficiaries decide not to take pay because they’re going to benefit from getting something from the estate. And also, these fees are taxable to the person receiving them. So the executor and successor trustee would have to report them on their tax return. But some people may want to get paid. So just to give you an idea, and I live in California, so the executor compensation is pretty much set by the state. And in California, under California’s probate code, the person is entitled to—it’s very complicated—but 4% of the first 100,000 of the estate’s value, so $4,000, 3% of the next 100, so that’s another $3,000, 2% of the next 800,000, 1% of the next 9 million, 5% of the next 15 million, and if the total value exceeds 50 million, the court decides on a reasonable amount.


So that’s just an example of what an executor could be paid.


Now, if you designate in your will that there should be no fees, which some people do, and it ends up that this job is exceptionally difficult or time consuming, the executor can request compensation for extraordinary services from the court. Because remember, wills go through probate, and they may be able to get some form of compensation, if it ends up that they’re taking a lot of time.


So that’s for the executor of your will. For the successor trustee, it kind of depends on what type of trustee. Corporate trustees are paid, usually on a percent of assets under management. And that could be 1-2% of the trust assets. So that’s if you have a complicated estate where the trust assets need to be managed over time and you don’t have a personal acquaintance or relative that you want to have to do that job.


Professional trustees that aren’t necessarily corporate trustees, they may be an individual or a small firm, usually charge by the hour, and that would really depend on where you live.


I read things like $100 an hour, but in California, I don’t know anyone that charges $100 an hour. So I think it would be a couple hundred or $300 an hour at least. And then there’s the private trustees, which are your relatives, friends that do it. And


I would say that unless they decide not to take a fee at all, they would take an hourly rate. And it’s really important that that person keep track of their hours and everything that they’re doing, because they have to do a complete reporting to the beneficiaries to show what work they did. So that’s, that’s how the fees work.


And again, like I said, I, I really believe, because I actually have administered three different family estates, people in my family, and I can tell you that it does take a lot of time, you need to be super organized, detail-oriented. And,


you know, time is valuable. So I would consider letting people know that it’s okay to take a fee. And also, if you’re worried about assigning one person, because they won’t be supervised anyway, you can appoint more than one successor trustee.


It does make it a little more difficult, because both people have to sign everything. So you have to keep that in mind. Also, keep in mind that a person does not have to accept this responsibility. So I would not just appoint them in your documents and not tell them. I would talk to them about it and find out if they want to do it. I would also appoint more than one, so you’d have a contingent person or even two contingent people in case the first person passes away or doesn’t want to do it. So this takes a lot of thinking. And I know sometimes it can make people not execute their documents. And I really want to, I want to just make it clear, do not let the choice of your executors or successor trustee stop you from getting these documents in place.


You could always appoint a professional or that could be the end result. If whoever you choose doesn’t want to do it, they can appoint a professional. And it’s just more important that you get these types of affairs in order. Okay. Then there’s two last documents that usually go in a group with an estate plan. And that is your healthcare proxy, or durable medical power of attorney. They’re both the same thing. So this document deals strictly with your healthcare decisions and medical treatments. And with your healthcare proxy document, you will appoint an agent to make healthcare decisions on your behalf if you’re incapable of making them on your own. So this is a while you’re living document. So again, this is someone that you trust and also that you’re really honest with about the specifics of your wishes. Then there’s one last document, it’s called the financial power of attorney. And while the medical power of attorney deals with healthcare, the financial power of attorney deals with your financial matters. This is when you are living. So your financial power of attorney document grants another individual the power to make financial decisions for you while you are alive but not


capable of handling things yourself. So if you get very ill, this, this would spring into power, this person would help you with your finances.


It’s if you get hospitalized or incapacitated in any way, they do things like manage your bank accounts, pay your bills.


And you can also designate a power of attorney that’s effective immediately or kicks in after a specific event like Alzheimer’s, mental disability, things like that.


You can, while you’re living if you don’t want to handle a certain financial matter, appoint a power of attorney,


let’s say for one transaction. This is not if you can’t do things yourself because you’re incapacitated, and this power of attorney ends at death. And that’s when your other representatives take over, your successor trustee or your executor.


So that’s a lot of complicated information. There were so many that I tried to consolidate it so that it was understandable. There’s lots of things to think about here. But the main point that I want to get across is that it’s really important to get these things done.


And all you have to do is think about if this happened to you, if a friend or relative passed away, and they did not have an estate plan in place at all, it’d be so hard to know where to even begin. And the person is grieving already, and then to have to deal with this can be a real burden.

So I hope you found this podcast helpful. And again, if you want to hear more from me, please subscribe to my podcast on iTunes and other places where podcasts are housed. And also I’m on Twitter, and my Twitter handle is @CathyCurtis. And I have a Facebook business page called Women and Money. Thank you for listening.

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