I’m a Graduate of Blum’s Café School of Hard Knocks

My son Adam is a voracious reader. He regularly feeds me fascinating stories that inspire many of my weekly blog posts. Such is the case today with Beth DeCarbo’s family business piece “My Mom and Dad Owned Competing Side-by-Side Hardware Stores. It Was a Lesson in Life,” (Wall Street Journal, May 8, 2024). It’s a fascinating account of a daughter growing up working in her family’s hardware stores.

Upon first reading it, I didn’t grasp its application to me. Then, it hit me. I also learned “lessons in life” growing up working at Blum’s Café. It was far from glamorous, but it instilled in me a work ethic that serves me well to this day.

My father, Julius Blum, had a hard-knocks upbringing, raised behind his family’s small neighborhood grocery store in an impoverished area of Fort Worth. He was the son of immigrant parents who barely escaped Hitler. Though living in America, they were never “Americanized,” speaking only Yiddish and associating only with other similar immigrant families. Miraculously, my dad (with the help of his older brother Sol) rose from that world and became the first college-educated member of the family. Though my brother and I were Longhorns, we respected our dad’s affection for Texas A&M. He was a proud Aggie with a degree in Mechanical Engineering.

As a newlywed with my mom Elsie, Julius put his degree to use working for Almar-York Air Conditioning. That didn’t last long. As seems to be in our DNA, my dad wanted to be his own boss. Julius used to say he’d rather own a lemonade stand than work for someone else. He took it one notch up and instead opened Blum’s Café, an industrial restaurant in Fort Worth’s meat packing district.

Julius awoke every day at 4:15 a.m. in order to open for business at 5:00. You have to start early to fire up the oven and griddle and get the coffee going. Any day we weren’t in school, my brother and I were right there with our mom and dad. That’s where we spent our summer and Christmas breaks. The days started early and ended late, loading the soda water cases before we could head home, tired and hot. There was no air conditioning.

Like DeCarbo’s article reports, I learned a lot of life lessons growing up in a family business. Here’s a sampling. 

  • My dad never complained. Though the work was hard, he was grateful we made a good living.
  • Julius treated every customer with the same dignity and respect. Upon buying the café, he terminated the prior practice of segregation where white customers ate in the front and black customers ate in the back. He brought everyone together. I noticed.
  • Though he worked hard seven days a week, my dad found time to volunteer at our synagogue, proudly serving as an officer as well as cooking all the synagogue dinners. His example taught me that you have to give back.
  • I learned to be self-reliant. Two of my dad’s favorite sayings were:

“If you take care of your business, it will take care of you.”

“The only helping hand you need is the one at the end of your arm.”

  • I interacted with all walks of life, gaining an openness and awareness different from all my friends who never engaged with folks like packing house workers. I learned to see the value in every person.

My upbringing at Blum’s Café has certainly influenced who I am today. It generated enormous gratitude I have for my law firm. It informs the second prong of the Blum Family Mission Statement: We embrace productive work, waking up each day to engage in meaningful activity. I am grateful this work ethic is equally embraced by my children Adam and Lizzy.

Along these lines, Laurie recently asked our handyman Don for a referral to a washing machine repairman. It was 7:30 a.m., and she asked Don, “Can I text him now, or do I need to wait?” Don’s reply was choice: “Text him now. Successful people are awake by now.”

To sum this up, my heritage of hard work gave me a unique connection to the comments by comedian Jerry Seinfeld in his recent commencement address at Duke. His number one piece of advice to the graduates was “Work hard.” Then he followed it up with words that resonated: “Bust your ass.” I can hear my dad saying that to me now. 

First photo: Marvin Blum grew up working at Blum’s Café, an industrial restaurant in the stockyards. It wasn’t glamorous, but it provided important lessons in life. Second photo: A young Julius Blum (Marvin Blum’s father) who set an example for a strong work ethic and a positive attitude.

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The Blum Firm’s Approach to Saving Taxes

I often describe The Blum Firm as taking a “head & heart” approach to tax and estate planning. Most of my weekly blog posts veer more to the heart side, focusing on how to create and pass down a meaningful family legacy. Today’s post shifts more to the head side, describing The Blum Firm’s approach to helping our clients save tax. For the first 35 years of my career, saving tax was almost my only focus. Over the last decade, we’ve expanded our focus to help families create a thoughtful inheritance and pass it down to heirs who are prepared to receive it—not just preparing the money for the family, but also preparing the family for the money. The two work hand-in-hand.

Tax planning is still an important part of that equation. Let me give you a couple of real-life examples that illustrate our approach to helping clients save tax.

  • The new director of a family office insisted that the family get a second opinion on their estate plan. The family resisted, as they had been working with a reputable law firm for decades and were convinced they were “all set.” The family office director persisted, and they hired The Blum Firm to review the plan. To the family’s amazement, we discovered numerous missed planning opportunities. The family hired us to implement a series of transfers to trusts, including a sale to a grantor trust in exchange for a note, a sale to a grantor trust in exchange for a private annuity, and a charitable lead trust. When the matriarch died about two years later, the IRS audited the estate and upheld the planning we did. The director of the family office did the math: our planning saved the family approximately $1 billion in estate tax.

 

  • An elderly matriarch was in hospice care and seeking last-chance planning to help save estate tax.  We informed the family of options, including a private annuity technique that would only be available if she had a greater than 50% chance of surviving a year. Although not a tool that was initially available to her, she remarkably rallied (even booked a vacation) and we instantly implemented it. Several months later, she fell and soon thereafter died. The IRS initially challenged the plan because she didn’t live a full year after doing it. We defended the estate by asserting that the test was not whether she actually lived a year, but whether at the time of the transaction, she had a likelihood of living a year. The IRS later offered to settle the case by accepting 20% of the amount of the tax, saving the family 80% of the tax they would’ve owed had they not planned. The family saved millions of dollars and never had to go to court or talk to the IRS.

These are just two examples of many such cases, but they give a flavor of our approach to planning. We only propose techniques that are supported solidly under the law. We disclose everything to the IRS on gift tax returns, activating a statute of limitations that gives the IRS a three-to-six-year time frame to assert gift tax. In all my 46 years of practicing law this way, other than the one 20% concession described above (which was a big win for the family), The Blum Firm has never had to make a concession to the IRS, other than valuation adjustments. That track record is very important to us.

In addition to work to save estate taxes, we are equally committed to helping clients save income taxes. Saving income tax is harder because there are fewer tools in our toolbox, but we have devised multiple strategies to save income tax. I recently spoke to the Midland-Odessa Business & Estate Council on “Creative Income Tax Strategies.” Click this LINK to see the PowerPoint from that speech.

Some of the tools in my speech take advantage of opportunities in the law to avoid income tax, such as Roth IRAs, Qualified Small Business Stock (“QSBS”), and Private Placement Life Insurance. Other tools, such as Mixing Bowl Partnerships and Upstream Basis Planning achieve a free basis step-up on assets (and unlike the normal basis step-up, you don’t have to die to achieve it). Others achieve a tax deferral, such as Charitable Remainder Trusts and Installment Sales (where I illustrated a way to achieve a 23-year tax deferral). We have designed ways for people (who might think they aren’t a fit) to qualify for these tools and save substantial amounts of income tax. For example, if you expect to sell a business five or more years from now and your ownership interest isn’t currently structured as QSBS, there are multiple ways to convert into QSBS and avoid tax on $10 million (or far more) of the gain. And if you do own QSBS and are about to sell your business, consider gifting stock to non-grantor trusts so that in addition to avoiding tax on $10 million of gain on the stock you own, each trust can also avoid tax on $10 million of gain. 

This type of planning isn’t as simple as going through a simple checklist of tools. It requires a case-by-case analysis, reviewing your assets and entity structure to explore the many possibilities. One more word to the wise: we can do more to help when the call we receive is in future tense, discussing an asset you are planning to sell or planning to acquire, rather than a past tense call about something you already did. It’s never too late, but the earlier in the timeline you start, the more opportunity we have to help.

Marvin Blum was honored to speak on "Creative Income Tax Strategies" at the Midland-Odessa Business & Estate Council.

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Annette’s Legacy Letter: A Priceless Inheritance

I recently posted a Legacy Letter I wrote to my new granddaughter, Mia. My message to Mia was about the family heritage she inherits and will pass down to future generations. On her father’s side, Mia descends from ancestors who barely escaped the Holocaust. On her mother’s side, Mia is the great-granddaughter of Holocaust survivors who miraculously survived imprisonment in concentration camps. It’s a powerful legacy, and one shared by most American Jews.

That post generated a heart-heavy response. One response was so meaningful that I want to devote this post to it. It came from Ben Friedman, a young attorney friend I met years ago at synagogue services in New York. Ben shared the Holocaust survival story of his grandmother, Annette Baslaw Finger, and the Legacy Letter she left to her son, David.

Before I share Annette’s letter, I want to bring her to life by revealing her story. Annette was born in Paris in the late 1920s. Her family fled from the Nazis and Annette survived the Holocaust by hiding in a barn. At Chanukah, they looked to the stars to light an imaginary “Menorah in the Sky” (commemorated in a piece Annette provided to The Reader’s Digest.) Her picture also graces the cover of The Hidden Children by Jane Marks.

Like so many Holocaust survivors, Annette was a model of resilience. Though Hitler tried, he failed to snuff out her life or her light. Annette lived a life as a deeply spiritual Jew, producing heirs like her grandson Ben, who carry on her Jewish heritage. As further proof of her resilience, Annette went on to earn her PhD.

As she grew older, Annette wisely asked her family what items they wanted from her when she passed. Her son David asked for nothing material. All her son wanted from Annette was a moral legacy, which she beautifully composed in 2010. At her funeral 12 years later, David read his mother’s Legacy Letter. I urge you to click on this LINK to read every precious word, but here are a few abbreviated highlights:

“Dearest David,

The only thing you asked for was that I leave you a “moral legacy,” specifically a list of things that have worked for me in my life. You will feel those blessings, and you will continue to feel my presence in your heart. So here is my list:

  1. The gift of gratitude (Stop, look, cherish, and send up a prayer of gratitude. I never go to sleep without first offering a prayer of gratitude.)
  2. My father’s precious memory bottle (Simple moments that bring total happiness – I preserve them in my memory bottle so that I can relive them whenever I feel the need.)
  3. My father’s other precious gifts (The Menorah in the Sky, the pebble in the lake – do at least one small good deed every day which will hopefully reverberate.)
  4. Relish being alive (Every single day, experience something that you really enjoy – music, a friend, a walk in a beautiful place.)
  5. The gift of forgiveness (the anger and resentment are really bad for me. Ask myself ‘honestly, 10 years from now what importance will this have?’ I need to let it go.)
  6. Respecting HaShem’s [G-d’s] gifts and loans (HaShem gave this miraculous body – take proper care of it.)
  7. Feel HaShem’s presence within us and within every human being He has created (Lead honest, ethical, and moral lives – treat others with respect.)
  8. The gift of choice (Stay away from people who make us feel diminished, sad, depressed, or angry.)
  9. The gift of open communication (Almost any problem can be solved when I honestly and respectfully talk about what is bothering me.)
  10. Self appreciation (HaShem created us as imperfect human beings – concentrate on what is good within us, others, and the world.)

These have worked for me. I hope they will for you and I add for others.

All my love!

Mom”

My thanks to Ben for giving me permission to post your grandmother’s beautiful Legacy Letter. It’s truly the most valuable gift and one that will keep on giving. May we all be inspired to follow Annette’s lead and leave our heirs an inheritance from the heart.

Pictured on the cover of The Hidden Children is Annette Baslaw Finger, a Holocaust survivor who left her family the priceless inheritance of a Legacy Letter.

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Family Matters: Farewell, Dear Linda

It’s been a traumatic week for my family. My wife Laurie has three sisters. The oldest, Linda, collapsed while walking into work, completely out-of-the-blue. A blood clot traveled from her leg into her lung, depriving her brain of oxygen. By the time paramedics restored her pulse, too many minutes passed. Her brain activity went from 100 to zero and it was too late to bring her back. We lost our sister Linda this week.

My mind fills with so many lessons from Linda’s life. I’ll share a few.

  • Linda was a vibrant 78-years-young ball of energy. [I used to think 78 was old. I don’t anymore.] She was fully engaged with her work, family, travel, and multiple interests. Linda is a role model for my motto to “Never Retire,” literally running her husband’s ophthalmology practice till her last breath. That’s how she would’ve wanted it.
  • The pain of losing Linda is even more intense because we were so close to her, but that closeness generates memories that now help comfort us. As my law school “Canoe Brother” John Peper so wisely told me: “Experience has taught me that the intensity of the pain is in direct proportion to the depth of the relationship each of you has had with her. And the pain is unavoidable, as it is inextricably intertwined with the memories.” It again confirms what is most valuable in my life – my relationships with family and friends and the need to continually cultivate them. May we all live each day fully.
  • I ended last week’s post quoting my longtime client Jane, whose 7-year-old grandson Jack said the best part of their annual family trip was “being with family,” to which Jane responded “Amen” and “Bingo, we hit the jackpot!” The four Kriger sisters and their families live dispersed, but we gather regularly for valuable family time. Our greatest comfort now comes from all of us being with each other only a few weeks ago at a family Bar Mitzvah in St. Louis. We had no idea that would be our last time to all be together. We will forever cherish that time together and the attached photo. Bingo, we hit the jackpot!
  • I was fortunate to marry into the Kriger family over 45 years ago. The family welcomed all four of us husbands and treated us as part of the family from day one. Some families adhere to a “no in-laws” policy as a means of excluding in-laws. This family has a different kind of “no in-laws” policy – we treat each spouse as a full-blown relative, and no one is an “in-law.”
  • So many treasured thoughts fill my mind, but I’ll close with a Kriger family motto decreed by the sisters’ plain-spoken and wise father, Abe Kriger: “No matter what, you all need to get along.” There’s no shortage of strong personalities in this family, but everyone respected Abe’s decree – we all got along. Losing Linda is hard, but we’re grateful that our sorrow isn’t mixed with guilt.

Life is unpredictable. We lost Linda with no warning. I’ll sum up my message by urging us all to live each day to the fullest, love deeply, spend time with family, create meaningful memories, and “no matter what, we all need to get along.”

(To learn a bit more about our dear sister Linda, click on this LINK to read the eulogy I gave at her funeral.)

Rest in peace, precious sister Linda.

(L to R): Marvin & Laurie Blum, Peggy & William Adler, Diane & Barry Wilen, Linda & David Usdan. We lost dear Linda (oldest of the four Kriger sisters) this week, but cling to this memory of our last time together a few weeks ago.

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Let Me Hear an “Amen” and a “Bingo!”

Each week, my 11-year-old granddaughter Stella Savetsky takes to Instagram to post “Stella’s Torah Corner,” teaching thousands her interpretation of that week’s Torah portion. I filled in for her once as a “substitute teacher” and discovered it’s a lot harder than it looks. Stella is truly an old soul whose Torah Corner offers remarkable wisdom. This old Zaidy Marvin certainly learns a lot from her. Often the lesson informs my work as an estate attorney, especially my passion for family legacy planning. Such was the case recently with Parashat Behar, Leviticus 25:1-26:2.

Behar teaches the importance of advance planning, certainly critical to getting your estate in order. How does it do that? The Torah describes the practice of shmita, giving the land a sabbath of rest every seventh year, “allowing the earth to rest and reinvigorate.” (Vanessa Ochs, “Parashat Behar: Advance Planning,” My Jewish Learning, May 25, 2024.) Because there would be no harvest in the seventh year, the Israelites did advance planning to store up reserves from an abundant harvest in year six. Archeologists have discovered sacks, jars, and storage pits as evidence of these preparations.

Ochs ties shmita to the importance of advance planning before death: “These extensive preparations remind me of how advance planning can alleviate the intense burdens of planning for a Jewish funeral and the subsequent mourning period.” My interpretation of Behar goes beyond funeral preparations into the broader realm of estate planning. 

Is your estate in order? Check your documents, bank accounts, and beneficiary designations. Create a “Red File” to give your family a roadmap containing key information and passwords. Follow the advice of one of my TIGER 21 colleagues who advised Bill (a fellow TIGER member) to do a test run of his estate: “Meet with your planning team and answer this question, “What if Bill died today?” Such a test run often reveals the need for updates and tweaks that are too late to correct after you’re gone. 

Take it a step further and heed the advice of Ashlea Ebeling in “Hash Out the Inheritance Now, or Fight Your Family Later,” (Wall Street Journal, April 6, 2024.) With “more than $84 trillion in wealth” to be transferred over the next 25 years, get in front of potential family conflicts. Avoid surprises, especially in blended families, and explain “why things have been put in place a certain way, no matter how uncomfortable they may be….The topics to cover go beyond just dollar amounts, financial advisers said. The discussion can also address caregiving, charity, and educational costs.” Moreover, select the right time and place for the conversation. “Thanksgiving dinner… is not the best choice.”

Ebeling covers one more aspect of advance planning that especially speaks to me. Share the wealth while you’re still alive, especially by creating meaningful family experiences. Take your family on “all-expenses-paid trips… [to create] memories and a family tradition of togetherness.”

I’ll close with a prime example of family bonding recently shared by Jane, a longtime friend and client. After telling me that my recent Legacy Letter to our granddaughter Mia inspired her “to update my ‘legacy letters’ to my children and grandchildren stashed in my End of Life file,” Jane continued: “We just returned from our annual trip—a long weekend at Hyatt Regency’s Lost Pines near Austin. In addition to four G-2’s and seven G-3’s, along with spouses, all nine G-4’s (ages 1-13) joined. When seven-year-old Jack was asked what was his favorite part of the trip, his response was ‘Being with family.’ I didn’t know whether to say ‘Amen’ or ‘Bingo—we hit the jackpot!’”

Jane, your legacy letters and annual family trips are the kind of advance planning that will yield benefits for generations to come. Your family is richly blessed. I would say both “Amen” and “Bingo!”

Marvin Blum’s granddaughter Stella Savetsky teaches “Stella’s Torah Corner” each week, frequently imparting estate planning wisdom through her insightful Torah lessons.

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Cinderella Estate Planning: What You Need to Do Before the Clock Strikes Midnight on 12/31/2025

As an estate planning lawyer, one of the favorite hats I wear is to be a teacher. From the early days of my career over 45 years ago, I discovered a passion for educating people about estate planning. It all started when I was a new lawyer and got invited to speak on estate planning for a “Money, Money, Money” seminar sponsored by Fort Worth National Bank. It was a two-hour course, and I was amazed to discover the adrenaline rush it gave me. I tend to get really enthusiastic, ever louder and faster as I get wound up, and even when I try to lower the volume and slow down, it’s a lost cause. My friend Bob Mitchell once affectionately described me as a Baptist preacher (the fire and brimstone variety), and I jokingly redubbed myself a fire and brimstone rabbi.

Over my career, I have enjoyed many opportunities to speak across the country. It was a special honor recently when I got to speak to a hometown crowd, the Tarrant County Probate Bar Association. We have a large and active group of probate attorneys in this area, and it was fun to look out on a sea of friendly and familiar faces. My topic was Estate Planning to Do Before the Clock Strikes Midnight on 12/31/2025. It was a pretty tax-centric presentation, and much of that audience doesn’t want anything to do with a topic that has the word “tax” in it, so I started by going over some basics and getting us all on a level set. I know how they feel, as I feel the same way when they teach me probate litigation topics.

I started by describing this topic as “Cinderella Estate Planning,” because when the clock strikes midnight on 12/31/25, the coach turns back into a pumpkin. You go to bed on New Year’s Eve 2025 with an estate tax exemption of around $14 million, and you wake up on New Year’s morning with an exemption of around $7 million. What planning can we do to lock in the doubled exemption, so we don’t waste half of it? I call this area of our law practice “use it or lose it” planning. The clock is ticking fast. The deadline will be here before we know it.

The sunset date (when the coach reverts to a pumpkin) is part of 2017 Trump tax legislation that cut taxes, but only temporarily. Click on this link for a copy of my PowerPoint to discover estate planning ideas to do before the sunset happens. I’ll summarize briefly to say we’re in the “Golden Age” of Estate Planning. In particular, we can employ “squeeze & freeze” techniques, such as transfers to FLPs, gifts and sales to Grantor Trusts (like a SLAT, DGT, 678 Trust, GRAT, ILIT, CRUT, CLAT, QPRT, etc.), and the one Biden hates the most called stepped-up basis where you “Buy, Borrow, Die” and never pay income tax on your gains. There’s a lot of estate planning you can do over the next year to get in front of the looming sunset date. I also address some challenge areas, such as when a couple wants to only transfer half as much as needed, or when one spouse has wealth and the other doesn’t, or when the bulk of assets are in an IRA, or “use it or lose it” planning for a single person.

Income tax breaks will also go away upon sunset, where the individual top rate will go from 37% to 39.6%, and the corporate income tax rate will go from 21% to 35%. Consider accelerating income into 2025 from 2026 to pay the lower rate. As a silver lining, the SALT cap (limiting the deduction for state and local taxes at $10,000) goes away in 2026, so defer paying large property taxes from 2025 into 2026 to get a tax deduction. Another popular idea is to convert a traditional IRA into a Roth IRA before 2026, so you pay the income tax hit at a lower rate.

Will the sunset date be extended? Every commentator I read is predicting no. The reason is that it is already baked into the law, and for sunset not to happen, Congress would have to pass a new law and the President would have to sign it. That’s a hard thing to pull off in the current legislative environment with record low passage of new laws.

I end with a “Word to the Wise.” Don’t put off the planning. It takes time to design the right strategy for you and put it into effect. Tax lawyers will likely be inundated in 2025, like we were in 2021 when new legislation (that would have shut down most of these tools) came within two votes of passing. Business Insider affirms my prediction that “estate planning will rev up into high gear as the end of the Trump tax cuts approaches.” So please get started early and avoid the crunch. My colleagues and I are pleading with you to get started early.

Marvin Blum was honored to speak to the Tarrant County Probate Bar Association on “Estate Planning to Do Before the Clock Strikes Midnight on 12/31/2025.” 

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Every New Baby Is a Miracle

Last week’s post with my Legacy Letter to my new granddaughter Mia stirred up a moving response. Thanks to all for sharing in my joy.

As an estate planner, I have a special perspective on the significance of grandkids. Providing for your heirs in a meaningful way is usually the driving force behind a thoughtful estate plan. My mission is to help families create responsible inheritors who are prepared to receive the inheritance that will come their way. And by “the inheritance,” I mean not only money, but also the passing down of a family’s heritage. My prayer is that Mia and our other five grandchildren will safeguard the precious legacy bequeathed to us by our ancestors.

A new baby is a miracle from heaven. As I held Mia only moments after her birth and peered into that angelic face, I was overcome with awe at how a new baby comes into the world. Because of our family’s experience with pregnancy loss, I feel even more acutely blessed. When a healthy baby arrives, I don’t take it for granted.

For those readers who are newer to my blog, I’ll share again what Laurie and I experienced. After a perfect full-term pregnancy, we went to the hospital on February 11, 1982, expecting to return home with a newborn child. For unknown reasons, during the delivery, we heard words we’ll never forget: “There’s no heartbeat.” Laurie and I powered through that tragedy and were blessed with another pregnancy a few months later.

