“If you can keep your head when all about you are losing theirs…” Perhaps you recognize this opening line from Rudyard Kipling’s poem If. Who doesn’t appreciate some Kipling? Well, I suppose if you’re a delicate Sallyboy, you might not understand him—perhaps Oscar Wilde would be more your cup of tea.
About once a year, I write an article reporting on things I experience in my business. At Chartwell Capital Advisers, we take a holistic approach to wealth creation and management. We help folks grow their money, protect their assets, sell real estate, insure lives and property, structure advantageous tax deals, invest in private placements, provide personal and employee benefits, and handle a variety of other matters.
Although a practicing lawyer, I generally dislike lawyers and the practice of law. Many will rob you blind while offering little value in return. Lawyers are like dentists—only without the personality. Sure, there are a few Atticus Finches out there, but lately, I’ve encountered far more Dodsons and Foggs (see Pickwick Papers by Charles Dickens). When you buy a new fly rod, shotgun, or sports car, it’s because you want what you’re buying. Nobody wants what a lawyer is selling. They bill you for their time, even when their time may not be worth a bag of nickels. They truly suck the fun out of life.
However, there are times when legal fees are a great investment, yielding returns many multiples over the cost. Estate planning and advanced planning techniques provide some of the biggest bangs for the buck. It’s entirely possible to spend a few thousand dollars and save a few million. If you die right after signing the paperwork, your return is infinite! However, if you live another 30-40 years, proper estate planning remains one of the best investments available. We handle generational wealth and administer numerous estates and trusts, which integrates well with the rest of our business.
So, in a nutshell, we handle both the money and the legal stuff under one roof. It works better that way.
Here are some reports, thoughts, and observations from recent months:
People can be divided into Kiplings and Wildes. It’s easy to be a financial success: just be a Kipling. Self-discipline and logic. Maintain a stiff upper lip, exhibit courage and good judgment. Then there are the Wildes, where waves of emotion erode logic, and lack of self-discipline leads to ruinous results. These are the people who need calm, cool-headed advice—and sometimes a firm hand to slap some sense into them.
In previous reports, I’ve emphasized the importance of forming trusts to protect beneficiaries from their own bad habits: drinking, overspending, laziness, etc. But recently, I encountered something I never expected. A second wife, who was the beneficiary of a huge annuity, cashed out all of it and gave the money away. Ouch—taxes! She now has almost nothing left. Lesson learned: as fiduciaries, we must protect beneficiaries not only from their vices but also from their altruism.
Personal property: One client had over $2 million in gold bars and other valuables at home. Guess what? This stuff walks. If you have valuable assets, make a detailed inventory and get a safe deposit box. I hate to sound so cynical, but even the nicest people are capable of stealing—especially in family matters, where many feel entitled to take what they want because "Dad didn’t come to their third-grade ballet recital."
Speaking of Dodsons and Foggs: many lawyers draft trusts but fail to fund them properly before the client dies. Then, assets have to go through probate. And let me tell you, having a colonoscopy every day is more fun than probate—but probate is quite lucrative for lawyers! I’m convinced some of these slippery snakes leave trusts unfunded on purpose, knowing they’ll make money handling the probate estate. And, conveniently, the client is dead—so they won’t complain.
For heaven’s sake, don’t scatter your money where no one knows where to find it. What's the point of leaving an inheritance for little Johnny and Suzie if nobody can locate it? Do you know how expensive it is for an executor or trustee to go on a treasure hunt with no map?
Investments: I’ve never heard so much scaredy-cat caterwauling over a market dip. I bought on the dip and encouraged clients to do the same. "A Kipling keeps his head when all about are losing theirs." It takes patience to convince a Wilde not to panic and act rashly. You listen to their drama, calm them with facts, reason, logic, and historical analysis—they’re grateful. And then, three days later, emotion overtakes them again. Groundhog Day! Just last week, I sent a client Matthew 6:25-34: "Read it, and quit worrying!" A good lawyer must be counselor, fiduciary, psychiatrist, priest, friend, and sometimes bartender.
On dying intestate: Do you want your wife to find out at your funeral that you fathered a child with another woman while she thought you were happily married for 50 years? If not, then don’t die intestate! If you do, then Trixie’s son from the diner—who happens to resemble you—automatically inherits a share of your property. You’d be amazed who shows up at funerals. This happened not long ago!
Accountants: Oh boy. They’re not all created equal. Many are little more than IRS compliance officers. Ever notice there are no TV dramas or action movies about accountants? There’s a reason: robotic bean counters. Find someone more like Parks and Recreation’s Ron Swanson. You want your accountant to hate the government like Iago hated Othello.
Higher education giving: Never, EVER make outright gifts to universities. Form a foundation that retains control and can cut funding at any time. Always maintain control. I don’t care if I’ve been dead 1,000 years—I don’t want a single nickel going to support woke commie nonsense. You’d be surprised how many elitists at these fancy schools despise their donors and feel entitled to violate the terms of gifts received.
I’m a generational wealth guy. Why do we have so many overweight people in this country? Because food is cheap and plentiful. Why do we have so many poor rich people? Because they have too much money and no discipline. Wildes can’t control their spending; they get a dopamine rush buying ostentatious toys. Kiplings get their dopamine hit by resisting temptation and watching their wealth grow. The hardest part of being a trustee is saying no to beneficiaries with their hand out. The old WASP adage, “never touch the principal,” creates enormous future wealth. There’s virtue in waking each day with “hunger in the belly” and earning one’s way. Giving too much, too soon, usually stunts a child’s growth and potential.
Women clients: Many spend too much. I bark at them all the time. Yes, they like shiny objects, but often they haven’t had the experience men have in stretching dollars. I’m old school—I believe part of a man’s role is to protect women. I often offer to review stressed lady clients’ bank and brokerage statements. One gal was paying $46,000 in insurance; I cut it to $6,000—just one of many substantial savings. It changed her life and reduced her stress. If you’re an experienced businessman looking for a feel-good cause, there’s plenty of low-hanging fruit in this area. You can make a difference.
On divorce lawyers: Slimy divorce attorneys (pardon the redundancy) milk women clients dry. They should be thrown in prison. I have a tip that can save both men and women hundreds of thousands in legal fees. It’s worked several times when coaching clients on managing their lawyers...I’ll save this for another time!
"Shoot all the bluejays you want, if you can hit 'em, but remember it's a sin to kill a mockingbird." Atticus Finch. Reminding us that the real world is often ugly and troubling and clashes with our moral responsibility to make it better, but navigate on we must.
