Date: Jun 21 2019
In this episode, we talk to Susan Colpitts at Signature Family Wealth Advisors about approaching estate planning in a way that alleviates anxiety and seriousness through planning. She also presents a refreshingly unique strategy around philanthropy.
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Below is a transcript from the conversation:
KC: So, you really specialize in helping families define their long-term goals. Why is it important for families to do that?
Susan Colpitts: For a couple of reasons. And I think it is particularly important for families of significant wealth to be clear on their goals. One of the things that we notice in working with families is that for the majority of folks, having enough in retirement ends up being a primary goal. And one of the things that we found in working with families is that as soon as you kind of can knock that big goal out—because you've built a business or sold the business, or received an inheritance—then there’s this kind of gaping hole in, you know, what is my financial goal? What is my purpose?
And so, we find ourselves frequently talking with families about: What is the most important thing? How do I want to organize my time? How do I want to commit my financial resources in a way that's really meaningful for me? And so, the word “goal” is used a lot. We also use the word “purpose.” And again, purpose can be applied to time but it can also be applied to the financial resources.
And what we try to help families do is to think about at least three big buckets:
- One is lifestyle. So that's our stuff. It's our homes, it's the financial resources that we need to support our lifestyle.
- There's the financial allocation to the next generation, as we begin to plan for transfer of assets to the next generation.
- And then, really the third major bucket for a lot of our clients is philanthropy and how much they might want to devote to philanthropy now and in the future.
So that begins to provide kind of an organizing mechanism for people to start thinking about how to organize their financial goals around purpose.
We do a lot of work with entrepreneurial families. Husband or wife had an idea one day for a business, worked really hard over the years, and really didn't anticipate that they were going to end up in this situation. Find themselves with their business that's ready to be sold and they kind of look up one day, having really had their nose down working, and all of a sudden they have more choices. Choices are really important. More choices than they ever thought they would have, and so they may come to Signature and say, “we don't know what we can afford. We really don’t.”
“This is a new world for us and we want to be responsible. We want to be good stewards. And, you know, can we have a house in Telluride or is that just crazy talk? Can we fly private? We really don't know. And, you know, maybe we should have a new rolodex of advisors that we should be working with.”
And so it's really a conversation, and it's probably a conversation that happens over a period of time. And we try not to make— like other significant transitions in life—you don't want to make any permanent decisions too quickly, because this is going to take a little bit of time to figure out. So the estate planning really happens over a long period of time, and the philanthropic commitment happens over a long period of time.
We find that if we can talk about that with the family, some of the seriousness is alleviated. We were just working with a family that sold the business kind of in pieces over the last five to six years. And I think they feel like they have to have the estate plan to end all, and be all. But they have a seven-year-old and they’re 45. So, I know this is just the estate plan that has to work for now, and then you're going to learn stuff, and then we’ll revise. So, it is bits and pieces. And it's not just the estate planning—it's really, where do you want to live? And do you want to have an extra home? And what do you want your philanthropy to look like? How do you want to spend your days? And all of those things will change over time.
KC: Let's talk a little bit about philanthropy. You work with your clients and you're a philanthropist yourself. You have a lot of experience with creating strategies around philanthropy. What do you tell families regarding their approach?
SC: I think the first thing to do is ask a lot of questions. In general, people don't know what they don't know. And this doesn't make any difference how much money you have. And if they're new to philanthropy, they don't know what they don't know. If you have a family that’s done things the same way for 30 years, they don't know any other way. And so I feel like one of the things that we can do is provide kind of the panoply of things that can be done. There’s a lot of talk about impact investing these days. And you know, there a lot of articles written about how the next gen wants to invest. But I think it's pretty cool to say, “rather than make it either or, make it both and.”
And again, I think this can be very liberating. This is how you have been doing it: How much joy does that bring you? How much satisfaction? Are there things that you regret? Are there ways that we could have avoided the things that you regret? Could have asked yourself a different question? So, they really begin to generate their own answers about what's worked and what hasn’t.