About three weeks before the due date, I was at work and my assistant interrupted a meeting to tell me Laurie was in labor. How could that be? There had been no sign of contractions earlier. We rushed to the hospital, and on February 11, 1983 (one year to the day after our loss), Adam was born. I am convinced there was divine intervention.

Our daughter Lizzy’s first-born came into the world in an emergency delivery after being under stress. It was a déjà vu horrifying experience, but thankfully ended with a healthy (though premature) Stella. Lizzy’s second pregnancy produced Juliet, this time an easy delivery but no less a miracle.

Years later, Lizzy went through a calendar year with three miscarriages (two of which were ectopic and life-threatening). But Lizzy and Ira held onto their faith and decided to try once more. The pregnancy started out a disaster, as we were informed Lizzy had once again miscarried. Days later, at a doctor appointment, Lizzy heard words she will never forget: “There’s a heartbeat.” About eight months later, Ollie was born—another miracle.

Lizzy uses her experience to help others struggling with pregnancy difficulties. She founded the “Real Love, Real Loss” movement to acknowledge the unborn souls of lost pregnancies and provide support and comfort to suffering families. She raised funds to donate a Torah to the Israeli Defense Forces, which they carry with them into battle this very day. Lizzy’s message to the troops in giving the Torah was that each letter represents an unborn soul who is looking out over our soldiers and protecting them.

Perhaps now you see why I regard each healthy newborn as a miracle. I am one very, very grateful Zaidy.

A final word to answer questions about my choice to be called Zaidy, the Yiddish word for grandfather. As explained last week, it’s a tribute to my Zaidy Eliezer. The female counterpart is Bubbie, but Laurie couldn’t relate to the stereotype of that visual image, so she chose “Mimi” instead. I once heard a joke that the word Zaidy means “shrinking man,” which certainly applies to me as my shirt size has gone from XL to L to M to S. And finally, there are lots of ways to spell it in English, but I chose my spelling in honor of Zaidy’s Deli, our favorite Denver restaurant, and its terrific owner and friend Gerard Rudofsky.

(1) Marvin Blum’s daughter Lizzy Savetsky with husband Ira and three miracle children dedicating a Torah in Israel as the scribe inks in the final letters. Each letter commemorates an unborn soul from a pregnancy loss. (2) Lizzy and Ira Savetsky rejoicing with Israeli Defense Forces who carry that Torah with them into battle, to be protected by each of those unborn souls.

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A Message to Mia, My New Granddaughter

I’ve been writing this weekly blog for 2 ½ years, and the best feedback I get comes when I share personal stories from my heart. That’s what I’m doing today, as I share with the world a message to my new granddaughter Mia, born one week ago today.

When it comes to legacy planning, the most powerful action is to pass down not just valuables, but (more importantly), our values. One way to do that is to write a legacy letter to your heirs sharing what’s in your heart. Sometimes also called an “ethical will,” these legacy letters convey messages not found in your formal estate planning documents. So, here goes.

Dear Mia,
I am your very proud and grateful Zaidy (that’s Yiddish for grandfather). Your birth created a new link in the chain of our family’s heritage, an unbroken chain that goes all the way back to Moses on Mount Sinai.

To understand the significance of that unbroken chain, I want to share the story of one of your ancestors who was also called Zaidy—my great grandfather Eliezer Weinstock. When the time came for me to select the name for you grandkids to call me, I chose the name “Zaidy” as a tribute to Zaidy Eliezer’s legacy.

Zaidy Eliezer and his wife Leah lived in a village in Eastern Europe called Polona in what is now Ukraine. To understand what their life was like, you should go see the show “Fiddler on the Roof.” They were observant Jews, deeply committed to faith and family. They had six kids: Elke, Enoch, Yosef (Joe), Rachel, Pauline (my grandmother), and Morris. Life was a very difficult struggle, as the czar would create periodic pogroms to rough up the Jews in their village. In one pogrom, they poked out one of Zaidy Eliezer’s eyes. It got so bad that their son Joe courageously immigrated to America, all alone as a young boy, seeking a better life.

When Uncle Joe arrived in America, his ship was diverted from Ellis Island to Galveston, Texas, as part of the “Galveston Movement” to alleviate overcrowding of Jewish immigrants in New York. The Jewish Welfare met Uncle Joe at the dock and placed him in Montgomery, Alabama, quite a culture shock for a religious Jewish boy who didn’t know a word of English and didn’t have a penny in his pocket.

Uncle Joe pushed a fruit cart door-to-door saving his pennies until he could bring over his family to America. While raising the funds, World War I broke out shutting down immigration. When the war ended, Uncle Joe was able to obtain a family visa for his parents and three younger siblings. His older siblings Elke and Enoch were married by that point and couldn’t be included on the same visa.

Eliezer, Leah, and three of their children made the journey to join their son Joe on the other side of the world. Elke and Enoch remained behind in Europe. Eliezer’s daughter Pauline married Meyer Oberstein and made a home for her parents and their four children, including my mother, Elsie. Elsie shared a bed with her grandmother Leah, who prayed every night that Elke and Enoch were still alive. Alas, that was not the case. Hitler captured them, and Elke and Enoch were murdered in the Holocaust.

Through all these trials and tribulations, Eliezer held on tightly to his Jewish faith. Against all odds, he remained a religious Orthodox Jew in Montgomery, Alabama. He even refused to eat meat in America, not trusting that it was properly kosher.

Eliezer studied Torah every day. Leaving behind all his possessions in Europe, he advocated learning and used to say: “What you put into your mind, no one can ever take away from you.” That became one of my mottos in life, as I’ve always put a high value on being a lifelong learner. I trust you will too.

Eliezer never learned English, speaking only Yiddish at home with his family. When my grandfather Meyer took Eliezer to court to become a U.S. citizen, the judge waived the requirement for him to pass a test in English, saying to him: “Rabbi Weinstock, with all you’ve been through, it’s my honor to declare you a U.S. citizen.”

Zaidy died soon after I was born, but he lived long enough to witness the birth of great-grandchildren. As another relative so powerfully said, seeing the birth of that fourth generation proved to Zaidy that “we beat Hitler.” The Nazi’s mission was to wipe out all the world’s Jews, but we’re still here, standing strong and proud of our Jewish identity.

We are once again living in turbulent times for Jews. As we read each Passover: “In every generation they rise up against us to destroy us, and the Holy One, Blessed be He, rescues us from their hands.” Mia, your birth proves once again that we will prevail against the forces of evil who may try to destroy us, but we will survive and thrive. When adversity strikes, know that you come from ancestors like Zaidy Eliezer Weinstock who overcame great obstacles and were resilient. As we always say in our family, “You come from good stock—WEINSTOCK!”

Mia, my prayer for you is that you live a meaningful life, inspired by the precious legacy that Zaidy Eliezer passed down to us. And may you, like our ancestors before us, continue to pass down this heritage “l’dor vador, from generation to generation.”

Your loving Zaidy,
Marvin E. Blum

(1) “Zaidy” Marvin Blum welcomes granddaughter Mia to the world, just moments after her birth. (2) The original “Zaidy” in the family, Eliezer Weinstock, survived persecution in Ukraine, though one eye was poked out in a pogrom. Marvin Blum is grateful to now be “Zaidy” to six wonderful grandkids who will carry on the Weinstock family heritage.

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Creative Income Tax Strategies

Marvin Blum spoke to the Midland-Odessa Business & Estate Council on “Creative Income Tax Strategies” on May 23, 2024.

Some of the tools in his speech take advantage of opportunities in the law to avoid income tax, such as Roth IRAs, Qualified Small Business Stock, and Private Placement Life Insurance. Other tools, such as Mixing Bowl Partnerships and Upstream Basis Planning achieve a free basis step-up on assets (and unlike the normal basis step-up, you don’t have to die to achieve it). Others achieve a tax deferral, such as Charitable Remainder Trusts and Installment Sales. We have designed ways for people (who might think they aren’t a fit) to qualify for these tools and save substantial amounts of income tax.

Slide Deck: Creative Income Tax Strategies for MOBEC (Marvin Blum, 5-23-2024)

Slide Deck: Creative Income Tax Strategies- Additional (Technical) Handout for MOBEC (Marvin Blum, 5-23-2024)

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More on Buffett: Dr. Ruth’s Gift That Keeps on Giving

As I reported last week, I missed being part of the Omaha crowd at this year’s Berkshire Hathaway annual meeting. But there was a very important guest of honor in that crowd who was seated on the front row, a true role model who deserves our recognition. It was Dr. Ruth Gottesman, who recently donated $1 billion to the Albert Einstein College of Medicine. Dr. Ruth’s gift is likely the largest ever made to a medical school, according to Joseph Goldstein’s New York Times article of Feb. 26, 2024, “$1 Billion Donation Will Provide Free Tuition at a Bronx Medical School.”

The donor is the 93-year-old widow of Wall Street financier Sandy Gottesman, a close colleague of Warren Buffett who made an early investment in Berkshire Hathaway. According to Dr. Ruth, Sandy died in 2022 at age 96, leaving her a powerful opportunity. “He left me, unbeknownst to me, a whole portfolio of Berkshire Hathaway stock, she recalled. The instructions were simple: ‘Do whatever you think is right with it.’”

Dr. Ruth seized that opportunity to make a difference in the world, and by doing so created a meaningful family legacy. “She realized immediately what she wanted to do, she recalled. ‘I wanted to fund students at Einstein so they could receive free tuition,’ she said. There was enough money to do that in perpetuity.” Dr. Ruth, a former professor at Einstein, was director of psychoeducational services and is current chair of the Board of Trustees.

When Dr. Ruth approached the head of the medical college Dr. Philip Ozuah, she asked this provocative question: “If someone said, ‘I’ll give you a transformative gift for the medical school,’ what would you do?” He answered there were three things: “One, he began, you could have education be free—.” She stopped him there. “That’s what I want to do,” she said. He never mentioned the other ideas.”

In unsurprising humility, Dr. Ruth didn’t want any recognition or publicity. Dr. Ozuah convinced her otherwise, as attaching her name to the gift might inspire others. She relented, but on the condition that the Einstein College of Medicine not change its name. “The name, she noted, could not be beat. ‘We’ve got the gosh darn name – we’ve got Albert Einstein.’”

Einstein’s student body is about 60% women. The racial composition is diverse: about 29% Asian, 11% Hispanic, and 5% Black. When the students assembled for a recent mandatory meeting, they had no idea why. “The future doctors screamed, jumped out of their seats, and cried when Gottesman made her announcement,” per Ben Cohen and Karen Langley’s article, “The Friendship with Warren Buffett that Led to Her $1 Billion Donation” (Wall Street Journal, March 1, 2024).

The Gottesman family credits Buffett’s Berkshire success with enabling them to make charitable gifts “that have brought joy to the whole family.” Buffett deflects the praise: “I’ve never seen anybody behave better with a billion dollars…. She could change all these people’s lives by giving up something that wasn’t actually important to her and would be hugely important to thousands of people over time.”

One of the most fulfilling aspects of my career as an estate planning lawyer is to help clients achieve their philanthropic goals. It is richly rewarding to help families create charitable structures that provide a true “win-win,” blessing not only the recipient of the gifts, but also providing the donor family with meaningful benefits. Those who give discover the fulfillment that comes from giving to others. Moreover, as the family comes together to make philanthropic decisions, that process brings another “win,” generating powerful family glue to help bond heirs together.

The seeds for philanthropy can be planted into children at a young age. Dr. Ruth attests, raised by parents who set an example with not only gifts of money, but also good deeds. “Philanthropy was in Ruth’s blood…. One of the formative moments of Ruth’s life came when she was around 10 years old and her family took in another 10-year-old girl fleeing Nazi Germany during World War II. ‘She never said goodbye to her parents, and she didn’t know whether they would be alive after the war,’ Ruth Gottesman once said. ‘That began a process of seeing others and feeling their pain.’”

Dr. Ruth’s story certainly inspires me. I’m with Warren Buffett—look at all the good she’s doing that will continue forever. Few can give in the magnitude that Dr. Ruth did, but with whatever we have, we can make a difference in others’ lives. And the bonus is that by doing so, we set an example for the next generations to follow. The Blum Firm welcomes the opportunity to help you explore charitable structures that are right for your family.

Dr. Ruth Gottesman (pictured with husband Sandy) is a role model for philanthropy, using their Berkshire fortune to make a $1 billion gift to endow free tuition at Einstein Medical School, truly a gift that will keep on giving.

 

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Understanding Probate Appeals in Texas

In this episode of Before You Go…, join Stacy Kelly and Keith Morris of The Blum Firm as they provide a general overview of how legal appeals work, then discuss some appellate issues specific to the world of probate, trust, and guardianship law.

What is an appeal? What issues can be appealed? What happens if an appeal results in an issue being sent back to the trial court?

There are a lot of myths surrounding appeals. The process can be difficult, and appeals rarely happen as swiftly or as smoothly as they do on TV and in the movies.

Check it out here on YouTube.

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Wisdom from Warren: You Can’t Wind the Clock Back

My son Adam’s wife is expecting a baby any day now, so we made the decision to stay close to home and miss this year’s Berkshire-Hathaway annual meeting. In past Blum family excursions to the “Woodstock for Capitalists,” I was honored three times to ask questions of Warren Buffett and Charlie Munger. My first was about their estate plans; my second was about their philanthropy; and my third was their advice for preparing heirs. Although I missed my chance to ask a fourth question this year, I couldn’t have topped the best question of the day. Like so much surprise wisdom that comes “out of the mouths of babes,” the question came from a kid: “If you had one more day with Charlie, what would you do with him?” Like everyone following the Q & A session that day, I was on the edge of my chair eager to hear Warren’s answer. He didn’t disappoint.

My mission in writing this weekly blog is to impart estate planning lessons from the head and the heart. Buffett’s answer was chock full of legacy planning advice. Even though we missed hearing how Charlie might have punctuated Warren’s answer with one of his famous one-liners, we can still hear those clever witticisms in our imagination. Charlie lives on in our minds and hearts.

Buffett reflected on his longtime close friendship with Charlie Munger, who “lived to 99.9 years” and died suddenly and peacefully last November 28, just 33 days before his 100th birthday. Warren joked that Charlie wouldn’t have wanted to know it was his last day, recalling Charlie’s quip: “Just tell me where I’m going to die, so I’ll never go there.” He just lived every day to the fullest, and he did it with vigor and humor. That’s lesson number one.

Lesson two: Warren has no regrets. He can’t wind the clock back and have one more day with Charlie, but he wouldn’t need to. “In effect, I did have one more day. We always lived in a way where we were happy with what we were doing every day.” The message is to treat every time with your loved ones as if it were your last time with them. “If I’d have had another day with him, we’d have done the same thing we were doing on all the other days…. I can’t remember any time that he was mad at me, or I was mad at him.”

How did they spend those days together? That brings us to lesson three: their time together was enriching and productive. “We did keep learning, and we liked learning together.” As the years went by, they expanded their learning even more, because they made more mistakes and they learned from each of those mistakes. “We had as much fun, perhaps even more to some extent, with things that failed, because we really had to work our way out of them. And in a sense, there’s more fun having somebody that’s your partner in digging your way out of a foxhole than just sitting there and watching an idea that you got 10 years ago just continually produce more and more profits.” In this year’s annual letter to shareholders, Buffett humbly takes the blame for many of those mistakes, acknowledging that Munger “jerked me back to sanity when my old habits surfaced…. In reality, Charlie was the ‘architect’ of the present Berkshire, and I acted as the ‘general contractor’ to carry out the day-to-day construction of his vision.” Bottom line: embrace challenges and work with a partner to dig out of them.

Lesson four: As you age, stay interested and interesting. “He was not only interested in the world at 99, but the world was interested in him. I’d never seen anybody that was peaking at 99…. They all wanted to meet Charlie, and Charlie was happy to talk with them…. The world was still a very interesting place to us when he got to be 99 and I got to be 93.” Keep actively engaged with life. “What you should probably ask yourself is who do you feel that you’d want to start spending the last day of your life with? And then figure out a way to start meeting them, or tomorrow, and meet with them as often as you can, because why wait till the last day? And don’t bother with the others.” If you can’t meet them in person, read about them. Charlie was such a voracious reader that he felt he’d actually met the people he read so much about, including his favorite Ben Franklin.

Final lesson: live life the way you want to. That’s what Charlie Munger did, even down to the fact he “never did a day of exercise.” I don’t condone that, but hey, who am I to say? Charlie drank sodas, ate candy, never exercised, and lived to 99.9!

At last year’s meeting which occurred on the day of King Charles’ coronation, Warren dubbed Charlie as Berkshire’s King Charles. Even after he’s gone, we’re still learning lessons from our own King Charles. Rest in peace, Charlie Munger.

The most profound question for Warren Buffett came from this kid: “If you had one more day with Charlie, what would you do with him?”

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Unknotting Common Law Marriage Issues in Probate with Attorney Shawn Williamson

In this episode of Before You Go…, Stacy Kelly and Keith Morris of The Blum Firm welcome guest Shawn Williamson, Senior Associate Attorney at The Blum Firm and an experienced negotiator in probate litigation. Stacy, Keith and Shawn discuss the basics of common law marriage and the types of disputes it brings up in probate litigation, including what it takes to prove common law marriage and why it can be a big, “spicy” issue. They also share real life examples of attempts to prove common law marriage and attempts to fib about the existence of one.

Did they have a common law marriage, or not? Whether you leave behind a will or not, determining if there was a valid common law marriage can have a big impact on families, and on inheritance and property issues in probate litigation.

Check it out here on YouTube.

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Congratulations Jeff Hamilton!

Congratulations to Jeff Hamilton for being named a Best Lawyer in Dallas by D Magazine!

Jeff holds an LL.M. in Taxation, is a Chartered Advisor in Philanthropy, and is board certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization. He is licensed to practice law in both Texas and New Mexico and maintains active practices in both states.

For nearly 18 years, Jeff’s trusts and estates practice has focused on providing counsel to high-net-worth individuals and families, family offices, fiduciaries of estates and trusts, and charitable entities. Jeff’s experience ranges from the most basic estate planning and estate administration exercises to planning for the disposition and management of very complex estates in excess of one billion dollars. Jeff routinely works to help clients protect their wealth and to minimize their estate, gift, and generation-skipping transfer tax exposure. In designing estate plans, it is important to Jeff to help clients convey their wealth to their loved ones and charities in a manner that is thoughtful and consistent with family goals. Jeff endeavors to be a trusted advisor working alongside other members of the advisory team to obtain the best possible outcomes for his clients.

Music was an integral part of Jeff’s youth (playing the piano, saxophone, and cello). He credits this background to being very right and left-brained balanced. Such balance has served him well over the course of his career as estate planning requires the use of logic and mathematics, but also affords so many opportunities for creative and intuitive thinking.

Although Jeff loves coming up with creative strategies to help clients save tax and protect their assets from claims of potential creditors, he is particularly gratified by helping his philanthropic clients foster dreams of impact. As a trained expert in philanthropic giving, Jeff particularly enjoys helping clients articulate and implement their highest hopes for self, family, and the communities they support. To that end, Jeff has extensive experience helping clients establish and operate private and public charitable organizations, charitable remainder trusts, and charitable lead trusts.

D Magazine conducts an extensive search each year for the best legal professionals in the Dallas legal community, asking attorneys across the state to nominate the best of their peers. Their list of the Best Lawyers in Dallas 2024 is published in the May issue of D Magazine.

We are grateful to D Magazine for recognizing Jeff Hamilton!

 

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Learn How to Be a Better Leader: Talmage Boston’s “How the Best Did It”

Heroes provide an important guiding light to help us live a fulfilling life and build a meaningful legacy. They inspire us and stretch us to be better. I am blessed with such a hero—it’s my best friend Talmage Boston, my law school roommate going back almost 50 years now. In my post of June 7, 2022, I explained how Talmage’s example and encouragement gave me the confidence to expand my horizons. Talmage’s leadership skills became a lesson in leadership for me. Now Talmage has written a book on this very topic. In How the Best Did It, Talmage Boston examines 24 leadership skills of our eight best Presidents and shows how we can apply the traits of those heroes to become better leaders in our own lives.

We are in the midst of a down and dirty Presidential campaign that has many of us longing for the days of exemplary Presidential leadership. Talmage restores hope that we’ve had that kind of leadership before, and by learning from their greatness, we can once again achieve greatness. Beyond following their example to become a great President, Talmage shows us how to apply the lessons of history to become a better leader in any field, be it business, government, academia, non-profit, or volunteerism. Each of the eight chapters ends with a mini workbook that serves as a practical checklist to assess: How am I doing? How can I improve? Speaking from personal experience, Talmage’s book is helping me become a better managing partner of my law firm.

Who made Talmage’s Top Eight? It’s the four on Mount Rushmore (Washington, Jefferson, Lincoln, and Teddy Roosevelt), plus four more since then: Franklin Roosevelt, Eisenhower, Kennedy, and Reagan. Talmage defends his selections by highlighting each one’s formula for effective and ethical leadership. Though each brings unique skills, there are three traits held in common by all eight featured Presidents. First, they were self-aware, recognizing any gaps in their toolkit and filling that void by teaming up with those who could enhance them where they had some weakness. Second, each was a great persuader who could bring the country around, though some did it through eloquent oratory prowess (Lincoln, FDR, JFK, and Reagan) and others did it more one-on-one (Washington, Jefferson, TR, and Ike). Third, all eight prioritized appealing to the American middle (where the majority of us reside) and resisted pressure from the far left and far right extremes.

One of the most fascinating aspects of the book for me is that Talmage not only reveals each one’s strengths; he also candidly discloses each one’s flaws. No leader is perfect. By pulling back the curtain on their weaknesses, we realize that we too can overcome our own deficiencies and rise to greatness. For example, Washington was a slave owner who saw the light and revised his Will to free his slaves upon his death. Jefferson was painfully shy and a lackluster speaker (giving only two speeches in his eight years—his first and second inaugural addresses), yet he was a master at hosting small dinner gatherings to break down barriers with his Federalist adversaries. Lincoln’s wife Mary was a notoriously difficult woman, but Lincoln powered through his difficult marriage and stayed focused on winning the Civil War and reuniting the country. FDR could’ve succumbed to his polio paralysis at age 39, but steadfastly refused to let it dampen his confidence. Reagan overcame his deficient upbringing with an undependable alcoholic father, living in suitcases as they moved from one rental home to another, yet emerged with an optimism that was so contagious that he could heal the country from the malaise that pervaded the end of Carter’s presidency.

I won’t give away any more, so go read it for yourself and find out the rest. You’ll enjoy Talmage’s “snap, crackle, pop” writing style and skillful storytelling. Suffice to say How the Best Did It is a masterclass in leadership.

I am a member of TIGER 21, an international peer-to-peer learning organization with monthly group meetings. At the beginning of each meeting, each member contributes to a “Tip Jar” by recommending a book, show, or other tip. I was gratified in my last meeting when a fellow TIGER member’s tip was a glowing recommendation of Talmage’s How the Best Did It. He had no idea of my friendship with Talmage. He was just objectively giving praise. I was also gratified when I sent the book to my longtime friend Bob Schieffer, regarded as one of the greatest American journalists of the 20th and 21st centuries, and, upon reading it, Bob Schieffer declared: “I was just waiting for someone to write this book!” Now that’s some endorsement. So don’t just take my word for it. These assessments, as well as a multitude of other reviews, are declaring Talmage’s book to be stellar.

