Life Planning Success Stories

Person looking directly forward, smiling, wearing a black blazer, white collard shirt, and maroon tie.

by Randy Gardner

Yesterday, I awoke in a funk, wondering how I could come up with a second case in less than a month. I had lots of work to do getting ready for upcoming presentations and, thankfully, only one meeting scheduled for the day. The meeting was with Dev (short for Devastated) at our comfortable and well-appointed satellite meeting location, about 25 minutes from our main office in Laguna Beach.

Dev is 83, has pancreatic cancer, and is still working, as he prepares to pass his property and casualty insurance agency on to his son, Dev III, who is in his 40s. The doctors “opened [Dev] up” to perform the very-risky Whipple surgery earlier this year, but the surgeon after four hours “closed him up” because the tumor was wrapped around a major blood vessel and was inoperable at that time. Dev switched doctors to a renowned surgeon who is successfully shrinking the tumor with radiation in anticipation of “going back in” and completing the Whipple surgery in late July 2018. In April, shortly after the first surgery, Dev lost his 82-year-old wife to congestive heart failure. She and Dev were married 55 years ago in Los Angeles, where they lived their adult lives.

Dev and I met to discuss trust administration issues and gather information for the Form 706 Estate Tax Return for Dev’s deceased wife. With the agency and rental properties Dev and his wife owned, their estate is valued at over $15 million. We are preparing the form to make the portability election so her $11.18 exclusion can pass to Dev. Dev wants to complete it before his surgery so, in case he “doesn’t make it,” his estate will pass to Dev III, Forlorn (their daughter), and their three grandchildren with a stepped-up income tax basis and no estate tax.

Obviously, Dev has plenty to think about, but during our meeting, I could tell something else was on Dev’s mind. So, as we were wrapping up the Form 706 discussion, I asked “Is there anything else you want to talk about?” He choked up, and I asked what was wrong. He said “It’s Forlorn, my daughter. My wife and I have owned a lake cabin with acreage in the mountains for over 40 years. It’s been in my family since it was built in the 1920s. My wife and I had some of our favorite times there and I thought the kids and grandkids had fond memories as well. When I mentioned the property to my daughter the other day, she said, ‘Dad, don’t worry about it. Dev III and I will probably just sell the property anyway.’ I was shocked. I don’t want them to sell it. I talked to Dev III. He doesn’t want to sell it!!! I don’t know what to do!!! If she is a co-owner, she could force the sale of the property. What can I do???”

I listened, nodding and saying “Oooh, no!” when he told me what his daughter had said, thinking either she is thoughtless or just trying to relieve her father of any concerns, not realizing she had probably just pushed him over the edge. I said to Dev, “I understand your concern and have some ideas, but first, with your permission, I would like to ask you some questions from the Life Planning program I am in.” He said he had no plans for the day and that would be fine. I reached into my large work bag and pulled out my Life Planning Worksheets and Torch Script from the EVOKE binder so I could do it by the book.

Question 1: I want you to imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is…how would you live your life? Would you change anything? Let yourself go. Don’t hold back on your dreams.

Describe a life that is complete, that is richly yours.

He said he would spend his fortune to be healthy if he could, and then followed with “That’s actually not true. I want my children and grandchildren to be taken care of. Even as I schedule these tests and doctor visits and now this surgery, I have one eye on the bills making sure there is actually a benefit to the payments I am making so I can leave my wife’s and my wealth to the kids.” I asked about travel, and he said he and his wife did a lot of that. He loved traveling in their RV, but it is hard to do alone and too much work for him at his age. He said he really enjoys the cabin the most.

Question 2: This time you visit your doctor who tells you that you have only 5–10 years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live?

Will you change your life and how will you do it?

“I am lucky,” he said. “I have the kind of pancreatic cancer that is normally treatable by the surgery, so I am optimistic this will give me another five years.” He said he cannot travel far currently because of the treatments, but he has been spending time at the lake cabin and wants to spend as much time with his children and grandchildren in LA and at the cabin as he can. He said he wants them to love it like he does.

Question 3: This time your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself:

What did I miss? Who did I not get to be?

What did I not get to do?

Probably because it was fresh on his mind, he said he would really regret it if the lake property was developed or left the family. He said his son is mostly ready to take over his insurance business, but he would regret not helping him more. He finished with not being able to spend more time with the family.