If they're new to philanthropy, then I think we can say, “you can do this or you can do that. You can do this and you can do that. You can make a permanent transformational gift to this issue that you're very interested in, but you can give kind of more of a baseline support to just kind of basic human services in your community.” And it doesn't have to be a single choice. And once again, we're going to organize it so that there's a lot of flexibility built into the plan.
Unless you're working in a big family council, in a big family foundation with a stated mission—and those are great—but if you don't have that, I really think you can play with it more. And make it work for you, make it work for the family member in real-time, year-in and year-out, by keeping it a little bit more fun, more playful, more agile, more feedback.
KC: I can't imagine anybody already having that knowledge with their approach to philanthropy, no matter how much you’ve read or how much money you have, it sounds like this is a really valuable approach that you're offering your clients. You know, it takes a lot of the anxiety out of philanthropy.
SC: Yeah, so much of what I've talked about, I realize, is that there’s a theme that has come from our experiences working with the families that we cut our teeth on. And we learned a lot from them. And families really need to find the advisor that represents the themes that are important to that family. We talked to families about what we do and how we love to do it and they go, “that’s not quite right.” You know, and that's perfect. You really want to find the advisor that you resonate with.
And again, we’ve worked with a lot of entrepreneurial families and helped them through that process of getting used to this new balance sheet. For the family that has been around for three or four generations, you know, we really have a different conversation with them. Because in those cases, a lot more of the decisions have been made. There, they've got a framework that they're trying to work within, as opposed to the newer family that's building a framework. And frankly, some of the multi-generational frame families have frameworks that have some rigidity built in, just think of something that grandmother or great-grandmother did. And sometimes it's great, and sometimes it's it's restricting. And so people have to learn to live with the landscape that they’re in, given the set of circumstances that they've got to work with.
KC: And they want to work with you to get to a zone that they're comfortable with.
SC: Right, right. Then again, and I think the thing to do is to say, “wow, there's so many things you can do, let me ask you a lot of questions.”
I'm a really big fan of this book 5 (The 5 Book) that came out a few years ago. I recommend it to everybody, love to hand it to people. And the the point of 5—which has a big number 5 on the cover—is, “what do you what do you want to accomplish in the next five years?” And and the way this book gets you there is by asking a lot of questions about, how have you gotten where you are? What matters to you? What are the things that you value? What are the things that you don't value? And I think the reason I love the book is it’s an example of kind of what we do face-to-face for the clients that we work with.
KC: So, being a FOX member and FOX Thought Leaders Council member, how do you partner with FOX to create those client experiences?
SC: For those of us who aren't in very large organizations, we really need to reach out to organizations like FOX to a broader environment, a broader landscape of the smartest people in the industry who are doing super-clever things that we can benefit from hearing. I got to sit in the room with folks who come out of other multi-family offices and single family offices. And that’s always been really invaluable—to hear about all of the families that we don't work with and what's important to them. And how other advisors solve problems that we all face. How you can create a conversation. Ways that they found of reporting on things or doing things. And we love learning from other people who are working with ultra-wealthy families to find out solutions that they've developed to bring to those families.
And we can all learn from each other. Sometimes it's personnel-related, so we share experiences about how to do annual reviews for the people that work for us or that work in a single family office. And how do we create learning cultures for ourselves and also for our family members? But the open dialogue, with lots of different sets experiences and expertise in the room in a fairly unguarded fashion, creates for wonderful learning opportunities for us all, and therefore, for the families that we work with. One of the things that we say to families that come to us, when they're thinking of hiring us, is that we have a lot of leveraged intellectual capital. We go to the research and then everybody can benefit from that. And the FOX membership is really just like a larger platform of that learning from one-another, from the different families that we work with, and the experiences that we have.
KC: I love listening to you talk about this stuff.
SC: Oh, well, I love what I do and I love to talk about it.
KC: How could somebody contact you if they were interested in learning more?
SC: My email address firstname.lastname@example.org
I love to answer questions, create conversation—I’d just be thrilled to do that
KC: And you can always find information about Signature Family Wealth Advisors on the FOX website, www.familyoffice.com. And Susan, thank you, really, for sharing your wisdom. That was really enlightening and super interesting.