In writing this weekly estate planning blog, my mission is to help others build a rich legacy that will inspire future generations. We leave behind more than money. Ideally, we bequeath to our heirs an example they can follow to help them live a fulfilling life. Talmage Boston’s How the Best Did It is a roadmap to help us live such an exemplary life and inspire our heirs to likewise become leaders with the skills to carry on our family legacy. One final tip: this book would make a perfect Mother’s Day or Father’s Day gift!

1– Marvin Blum and Talmage Boston, best friends for 49 years (and counting), celebrate Talmage’s sixth book How the Best Did It, lessons in leadership from our eight best Presidents. 2– Book cover for How the Best Did It by Talmage Boston.

Learn How to Be a Better Leader: Talmage Boston’s “How the Best Did It” Read More »

Estate Planning To Do Before the Clock Strikes Midnight on 12/31/25

On May 2, 2024, Marvin spoke to the Tarrant County Probate Bar on the topic of “Estate Planning To Do Before the Clock Strikes Midnight on 12/31/25.”

Marvin describes this topic as “Cinderella Estate Planning,” because when the clock strikes midnight on 12/31/25, the coach turns back into a pumpkin. You go to bed on New Year’s Eve 2025 with an estate tax exemption of around $14 million, and you wake up on New Year’s morning with an exemption of around $7 million. What planning can we do to lock in the doubled exemption, so we don’t waste half of it? I call this area of our law practice “use it or lose it” planning. The clock is ticking fast. The deadline will be here before we know it.

Slide Deck: Estate Planning to do Before the Clock Strikes Midnight on 12-31-25 (Marvin Blum, 5-2-2024)

 

 

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As Campus Protests Rage, Our Kids Face Tough Decisions

To say I am greatly disturbed by the protests on college campuses is an understatement. I grew up in the Vietnam era, so I understand the urge for students to speak out. But when protests turn from being a peaceful demonstration to a call for violence against a group of people (whether it be a call to kill Jews, Blacks, transgenders, or any other marginalized community), it crosses the line from “free speech” to “hate speech,” making the targeted group feel unsafe on campus. In this season of Passover when we celebrate freedom, these kids are robbed of their freedom.

I can’t help but wonder how we got here. Students are easily influenced. Social media and Tik Tok contribute. For every pro-Israel post, there are 50 posts against the Jewish homeland. The anti-Israel propaganda machine has been actively at work for the past 20 years. Unfortunately, much of the hate comes into students’ heads from some professors who have bought into an ideology that vilifies not only Jews, but Western Civilization as a whole. It’s no wonder so many kids are morally confused. I am reminded of a prep-school teacher’s line from the movie The Prime of Miss Jean Brodie: “Give me a girl at an impressionable age, and she will be mine for life.” We’ve all had teachers like Miss Jean Brodie who held that kind of power over our minds.

We’ve been here before. In 1930’s Europe, universities were a hotbed for fomenting antisemitism. The hate started in schools, then moved into cultural institutions, media, businesses, neighborhoods. It led to the murder of two-thirds of Europe’s Jews. Either we learn from history, or we are doomed to repeat it.

I’m grateful that our two kids, Adam and Lizzy, are grown and were never radicalized to hate. But Laurie and I have five young grandkids, and it’s hard not to worry how they will respond when the time comes that they face such temptation. What can we, as parents and grandparents, do to strengthen their core and give our kids the tools to make good decisions?

Laurie and I were recently in Florida to hear our daughter speak at the Annual Summit Countering Antisemitism. Coincidentally, Lizzy asked what we did to raise kids who stayed connected to our faith and identity. We are grateful that Lizzy is a leading advocate for Israel and Judaism, and that Adam was recently appointed by Gov. Abbott to the Texas Holocaust, Genocide, and Antisemitism Advisory Commission. We’re no experts at raising kids, and certainly we didn’t do everything right. No doubt that luck and blessing played heavily into the outcome. But I answered that we were intentional about identifying our core values and actively sharing those values with our kids. We regularly shared stories of our ancestors who miraculously survived Hitler, who faced unimaginable persecution but stayed strong and resilient. We taught our kids they are links in an unbroken chain. They grew up knowing that they belong to a heritage that’s bigger than they are. We did our best to adhere to the line in Ethics of the Fathers, “Train up a child in the way he should go, and even when he is old, he will not depart from it.”

In my role as an estate planning lawyer, I’ve become a major proponent of family meetings. The goal is to create family cohesiveness. Even young children can have a seat at the table and participate in an exercise to identify the family’s values and answer aspirational questions. What is the purpose of our family? What do we care about and stand up for? Who do we come from? These are conversations that should happen early and often. I’ve written a lot about family meetings in this blog. To reiterate, estate planning is about more than money. It’s about passing down not just your valuables, but even more importantly, your values. To get the most from this process, I recommend bringing in a professional to facilitate the meetings, someone who knows how to guide the process.

Obviously, there’s no guarantee that raising kids to know the family’s values and heritage will keep them on track. However, when our kids are faced with the choice of which path to take, there is a moment when they have the power to choose their response. Lizzy recently taught me a powerful lesson from Viktor Frankl’s Man’s Search for Meaning: “Between stimulus and response, there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” We cannot control what influences may tempt our kids. But when temptation arises, our kids are in control over how they respond. Let’s raise them with the tools to hopefully make the right choice when that time comes.

It’s never too early to give kids a seat at the table to learn family values and heritage. This photo of Memphis’ Goldsmith family from a century ago brings together family of all ages to honor the legacy of patriarch Jacob Goldsmith, including Marvin Blum’s mother-in-law Aimee as a young girl, seated second on the left.

 

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Attorney Spotlight: Meet Austin Light

Austin B. Light, J.D., is an Associate Attorney at The Blum Firm. He recently relocated from Austin to Fort Worth and now offices in our Fort Worth office. Austin joined The Blum Firm in 2021.

He is a Longhorn alumnus, having earned his law degree at The University of Texas School of Law (with Honors!).

Austin’s practice focuses on developing comprehensive, individually tailored estate plans to minimize estate, gift, and generation-skipping transfer taxes and provide an efficient and effective means for transferring wealth. Austin is skilled in navigating family and other relationship dynamics to develop strategic, successful estate plans that address both economic and non-economic concerns with a dedication to understanding the special needs of clients and their families. Austin also advises business owners on tax minimization, business succession at death or retirement, best practices, valuation discounts, and creditor liability and asset protection.

Austin’s prior experience includes working in the Dallas and Austin offices of Vinson & Elkins LLP, where he specialized in Executive Compensation and Benefits. Austin brings a wealth of knowledge on structuring, drafting, implementing, and administering a variety of compensation-related plans and arrangements as well as compensation and employee-related aspects of public and private transactions.

In his free time, Austin enjoys the outdoors and hanging out with his dog, Pinto.

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Fair vs. Equal: Be Ultra-Careful with Unequal Inheritances

One of the thorniest issues in estate planning is the age-old question of fair vs. equal. Should you always split an inheritance equally among your kids, or are there situations where an unequal division may actually be more fair? I’ve covered this topic numerous times before in prior posts, but it always merits reconsideration.

I referred to the work of Family Consultant Jeff Savlov a couple of weeks ago in a post about procrastination. I return to Jeff’s expertise today for the excellent way he addressed this dicey topic in his March 2024 article “Fairness, Once Again.” Like all estate counselors, Jeff recognizes that what may appear unfair may actually be fair once you know the whole context. As Relational Consultant Byron Gossett writes in his book Expand the Frame, you have to look at the big picture before you pass judgment, expanding out from the narrow frame where things may appear to be unfair. Savlov cleverly shows two boys, one with a big piece of cake and the other with a little piece. He then offers three scenarios to explain why this may actually be fair after all. “Fairness is not always a 50/50 split of the assets under consideration.”

Savlov goes on to give a personal example where their older son has a job with great health insurance while the other son is a personal trainer with no health insurance. Savlov and his wife added the younger son to their policy and agreed to pay for his coverage. Aware this could ruffle feathers with their older son, they did the smart thing. They engaged in open communication with their sons, receiving a seal of approval. But when it comes to dividing an inheritance unequally at death, proceed with caution. As Savlov illustrates, parents of a prominent surgeon considered leaving more to the less successful child who didn’t put in the hard work it took for the surgeon to succeed. As I’ve witnessed in my own practice, “The surgeon child, in this example, may not need the parents’ assets, but often feels unfairly treated or even less loved.” There isn’t an obvious right or wrong here, but I recommend Savlov’s approach to have open communication and avoid surprises when it comes time to read the Will.

Here’s a recent case involving the billionaire family of Hubert Neumann that carries the consequences of an unequal inheritance to the extreme. Kelly Crow tells the horror story of the Neumann family in her Wall Street Journal article of Feb. 3, 2024. When their mother Dolores died, the three Neumann daughters discovered a “bombshell.” Dolores left her mega-millions of dollars’ worth of art (including one painting that was “the crown jewel” of the estate) entirely to daughter Belinda. Daughter Melissa (who was independently wealthy) was devastated to learn that her share of the estate was capped at $1 million, which she’d forfeit if she contested the Will. “‘We’re sisters,’ Melissa remembers Belinda saying, reaching over to squeeze her arm. ‘We’ll get through this.’” Easy for Belinda to feel that way, but suffice to say, they didn’t get through it. Things got really ugly after the hurt of that unequal bequest.

Their father Hubert was equally shocked by the unequal division and sided with Melissa. “But in the eight years since his wife’s Will was read, his family has descended into a feud with at least 18 lawsuits exchanged among them…. [Belinda] tried to oust her father as manager of their family’s estimated $1 billion art trust.” It gets worse. Belinda and her father Hubert were sharing a residence when Hubert went to court and got an order to evict her. Belinda’s husband showed up and claimed Hubert “just shoved me into a set of doors,” leading to Hubert’s arrest. Hubert was led out of his own residence in handcuffs and “slept on the cement floor of Manhattan’s 23rd Precinct.”

Melissa and Hubert filed a Will contest, but the court upheld Dolores’ Will. Melissa and Hubert have filed an appeal. In another action, the court denied Belinda’s effort to remove her father as managing trustee. “Melissa mostly goes to art shows alone now, or occasionally with her father. She hasn’t spoken to Belinda in years.” What’s perhaps worse is that the family’s dirty laundry is on display now for the entire world to see. All hope for passing down a meaningful legacy to the next generation is destroyed.

I’ll repeat: unequal inheritances are fraught with risk. If you’re going down that path, proceed with caution!

Unequal inheritances may be “fair,” but they are also highly risky. Be careful to avoid a family feud like the one that erupted in the Neumann family when daughter Melissa (pictured here with father Hubert) received far less from her mother’s Will than sister Belinda.

Fair vs. Equal: Be Ultra-Careful with Unequal Inheritances Read More »

Will Contests: Everything You Need to Know with Probate Litigation Attorney Rudy Culp

In this episode of Before You Go…, Stacy Kelly and Keith Morris of The Blum Firm welcome guest Rudy Culp, an experienced attorney and partner at the Houston-based firm, Horrigan, Goehrs, Edwards & Culp, LLP, which focuses almost exclusively on probate fiduciary litigation.

A Will contest is a formal challenge to a Will. But the process can be lengthy, expensive, and emotionally taxing.

Stacy, Keith, and Rudy discuss Will contests, including how and when to file them, the reasons for challenging a Will, and some of the other issues and considerations that arise with Will contests.

Check it out here on YouTube.

Will Contests: Everything You Need to Know with Probate Litigation Attorney Rudy Culp Read More »

Want to Stay Younger? Dance!

I recently revealed a highlight from attending the TIGER 21 annual conference in Arizona, hearing words of wisdom from President Clinton and President Bush. Exciting as that was, it wasn’t the only notable highlight of the conference. Another magic moment came in a session from scientist Marc Milstein, PhD, entitled “Age-Proof Your Brain.”

As an estate planning attorney, my mission is to help clients not only enrich their estates, but also live enriching lives and pass down a meaningful legacy. I learned a lot from Dr. Milstein about how to have a brain that is younger than your age. Here are some tips to have a younger brain and hence a more fruitful life.

  1. Optimize your sleep. Sleep in a pitch-dark room and awaken to morning light, spending at least 10 minutes outside in natural light each morning to reset your brain clock. Avoid sleep aids, because those disrupt your natural brain clock. Your brain releases natural melatonin in the dark, then you wake up when your brain detects natural light in the morning.
  2. Tackle a new challenge as you age. By forcing your brain to learn new things, it exercises your brain and helps cleanse out brain trash. Develop a new hobby outside of your field of expertise. Take up painting (like President Bush), or learn a musical instrument, a foreign language, or a new sport (maybe join the pickle ball craze!).
  3. Keep socially engaged. Resist the temptation to become isolated (a particularly bad side-effect of COVID) and get out. Being in contact with others actually “power washes” your brain. Social engagement fights the impact of our brains shrinking 5% every 10 years, beginning at age 40.
  4. Take care of your body and mind. Treat inflammation diseases, brush your teeth (to combat gingivitis/plaque), eat right (avoid processed foods; go for the dark green stuff and a Mediterranean diet), don’t smoke, manage stress (though a moment of stress can actually be good for the brain, just not too much), breathe (mindfulness exercises to keep us in the moment help reduce harmful cortisol levels).
  5. Get daily exercise. Take the stairs. As I recently promoted in my post on the benefits of taking a walk, take a walk. Per Dr. Milstein, walk for 30-40 minutes a day, and ideally during that time, increase your heart rate for 6-8 minutes. An especially good time to take a walk is after you eat, so any sugar you consume will be a lot less toxic.

Now here’s the bonus tip: the best exercise of all is… DANCING! Why, you may ask? Because it combines the best of active movement, socialization, and forcing your brain to learn something new. Lee Ann Womack sang “I Hope You Dance,” one of my favorite tunes, so let’s follow this advice from both her and Dr. Milstein.

One more thing: following these tips can also help us ward off dementia. Per Dr. Milstein, 95-99% of Alzheimer’s isn’t genetic; it’s more affected by our lifestyle. I recently read about Vernon Smith, a very busy 97-year-old economist in Dominique Mosbergen’s article “How to Stay Mentally Sharp into Your 80s and Beyond” (Wall Street Journal, Feb. 15, 2024). Smith works eight hours a day, seven days a week, just finished writing a book on Adam Smith, and regularly goes to concerts with his daughter. He’s a poster child for Marc Milstein’s thesis. Per Smith: “Our brain is like a muscle. Use it or lose it. I want to go to at least 106.”

Way to go Vernon Smith! And while you’re at it, I suggest you also “dance like no one is watching.”

Weddings offer a great opportunity to cut loose and dance, as shown here with Marvin Blum’s daughter Lizzy Savetsky and her family. Per Dr. Marc Milstein, don’t just dance at weddings. Dancing can actually keep your brain younger!

 

Want to Stay Younger? Dance! Read More »

The Best Time Is Now

I recently had a wake-up call at a TIGER 21 meeting, thanks to my TIGER colleague and good friend Tom McKelvey. I was giving the Marvin Blum pictorial life story as part of my annual Portfolio Defense. I came to a photo of Laurie and me at Trinity Valley School with Adam in football uniform and Lizzy in cheerleader uniform. I described the picture as the all-time highlight of my life, quoting the title from Jack Nicholson’s epic movie by labeling the photo “As Good As It Gets.”

In the feedback after my presentation, Tom challenged me: “You say that picture was ‘as good as it gets.’ I submit to you that this time in your life right now is ‘as good as it gets.’”

That revelation was startling to me. Here I was winding the clock back 25 years to describe the best moment of my life, and Tom is jolting me into the realization that right now is “as good as it gets.”

How tempting it is to overlook the blessings in our lives and assume our best is behind us or in front of us. Tom pointed out that I’m healthy, married to the love of my life, have terrific kids and five wonderful grandkids, and enjoy a fulfilling career. The song “The Best of Times Is Now” starts ringing in my head.

Kasia Flanagan who documents life stories at everydaylegacies.com had a similar wake-up call. In her March 1, 2024 newsletter, Flanagan confesses to feeling burdened by jugging her business, young family, serving at church, and all that life throws her way. “Too often these days, I am caught up in the busyness of the time, with stress from kids, work, family, and lack of sleep overwhelming me. I’m sad to admit that I generally spend a lot more time dreaming about the future (and these days being past us) than I do being grateful for the present.” Then, when Flanagan interviewed a client who was looking back on her life, the matriarch described the early hectic years with her family as “among the best of her life.” Flanagan suddenly realized the blessings of her current life. She poses the question: “What have been the best days of your life?” It very well may be right now.

As an estate planning attorney, it’s my mission to help clients build and pass down a family legacy. That legacy is the sum of meaningful moments, like the simple yet profound one I’m living right now as I cuddle with my five grandkids. Thanks, Tom and Kasia, for waking me up to count my blessings and realize that today is my best day. Perhaps this post may do the same for some of you.

Then: Marvin and Laurie Blum in a lifetime highlight moment 25 years ago with football player son Adam and cheerleader daughter Lizzy. Now: Marvin Blum with his five grandkids, truly “as good as it gets.”

The Best Time Is Now Read More »

Why We Procrastinate, and How To Fix It

I hope all successfully emerged from yesterday’s April Fool’s Day unscathed. Last week’s post pointed out the dangers of procrastinating, which can be particularly costly in estate planning. This week, let’s dive deeper into the risks of procrastinating and the rewards of getting your planning done. Failing to plan can be a very harsh way to make your family feel they’ve been fooled. As my friend Tom Rogerson of GenLegCo. cautions: “Failing to plan is planning to fail.”

To illustrate, consider this real-life tale of two families described by family business consultant Jeff Savlov in his Family Business Minute blog on February 21, 2024. Savlov tells the horror story of an entrepreneur who procrastinated, followed by the success story of a matriarch (Savlov’s own mother) who did it right.

First, the bad story. At age 60, a car accident killed a serial entrepreneur whose attorney had tried unsuccessfully for years to get him to plan. He left behind five kids who had never been trained, suddenly thrust into managing two operating businesses and complex real estate assets. The eldest child had to step up, juggling his own career and family, while grieving the loss of his father. “The lawyer had seen the possibility of a train wreck like this and was unable to help the father manage it more proactively. . . . ‘We have plenty of time,’” or so we think. But as this story shows, that’s not always the case.

Now the good story. Savlov’s mom is a role model for doing it right. After her husband died, she made a commitment to get her affairs in order. “Her driving priority was that all of us [three] siblings would continue to love and support one another. . . . After her death, she wanted us free of administrative hassles and surprises.” To that end, she did detailed planning, including “who would hold onto the infamous twisted soup ladle for future generations.” She also named Jeff as her healthcare representative to manage her end-of-life care, and they discussed her wishes in detail. What a gift to the Savlov siblings!

My niece Jessica Wilen, Ph.D. (an ICF-certified executive coach with significant experience as a psychotherapist and educator at Yale and at Washington University) writes a weekly newsletter called “A Cup of Ambition.” In her February 15, 2024 article, Jessica tackles “Why You’re Procrastinating . . . and What To Do About It.” Given that procrastination is the greatest obstacle in estate planning, I read it with great interest. Jessica covers five reasons why we procrastinate, and what to do about it.

  1. You’re waiting for motivation to strike. It may never happen. What to do: Break the task into smaller sub-tasks. Doing step one motivates you to step two, etc.
  2. You expect too much of yourself, beating yourself up for procrastinating, further paralyzing you. Everyone procrastinates. Don’t be so harsh on yourself.
  3. As a perfectionist, you obsess over details, delaying completion of the task. Consider therapy and coaching to help you manage “toxic perfectionism.”
  4. You’re trying to avoid conflict. You took on a task that you just don’t want to do. “Rip off the bandaid and be honest.” Otherwise, you build up anger and resentment.
  5. You just don’t want to do it. Examine the consequences of not doing it, and if “you can live with the repercussions of not doing it, then this is your official permission slip to not do it.”

Jessica confesses how she put off opening a retirement account. Following her first piece of advice, she broke it into smaller tasks: (1) call the bank and get the paperwork; (2) then fill it out; and (3) then mail it in. One motivated her to do two; two motivated her to do three. Done!

We all have our own stories. As a young lawyer, I struggled with doing tasks that I dreaded. I remember when my boss “volunteered” me to solicit contributions for the Arts Council, and that uncomfortable task kept falling to the bottom of the stack. I got chewed out for that but learned a lesson. I adopted a methodology to do the most dreaded task first, and it really brings a gift of freedom. I give credit to Laurie’s mother Aimee Kriger for training us to “do it now.” She lived that way, and it’s part of the legacy she left to us. I highly recommend it.

Marvin Blum with niece Jessica Wilen, an executive coach offering five tips to help cure us of procrastination.

Why We Procrastinate, and How To Fix It Read More »

In Estate Planning, Procrastination Can Be Costly

The Blum Firm said goodbye to 2023 and hello to a new year filled with promise and opportunity.

On New Year’s 2024, I started year three of this blog urging all to adopt a resolution to update your estate plan, avoiding the temptation to be like Scarlett O’Hara and “worry about that tomorrow.” Procrastination is especially risky when it comes to estate planning. For one, there’s no guarantee we have tomorrow. But moreover, as explained below, we are living in “use it or lose it” times.

At this time of year, The Blum Firm has a tradition of mailing an annual newsletter covering highlights and planning tips. The theme of this year’s letter is “Now Is the Time for Action.” If you failed to receive a copy, notify us to add you to our mailing list. Here’s a link to this year’s letter.

As the newsletter indicates, and I frequently remind, the estate tax exemption shrinks by about $7 million at midnight December 31, 2025 ($14 million for a married couple). I’m often asked to speculate if the current $13,610,000 doubled exemption will be extended. It would take three things for that to happen: the House, the Senate, and the President would all three have to approve and pass a new law. Be aware that extending the exemption does not have bi-partisan support, and we are living in an era where passing legislation is close to impossible.

My word to the wise is to act now to lock in the doubled exemption. Don’t wait until 2025 when estate lawyers will be bombarded.

By gifting now, you can save your family over $5 million. The tax savings is considerably more if you do “squeeze & freeze” planning to first transfer your investments to a Family Limited Partnership (“FLP”) and then transfer FLP interests at a valuation discount. For example, you could transfer an FLP with $20 million of assets (discounted by 35% to $13 million) and completely avoid the 40% estate and gift tax, saving $8 million of tax. If the $20 million grows over time, you also avoid the 40% tax on the appreciation.

I recently met with a couple who told me they’d already used all their exemptions when they did their planning in 2020. They were unaware that inflation bumps in 2021, 2022, 2023, and 2024 yielded them an additional $4,060,000 of exemption. Unless they lock in that extra $4 million, they’ll lose it on the December 31, 2025 sunset date.