He needed to take a bathroom break which gave me the opportunity to collect my thoughts and prepare a torch. I knew the tinder was the cabin and keeping it in the family, the insurance agency, and family togetherness. A successful surgery was there, too, but obviously that was nothing I could deliver.

When he returned, from notes, this is what I said: “If as a consequence of our work together, I/we were to deliver to you in a month, on the Sunday before your surgery, a moment when your family was together at your home for a meal. You all had just attended church, and after the meal, your son said. ‘Dad, I appreciate the opportunity I have had to work with you and all the effort you have made to get me ready to take over the business. I am ready, and I will take care of your clients like you have.’ You reminisced with the family about times when everyone was together in LA, the cabin, and on trips. Your daughter said ‘Dad, I appreciate you explaining your estate plan to all of us. I love the lake cabin, too, and understand how much it means for you to keep it in the family.’ The changes you made lay out the ground rules for using the property and ensure that the property will always be owned by direct descendants. How would that be for you?” He had already pulled tissues, but when he finished he pulled more, as did I.

When he finally spoke after almost a minute, he said, “That would be great! Can we really do that?” I felt the torch was definitely lit; with tears, he was more enthusiastic and upbeat than he had been since coming to the office.

Dev and I talked about putting a restriction in the property deed or creating an incentive trust but dismissed those options because the courts are not always favorable to sale restrictions. We discussed a detailed limited liability company agreement with rules for family usage, a lottery for holidays, and sharing of ownership expenses, similar to what we set up for vacation homes. However, we ruled that out because he prefers not to see the property rented. In the end, he directed me to draft a tenancy-in-common agreement with terms similar to the vacation home LLC agreement. We will amend the trust so that the property goes directly to the descendants as tenants in common, subject to the terms of the tenancy-in-common agreement. He will sign the trust amendment in two weeks.

Another solution to this issue is for Dev to bring the remark up to Forlorn and have Dev convey to her how much the cabin means to him and how he does not want her to sell it. Hopefully, this agreement will open that conversation and take away the bulk of the incentive to do that.

As we wrapped up our discussion, we were both reaching for the tissues again. He was so visibly relieved, and I was so happy to see him that way and grateful to have the tool box to relieve him.

In my opinion, in two weeks when we Execute, by delivering the trust amendment and tenancy-in-common agreement, I will have completed the five steps of the EVOKE process. I have completed the “Exploration” and “Vision” steps in the process. We moved through Obstacles by examining the tools in the tool box, evaluating them, and picking the best one (Knowledge).

This plan just came together so well and so quickly. I hope the removal of this concern will help him survive the surgery. Once again, the personal connection the Life Planning process has created strengthened a client relationship plus brought relief to a troubled man.

I think Life Planning does not have to be centered on home runs. Life Planning can be done in the form of base hits and, over a long-term relationship, the opportunity for base hits will come up at every meeting. Life Planning gives you the big picture, and the more you know about a client, the better you can plan for them, even with the minor decisions.

Every day, I am grateful for the opportunities given to us, the skills we have been given, and how they can be used to make others’ lives better.

Randy Gardner is the Founder of Goals Gap Planning, LLC, a holistic, personal financial planning firm, providing group and one-on-one financial education to professionals and individuals. Randy also works as a tax and estate planning attorney with Estate Plan, Inc. Previously, Randy was a Professor of Tax and Estate Planning at the University of Missouri. He has taught and practiced for over 35 years.

Randy is the coauthor of the books, The Closing Wealth Transfer Window (with Leslie Daff), 101 Tax Saving Ideas (with Julie Welch), and Tools and Techniques of Income Tax Planning, and co-editor of WealthCounsel Estate Planning Strategies (with Leslie Daff). Randy serves on the Editorial Board of The Journal of Financial Planning and has written over 100 articles for publications, such as The Journal of Financial Planning, Taxation for Accountants, Practical Tax Strategies, and Tax Adviser.

Randy earned: a Bachelor of Arts degree, cum laude, from Harvard University; his JD and MBA degrees from the University of Kansas; and a Master of Laws in Taxation from the University of Missouri.

Randy lives and works in Laguna Beach, CA and Las Vegas, NV.

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