There are lots of ways to lock in the exemption before it sunsets. Our menu has a hearty alphabet soup selection: FLP, DGT, SLAT, BDT, GRAT, ILIT, QPRT, CRUT, CLAT, etc. The Blum Firm would be honored to help you identify the selection that’s right for your appetite.

In Estate Planning, Procrastination Can Be Costly Read More »

Estate Planning: Safeguard Your Hard-Earned Assets Now with Marvin Blum

Join Stacy Kelly and Keith Morris of The Blum Firm for the latest episode of their Before You Go… podcast as they speak with guest Marvin Blum, a savvy estate planning attorney and Founder and Managing Partner of The Blum Firm.

“It’s a dagger in me when I see families writing those estate tax checks because the planning tools that are available to us almost always allow us to get that tax down to either very low or zero,” says Marvin Blum.

Tune in as Stacy, Keith, and Marvin break down complicated concepts like how the estate tax works, estate tax exemptions, and the clever estate planning strategy of “squeeze and freeze.” They also share why you need to do estate planning before disaster strikes and information to help you choose your law firm wisely for your estate planning needs.

Check it out here on YouTube.

 

Estate Planning: Safeguard Your Hard-Earned Assets Now with Marvin Blum Read More »

Benihana Restaurant Blended Family Saga: Stepmother vs. Stepkids

Today’s post continues our series on real-life family business succession dramas. Like the last two posts, we turn again to the food industry for a meaty succession story. Let’s learn lessons from the blended family saga of the Benihana Restaurant chain, truly a case where the truth is stranger than fiction.

This gets messy. Let’s follow the money. Benihana founder Rocky Aoki set up a trust for his six children, retaining a special power of appointment (“SPOA”) to designate how the trust would pass at his death.

Later, Rocky married his third wife Keiko, causing his kids to worry that their inheritance could get diluted. Two of them, Kana and Kevin, met with Rocky’s lawyers about their concerns.

The next day, Rocky met with kids Kana and Kevin and his lawyers, and Rocky signed an irrevocable “Release” limiting the SPOA so that only Rocky’s descendants could inherit the trust. Apparently, no one emphasized to Rocky that it was irrevocable or explained that he could no longer give any of the trust to new wife Keiko.

Almost a year later, Rocky hired a new lawyer and signed a codicil allocating 25% of the trust to new wife Keiko outright. Rocky’s previous lawyers opined that the codicil was invalid because it violated the Release. Rocky later testified he would have never signed the Release had he known it was irrevocable.

Four years later, Rocky signed a new 2007 Will allocating 25% of the trust to wife Keiko outright and 75% to a trust for Keiko’s benefit. According to the Mashed.com article, “Why the Benihana Founder Sued His Own Kids,” just prior to that, Rocky filed suit against four of his seven children for trying to “wrest control” of the company away from him, asserting: “I want to help my kids, but I want my children to crawl, to walk, then run on their own. Then I help them. But they can’t even crawl. They just collect money and do nothing. What else they want? Can’t wait till I’m dead?”

Rocky died a year later, and the 2007 Will (cutting out his kids) was admitted to probate. Rocky’s kids challenged the Will, asserting it violated the Release.

The New York trial court denied the claim of Rocky’s kids, but on appeal, the New York Court of Appeals reversed, finding that Rocky had an opportunity to read the Release and ask questions. Accordingly, the court held that the Release was valid, and the trust passed to Rocky’s kids instead of to wife Keiko.

Let’s unpack a few lessons from this case:

  • First, to the lawyers: Rocky’s original lawyers were playing with fire, trying to dance around all kinds of conflicts of interest dealing with Rocky’s kids. In representing a blended family, be ultra careful to avoid conflicts of interest.
  • Children acting in secrecy to avoid sharing an inheritance with a stepparent is a recipe for a disaster. Although it’s a delicate conversation, the better course is a facilitated family meeting process with open communication.
  • Disinheriting kids in favor of a new spouse is ripe for a claim of undue influence. Take extra precautions to preserve evidence that would defeat such an assertion.
  • Before signing anything, read it and understand what you’re signing.

More than half of Americans are part of a blended family. Recognizing the numerous issues this statistic presents, I gave a speech identifying 18 sensitive fact situations in estate planning for the blended family. Click here to check out “I Do, Round Two: Second Marriage Estate Planning.” The Blum Firm is committed to helping blended families create thoughtful estate plans, reducing the risk of family friction.

 

Marvin gives appreciation to Charles A. Redd for his education on the subject as part of his Cannon Financial Institute, Inc. seminars.

Marvin Blum’s recap of the Benihana family saga offers important tips for business succession planning in a blended family.

 

Benihana Restaurant Blended Family Saga: Stepmother vs. Stepkids Read More »

Business Succession Challenges—More Food (or Beverage) for Thought

Last week’s post used true stories from the food industry to illustrate the importance and challenges of Business Succession Planning. Today’s post quenches the thirst for more business transition lessons by shifting from food to beverage, using real life succession strategies from wine and beer empires.

Let’s start by popping open a Heineken beer. When Freddy Heineken died in 2007, voting control passed to his only child Charlene de Carvalho, a 47-year-old housewife with no business education. “Within a week, daughter Charlene uprooted her tidy life in London, began traveling the globe to study Heineken’s far-flung operations, and learned how to become an effective owner and the guardian of a dynasty.”

Though her father Freddy failed to groom her to take over, Charlene was a quick study. Her transformation from housewife to entrepreneur is especially fortuitous, given Charlene’s sheltered upbringing. She vacationed with the likes of Onassis and Monaco’s Prince Rainier and Princess Grace but lived a mostly simple life eating dinner with her parents on TV trays. After her father survived a frightening kidnapping during Charlene’s honeymoon, Charlene dropped Heineken from her surname and retreated to a reclusive life raising her five kids. Then Daddy died.

Charlene replaced the CEO with a more aggressive leader, embarked on 49 acquisitions, and tripled revenue. Her crash course in business succeeded, but Charlene is determined to be more prudent with succession planning than her father.

Eldest son Alexander is on the board and being groomed to take control. Charlene’s advice to Alexander on selecting board members: “Surround yourself with the best possible people who are not yes men,” unlike Freddy who would only select board members who would agree with him.

Each of the other four children are being educated to be responsible owners. Charlene hired a consultant on inherited wealth to meet with the family as a group and also with each of the five children individually. The consultant addresses with each child “your ambition, desires, questions, maybe even fears of inheriting a legacy.”

Each child is encouraged to pursue some business education which Charlene lacked. Nevertheless, she wants each to follow his or her passion. Those not info business “may play roles in Heineken’s work on philanthropy and social responsibility.”

Shifting beverages from beer to wine, a Wall Street Journal study of 21 family-owned German vineyards (the average founded 11 generations ago) revealed several factors as key in successful generational transition of legacy wineries. Though some may go against your grain, here’s what worked for these families:

  • Preserve family stories: Tell stories at the dinner table of how the family overcame obstacles. “It is hard to complain about losing a customer knowing your great-grandparents overcame war and starvation to build the business.” Research shows that “telling and retelling tales about the family’s entrepreneurial legacy inspires children toward entrepreneurship.”
  • Start training at an early age: Kids can do planting, pruning, packing, and shipping. “The families actively resist the view that childhood is foremost a time to play and explore.”
  • Get a practical education: Attend the best colleges and study business and law, become multilingual, and go to work for competitors before joining the family business.
  • Learn from your children: Allow younger generations to teach the older about new product lines, markets, and the latest technology.
  • Designate one child to have control: Having one child in control protects the business from being split. But, provide the other children with education and financial and emotional support to pursue their own entrepreneurial ventures.
  • Embrace in-laws into the family: Include in-laws in family retreats and hire consultants to foster family communication. In-laws play a critical role in raising the next generation of entrepreneurs.

Whether your business sells wine or widgets, these tips merit consideration. While some may fit your parenting philosophy better than others, these suggestions are certainly good food—or should I say beverages—for thought.

Marvin Blum (with wife Laurie on a vineyard tour) uses family-owned wineries and the Heineken story as role models for business succession planning.

Business Succession Challenges—More Food (or Beverage) for Thought Read More »

The Corporate Transparency Act is Here

The Corporate Transparency Act (“CTA”) went into effect January 1, 2024. The CTA requires that certain entities (including LLCs, corporations, and limited partnerships) submit information about their owners and any other individuals who have substantial control of the company in a report called a Beneficial Ownership Information Report (“BOI Report”).

The Blum Firm is prepared to help clients meet the compliance requirements of the CTA, including filing the necessary information with the Financial Crimes Enforcement Network (“FinCEN”). We will assist you in evaluating your reporting requirements, including who must be reported as a beneficial owner. Some initial determinations may be complex, so it is best to start this process soon to set up procedures to timely and accurately update the relevant information that must be reported. For entities formed or registered to do business in the U.S. before January 1, 2024, the initial reports must be filed with FinCEN by January 1, 2025. New entities created in 2024 must file initial BOI Reports within 90 days of formation. Beginning January 1, 2025, new entities will have just 30 calendar days to file their initial BOI Report.

You should continue to plan for CTA Compliance despite the recent case (National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)), which declared the CTA unconstitutional. FinCEN addressed the court’s ruling in a notice on March 4, 2024, stating that the ruling only applies to the plaintiffs in the case (the individual, the National Small Business Association, and its members). We will continue to monitor the developments in this case, but for the time being, it is advisable to move forward under the assumption that the CTA and its filing requirements will remain in effect.

Please contact us if you would like our assistance regarding CTA Compliance and the impact on your entities.

Please be aware of scams and fraud regarding the CTA and personal information. The fraudulent correspondence may be titled “Important Compliance Notice” and asks the recipient to click on a URL or to scan a QR code. Those e-mails or letters are fraudulent. FinCEN does not send unsolicited requests. Please do not respond to these fraudulent messages or click on any links or scan any QR codes within them.

The Corporate Transparency Act is Here Read More »

Before You Go Podcast: Navigating the Texas Mental Health System with Lynn Waller Kelly

In this episode of Before You Go…, host Keith Morris of The Blum Firm welcomes colleague Lynn Waller Kelly, a former Associate Judge for one of the Tarrant County probate courts. Judge Kelly is now also a partner at The Blum Firm whose current practice focuses on representing clients in probate matters, estate litigation, and guardianship proceedings throughout North Texas. She also serves as a mediator in contested probate litigation matters.

Tune in to hear Keith and Judge Kelly talk about navigating the involuntary commitment system in Texas, including how the system works and misconceptions about the system. Judge Kelly also addresses a frequently asked question concerning the “public records of a private nature” once someone has been in the mental health court system.

Check it out here on YouTube.

Before You Go Podcast: Navigating the Texas Mental Health System with Lynn Waller Kelly Read More »

Business Succession Planning – Food for Thought

In my post two weeks ago, I promised more real-life business succession stories. Here are three shocking words for many business owners: You will die. Perhaps you read that and say: “Duh! That’s obvious!” But most business owners do no business succession planning, acting as if they’ll live forever.

As an estate planning lawyer, I have come to grips with the reality of death. That wasn’t the case when I was a young lawyer. Then I had a wake-up call. In a meeting with a client, I started a sentence like this: “IF you die,….” The client stopped me and said: “You mean WHEN you die,….” That’s when it hit me.

For this post, I’m doing a survey of real-life succession stories from the food industry. So today, it’s all about food. Let’s start with a favorite appetizer—cheese.

  • Jim Leprino’s Denver-based company Leprino Foods cornered 85% of the pizza cheese market for over 70 years. Leprino landed in court over a battle for succession between two nieces vs. Jim and his two daughters. The jury ruled for Jim after an agonizing trial to determine “the next, um, cheese heads, so to speak. Nieces need not apply.” (Amy C. Cosper, “When the Cheese Stakes Are High,” Family Business Magazine, Jan./Feb. 2023.)
  • The next cheese fight involves The Chicago Pizza and Oven Grinder Co., home of the pizza pot pie. Legal battles over control ensued among three factions: children of founder Albert Beaver, Jr., a longtime employee, and Beaver’s fourth ex-wife. Beaver gifted the business to a trust for his children. The employee later presented documents (which the children assert were forged) where the children relinquished their interests in the trust, followed by Beaver assigning the same business to the employee. Ironically, the restaurant business was a lookout spot for the 1929 St. Valentine’s Day Massacre. Now a business massacre is continuing to this day in the same location. (Joe Barrett, “Chicago Restaurant That Invented Pizza Pot Pie Embroiled in Legal Battle,” Wall Street Journal, Apr. 29, 2023.)
  • Shifting from pizza to another fast-food fiasco, the Fletcher corn dog. Each year at the Texas State Fair, the Fletcher family enjoys sales of more than 500,000 of these breaded hot dogs on a stick, raking in $4 to $5 million in three weeks. When grandfather Fletcher died, his fifth wife G.G. sued granddaughter Jace over the rights to use the Fletcher name for Jace’s competing corn dog business. Jace settled for the name CornDog With No Name.” Both corn dogs are sold at the State Fair. Too bad this wasn’t all resolved while grandfather was alive. “It’s a deep-fried mess.” (Brian Davis, “Corny Dog Crossroads: How a Fletcher’s Trademark Dispute Led to Family War with Deep-Fried Emotions,” Austin American Statesman, Sept. 30, 2020.)
  • Now a fast-food story with a happier outcome—Subway sandwiches. Following a recent trend of charitably inclined business owners, the late Peter Buck left his half of Subway to his family foundation. Following the donation, Subway embarked on negotiations to sell the business at more than $10 billion. Note the order of events—donate to charity first, then sell the business. By doing it in that order, the Buck family avoids tax on the half donated to the foundation. Upon a sale for $10 billion, the foundation receives $5 billion to create educational opportunities, undiluted by income tax. Way to go, Subway! (Simrin Singh, “Late Subway Co-Founder Leaves 50 Percent of Sandwich Chain to Charitable Foundation,” CBS News, Jan. 31, 2023.)
  • Tyson Foods sells one-fifth of the meat eaten in the U.S. Founded in 1931, the Tyson family still controls a majority of the stock. The efforts to keep governance in the family are now at risk, due to rising costs, layoffs, and plant closings. Even worse, CFO John R. Tyson, fourth generation and presumed next in line for Chairman, “pleaded guilty to charges of public intoxication and criminal trespassing, after he allegedly was found asleep in the bed of a woman who didn’t know him.” When selecting family members for key positions to run the businesses, be careful whom you get in bed with. (Dominick Reuter, “Meet the Billionaire Family Behind Tyson Foods, the Beef, Pork, and Chicken Juggernaut Whose Heir Apparent Has Battled Legal Troubles,” Business Insider, Jun. 10, 2023.)
  • Concluding this food survey, consider the saga of brothers Theo and Karl Albrecht, owners of grocery chains Aldi and Trader Joe’s. The Albrecht brothers grew their mother’s corner grocery store in Germany into a giant supermarket business. Theo was notoriously frugal. “He was known to use pencils down to their stubs, wore cheap suits, and never allowed the stores to [indulge] in fancy décor.” Similarly, Karl shunned publicity “and always turned down any honours, leading a secluded life.” However, Theo’s and Karl’s values weren’t successfully infused into the next generations. Theo’s daughter-in-law Babette went against family rules by spending millions on vintage cars and art. Babette challenged her husband’s Will which cut out Babette and her children from control of Aldi Nord, worth more than $22 billion. The family reached a settlement whereby Babette and her children have to make do with $36 million a year. The drama continued when Theo’s wife Cacilie died, leaving a Will where “she accused Babette and her children of ‘lavish spending’ and of siphoning $112 million from one of the company’s foundations to fund her lifestyle,” adding “they should have no role in the company’s future.” (Meira Gebel, “The Family Behind Grocery Giant Aldi Is Locked in a Feud After the Founder’s Wife Tried to Cut Her Grandkids Out of the Business in her Will—Meet the Albrechts,” Business Insider, Apr. 5, 2019.)

The lessons from these food industry stories abound. As Amy Cosper points out in her article, family business succession is fraught with challenges: “No matter the company size, revenue or sector, family business succession is never easy, and no two successions are the same…. ‘There are a lot of reasons succession is hard,’ explains Dennis Jaffe…. ‘Leaders want to hang on and sometimes think nobody else can possibly do a job better…. When emotions run high, things get messy. The best strategy is to have a plan.”

Furthermore, senior generations need to be intentional about imparting the family values to future generations, especially to younger ones who grow up in wealth! Your estate planner can help you design a strategy to address these challenges.

Marvin Blum draws lessons from the food industry to show the importance of business succession planning, including the story of the Albrecht family’s Trader Joe’s grocery.

Business Succession Planning – Food for Thought Read More »

Rise to the Occasion: The “Shark Tank Trust”

As mentioned in last week’s post, my regular Valentine’s Day speech in Midland was postponed. Much to Laurie’s pleasure, I rose to the occasion and took her to Rise, her favorite dining experience. Rise urges all to follow their souffle motto and “Rise to the Occasion,” a theme I’ll borrow for this week’s post. Whereas last week’s focus was business transition at the end of the founder’s tenure, we flip this week to the other end of the business life cycle. How can parents, especially in more affluent homes, encourage the next generation to “rise to the occasion” and pursue entrepreneurial endeavors?

It’s the American Dream. A kid with grit and talent grows up to build a mega-successful business. Interestingly, children who grow up with modest means learn how to prioritize limited resources, using their wits to make the most out of whatever they have. Moreover, sharing close living quarters with others teaches them to relate to others, building leadership and interpersonal skills. Family consultant Tom Rogerson of GenLeg Co. describes the conditions of a modest upbringing as creating an “entrepreneurial incubator.” Kids from that world learn how to build and lead a team.

However, as a family’s wealth increases and kids become more independent, they lose much of that drive and interpersonal connection. Rogerson labels such a privileged environment as an “entrepreneurial kill-zone.” Kids from that world are much less likely to become risk-taking entrepreneurs.

How can business creators improve the odds that future generations, though affluent, avoid the “kill-zone” and grow an entrepreneurial spirit? The answer lies in designing an inheritance structure that creates empowered, rather than entitled, heirs. Enter the “Shark Tank Trust.”

Pamela Cucina and Eric Czepyha, both with Northern Trust, explore this concept in “The Entrepreneur’s Trust” (Trusts & Estates, May 2023). Traditionally, trusts that automatically dole out regular distributions are like giving a kid an allowance. Beneficiaries are shielded from trust investment management and decision making, leaving the heavy lifting to family offices and trustees. Per Cucina and Czepyha, this traditional structure “has the potential to infantilize rather than empower and inspire beneficiaries, creating a generation of ‘perpetual children’ who are ill equipped to become responsible and engaged stewards of the family’s wealth and business holdings.” Furthermore, such trust babies are unlikely to possess the grit and ingenuity to become an entrepreneur.

It’s time for a new kind of trust that will “ignite a fire” and “cultivate a spirit of entrepreneurship.” Cucina and Czepyha call it the “Entrepreneur’s Trust.” I’m borrowing the concept from a hit TV show and labeling it the “Shark Tank Trust,” but it’s the same thing. Here are some key features:

  • Authorize the trustee to invest in a business where the beneficiary will be actively involved, even if new or speculative.
  • For each such investment, require the beneficiary to present a “Shark Tank” business plan with projected budgets and information on advisors and co-investors.
  • Hold the business to certain standards of accountability, such as conservative leverage, hiring practices, and reporting requirements.
  • Encourage beneficiaries to get the needed financial education.
  • Develop parameters for requirements to be met before funding additional capital needs beyond the initial investment.
  • Allow the trustee to hire outside advisors, at the expense of the trust, to evaluate the proposed business.
  • Use a Directed Trust approach where the Shark Tank process is delegated to an investment committee.
  • Waive the trustee’s duty to diversify and duty of impartiality for such private investments.
  • Indemnify the trustee from liability related to such investment decisions.
  • Consider imposing a percentage limitation on the portion of trust assets to be invested in the beneficiaries’ private businesses.

In addition to these provisions, probe the trust creator’s intent on the “why” behind the entrepreneurial emphasis. Include such statements of intent (the “why”) in the material purposes section of the trust. For example, perhaps the trustor believes that private businesses are better investments for creating and preserving wealth, provide practical training, and give beneficiaries the fulfillment that comes from achieving something out of their own hard work and skill. Knowing that “why” can guide trustees, and moreover, inspire beneficiaries to endure challenges in their quest for the stars, achieving the rewards of self-esteem and self-growth along the way.

In the words of the Latin motto adopted by Fort Worth’s Trinity Valley School’s beloved founding Headmaster Stephen Seleny, give your kids the chance to grow per aspera ad astra, through difficulty to the stars.

Marvin and Laurie Blum enjoying a Valentine dinner at Rise, encouraging the next generation to “Rise to the Occasion” and pursue entrepreneurial endeavors.

 

Rise to the Occasion: The “Shark Tank Trust” Read More »

Family Business Succession: The Good, The Bad, and The Ugly

I hope everyone had a happy Valentine’s Day. For the last several years, I spent most of my Valentine’s Days speaking to advisors in Midland, Texas. The same was to happen this year, but my speech was rescheduled (from my wife’s perspective, a happy postponement, for as much as I enjoy my connection with the terrific Midland planning community, I admit that being there on Cupid’s day without Laurie is not the most romantic way to celebrate). However, I was in Midland recently for a presentation on a topic I describe as the most neglected (and potentially dramatic) area of estate planning, Business Succession Planning.

What makes succession planning so challenging? There are no easy answers or fill-in-the-blank forms. In my Midland presentation on “Business Succession Planning,” I dive into the many technical and psychological aspects, including buy/sell agreements, life insurance solutions, squeeze & freeze tools, and charitable planning ideas. Click here to read the PowerPoint.

The TV Series “Succession” has certainly made business transition a sexier topic. On top of that fictional account of family power struggle to take over a family enterprise, the media coverage is replete with real-life examples of succession intrigue. Over the coming weeks, I’ll share a number of sensational true stories so we can learn the “do’s and don’ts” from them.

The Blum family has its own example of business transition “don’ts” which I’ve confessed before. I’ve readily admitted that this cobbler at times needs to take better care of my own shoes. This month marks seven years since my brother Irwin’s sudden death at age 65 from pancreatic cancer. Irwin was running our family’s meat-packing supply business, handling every important aspect of the business by himself. He was a business whiz, but his style was to keep most data in his head and fly solo. When he left us suddenly, we had a miracle solution. Our mother Elsie (now 93 and still 100% sharp and a business whiz herself) emerged from retirement to manage the business transition. However, our way is not the safe way, for as I wrote in my March 1, 2022 post, “Not Every Family Has an Elsie.”

The Blum family lesson for business leaders is to train successors and, hard as it is, delegate important tasks to them so they can learn. Let’s observe more real world “do’s and don’ts” from three other recent stories of succession. Here is my version of “The Good, The Bad, and The Ugly.”

The Good: H-E-B grocery is a multiple recipient of the Dunnhumby award as the top U.S. grocery retailer, named for owner Howard E. Butt. In the article, “That Time I Met the Owner of H-E-B, and Drove Through a River,” Christopher de Vinck credits H-E-B’s succession win with the strong culture the Butt family instilled in their Texas grocery chain (DallasNews.com). Originally founded by Florence Butt, the business passed from her to son Howard Sr., then to Howard Jr., and now to other Butt family members. Howard Jr. challenged his team with this question: “Is our work a paycheck or a calling?” As a leader, Butt lived by his motto “The High Calling of Our Daily Work” and taught “the difference between a company that only cares about money and a company that cares about the customers.” Butt passed down that “spiritual beauty of the best entrepreneurial practices.” Crediting Butt’s values-based leadership for H-E-B grocery’s business continuity, de Vinck sums up the reason for their success: “What a leader says at the top filters throughout the system.”

The Bad: Three months before French fashion designer Pierre Cardin died at 98 of Covid, he boasted to a reporter: “After my death? I don’t think about it. I didn’t organize anything. NOTHING.” The result: a notorious legal battle among 22 family members claiming to be heirs. Cardin, who never had children, left behind an UNSIGNED will designating one nephew Rodrigo to take over his 99.999% ownership. Unsurprisingly, a Paris court ruled the will invalid. As Dana Thomas quotes in “A Tale of Family Intrigue and Inheritance” (New York Times, Sept. 25, 2023), “He didn’t want to hand over his power. He wanted to keep it until the end.” Worse yet, Pierre Cardin refused to create a legally binding succession plan for his family: “Every time we said, ‘Let’s go to the notary and put it down on paper,’ he canceled at the last minute. He couldn’t imagine someone replacing him.” He saw himself as indispensable, bringing to mind another famous Frenchman Charles de Gaulle who wisely admonished: “Cemeteries are full of indispensable people.” Cardin is in one of those graves now while his family feuds over the mega-mess he left behind, three wanting to continue the legacy and 19 wanting to sell and cash out.

The Ugly: Can it get worse? Consider the drama playing out in real time in the Hermes luxury fashion house. Nicolas Puech, also childless like Cardin, is a fifth-generation billionaire owner who has ignited a bitter succession war within the Hermes dynasty. Observe this real-life story where truth is stranger than fiction. The Hermes descendant is adopting his 51-year-old gardener and designating this “‘handyman’ from a ‘modest Moroccan family’ as his rightful heir” (Mary K. Jacob, “Hermes Heir Awarding 51-Year-Old Gardener $11B Fortune, $5.9M in Properties,” New York Post, Dec. 11, 2023). His actions have triggered “an acrimonious battle within the family…[and] irreparable discord with his kin.” Puech had previously pledged his fortune to the Isocrates Foundation, who “opposes any unilateral cancellation of the inheritance contract.” Was it a “contract” or a revocable pledge? Let’s watch to see how this ugly showdown unfolds.

Perhaps script writers are already busy writing a sequel to “Succession.” There’s certainly plenty of material for it here, and even more to come in my upcoming posts.

Marvin Blum speaking in Midland on Business Succession Planning, the most neglected (and potentially dramatic) area of estate planning.

 

Family Business Succession: The Good, The Bad, and The Ugly Read More »

Podcast: Introduction to Corporate Trustees in Texas with Beth Owens

The Blum Firm attorneys Keith Morris and Stacy Kelly have released the next episode of their “Before You Go…” podcast. In this episode, Stacy and Keith are joined by Beth Owens, Trust Officer at American National Bank & Trust.

The trio dive deep into the role of a trustee, discussing their responsibilities and how they can manage a trust effectively. Tune in to hear Beth’s insightful observations about corporate trustees and their ability to manage complex situations. The conversation also discusses the importance of keeping accurate records, the necessity of clear communication with beneficiaries, protection of beneficiaries from scammers, and the benefits of appointing a co-trustee or corporate trustee as agent.

Check it out here on Youtube.

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What I Learned from Presidents Bush and Clinton

I had a mountaintop experience a few days ago. Attending the 25th Anniversary Conference for TIGER 21, the highlight was a candid conversation with President Bush and President Clinton. Without getting deeply political, I’ll share a few presidential takeaways that apply to my efforts to help families create a lasting legacy and thrive from generation to generation.

First and foremost is the example they set as close friends in spite of their political differences. Only 44 days apart in age, Bush described Clinton as a “brother from another mother.” They are role models for civility. When we disagree with family members or others, look to Bush and Clinton for inspiration on how to maintain civil discourse in spite of differing viewpoints.

Here’s a case in point. Clinton ran an aggressive campaign and deprived Bush’s father, George H.W. Bush, of a second term. Moderator Michael Sonnenfeldt asked Bush if he held any resentment over Clinton beating his dad. Bush answered absolutely not. Coming from political families, “we understand losing elections.” He elaborated that his dad had lost multiple elections, never winning a statewide election in Texas. Yet the Bush family respected the process and held no remorse.

Eight years later, Bush defeated Clinton’s Vice President Al Gore in a hotly contested presidential race, yet Bush and Clinton continued to get along. In the first term of his presidency, Bush called upon his dad and Clinton to work together to help him. He appointed them to head up the American response to the disastrous Indian Ocean tsunami. A year later, Bush again called upon them to team up to help address the Hurricane Katrina crisis. Given today’s political polarization, it’s astounding to observe such high-minded behavior. As my wife Laurie would say, “it’s always best to take the high road.” Bush and Clinton certainly took the high road.

Another takeaway that I recommend for families wrestling with tension is to preserve a sense of humor. Though the topics were serious and potentially contentious, Bush and Clinton found connection by sharing humor. A light-hearted comment can help us restore perspective that the relationship we share is what is paramount. Once, Bush jumped in with an answer before the notoriously long-winded Clinton could respond, chiding Clinton for always “talking too long,” so this time Bush wanted to have the floor first. When Clinton’s Apple watch went off, interrupting the flow, Bush joked: “Tell Hillary hi.” A further humorous tribute to their family connection was Bush kidding that Clinton visited his elderly “HW” dad at their Kennebunkport home even more than son “W” did.

My favorite example of humor came in their opening lines. Sonnenfeldt began with the observation that half the attendees at the conference likely voted for Bush and half likely voted for Clinton. Bush’s quick retort: “All of you would vote for either one of us today.” To which Clinton added: “Except we’re too young.” That humor opened the door for a very relaxed and revealing program.

A final observation that applies to family conflict is to find common ground. With Bush and Clinton, there was plenty of common ground. Both expressed concern over those in America who are advocating for isolationism. They were emphatically aligned on their unwavering support for Israel, doing “whatever it takes” to protect Israel and insure its survival. They also expressed fervent support for Ukraine, saying the world would long regret it if Putin won.

Both are champions for bipartisan cooperation. Bush praised Clinton for repeatedly reaching consensus with House Speaker Newt Gingrich, whom Clinton would frequently call to the White House. Per Clinton, Gingrich’s staff started discouraging Gingrich from attending those meetings, aware that Clinton had a way of convincing Gingrich to cave in.

The conversation ended with optimism for America’s future, citing advancements in technology, healthcare, education, and entrepreneurship. They believe the strength of our institutions will withstand whatever happens in the next election and the following four years. Let’s hope they’re right.

The program was an inspiring reminder to cling to values of decency and civility in spite of our disagreements. Families striving for harmony can draw valuable lessons from these leaders. The session ended with Bush planting a big kiss on Clinton’s right temple, which was very warmly received. That kiss served as yet another lesson to battling relatives—follow mother’s advice to put aside differences “and now kiss and make up.”

Marvin E. Blum

Marvin Blum was honored to meet Presidents Bush and Clinton, role models for civility and decency despite their differences. May their example inspire families to do the same.

What I Learned from Presidents Bush and Clinton Read More »

What I Learned From My Brother-in-Law’s T-Shirt

I have a brother-in-law Barry Wilen (married to Laurie’s sister Diane) who is one of those super-smart, walking encyclopedia kind of guys. Normally, his wisdom deals with academic topics and world events. But on a recent visit to their home in Hollywood, Florida, Barry waxed eloquent on a softer topic—the benefits of walking. To be more specific, it was actually Barry’s T-shirt that did the talking.

Laurie and I joined Barry and Diane on their morning ritual, a three-mile walk in Topeekeegee Yugnee Park. As the photo of the front of Barry’s T-shirt attests, they’ve passed the 10,000-mile mark. But even more impressive is the back of Barry’s T-shirt that touts some of the many benefits of walking.

Barry’s wisdom on walking brought to mind my post of August 22, 2023, entitled “Take a Walk– Alone, No Phone.” That post promoted the benefit of walks in nature, particularly silent walking and moments of stillness. Although the Wilen hikes aren’t silent, the experience is still inspirational and restorative.

Reflecting on that post, I recalled the powerful reaction that it generated. As we contemplate the immense physical and spiritual benefits of taking walks, I’ll share some of the profound comments readers of that post sent me.

  • “YES, Marvin! YES! This is gold. Wonderful post and stillness, to me, is the new busy. Somewhere along the way we culturally accepted busy (often rushed) as the norm. That if you weren’t ‘crazy busy’ you weren’t DOING enough. We are after all a productivity culture. Creativity or vision or ideas come in the stillness. Stillness makes way for gratitude, which is the ultimate state in which to receive. Connection to G-d is found in the stillness. Meditation changed my life 2 years ago. I just love this post.”
  • I do my best thinking when I am alone walking. I do my walk around the TCU campus and intentionally do not listen to a podcast or call anyone on the phone. It is so nourishing.”
  • “Today’s article resonated with me. I am actually planning on walking the El Camino trail across Portugal and Spain and plan to only use my cell in an emergency. Like you discovered on your walk around Lady Bird Lake, I am excited by the prospect to be completely detached from technology and have a couple of hundred miles or so to calm that ‘hurricane’ that constantly occupies my mind.”
  • “Quoting from an article “Walking” in The Atlantic, ‘I have met with but one or two persons in the course of my life who understood the art of Walking, that is, of taking walks—who had a genius, so to speak, for sauntering: …under pretense of going ‘a la Sainte Terre, to the Holy Land…. For every walk is a sort of crusade [to the] …Holy Land.”
  • “I have tried (sometimes more successfully than other times) to add thinking time to my day.” The reader attached an article about President Eisenhower, perfectly on point, from The New York Times (Jan. 19, 1954), “President Has Only Hour a Day to Think and Had to Beg for That.” “’The President’s main complaint is that we don’t give him enough time to think,’ Mr. Shanley said. ‘Finally, we had to set aside a half hour in the morning and the same time in the afternoon, in order to give the President the time he requires.’”
  • “Regarding ‘Take a Walk,’ I’m a huge proponent and have been all my life. My grandfather was a locally known ‘naturalist’ in Southwestern Wisconsin and has a trail named after him. He and my father taught me that part of the time should be spent silently, listening to sounds and seeing sights.”

This last piece of wisdom came with a link to a brilliant article on Today.com by Daryl Austin (Aug. 25, 2023) called “What Is Silent Walking?” advocating silent walking “to disconnect from all the noise and chaos that is part of our busy world.” The article offers tips on how to do it, warning it’s easier said than done. Benefits include reduced anxiety levels, improved sleep, lower blood pressure and heart rate, improved blood glucose levels, and a boost to the immune system.

I hope you’re as inspired as I am to take time for some meditative walks. Who knows what meaningful revelations may emerge!

(1) Marvin Blum with brother-in-law Barry Wilen, a walking enthusiast who has logged more than 10,000 miles on the trails of Topeekeegee Yugnee Park in Hollywood, Florida. (2) The back of Barry Wilen’s T-shirt waxes eloquent on the benefits of walking. Here’s to your physical and mental wellbeing!

 

What I Learned From My Brother-in-Law’s T-Shirt Read More »

Podcast Episode 2: Understanding Guardianships in Texas

The Blum Firm attorneys Keith Morris and Stacy Kelly have released the second episode of their “Before You Go…” podcast. Episode 2 is “Understanding Guardianships in Texas: What You Need to Know.”

In this episode, Stacy and Keith discuss the basics of a guardianship in Texas, the difference between a guardianship of the person and a guardianship of the estate, and the different situations that can lead to litigation involving guardianships. They also share real-life examples, including a high-profile case involving the owner of the Houston Texans, to illustrate how complex and costly these situations can be.

Check it out here on YouTube.

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Welcome Attorney Anna Rose St. Martin

Attorney Anna Rose St. Martin

We’re proud to announce that Anna Rose St. Martin has joined The Blum Firm as an Associate Attorney in our Fort Worth office.

Anna Rose earned her J.D. cum laude from Texas A&M University School of Law in 2022.

While in law school, Anna Rose was a Teaching Assistant for the Academic Support Program and Professor Fortney’s Legal Ethics Research Assistant. She also participated with the Alternative Dispute Resolution Competition Team in Mediation and served as Vice President of the Longhorn Law Student Association.

Anna Rose earned her undergraduate degree—a Bachelor of Science in Communication Studies with a McCombs Business Foundation Minor—from the University of Texas at Austin with High Honors. While at the University of Texas, she earned a Certificate in Ethics and Leadership in Law, Politics, and Government as part of the Bridging Disciplines Program.

Anna Rose’s contact information can be found here.

Please join us in welcoming Anna Rose to The Blum Firm team!

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More Wisdom from “Frugal” Warren Buffett (Including His Wife’s Reaction to a $4 Coffee)

Last week’s post was dedicated to the wisdom of Warren Buffett’s longtime sidekick Charlie Munger who died in late 2023 at age 99. Today’s post looks ahead to 2024 and the next annual meeting without Munger. Although Charlie is irreplaceable and we’ll miss his sharp intellect and wit, the show must go on. Our family has already booked our annual pilgrimage to Omaha for this year’s annual meeting on May 3-5. Come join us!

In anticipation of the upcoming “Woodstock for Capitalists” (as the annual meeting is commonly dubbed), I’ll share a few tidbits of wisdom from the Oracle of Omaha. Previous posts have described much of Warren’s estate planning philosophy. Today, let’s dive deeper into Buffett’s estate plan, as many join me in finding it to be instructive.

The Oracle of Omaha revealed in his 2020 annual letter to shareholders that his Will directs his executors “not to sell any Berkshire shares.” Furthermore, after the estate closes and the shares transfer to trusts, the trustees are likewise directed to sell no Berkshire stock. Over the 12 to 15 years following his death, they are to gradually convert portions of A shares into B shares and distribute them all to various foundations.

Buffett acknowledges that absent such explicit direction, state law would require his fiduciaries to diversify assets. Accordingly, “my Will also absolves both the executors and the trustees from liability from maintaining what obviously will be an extreme concentration of assets.”

Buffett believes that holding Berkshire stock during the 12 to 15 years disposal period will enrich his estate better than an upfront sale and reinvestment in US Treasury bonds. Although perhaps not the “safe” course, “there is a high probability that [his] directive will deliver substantially greater resources to society.” As he later expounds in a Nov. 2023 Berkshire news release, “Berkshire’s advantage is that it has been built to last.”

Here’s the lesson from Buffett’s “Berkshire-only” instructions. If you own a family business, real estate, or certain other investments that you want preserved in your trust, spell it out in your estate plan. Otherwise, state law will likely force your trustees to liquidate and diversify.

Interestingly, Buffett’s estate plan doesn’t delay making charitable gifts until his death. In a Berkshire news release in June 2023, Buffett announced that over the last 17 years, he has gifted about $50 billion of Berkshire stock to five foundations as part of a plan for annual grants he adopted in 2006. By far the largest recipient is the Bill and Melinda Gates Foundation. Buffett confirmed that the plan will continue after his death: “My Will provides that more than 99% of my estate is destined for philanthropic usage.” In the Nov. 2023 news release, he offers further wisdom on the reason for his philanthropy at death: “My children, along with their father, have a common belief that dynastic wealth, though both legal and common in much of the world including the United States, is not desirable….Private philanthropy will always have an important place in America.”

As previously reported, I’ve had the privilege of asking Buffett estate planning questions at three Berkshire Hathaway annual meetings. Each time, Buffett stresses the importance of raising kids, especially affluent kids, with solid values. Per Buffett, the best way for parents to build a lasting legacy is being role models who live those values themselves. He advises that kids are watching their parents more than they are listening to them.

Since the kids are watching, Buffett cautions against living an extravagant lifestyle, even if there’s great wealth. Worth about $115 billion as the world’s seventh richest person, Buffett takes that value to the extreme, to the point of being considered “frugal.” According to a Business Insider article last July 14th, “Bill Gates, a longtime friend of the 92-year-old, once recalled the billionaire pulling out a handful of coupons to pay for a McDonald’s meal.” Moreover, Buffett still lives in the same Omaha house he bought for $31,500 in 1958.

That frugality spills over to Buffett’s family. That same Business Insider article reported that at a summer summit for billionaires in Sun Valley, Idaho, Warren’s wife Astrid Buffett was overheard griping to resort employees about having to pay $4 for a cup of coffee. She complained that she could buy a whole pound of coffee for that price. Astrid was working as a waitress at the French Café in Omaha when she first met Warren. They married in 2006, and it’s evident she embraces her husband’s views on conservative spending.

For all those who cling to every story and piece of advice we can glean from the Oracle, Buffett is certainly a gift that keeps on giving.

Marvin E. Blum

Estate planning attorney Marvin Blum with son Adam and a cutout of Warren Buffett

Marvin Blum (left) with son Adam, part of the “Warren Buffett Fan Club” that welcomes all tidbits of wisdom from the Oracle of Omaha. 

More Wisdom from “Frugal” Warren Buffett (Including His Wife’s Reaction to a $4 Coffee) Read More »

New Podcast: “Before You Go…”

Attorneys Keith Morris and Stacy Kelly have launched a new podcast!

The podcast is called “Before you Go…,” and their first episode is available now—“Unraveling the Texas Probate, Trust, and Guardianship Landscape.”

Death is one of life’s certainties. Yet, it’s not easy to contemplate a world that moves on without us. It’s common to feel anxious and have questions. Attorneys Keith Morris and Stacy Kelly provide practical insights, simplify complex legal topics, and empower you in navigating Texas probate, trust, and guardianship issues.

It’s available on Spotify, Apple Podcasts, and YouTube. Be sure to subscribe in your favorite podcast app so you don’t miss out on what you need to know before you go.

Check it out here on YouTube.

New Podcast: “Before You Go…” Read More »

A Role Model for Philanthropy with Strings: Rest in Peace, Charlie Munger

While I’m still reflecting on 2023, I lament the passing of Charlie Munger at age 99, Warren Buffett’s sidekick at Berkshire-Hathaway for nearly 50 years. All of us in Charlie’s fan club knew the day would come, though we kept hoping it’d be later. He was the kind of guy who just seemed like he might live forever—brilliant and quick-witted all the way till the end. We can learn a lot from Charlie’s life. He was a voracious reader who committed the bulk of every day to learning. He was a genius investor who freely shared his advice, such as buying quality companies with good upside potential, paying a good (even though not bargain) price, rather than buying cheaper damaged goods. But the lessons from Charlie Munger’s life I want to focus on today is his philanthropy.

Per Karen Langley’s Wall Street Journal article “Charlie Munger’s Donations Came with Plans Down to the Details,” (Dec. 4, 2023), he gave more than $500 million to universities, hospitals, and other institutions. But “Munger didn’t just write checks.” He was a generous donor, but his gifts came with strings. He had specific ideas for the use of philanthropic dollars, and he attached conditions to his gifts. When he funded campus projects, the money came with blueprints for the design. For example, “he pushed for high ceilings and plentiful common areas and expressed his dislike for buildings with curves.”

Munger was especially interested in the design of student housing, seeing it as “a component of education…. It’s where young people meet and learn to exchange ideas and form business relationships that they’ll then have for the rest of their lives.” I can personally attest to the value of student interaction, as I consider the lifelong impact of my law school classmates on my law practice. To facilitate such interaction, Munger insisted that hallways should be wider “such that when people see each other they are comfortable interacting whenever they bump into each other.” Munger Hall at UC Santa Barbara was a residence hall so large that it even contained interior bedrooms in order to house thousands more students. Munger eliminated bedroom windows, opting for “artificial windows with LED lighting that would mimic natural daylight.” One architect was so offended by the omission of bedroom windows that he resigned, but Munger refused to budge.

Recent media coverage highlights many major donors who have been disappointed by the way their funds are being spent by universities, often the donor’s own alma mater that the donor believes has gone off course. Munger’s approach is instructive. His advice would be to carefully design the gift, so it is contractual. Make the donation pursuant to an agreement that spells out detailed conditions where, if violated, the gift is revoked.

As generous as he was, the billionaire Munger refused to join his partner Buffett in signing Bill Gates’ Giving Pledge to donate at least half of your net worth to charity. The reason? He’d already given more than half of his wealth to his kids. (Sounds like Charlie did some very effective estate planning!) Unwilling to sign the pledge, he explained, “I’ve already given more than half of it to my children. So I can’t join them. It’s like coming back from the dead. I can’t do it.”

As we look to Munger as a role model, it’s interesting that Munger’s philanthropic views were inspired by one of his role models. “I’ve patterned my life after [Benjamin] Franklin. I stopped trying to make more money when I had enough. He did the same damn thing. He didn’t try to die with all his money, he gave away a lot of it…I’ve done the same thing.”

In the second of my three opportunities to ask a question at Berkshire annual meetings, I had the privilege of asking Warren & Charlie about their charitable giving. In their answer to me, Warren echoed Charlie’s sentiments about giving it away before you die, joking: “As Charlie said the other day, where he’s going, it won’t do him much good anyway. There’s no Forbes 400 in the graveyard.” Sadly, Charlie now lies in that graveyard, but his legacy lives on in millions of dollars of gifts designed exactly the way he wanted that money spent. And if those recipients ever go against Charlie’s wishes, I’m sure he’ll figure out a way to come back and haunt them.

Marvin E. Blum

Charlie Munger and Adam Blum

Marvin Blum’s son Adam with the irreplaceable and no-nonsense Charlie Munger, a role model for carefully structuring charitable gifts to meet the donor’s specifications.

 

A Role Model for Philanthropy with Strings: Rest in Peace, Charlie Munger Read More »

How My Work and Workout Communities Enrich My Life (and Maybe Will Help Propel Me to 98 Like Anna Stucker)

In last week’s post, I told of a joyful holiday visit from our kids and five rambunctious grandkids (even though a shattered porcelain pot means one less thing in our estate sale when we die). Reflecting on last month’s holidays brings many happy thoughts, all associated with meaningful interactions with family and friends. As I think about those holiday gatherings, here’s what hit me. Our lives are richly blessed by being a part of some wonderful communities. I began to count those communities, and in doing so, I count my blessings.

Research shows that being a part of a community does more than make you feel happier. It also actually makes you feel healthier. Indeed, the research goes so far as to show that it contributes to our longevity. More than that, of the top ten factors that help us live longer, the top two have to do with human interaction and relationships.

My post from June 14, 2022, on Ten Keys to a Long (and Good) Life listed ten factors (in reverse order of importance) which I’ll repeat here:

10. Clean air
9. Hypertension medication
8. Staying lean
7. Exercise
6. Cardiac rehab
5. Flu vaccine
4. Quit drinking
3. Quit smoking
2. Close relationships
1. Social integration

Being a member of a community feeds the top two reasons people live long and good lives. The human connection is food for the soul, which in turn contributes to a healthy body, mind, and spirit. It’s all connected.

The holidays brought me interactions with so many meaningful communities: my family, Canoe Brothers, TIGER 21 colleagues, neighbors, friends, civic organizations, fellow Longhorn boosters at the Sugar Bowl (we almost did it!), and others. But I want to shine a light on two that especially enrich my life: my work community and my workout community. These two in particular work together to give my life balance.

I typically refer to my work community as The Blum Firm “family.” I use the word family very sincerely. I shared in prior posts that my first lawyer job was in the Big Law world, which was not a happy fit for me. When I left to form The Blum Firm, I made a vow to create a caring environment where people would be surrounded by co-workers who support each other and care about each other. When I’m asked about my greatest professional accomplishment, the answer is easy: it’s the team I’ve assembled. We share a commitment to our clients and each other, and we strive for excellence in everything we do. No one here is flying solo. We know we can rely on the strengths of everyone in the firm to always be there to help, making each of us a better professional and a happier worker. When I left the big law firm, my father-in-law wisely said, “Don’t be mad at them. Send them a thank-you note.” Boy was Abe Kriger right! I am grateful every day that I get to spend my work hours with a wonderful work family.

The old adage to avoid an “all work and no play” life certainly speaks to my efforts to build a balanced life. Part of how I aim for balance is to spend a part of each day working out. As I got older, I discovered that my workout experience is far better if I do it with a group. Laurie and I are members of a fitness center where we do almost all our workouts in classes. Our workout group has become another meaningful community. We encourage each other and enjoy the camaraderie. As each other’s accountability partners, we are much more inclined to show up and give it our all. For those whose new year’s resolution list includes more regular exercise, I strongly urge you to join a fitness group.

I’ll close with a tribute to one of the stars of our workout community, 98-years-young Anna Stucker. Anna is our role model. I joined an aquatics class and Anna shows up every day to not only swim but also serve as the class cheerleader. It turns out that she had perfect training for that role. When she attended college at the University of Kansas, she was a Jayhawks cheerleader. Anna graduated with a geology degree, moved to Texas for work as a geologist, married and raised three outstanding kids, and never stopped being physically active. Anna is a perfect example of the longevity benefits of both staying active and also staying connected with people. Her mind is as sharp as ever. And on top of that, she still fits in her Kansas cheerleader uniform! Anna inspires us all.

As we embark on 2024, may we all find the fulfillment of becoming connected with communities. We’ll be happier and healthier for it, and maybe even at 98, we can be like Anna Stucker!

Marvin E. Blum

Estate planning attorney Marvin Blum in pool exercise class

(1) Laurie and Marvin Blum celebrating Anna Stucker’s 98th birthday. (2) Marvin Blum (far right) and his aquatics colleagues, with role model Anna Stucker (age 98) in the center. (3-Photo Below) Building a superstar team at The Blum Firm is Marvin Blum’s greatest professional achievement. Here they are celebrating the 2023 holiday season.

Group of employees and family of The Blum Firm

How My Work and Workout Communities Enrich My Life (and Maybe Will Help Propel Me to 98 Like Anna Stucker) Read More »

Welcome Attorney Lynn Waller Kelly

We’re proud to welcome Lynn Waller Kelly, former Associate Judge of Tarrant County Probate Court 2, to The Blum Firm! She joins us as Partner in our Fort Worth office.

Lynn’s practice focuses on both contested and uncontested probate matters, including estates and guardianships, throughout North Texas. As Associate Judge for Tarrant County Probate Court 2 for six years, she presided over more than 6,000 probate hearings. An experienced litigator, Lynn has tried over 100 cases to North Texas juries.

Lynn is a member of the College of the State Bar of Texas. She earned her Juris Doctor at Pepperdine University School of Law. She has practiced in Dallas-Fort Worth since 1989. She has been a featured speaker for Texas Guardianship Association, Baylor Law School, Texas A&M Law School, Tarrant County Bar Association, North Texas Probate Bar Association, and support groups for parents of children with special needs.

Welcome to the team, Lynn!

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One Less Thing for Our Estate Sale When We Die

I’ve always been a big advocate of bedtime reading to kids. As Adam and Lizzy were growing up, we built a collection of children’s books and I’d read one (or more likely, several) to them every night. I credit that ritual with the fact that Adam and Lizzy both grew up to be voracious readers. I’ve continued that nightly practice now with our five grandkids. An interesting thing about kids’ books is that there’s actually a lot of grown-up wisdom in them. I recalled a piece of that wisdom over the holidays to help me through a challenging episode in our home. The source of that wisdom was a Sesame Street book entitled Bert and the Broken Teapot.

Here’s what happened. During the last week of the year, we went from a home of two to a home of 11, plus a dog. It was a joy to have our kids and grandkids (ages 11-3) with us over the holidays. But as any honest person will tell you, it’s also a hectic experience. One Friday night we made it even more hectic by inviting nine more to join us for Shabbat dinner, including 3 more munchkins. As you can imagine, eight little ones running around is a fun scene, but a recipe for chaos. Soon there was a CRASH! Stella, the biggest of the bunch, collided into a table and the breakable contents went flying. One casualty was a beautiful porcelain pot.

I remained calm on the outside, but my insides were in turmoil. Then my mind went back to Bert and the Broken Teapot, and I quickly began to heal. In that story, Bert was minding the soda fountain for David when he accidentally knocked over the special teapot that Mr. Hooper had given David years ago. Like my porcelain pot, it was now in a million pieces. Bert felt terrible about it and fought back tears to say “I’m sorry,” as Stella did to me. Here’s how David responded: “My friend Bert is more important to me than any teapot.” Those words were ringing in my ears. My granddaughter Stella is more important to me than any porcelain pot.

From her reading, Lizzy also came to my rescue and waxed yet more philosophical. She explained that Viktor Frankl, an Austrian psychiatrist who survived the Nazi concentration camps, taught that “between stimulus and response, there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” We cannot control what happens. The only thing we can control is how we respond to it. The crash happened. Now I was in that space where I had the freedom to choose how to respond. I chose to prioritize my love for my granddaughter (and my understanding that this kind of thing happens when you have a house full of kids) over some THING. Lizzy went on to explain that Frankl’s wisdom applies well beyond broken pots. In her words, here’s how she uses it to handle life’s challenges: “I say, ‘ok, this is the situation. I can either fall apart, refuse to acknowledge it and build up anger, or deal with it the best way I can and hand the rest over to G-d.’” That night, the tables turned and the father learned a lesson from the daughter.

My wife Laurie chimed in with her own good wisdom to help everyone feel better: “Who cares about a pot? So there’ll be one less thing in the estate sale when we die.” So simple, yet so profound, and so true!

And as if all that wisdom from Sesame Street, Viktor Frankl, Lizzy Savetsky, and Laurie Blum wasn’t enough, a session of restorative yoga helped get my headspace right too. In these hectic times, we need all the help we can get!

As I’ve often emphasized in this blog, we have to be intentional to create family “glue” that helps keep a family connected over the generations. Let’s learn from the actions of those 10% of families who do it best. They have family meetings, teach meaningful lessons to their kids, engage in philanthropy, take family trips, preserve stories of their heritage, and very importantly, they gather as a family for special occasions and holidays and keep alive family traditions, just as we were doing at that Shabbat dinner. Don’t let a broken pot spoil the beauty of your family time together.

Marvin E. Blum

(1) When rambunctious kids like Marvin Blum’s five grandkids invade your home and maybe even break a pot, keep perspective about what really matters. (2) Restorative yoga also helps Marvin, daughter Lizzy, and granddaughter Stella keep their headspace right.

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New Year’s Resolution: Don’t Be Like Scarlett O’Hara

Here’s to a new year and all the promise it holds for a brighter 2024! In the spirit of new year’s resolutions, let’s tackle the number one obstacle to estate planning: procrastination. In Gone with the Wind, Scarlett O’Hara famously dodged today’s problems by declaring, “I’ll worry about that tomorrow.” Scarlett’s decision to violate Thomas Jefferson’s proverb and “put off until tomorrow that which could be done today” may have helped her cope with Civil War devastation, but it’s not a wise strategy for estate planning. The most obvious reason is our mortality. We have no guarantee of living until tomorrow. But there’s another reason not to tarry. There’s about to be a mad rush to do “use it or lose it” planning by December 31, 2025.

As Hayley Cuccinello warns in a recent Business Insider article, “In the next two years, estate planning will rev up into high gear as the end to the Trump tax cuts approaches.” In particular, a person’s unused lifetime estate and gift tax exemption will decline by about $7 million as the clock strikes midnight on December 31, 2025. I call it the “Cinderella” effect—when her coach suddenly turns back into a pumpkin. Go to bed with a $14 million exemption. Wake up with a $7 million exemption. Poof—$7 million exemption is gone ($14 million for a couple).

Here’s another reason to examine your estate plan in the new year. On January 1, 2024, the lifetime exemption rose by $690,000 to $13,610,000 per person. Even if a married couple fully utilized their exemptions through prior planning, they now have an additional $1,380,000, half of which will go to waste in not locked in by December 31, 2025. In addition, the annual exclusion for gifts rose from $17,000 per donee to $18,000 per donee, so a couple can now give each child (or any other donee) $36,000 free of estate and gift tax.

By using certain squeeze & freeze tools like DGTs, SLATs, and GRATs, you can lock in the doubled lifetime exemption before it sunsets in half. However, you must act soon, lest you awaken with remorse on New Year’s Day, two years from now.

Through creative trust planning, you can lock in the exemption but retain access, control, and flexibility over your assets. As Cuccinello points out, “Some of these tax avoidance techniques might be eyebrow-raising, yet they are perfectly legal.”

In addition to the above-mentioned squeeze & freeze ideas, Cuccinello touts Qualified Personal Residence Trusts (QPRTs), Charitable Remainder Trusts (CRTs), Private Placement Life Insurance (PPLI), and Dynasty Trusts that last up to 1,000 years (note that Texas now allows 300-year trusts). She also advocates doing planning before the economy fully recovers. “The down market has one silver lining…. It is an optimal time to create new trusts as people can transfer depressed assets” at a lower valuation. Pre-recovery planning beats post-recovery planning.

Two years may seem far off. But if your experience is like mine, two years will fly by in a flash. The older I get, the more time seems to speed up. Moreover, waiting until 2025 to plan is also a risky idea. Estate Planning lawyers will be swamped. My colleagues and I learned in 2012 and 2021 how challenging it is to handle the expanded workflow from impending law changes.

As we move into 2024, now’s the ideal time to start the planning process. I urge all who want to lock in the Trump tax cuts to get in front of the work crunch that’s coming. The clock is ticking. Make it a goal to start estate planning soon and wrap it up during 2024. Years from now, you’ll celebrate the work you did to set up your family for success.

Marvin E. Blum

The Blum Family wishes you all the best for 2024!

New Year’s Resolution: Don’t Be Like Scarlett O’Hara Read More »

678 Trusts (also called Beneficiary Defective Irrevocable Trust)

Typically, when a client is considering options to help reduce estate taxes, the client must consider techniques that require the client to part with assets he or she has accumulated over the years. For example, many estate planning techniques involve gifting and/or selling the client’s assets to trusts that benefit the client’s children. As a result, the client permanently parts with the assets, as well as all of the future appreciation and the income stream from the assets. However, use of a “678 Trust” (sometimes also called a Beneficiary Defective Irrevocable Trust or “BDIT”) allows the client to combine asset protection, estate tax savings associated with “estate freeze” techniques, and the continued ability to benefit from assets he or she has accumulated over the years.

Paper: 678 Trusts – Planning Strategies and Pitfalls (2024)

Paper: Squeeze, Freeze, and Burn with 678 Trusts (2024)

Slide Deck: Squeeze, Freeze, & Burn – Estate Planning with 678 Trusts (2018)

678 Trusts (also called Beneficiary Defective Irrevocable Trust) Read More »

Math Class on How to Achieve Happiness

As we close out 2023, I remain hopeful for a happier 2024. When it comes to finding “Happiness,” Arthur Brooks has the formula. Laurie and I recently learned “The Science of Happiness” at a stimulating lecture by this best-selling author of 12 books. Brooks just released yet another book, this one co-authored with Oprah Winfrey, entitled Build the Life You Want: The Art and Science of Getting Happier. Brooks’ Harvard business school course on Happiness is always jam-packed with a long waiting list. In his lecture, Brooks identified a mathematical path to finding happiness. Let’s go back to algebra class and learn the happiness formula from Professor Brooks.

To define happiness, Brooks starts with this equation: Happiness = Enjoyment + Satisfaction + Purpose.

Happiness is not just a “feeling” you get; it is more lasting than that. Enjoyment includes a conscious awareness of pleasure in your life. Satisfaction is the joy of accomplishing a goal with effort. Purpose comes from living a life with meaning. There is so much more to happiness than just feeling joy.

Brooks takes issue with Mick Jagger’s song lyrics, “I Can’t Get No Satisfaction.” With work, you can get it, but the problem is, you can’t keep it. Once you find satisfaction, your body soon returns to equilibrium, and you lose the buzz. To sustain satisfaction, the answer isn’t to increase what you have. Instead, preserving satisfaction comes from increasing this fraction: Satisfaction = Haves ÷ Wants.

Back to math class, there are two ways to increase a fraction. One way is to increase the numerator. The other way is to decrease the denominator. Brooks favors the second way. To increase satisfaction, don’t try to increase your “haves;” better to decrease your “wants.”

Now to the third element of happiness: purpose. To achieve purpose, you must find meaning in your life. Per Brooks, “you can’t get along for even one day without meaning; you will be depressed.” To discover meaning, you need to know that you are alive for a reason. Your life matters. You have significance. To learn your “why,” Brooks poses two questions:

  • Why are you alive?
  • For what are you willing to die?

To illustrate, Brooks tells his son’s story. Not a strong student, he found his “why” in the military as a sniper. Brooks is justifiably proud of his son’s answer to question two: “my faith, my family, and the United States of America.”

Why are some people happier than others? Yet again, Brooks resorts to math: Happiness = 50% Genes + 25% Circumstances + 25% Habits.

Even if your genetics predispose you to being unhappy, you can counteract it with good habits. The next component depends on your circumstances at the time, which of course, isn’t permanent. So, the key to fighting challenging genetics and circumstances comes down to the one component you can control: habits.

My greatest takeaway from Brooks’ lecture is to actively pursue four good habits. Here’s his final equation: Faith + Family + Friends + Work = Habits for a Meaningful Happy Life.

Faith: Faith provides a way to “zoom out of yourself,” transcending your reality into a realm of spirituality. To Brooks, it is his Roman Catholic faith, but the path to spirituality doesn’t have to be through religion.

Family: This is a love you didn’t choose. It was chosen for you. Don’t disconnect from your family (except in cases of abuse). Brooks laments that one in six people in the U.S. don’t talk to their family because of politics.

Friends: There are two kinds of friends: “real” friends and “deal” friends. A deal friendship is transactional: “What can you do for me?” Deal friends are “useful.” However, the goal is to cultivate real friends—those whom you love even though they are “useless” to you.

Work: Work is essential to happiness, but only if it checks two boxes: (1) Your success was earned, not given to you; and (2) Your work serves the needs of others.

In my work of holistic (“head and heart”) estate planning, I take a much broader view of helping families. I’m still driven to help families save tax and protect assets, but I get great satisfaction from also helping families live fulfilling lives, connected with each other. I’m honored to share Arthur Brooks’ math lesson for happiness, so we need not live a life where we “can’t get no satisfaction.” Now that Professor Brooks has taught us how, here’s to getting happier in 2024!

Marvin E. Blum

Marvin and Laure Blum went back to math class and learned the key to happiness from Harvard professor and author Arthur Brooks.

Math Class on How to Achieve Happiness Read More »

ATTENTION: Uncle Sam Wants Your Information! Act Now to Save $500 Per Day!

All U.S. entities need to know this! A new law goes into effect in less than two weeks. This law will require most business entities to file an information report on or before December 31, 2024. Failure to timely file may result in civil penalties of $500 per day. In some cases, criminal prosecution could result in a fine of up to $10,000 and/or imprisonment of up to 2 years.

The law is called the Corporate Transparency Act (“CTA”), and it goes into effect January 1, 2024. It is aimed at combatting money laundering. The CTA requires that certain entities submit information about their owners and any other individuals who have substantial control of the company in a report called a Beneficial Ownership Information Report (“BOI Report”). The information will be maintained by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) and will not be publicly available.

New entities created in 2024 must file initial BOI Reports within 90 calendar days of formation. Beginning January 1, 2025, new entities will have just 30 calendar days to file their initial BOI Report. For existing entities—companies existing prior to January 1, 2024, they must submit their beneficial owner information by January 1, 2025.

This law applies to all entity types that are formed by filing a document with a Secretary of State unless an exception is met. (A Texas trust and a Texas general partnership are examples of entity types that are not subject to the CTA because no filing with a Secretary of State is required for formation.)

There are 23 categories of entities that are exempt from the requirements of the CTA. Tax-exempt entities are exempt from the reporting requirements of the CTA. Most other exemptions apply to companies already subject to government oversight such as securities brokers, bank holding companies, and insurance companies. Large operating companies are also exempt because the principal targets of the CTA are shell companies used for illicit purposes. Therefore, legal entities that have at least 20 full-time employees in the U.S. and at least $5 million in gross receipts are generally not subject to the CTA.

For more information, read “Understanding the New Corporate Transparency Act” HERE.

ATTENTION: Uncle Sam Wants Your Information! Act Now to Save $500 Per Day! Read More »

Gifts that Keep on Giving

In the holiday spirit of giving and sharing, I’d like to share with you a surprise I received from Kasia Flanagan. She brought me truly one of the best gifts I’ve ever received. Kasia owns Everyday Legacies, a company that helps families document and record their stories, whether by producing books, videos, or audio recordings. Kasia appeared at my office with a 300-page book she compiled containing my first 150 Family Legacy Planning blog posts. I am blown away by this amazing gift. It starts with my first post three years ago and proceeds week-by-week, concluding with the series I just wrote about our family’s recent trip to Israel. Reading these planning tips and Blum family highlights, I feel as if my life is flashing before my eyes. It’s very powerful to see it all pulled together in one place. I will treasure this gift forever and will pass down copies to future generations so they can also know the essence of their ancestor Marvin.

I had heard of Kasia’s excellent work, and I knew we share a passion for helping families succeed. Kasia and her team specialize in recording stories—a life story, a love story, special memories of a person, place, event, or experience. They are even running a holiday special on their 2-Hour Memoir Package if you reach out to them at www.everydaylegacies.com by the end of the year. Kasia describes a 2-hour memoir they did for a man who had just started on hospice. His story was preserved just in time. Kasia writes how touched she was by a note from the man’s son: “My mom loves the work. . . . Thanks so much—I think this really means a lot to her, more than she expected.” Kasia continues: “That message encapsulates everything we strive for—to provide connection to a family and something that they can treasure and hold on to when their loved one is gone.”

I am so honored that Kasia recognizes that I share her mission. I was moved by Kasia’s description of The Blum Firm: “More than just helping clients save money on their taxes and plan the distribution of their valuables, Marvin and his team pride themselves on providing service ‘with heart’ – helping clients see their personal legacy in a holistic way to preserve not only their material but their non-material assets as well.” Kasia’s endorsement means the world to me.

The goal of The Blum Firm’s Family Legacy Planning initiative is to help families achieve multi-generational connection. It’s so gratifying when we see the results in action. Here’s another “gift” of recognition I received a few days ago. This endorsement came from a long-time client, Janie: “Our family will be congregating for our Christmas celebration—25 adults from G1, G2, and G3, plus 10 G4’s. I can’t help but think Bill would be very pleased. I am so grateful that they all enjoy being together and because of Bill’s hard work and planning, we have the resources to make it happen. Thank you for your part in that as well.” Now I call that a multi-generational success story!

Shifting gears to the other side of the gifting equation, from receiving to giving, another gift that keeps on giving is family philanthropy. As I reflect on the highlights of 2023, one that stands out is joining with my daughter Lizzy to sign the “Jewish Future Pledge.” It’s a dark time for the Jews as we fight both a war in Israel as well as a war against skyrocketing antisemitism. One way to bring light into that darkness, as well as create some powerful family glue, is to support causes that help secure the Jewish future. The Talmud teaches: “I found a fruitful world because my ancestors planted it for me. Likewise, I am planting for my children.”

During this season of gift-giving, I urge us all to create meaningful gifts, like the one Kasia gave me and the one I am giving to my family by giving back. These are truly gifts that will keep on giving.

Wishing you all happy holidays and a brighter 2024.

Marvin E. Blum

(1) Marvin Blum is honored to receive a book compiling his first 150 blog posts from Kasia Flanagan of Everyday Legacies, truly a gift that will keep on giving! (2) For another gift that will keep on giving, Marvin Blum joins his daughter Lizzy Savetsky in signing the “Jewish Future Pledge” to help secure the future of the Jewish people.

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Will Your Grandchildren Love Their Grandchildren?

In this holiday season, our thoughts turn to our family. The goal of this Family Legacy Planning blog is to help families pass down a meaningful legacy, a heritage that connects the generations to each other. My uncle, Rabbi Leonard Oberstein, said it so beautifully 14 years ago when he presided at our daughter Lizzy’s wedding: “You and Ira are another link in the unbroken chain of our family that goes all the way back to Mount Sinai.” Each generation is a link in an unbroken chain. We pass down not just our valuables, but more importantly, our values.

My mission is to help families achieve multi-generational success. How do you measure success? My esteemed colleague Ron Aucutt offers this profound measuring tool: “You have been a success if your grandchildren love their grandchildren.” Having spent last weekend celebrating Chanukah with our five grandkids at our niece Aimee’s wedding in New Orleans, Ron’s words speak loud and clear to me. Laurie and I are giving our all to pass down our values to those precious little ones. Chief among those values is to love and care for one another. We won’t be here physically to witness if our grandchildren love their grandchildren, but our aim is to be with them spiritually as they carry on a family legacy of love, l’dor vador, from generation to generation.

Speaking of Ron Aucutt, in the estate planning profession, there are a handful of lawyers widely acknowledged as rockstars by the legal community. Without question, Ron is one of these, greatly respected for his brilliant mind and technical proficiency. Last year, Aucutt delivered the Trachtman Lecture at the Annual Meeting of ACTEC (American College of Trusts & Estate Counsel) Fellows. Aucutt’s lecture “The Calling of the Counselor in Counseling Families” was recently published in the ACTEC Law Journal (Summer 2023 edition). Aucutt’s article is a wake-up call that the estate planning lawyer’s role has expanded beyond tax planning to counseling clients on passing down a meaningful legacy. It gratifies me that a man of Ron’s stature is embracing my mission.

Aucutt urges attorneys to become caring counselors. He issues a challenge with a quote attributed to Theodore Roosevelt: “Clients want to know how much you care before they care how much you know.” It’s time to address the “heart” side of estate planning, sometimes called the “soft” side (ironic, because as Aucutt points out, it’s really the “hard” part of planning).

In a very meaningful shout-out to my own passion for this cause, Aucutt continues: “Many of our colleagues are giving emphasis to those issues, and many share their insights with the rest of us through blogs, emails, and the like. A good example is Marvin Blum in Fort Worth. He publishes by email a ‘Family Legacy Planning series’ with titles like ‘What Are Your Rose and Thorn This Week?’ And ‘What Keeps This Family Connected? The Answer May Surprise You.’”

I’m deeply honored that my weekly blog got Aucutt’s attention. When I emailed Ron to thank him, he responded: “I definitely regard the emails you regularly send out as a good model and encouragement to our colleagues to ‘see the big picture.’ Keep it up. The responses I’ve received to my lecture have reassured me that this awareness is catching on.” That’s music to my ears.

In addressing how a lawyer can go about counseling with care, Aucutt suggests we encourage regular family meetings, with the cost funded by a long-term trust (what I call a FAST Trust). Aucutt advocates for family governance, mission statements, storytelling, traditions, and philanthropy. Finally, to help a family identify and transfer a legacy of values, Aucutt distills it down to these five recommendations:

  • Spending time together,
  • Shedding tears together,
  • Sharing joys together,
  • Serving others together, and
  • Sustaining values together.

Aucutt offers tips on how to do each of these activities. Moreover, he stresses that this process applies to any family, no matter their net worth. “Shouldn’t any family, regardless of material resources, be encouraged to develop a legacy of family values?”

Thank you, Ron Aucutt, for advancing the cause of caring estate planning where we counsel clients to nourish a legacy of family values. I pledge to continue giving this initiative my best effort. And here’s praying that my grandchildren will love their grandchildren.

Marvin E. Blum

Marvin and Laurie Blum are working to pass down a legacy of love to these five precious grandkids, praying that the day comes when these grandchildren will love their grandchildren.

 

Will Your Grandchildren Love Their Grandchildren? Read More »

Nine Blum Firm Attorneys Voted Top Fort Worth Attorneys

Fort Worth magazine’s annual Top Attorneys list is out for 2023. Join us in congratulating our Top Attorneys!

Pick up a copy of the December issue of Fort Worth magazine or check out the online list here.

R. Dyann McCully – Probate, Estates, & Trust
Julie A. Plemons – Probate, Estates, & Trust
Kandice R. Damiano – Probate, Estates, & Trust
David Bakutis – Probate, Estates, & Trust
Beth Hampton – Probate, Estates, & Trust
Len Woodard – Tax
Marvin E. Blum – Probate, Estates, & Trust
Amanda L. Holliday – Probate, Estates, & Trust
John R. Hunter – Tax

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Attorneys Parisa Azalli, Ryan Vayner, and Adriana Lopez Join The Blum Firm

Please join us in welcoming Parisa Azalli, Ryan E. Vayner, and Adriana I. Lopez to The Blum Firm!

Parisa Azalli, J.D., LL.M. joins our Austin office as an Associate Attorney. Parisa earned both a J.D. and an LL.M. with a concentration in Corporate Law and Taxation at Southern Methodist University Dedman School of Law. She is also a Texas A&M alumnus, having earned a Bachelor of Arts at Texas A&M University – Corpus Christi. Parisa recently moved to Austin with her fiancé, Scott. She is a lifelong supporter of the Manchester United Football Club and stays active with barre and pilates exercise classes.

Ryan E. Vayner, J.D. joins our Dallas office as an Associate Attorney. She earned her J.D. at Southern Methodist University School of Law this year and recently passed the Bar. Before entering law school, Ryan worked as a dental hygienist. Ryan earned her Bachelor of Science in Dental Hygiene from Texas A&M College of Dentistry. Ryan and her husband Brian live in Dallas. For fun, Ryan enjoys board games, video games, and true crime documentaries.

Adriana I. Lopez, J.D. joins our Fort Worth office as an Associate Attorney. She earned her J.D. at the University of Utah Quinney College of Law earlier this year and recently passed the Texas Bar! Adriana earned her bachelor’s degree at the University of Texas at Austin with a double major in Philosophy and Rhetoric/Writing. Before entering law school, she taught high school English in Grand Prairie.

Welcome to the team, Parisa, Ryan, and Adriana!

Attorneys Parisa Azalli, Ryan Vayner, and Adriana Lopez Join The Blum Firm Read More »

Elderly Parents: The Difficult Conversation

In last week’s post, I explored the challenge of aging with dignity and making the most of our final innings. I concluded with the story of my mother Elsie and her successful transition from living alone in her own home to living in a beautiful community at The Stayton in Fort Worth. She would be the first to tell you what a gift it is to be free of the stresses of home maintenance, living among new friends in an elegant and welcoming environment.

When I started writing these weekly posts almost 3 years ago, I focused mostly on tips for estate planning and creating a family legacy. When I happened to share a personal story, I was surprised to learn that my readers craved more of it. In that vein, I’ll shoot straight with you and tell you that Elsie’s move wasn’t all easy. I offer this candid account to help those of you who may also be dealing with “the difficult conversation” about parents moving out of their home.

So, in the spirit of keeping it real, here’s how it went down. A few years ago, my mom fell and broke her pelvis. During the early days of her convalescence, we arranged around-the-clock care in her home. Let’s just say the experience with home caregivers was less than satisfying. Managing the frequent no-shows, weekly payments, medication rituals, etc. proved to be a nightmare. But Elsie (along with my wife Laurie and me) weathered through it. The recovery took about a year, but my mom bounced back 100%.

Then, a couple of years later, Elsie fell in her kitchen and broke her hip. During her stay in rehab, my mom once again expressed the desire to return to her home with around-the-clock caregivers. Laurie and I knew that returning to her four-level home with home healthcare was a bad idea.

I have always adored my mother and never wanted to disappoint her by telling her something she didn’t want to hear. On the other hand, a loving daughter-in-law was not as conflicted. I had to leave her rehab room and go sit outside on a bench while Laurie did the heavy lifting. My sweet but firm wife had the strength to flat-out tell her: “You can’t go home. We tried that before, and it didn’t work well.” Lesson: It’s important to have an objective third-party on the team to deliver unwelcome news, whether a daughter-in-law or an independent consultant.

Elsie’s response: “Well, if I’m not going home, then I’m moving to The Stayton.” Ironically, she’d never been there before, but she heard it was Fort Worth’s finest senior living facility. Laurie found me outside on the bench and gave me the report. In typical fashion, Laurie wasted no time. We had an appointment the following morning to go check out The Stayton. My sister-in-law Lea Ann (wife of my deceased brother Irwin) accompanied us, along with our interior designer Brad Alford (including Brad was another wise decision by Laurie).

The following morning, we convened in my mom’s rehab room before going to The Stayton. Before entering, Lea Ann hit me with a message I needed to hear: “If your brother Irwin were here, he’d just take care of this, and it would be done.” I knew she was right. Irwin was the more decisive and practical one. We loved my mom equally, but he was a more “get it done” kind of guy.

Elsie’s parting words as we left for The Stayton: “Don’t sign or commit to anything. Let’s take our time on this.” I looked at her and responded: “This is Irwin talking now. Since he’s not here to say this, I’m channeling him. If we find the right apartment, we’re going to buy it today before someone else snatches it up.” Then we left.

Lo and behold, that’s just what happened. We found the perfect apartment in the “independent living” section. Brad described it as a “jewel box.” We bought it on the spot. Brad immediately proceeded to turn it into a showplace, using the best of Elsie’s own furniture and art. A few weeks later, when my mom first saw it, it took her breath away.

Within days, Elsie’s hesitation about the move evaporated. She fell in love with her new luxurious environment, new friends, terrific food, and stimulating programming. On top of that, she certainly doesn’t miss home and yard maintenance.

Again, in the interest of full disclosure, I’ll share a comment Elsie made to Laurie after her first week: “I’m 90 years old and all my life, my only friends have been Jewish. For the first time, I’ve become friends with non-Jews, and they’re actually quite wonderful.” I already knew that, but way to go Elsie for branching out!

Okay, there you have the real story of Elsie’s move. It’s been over two years, and she’s loved every moment. The Stayton is a gift that keeps on giving, both to Elsie, and to us! I hope this story inspires others to have “difficult conversations” with your loved ones. You’re actually giving them a valuable gift.

Marvin E. Blum

(1) Marvin and Laurie Blum with Marvin’s mother Elsie, photographed in the Stayton’s fine dining room. (2) Elsie Blum’s “jewel box” apartment at The Stayton, her elegant new home.

Elderly Parents: The Difficult Conversation Read More »

Making the Most of Growing Older: Don’t Waste Your Remaining Cherries

Last week, I gave thanks for the 93rd birthday of my mother Elsie, a role model for aging with dignity. As we are about to wrap up yet another calendar year, I am contemplating how fast time flies. I know I sound old saying that, but please indulge me as I continue to explore the best approach to growing older.

I’ve written often of my admiration of Warren Buffett and Charlie Munger, the dynamic duo who lead Berkshire Hathaway, still going strong at ages 93 and 99. On the flip side of the aging story, a couple of my recent posts tell the story of the painful decline of Senator Dianne Feinstein, who recently died at age 90. Whether our final innings resemble Elsie and Buffett/Munger or Feinstein is largely out of our control. But, as we age, there are quality of life aspects that are within our power. What’s the playbook for making the most of our final years?

I wrote last week of The Book of Charlie by David Von Drehle, recounting the story of his neighbor Charlie Smith who lived to 109. As I explained in that post, Charlie found contentment by moving from stage one of life (when he was a “complexifier”) to stage two (when he was a “simplifier”). By simplifying his playbook, Charlie let go of things not in his power, and focused on things he could control: “his own actions, his own emotions, his outlook, his grit.” Charlie’s philosophy boiled down to making good decisions. “For all the books on all the shelves of all the world’s libraries, life must be lived as a series of discrete moments and individual decisions. What we face might be complicated, but what we do about it is simple.” Per Charlie, it’s this simple: “Do the right thing.”

Former Major League Baseball Commissioner Fay Vincent echoes this theme of making good decisions in his essay “Old Age Is Like a Debenture” in The Wall Street Journal. Vincent teaches the importance of knowing “when and how to leave each stage of life.” Baseball legends Joe DiMaggio and Ted Williams (whose final at-bat was a home run) knew how to “do the right thing.” Willie Mays and Yogi Berra didn’t—they kept trying to play after their skills had declined. Opera singer Beverly Sills got it right: “I know that to continue would not be worthy of what my audience deserved.” By knowing when to fold ’em, we can move elegantly into that second stage where we simplify life, as we ”surrender those things that are risky, silly, or just plain stupid.” DiMaggio, Williams, and Sills are role models for making a graceful transition from stage one to stage two.

An essential element of living an enriched life during the second stage is to cultivate quality relationships. Studies show that those who enjoy socialization and meaningful relationships live lives that are longer and healthier (both physically and mentally). I’ve written before of my close connection with about 20 of my law school classmates who travel together regularly and are in touch with each other daily. Because of our annual canoe outings, we call ourselves the “Canoe Brothers.” My dear friend (and fellow Canoe Brother) Bill Parrish shared a poem with me that puts an exclamation point on the goals of spending time with quality people and simplifying our lives as we age. It’s titled “The Valuable Time of Maturity.”

“…I have more past than future.
I feel like that boy who got a bowl of cherries—
At first, he gobbled them,
But when he realized there were only a few left,
He began to taste them intensely.
I no longer have time to deal with mediocrity.

I do not want to be in meetings where flamed egos parade.
…I want to live close to human people, very human, away from those filled with self-importance.
…I’m in a hurry to live with the intensity that only maturity can give.
I do not intend to waste any of the remaining cherries.”

For those of us aiming to enjoy intensely our remaining cherries, Elizabeth O’Brien offers more words of wisdom in a Barron’s article earlier this year. She says to continue to find your life’s purpose. “Having a reason to get out of bed in the morning is key for emotional and physical health.” Some do this by continuing to work well into their 80’s. But if staying on the job into your octogenarian years isn’t right for you, I reiterate the example of my 93-year-old mother Elsie. Elsie is taking more of the Charlie Smith approach to fulfillment, simplifying her life and focusing on relationships and human interaction. By taking the step to move from living alone in her home to a beautiful community at The Stayton in Fort Worth, she has made many new friends, participates in stimulating programs, and never dines alone. By staying engaged and interactive, Elsie looks and feels decades younger than 93.

As we age, I invite you to join the Canoe Brothers and Elsie in making the most of our senior years and intensely enjoying each remaining cherry.

One more thing: Over the Thanksgiving holiday, a dear family friend, age 44, was tragically killed in a car accident along with his two kids. We are heartbroken. Let’s start savoring life’s cherries even before we grow old. We never know what tomorrow brings. Life is precious and fragile.

Marvin E. Blum

Pictured above: Marvin Blum (shortest) and Bill Parrish (tallest) intensely enjoying life’s cherries on a recent Canoe Brothers trip. Thanks to Bill for sharing the poem “The Valuable Time of Maturity” about tasting intensely each of life’s remaining cherries.

 

Making the Most of Growing Older: Don’t Waste Your Remaining Cherries Read More »

Thanksgiving Blessing: Elsie’s 93rd

Thanksgiving is a perfect time to count our blessings. Doing that is easy for me this week, as yesterday marked the 93rd birthday of my remarkable mother Elsie. Thankfully, Elsie is going strong at 93 and a role model for how to age with dignity. I’ll draw from the example of my mom in reflecting on the gifts that old age can bring.

In The Book of Charlie, David Von Drehle draws wisdom from his neighbor Charlie Smith who lived to 109. One aspect of aging successfully is to transition gracefully from stage one of life to stage two. Per Drehle, “a life well-led consists of two parts. In the first, we are complexifiers. We take the simple world of childhood and discover its complications. . . . Then, if we live long enough, we might soften into the second stage and become simplifiers.” Charlie Smith found contentment by simplifying his playbook to these four words from his mother: “Do the right thing.”

Charlie indeed lived by that simple motto, but he elaborated. When he died, Charlie left behind a single sheet of paper on which he boiled down 109 years into an “operating code of life,” as summarized in an opinion piece in The Washington Post on May 28, 2023.

  • As Holocaust survivor Viktor Frankl taught, “everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances.” Charlie chose to be positive. He “didn’t have time to be sad.”
  • “Smile often. Forgive and seek forgiveness. Feel deeply. Tell loved ones how you feel.”
  • “Be soft sometimes. Cry when you need to. Observe miracles.”

Elsie’s approach to old age comes straight out of Charlie Smith’s playbook. Here’s how Elsie exemplifies the above three points in Charlie’s operating code:

  1. As a first-generation American, Elsie was raised by survivors like Viktor Frankl who trained her to approach life with a positive attitude. Rather than wallowing in self-pity that Hitler deprived them of their youth and murdered many of their loved ones, Elsie and her family counted their blessings for their life in America. Her Uncle Joe lived an enormously difficult life but always had a smile on his face, a song on his lips, and repeatedly said: “I never had a bad day in America.” Elsie lost a son, Irwin, to cancer when he was only 65, endured many other hardships, but she chooses to have a positive attitude every day. It’s a choice.
  2. Like Charlie, Elsie indeed smiles often, feels deeply, and tells us daily how much she loves us. Spoken in her deep southern accent, one of her favorite lines to me is “You are loved.” She told me she got that line from Lady Bird Johnson, and Elsie sounds just like Lady Bird when she says it.
  3. Observe miracles. Well, indeed the very fact that Elsie is alive is a miracle. The same Uncle Joe mentioned above is the patriarch of our family and the one who saved us from the Nazis. As a young boy, Joe (“Yossi”) Weinstock, made the courageous journey alone to America. He pushed a fruit cart from house-to-house in Montgomery, Alabama, saving enough to get a visa to bring over his parents and younger siblings, including Elsie’s mother Pauline. He couldn’t get his two older siblings on the family visa because they were married, so Hitler got them instead. But rescuing Pauline brought into the world the miracle of Elsie, now age 93! Elsie’s family tree now includes a spirited group of descendants who are giving our all to fight (once again) for the survival of the Jewish people.

So as generations of our family sit around the Thanksgiving table this year, it will be easy for us to be thankful for the miracle of our 93-years-young matriarch Elsie.

Marvin E. Blum

(1) Marvin Blum’s mother Elsie, celebrating her 93rd birthday this week, is a beautiful Thanksgiving blessing to the Blum family. (2) At the head of the table is Eliezer Weinstock, Marvin Blum’s “Zaidy.” To the right is Uncle Joe Weinstock (and his wife Rose), the patriarch who rescued his family from the Holocaust. Far right is Elsie Blum (now 93), her baby son Irwin, and her little brother Leonard (now Rabbi Oberstein). To the left is Elsie’s mother Pauline, Elsie’s father Meyer, and two more of Elsie’s brothers. This picture tells a miraculous story of survival.

Thanksgiving Blessing: Elsie’s 93rd Read More »

Business Succession Planning

Marvin Blum spoke at the 2023 TXCPA Permian Basin CPE Expo on Business Succession Planning, a topic he describes as the most neglected area of estate planning.

Slide Deck here: Marvin Blum at the 2023 TXCPA Permian Basin CPE Expo on November 16, 2023 for “Business Succession Planning.”

Slide Deck here: Marvin Blum at the Purposeful Planning Institute Symposium on February 9, 2023 for “Business Succession Planning.”

Business Succession Planning Read More »

The “New” IRS: No Longer “Kinder and Gentler”

Ever since the Inflation Reduction Act passed allocating $80 billion to the IRS, we’ve wondered what the impact would be. I can still hear President George H. W. Bush promising a “kinder and gentler” IRS a few years ago. That’s no longer what the government is promising us. When Congress struck a debt ceiling deal in June, Republicans succeeded in stripping away $20 billion of the $80 billion. That still leaves $60 billion to beef up the IRS. How will they spend it?

On September 8, 2023, we learned the plan. Here are some highlights:

  • Increased scrutiny of those earning over $1 million or owing tax of over $250,000.
  • Full audits of the 75 largest partnerships in the U.S., as well as other large partnerships with balance sheet discrepancies, or where asset valuations appear inflated or deflated.
  • Sending compliance letters to about 500 other partnerships (hedge funds, real estate, large law firms, publicly traded partnerships) and auditing those with unsatisfactory responses.
  • Special attention to digital assets and currency exchanges through the “Virtual Currency Compliance Campaign.”
  • Added efforts to audit owners of foreign bank accounts (FBAR reports).
  • Hiring some 3,700 more auditors to do this work under a new unit for the audit of complex tax returns.
  • Using Artificial Intelligence to help select those most likely to be tax cheats (just imagine all the possibilities advanced technology provides the IRS).

The IRS is aiming to close a tax gap of $700 billion that it believes goes uncollected each year.

The Blum Firm is here for you if you are targeted by this beefed-up IRS. Indeed, we have likewise “beefed-up” our team of tax lawyers with the recent addition of Christopher Beck to our tax staff. Christopher joined us from Boston with over 15 years of experience in tax controversy work.

So, if you are contacted by someone who says, “I’m from the government, and I’m here to help you,” please know that The Blum Firm also stands ready to really help you.

Marvin E. Blum

In preparing this post, Marvin acknowledges the help of Susan Lipp’s Wealth Management article “IRS Targets Large Partnerships and Millionaires” as well as Barron’s article “IRS Steps Up Audits of Partnerships, Wealthy Individuals.” 

With the October 15 tax deadline just behind us, Marvin Blum warns that dealing with the “new” beefed-up IRS is about to get even more complicated.

The “New” IRS: No Longer “Kinder and Gentler” Read More »

Israel Wrap-up: Discovering Our Roots

I was listening to an interview of my daughter Lizzy Savetsky when she was asked: “What keeps you from blowing away when the winds of misfortune come your way?” Lizzy’s answer: “It’s our deep roots. We get those roots from knowing about our ancestors and the stories of how they survived adversity.” Each of us will be an ancestor; but more importantly, each of us is also a descendant. Those roots give us, as descendants, the strength to not only survive, but to thrive. We owe it to our ancestors. In this series on Family Legacy Planning, I have often stressed the importance of knowing our ancestors and their stories. Families that know where they come from have stronger family glue. Research shows that the more we know about our ancestors, the higher our self-esteem and the better equipped we are to overcome adversity. Indeed, it’s our roots that ground us and keep us from blowing away.

For the Blum family, our trip to Israel provided us a deeper connection to our roots than I’d ever imagined. As Jews, Israel is our ancestral homeland going back to biblical times. I knew the stories of King David capturing Jerusalem 3,000 years ago, and the continuous presence of the Jews in the Land of Israel since that time. What blew my mind on this trip was a visit to the City of David. When I saw that on our agenda, I questioned why I’d never been there before on previous trips. What I learned is that the archeological discovery of King David’s palace in Jerusalem is fairly new. It’s only in recent years that we now have new physical evidence that further proves the biblical connection of King David to Jerusalem. That tour didn’t exist on my prior trips to Israel.

Just south of the site where King Solomon’s Temple stood is now the City of David, the location of King David’s palace. It is an active archaeological dig. In recent years, they discovered a wall that is 15 feet wide. Given the width of the wall, it was clear it wasn’t surrounding an ordinary home. Then archaeologists located a corner of the wall, where the wall shifted from north-south to east-west. Within that wall, they discovered evidence of palace life. Then a monumental discovery occurred to identify the palace’s origins as belonging to King David and his descendants. They found a signet ring bearing the seal of King Hezekiah, a direct descendant of King David. By connecting dots, a whole history of King David’s palace was unearthed. They found a great pool (a “mikvah”) at the bottom of the hill where travelers would cleanse themselves before journeying up the road, past the palace, to the steps leading to the Holy Temple. The road is fully revealed now, as are the steps. The step heights are uneven, making it hard to scale up them at a fast pace. The teaching is that the uneven steps forced the worshippers to slow down and contemplate the significance of their ascent to the Holy Temple.

At the site of the Holy Temple, we studied stone ruins thousands of years old inscribed with Hebrew letters. The Hebrew language of that inscription is the same language spoken by our people today, a thread that connects Jews of today to Jews of the Bible. As the attached photo shows, our granddaughter Stella was able to read to us those Hebrew words, telling of the sounding of the shofar (trumpet) blasts to call Jews to Sabbath worship on Friday afternoons. Each of us could feel our roots growing deeper into that ancestral homeland as Stella read those ancient Hebrew words aloud to us.

Since the time of King David, there have been a series of conquerors who attempted to destroy the Jewish people and rob us of our homeland, but none prevailed. Even after the efforts of Ancient Egyptians, Philistines, Assyrians, Babylonians, Ancient Greeks, Romans, Byzantines, Crusaders, and even today, Hamas, we’re still here. We’re a small people but with a powerful will to survive. We must survive. This is our home, and as Golda Meir reminded us, we have nowhere else to go. Our roots are here, and those roots run very deep. The Israel national anthem Hatikvah (a song of Hope) concludes with the hope of more than 2,000 years: “Lih-yot am chofshi b’ar-tzeinu, Eretz Tziyyon v’Yerushalyaim – To be a free people in our land, the land of Zion and Jerusalem.”

This post wraps up my five-part series on our trip to Israel. It was life changing. We will never be the same. But now more than ever, our family knows our roots and the responsibility of carrying on the heritage our ancestors bequeathed to us. We come from an unbroken chain that goes all the way back to King David and the children of Israel. Laurie and I feel that responsibility, but more importantly, so do our children and grandchildren.

With the world now in a very dark place, it’s our prayer that we look upwards and find the Light that will bring us to a brighter future.

Marvin E. Blum

(1) Ira, Stella, and Lizzy Savetsky and Laurie and Marvin Blum standing at the site of King David’s palace, looking out at the south wall that surrounded King Solomon’s Holy Temple. (2) Ira, Stella, and Lizzy Savetsky, Laurie and Marvin Blum, and tour guide Yoni Zierler at the Jerusalem Archaeological Park learning about the Jews’ biblical roots in the Land of Israel. (3) Marvin Blum’s granddaughter Stella reading the ancient Hebrew inscription on archaeological ruins thousands of years old, with tour guide Yoni Zierler teaching the significance of these findings. (4) The Blum family’s tour guide Yoni Zierler today, having traded in his tour book for weaponry as he protects our homeland of Israel from yet another force that seeks to destroy us.

 

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Update on Lizzy: Life Is Precious & Fragile

Those of you who are regular readers of my weekly posts are aware that my daughter Lizzy Savetsky is an outspoken activist supporting Israel and the Jews. Laurie and I are very proud of her advocacy and courage, and we applaud the hard work she does to get out the truth.

Earlier this week, Lizzy was returning from a meeting as the cab pulled up to let her out in front of her apartment. Lizzy stepped out of the cab into a bike lane, looked both ways, and seeing no bikes coming, she exited the cab. She was on the phone at that point with my wife Laurie when Laurie suddenly heard a scream. Lizzy had been hit by a fast-driving car that had swerved into the bike lane and accidentally hit her. Laurie screamed back “Are you ok?” Lizzy’s answer: “No! I’ve been hit by a car!”

Laurie immediately called Lizzy’s husband Ira who rushed down to the scene. By then, people were gathering who feared she was dead. The collision was that bad. An ambulance rushed Lizzy to nearby Cornell Hospital. She received excellent emergency care there, and six long hours later, Laurie and I finally got word about her condition. Lizzy suffered a concussion and scalp laceration requiring staples, a broken ankle, and other injuries. But the bottom line is that she is now on the mend and will be fine. We are beyond relieved and grateful.

As those who know Lizzy might suspect, this accident is doing nothing to slow her down. She got right back on social media to tell the world the information we need to know about what is happening in Israel. You can’t keep her down. Some suggested she cancel speeches next week in Greenwich and Baltimore, but she refuses to let this accident stop her. Lizzy is a soldier on a mission, and she has work to do!

We are living in turbulent times. May we all embrace the importance of having our affairs in order, as life is uncertain.

Marvin E. Blum

(1) Marvin Blum’s daughter Lizzy Savetsky now on the mend after being hit by a car. Nothing stops Lizzy from spreading the message on her shirt: “Am Yisrael Chai”—the people of Israel live! (2) Ever mindful of the cause, Lizzy chose Israel blue for the color of her cast!

Update on Lizzy: Life Is Precious & Fragile Read More »

Our Week in Israel: A Family on a Mission

In this weekly Family Legacy Planning series, I have often stressed the importance of a Family Mission Statement. Knowing who you are and what you stand for anchors a family. A succinct and memorable mission statement gives family members a core and connects them with each other.

In past posts, I have shared that the Blum Family Mission Statement includes the values of relationships, memorable moments, and spirituality. Our trip to Israel a few weeks ago checked every one of those boxes. We connected with family & friends who live in Israel. We made lifetime memories with our daughter Lizzy, her husband Ira, and their 3 kids. But today I want to focus on the spiritual aspect of the trip.

In the article “How to Make Life More Transcendent” in The Atlantic, Arthur Brooks endorses the importance of building spiritual moments into our lives. “Spiritual experiences—traditionally religious or otherwise—give us unique insights into life and positive benefits we simply can’t get elsewhere . . . . People often engage in religious and spiritual behaviors because they want to understand life’s meaning in a confusing world.” Given that our wondrous trip ended with a vicious attack aimed at destroying Israel, Brooks’ words ring truer than ever. Indeed, I look back on the spiritual insights we gained to try to make some sense of this very confusing world we now inhabit. I refuse to allow terrorists to rob me of the spiritual “sense of awe, a feeling of oneness with others or the divine” that Brooks describes.

We were in Israel during the week of Sukkot, the Feast of Tabernacles, a holiday celebrating the harvest and the miraculous protection G-d provided the children of Israel when we escaped slavery in Egypt. Sukkot begins five days after Yom Kippur. It culminates with Simchat Torah, the day when we complete the one-year cycle of reading the Torah. This time of year is the holiest few weeks in the Jewish calendar. Sukkot is the most popular time of year to be in Israel. The country is literally packed with visitors from around the world. Celebrating while feeling a physical connection to the land of our Biblical roots heightens the spiritual experience.

For Jews, the holiest site in the world is at the Western Wall in the Old City of Jerusalem, a section of the wall that surrounded the Holy Temple. That portion of the wall remains after the Temple was destroyed in the year 70 C.E. Prior to Israel’s victory in the Six Day War of 1967, Jews were deprived access to the Wall and the holiest areas of Jerusalem. Regaining access to those sites is one of the highlights of my lifetime. Upon reclaiming the holy city, Israel renamed the Wall from the “Wailing Wall” to the “Western Wall,” a tribute to the end of an era of wailing and longing for that return. A highlight of any Israel journey is to pray at the Western Wall. As the attached photo shows, we went to the Wall immediately after my 3-year-old grandson Ollie’s upsherin (first haircut) to praise G-d for this new chapter in Ollie’s life.

We returned to the Wall a couple of days later for another spiritual highlight. There are only two days each year when there is a mass gathering at the Wall called Birkat Kohanim (the Priestly Blessing), once during Sukkot and once during Passover. On those days, thousands upon thousands of Kohanim (Jews who descend from Moses’ brother Aaron, whose sons served as priests in the Holy Temple) congregate at the Wall to deliver the blessing. We were honored to witness the religious service from a rooftop balcony overlooking the Wall, a memory that is now forever woven into the fabric of our family.

It is not lost on me that Hamas’ surprise attack came on one of our most religious days of the year. The goal of catching Israel off-guard conjures up painful memories of the last surprise attack, 50 years ago to the day, the Yom Kippur War of 1973. I remember receiving the news while praying in our synagogue that Egypt and Syria invaded Israel on our holiest day of the year. It is also not lost on me that the October 7 attack came at a time when the country was jam-packed with visitors, the busiest tourist season of the year. The timing only adds to the brutality of the invasion. All airlines except the Israel-owned El Al immediately ceased operating. Many of those tourists are still trapped in Israel.

As part of my spirituality, I believe in miracles from heaven. Indeed, our trip brought us a series of miracles, both large and small. On the small end, the trip began with a miracle arrival at the King David Hotel in Jerusalem. Lizzy’s family flew to Israel a few days before Laurie and me so they could enjoy some time on the beach in Tel Aviv. We never discussed what time we hoped to arrive at the King David Hotel, aware that there were too many unknowns to predict an arrival time with any accuracy. Our car drove up to the hotel front door, and as I exited the car, a car pulled up behind me and I heard shouts of “Zaidy!” from my grandkids’ voices. Without any effort to coordinate, we arrived at exactly the same moment. Another miracle is that Laurie and I happened to leave Israel on one of the last American Airlines flights before air service ceased, arriving home only hours before the attack. Otherwise, we might still be there trying to get home. Miracle three is that Ira had booked their flights on El Al, even though more expensive, in order to support Israeli businesses. Because of that miracle, they were booked on a flight leaving two days after the attack on the only airline still operating. Otherwise, they might still be trying to get home.

But the biggest miracle of all is the way that Lizzy’s family managed to escape and return home safely. After spending time on-and-off in bomb shelters during their final two days, they made the harrowing journey from Jerusalem across Israel to Ben Gurion airport near Tel Aviv, risking terrorist attacks along the way. Laurie and I breathed a sigh of relief when Ira’s text arrived that they made it to the airport, got through security, and boarded the plane. Just then, news reports announced that Ben Gurion Airport was under attack, with missiles coming in from Gaza. The airport went into lockdown, but they were stuck on the plane, grounded. Laurie and I prayed and paced, then the biggest miracle occurred. We learned that the El Al pilots, trained in the Israel Air Force, turned off all lights outside and inside the plane, closed all window shades, shut down all internet communication, and took off just after midnight on a darkened runway, flying north to Haifa instead of west, and circling around until the plane was safely over the Mediterranean Sea. At that point, we received the best text of our lives from Lizzy, informing us the lights were back on and they were out over the water, safe from attack. How do you spell R-E-L-I-E-F? Laurie and I collapsed with thankfulness to G-d for this miracle.

In the Book of Esther, G-d placed Queen Esther in her role to save the Jews “for such a time as this: for if you remain silent at this time . . . you and your father’s family will perish.” When Lizzy’s plane landed, she was directed straight to a television studio for two live interviews on national news shows. She has since been on ten more national and international telecasts, along with giving numerous speeches in New York, as well as Montreal and St. Louis. More speeches and TV appearances are coming. Lizzy’s spirituality has generated a calling in her to become one of the strongest voices in the world to support Israel and fight against anti-semitism. It brings me immeasurable gratitude to see our family’s focus on spirituality carried on to the next generation, and we can already see that Generation Two is passing down that legacy to Generation Three. As we say in Hebrew, L’dor Vador, from one generation to another.

Marvin E. Blum

(For news coverage of the family’s escape from Israel, click on this link for a radio interview with Marvin Blum and on this or this link for an article in the Fort Worth Star-Telegram.)

(1) Marvin and Laurie Blum with daughter Lizzy Savetsky and her family, enjoying a trip to Israel that mirrors the Blum Family Mission Statement to celebrate relationships, memorable moments, and spirituality. (2) Marvin Blum’s son-in-law Ira Savetsky with his son Ollie, praising G-d at the Western Wall for the new chapter in Ollie’s life after his upsherin (first haircut). (3) Marvin Blum’s daughter Lizzy Savetsky on a Jerusalem balcony overlooking the spiritual service of Birkat Kohanim (Priestly Blessing) at the Western Wall. (4) Marvin Blum’s daughter Lizzy Savetsky and her family arrive in Israel on El Al Airlines for a trip celebrating the holiday of Sukkot.

Our Week in Israel: A Family on a Mission Read More »

Pay Attention to the Signs: Learning Warning Signs from Vishniak’s Pre-Holocaust Europe

I wrote last week about our impactful visit to Yad Vashem, Israel’s Holocaust Memorial, on our trip a couple of weeks ago to Israel. The night before that tour, we had a powerful prelude to set us up for the experience. We attended the world premier of a documentary produced by Nancy Spielberg, sister of Steven Spielberg, entitled “Vishniak.” The film tells the story of renowned scientist and photographer, Mark Vishniak. Vishniak’s gift to the world was a collection of photos documenting the propaganda campaign against the Jews in pre-Holocaust Europe.

Vishniak was born into an intellectual Jewish family in Russia in 1883. His family emigrated to Berlin in 1917 when the Bolshevik Revolution made it unsafe for Jews in Russia. At that time, Berlin was a haven for Jews. It was a center of art, scholarship, and culture that embraced and celebrated Jewish talents. However, Vishniak’s honeymoon period in Berlin began to wane as Adolph Hitler began a gradual campaign to convince the general populace of Germans that all their ills and misfortunes were the fault of the Jews. His message was that Jews controlled everything, and therefore any negatives in their lives were brought about by Jewish greed. Hitler’s venom spread slowly at first, starting in schools to indoctrinate the young against Jews, and growing into boycotting Jewish-owned enterprises. While this was happening, Vishniak had the foresight to begin photographing evidence of the growing hate. Signs were popping up condemning Jews, with caricatures exaggerating Jewish noses and making Jews look evil and ugly. When it became illegal for Vishniak to take pictures of those posters, he strategically posed his daughter in front, with the signs off to the side in the background, claiming he was photographing his little girl.

When Vishniak was in Eastern Europe photographing the growing horrors of life for Jews in ghettos, soldiers came to his Berlin home to arrest him. His wife got word to him not to return, and he re-routed to Paris. Kristallnacht, “the night of broken glass,” erupted in Germany and Austria on November 9-10, 1938, destroying Jewish businesses and burning sacred books. The family decided it was time to try to come to America. Though it was almost impossible to get a visa for the family, luck had it that his wife’s birth country was Latvia. She managed to obtain a Latvian visa to America that covered herself, her husband, and her son and daughter. The Vishniaks settled in New York, where he preserved his photographic collection revealing the horrors of pre-Holocaust life for Jews in Europe.

What is especially significant about the Vishniak story is that the Holocaust didn’t happen all-of-a-sudden. There was a gradual building up of hate. In all candor, that seems eerily familiar to today’s world. Anti-semitism is at an all-time high. The Anti-Defamation League reports that acts of anti-semitism in the U.S. rose 36% in 2022. The rise in attacks against visibly identifiable Orthodox Jews rose 69% in 2022. Since the outbreak of war in Israel, antisemitism is skyrocketing. Antisemitic posts online have increased 1200% since the October 7 attack on Israel by Hamas. College campuses across the U.S. are hotbeds for fomenting hate against Jews. Anti-Jewish speakers are welcomed on school campuses, making Jewish students feel unsafe. It’s happening at Harvard, Penn, NYU, Stanford, Berkeley, Michigan, Cornell, and likely in your own backyard, no matter where you live. Celebrities are asserting that Jews control the media, business, and the entertainment industry, blaming Jews for your misfortune. Rallies are even calling for the extermination of Jews. Is this beginning to sound familiar?

My son-in-law Ira Savetsky had a very wise uncle, Adolph Feuerstein (“Unkie”), a Holocaust survivor. Unkie warned repeatedly: “You say you’re comfortable in America. Well, let me tell you something. We were comfortable in Europe too.” Then look what happened.

We need to heed the warning signs. Hamas has been saying since its first charter in 1988 that its mission is to “obliterate” Israel. This vicious attack is not coming out-of-the-blue. We have been told over and over again that Hamas wants to kill all Jews. My wife Laurie had an intellectual Aunt Marjorie Cooper who lived in Haifa, Israel. I once asked Aunt Marjorie to explain the lesson of the Holocaust. Typically very erudite and poetic in her choice of words, she boiled down her answer to these few words: “The lesson of the Holocaust is that when someone says they want to kill you, you should believe them.” It’s as simple as that.

We are living in dangerous times. We must look out for each other and be vigilant. It’s time to pay attention to the signs.

Some might question what this post has to do with my “Family Legacy Planning” weekly series. Legacy planning is the process of creating a meaningful heritage to pass down to our descendants, leaving them an inheritance that’s more than money. Those of us who care feel we owe it to our future generations to leave them a tomorrow with hope, love, and family connection. I think this post fits right in.

Marvin E. Blum

Marvin Blum and son-in-law Ira Savetsky with Nancy Spielberg, Executive Producer of the documentary “Vishniak,” revealing the warning signs in pre-Holocaust Europe.

Pay Attention to the Signs: Learning Warning Signs from Vishniak’s Pre-Holocaust Europe Read More »

What I Learned at Yad Vashem, Israel’s Holocaust Memorial

As promised last week, I will continue sharing highlights and lessons learned from our week in Israel, a glorious week that came to a horrifying end as Hamas began a terror campaign aimed at eliminating Israel. Realizing that the goal of Hamas is to wipe Israel off the map, I reflect on why Israel must win this war, indeed why the world NEEDS Israel. We spent a day at Yad Vashem, Israel’s Holocaust Memorial. I’ll unpack some of the heart-wrenching revelations I learned there, but I’ll start with the overarching lesson from Yad Vashem: the six million Jews who were murdered had no place to go; other countries didn’t want them, and there was no Israel to take them in. Most say Israel exists now because the Holocaust happened. The reality is that the Holocaust happened because Israel didn’t exist.

The day began with my 10-year-old granddaughter Stella interviewing Rena Quint, a Holocaust survivor. Stella is embarking on a mission to teach the world, and young people in particular, about the Holocaust. She was alarmed to learn of the multitudes that either (1) believe the Holocaust is a hoax that never really happened or (2) have never heard of it and have no idea what it is. Unless we learn from history, we are doomed to repeat it.

Stella discovered that when Rena was Stella’s age, she had spent most of her childhood in a ghetto, a work camp, concentration camps, and a death march. Born in 1935 in Poland, Rena’s early years were spent in a loving home with her mother, father, and two brothers. Her entire family was murdered in the Holocaust; only she survived. She remembers the day her mother let go of her hand and told her to run. That day, the rest of her family went to their deaths. Rena was ultimately imprisoned in Bergen-Belsen concentration camp in April 1945. She managed to stay alive until the camp was liberated by the British. But there she was, a little girl Stella’s age, all alone in the world. Hearing Rena’s story of survival, strength, and faith propels Stella in her quest to educate us on where unchecked evil can lead. Indeed, after Stella ended her stay in Israel in a bomb shelter, her mission has become more critical than ever.

At Yad Vashem, we learned of another little girl Stella’s age. The story was told to us as we looked in a display case at a beautiful long braid of blonde hair that had once belonged to that little girl. As Nazis were coming for the family, the little girl’s mother convinced her daughter that where they were going, her long golden hair would become infected with lice. Her mother cut off the long braid, gave it to their neighbor (along with all their precious possessions) to hold until someday they’d return to retrieve them. The only family member to survive was the little girl’s brother. Years later, he returned to the neighbor to ask for his sister’s hair. They wouldn’t let him in, as they didn’t want to turn over the family’s silver, china, jewelry, and other precious items. The boy stood at the door and begged; he only wanted his sister’s hair. They could keep the rest. They slipped the braid through the door and then shut him out. He left with a priceless memory of his sister that he later donated to Yad Vashem, the Holocaust Memorial.

The tour then became very personal to Stella as she learned the fate of her father Ira’s family from Czechoslovakia. Ira’s ancestors were part of a desperation campaign by Hitler to kill as many Jews, as quickly as possible, when it became evident that they were going to lose the war. Hitler appointed Adolph Eichmann to mastermind the murder of 500,000 Hungarian and Czechoslovakian Jews in only 56 days. A number of Ira’s relatives were sent in cattle cars to Auschwitz, including his grandmother Miriam. Her job at Auschwitz was to sort the clothing of those who were sent into gas chambers. Miriam survived to tell the horror that, in sorting the clothes, she discovered her mother’s monogrammed head scarf. That’s how she learned that her mother (Ira’s great grandmother) had been gassed to death.

Our tour ended with a search through the Book of Names of Holocaust Victims, Yad Vashem’s chronicle of every known victim of the Holocaust. In that book, my son-in-law Ira discovered the name of his great uncle Yaakov Yitzchok Feuerstein, the man for whom Ira (Yitzchok in Hebrew) was named. Ira’s uncle was murdered at Majdanek concentration camp, along with his wife and baby.

Why do we need Israel today? When Ira’s family was part of the 500,000 Jews killed late in the war, the world by then was well-aware of the concentration camp killings. Nothing was done to save them. As Hitler’s Jew-hatred was spreading and Jews wanted out, no country would take them, except in small numbers. Hitler killed 6 million of Europe’s 9 million Jews, and 1.5 million of those killed were children. England reluctantly agreed to take in 10,000 kids, who had to come without their parents (imagine the fears of those kids and agony of their parents having to tell them goodbye, never to see them again). Had there been an Israel, there would have been a place to go. Today, Jews have a place to go. Israel, our ancestral homeland dating back to early Biblical days, will take us in. Today, more than half of the world’s Jews live in Israel.

The most effective way to wipe out a race is to kill all the kids. Hitler tried to do that. It’s taking decades to rebuild the Jewish population. Even today, the number of Jews is still not yet restored to the pre-Holocaust level. For most of their lives, survivors like Rena Quint missed out on the experience of sitting at a Shabbat table with three generations of a family. We are just now getting back to that.

So here we are again with enemies whose stated goal is to push us into the sea. Our tour guide at Yad Vashem told Stella, three days before the attack, that she was living in the best of times, that she would never see something as horrible as a Holocaust. The guide was wrong. Stella’s week in Israel was followed by the greatest loss of Jewish life since the Holocaust. But, this time, we have an Israel that has the might and fight to prevail. Israel must win this war. We owe it to Stella to give her a better future than her ancestors had. I call this weekly email series a “Family Legacy Planning” series. Stella is doing her part to preserve the legacy of her ancestors. Now that’s what I call Family Legacy Planning!

Marvin E. Blum

(1) Marvin and Laurie Blum with daughter Lizzy, granddaughter Stella, and son-in-law Ira Savetsky at Yad Vashem, Israel’s Holocaust Memorial. (2) Stella Savetsky interviewing Rena Quint, a Holocaust survivor. (3) Ira Savetsky discovering the name of his great uncle, a Holocaust victim for whom Ira was named. (4) Ira and Lizzy Savetsky entering “The Book of Names of Holocaust Victims” at Yad Vashem. The Savetsky family preserves the legacy of departed ancestors by leading an effort to fight anti-semitism.

What I Learned at Yad Vashem, Israel’s Holocaust Memorial Read More »

A Week in Israel: From Highest Highs to Lowest Lows

I just returned from a dream week in Israel that ended in a nightmare. I am still wrapping my head around the highs and lows of this trip to the Holy Land. As my thoughts settle down, I’ll share more of the experiences and lessons learned. For today, I’ll sum it up by saying that my life, and the lives of so many, has been forever changed. I now see the world through a different lens.

The week began with a glorious rooftop celebration overlooking the holiest sites in the Old City of Jerusalem. The occasion was an “upsherin,” the Yiddish word for a Jewish boy’s first haircut upon reaching his third birthday. The boy is my grandson Ollie, son of my daughter and son-in-law, Lizzy and Ira Savetsky. As the attached photo reflects, it was a grand celebration.

Fast forward one week. The man playing guitar in the far left of the photo is now on the front lines as a soldier in the Israeli Defense Forces, protecting Israel from attacks coming in from the north. His name is Noam, and he’s still singing. This time, his music is aimed at lifting the spirits of those fighting to save Israel. But this time he has a guitar in front of his body and a gun on his back. What a juxtaposition. What a difference a week makes!

There are so many “highs” from the week celebrating the Jewish holiday of Sukkot, both literally and figuratively. We stood on the top of Mount Moriah and worshipped where our ancestors prayed at the site of King Solomon’s Holy Temple. We toured archaeological digs where they recently discovered King David’s palace. We visited with family members and friends who share our passion for the miracle of Israel.

There were also literal and figurative lows. We visited the Dead Sea, “the lowest place on earth.” We looked down at the valleys flanking either side of the City of David. But from a figurative standpoint, the lowest low for our family was in a basement bomb shelter at the King David Hotel. As the photo reflects, my son-in-law Ira was helping lead the prayers and singing, while my daughter and her kids prayed along fervently. But still they were singing. Singing provides us with hope. We have to find light in every dark moment.

I will continue to share more highlights in future posts, but today I wanted to share these quick heartfelt reflections. We are grateful that we all made it home safely, but our hearts are still with our brothers and sisters in Israel. We pray for their safety. We pray they will someday live in peace. Spending a week in a country that is so narrow you can drive from east to west in about an hour (15 minutes in some places), surrounded by enemies who want to eradicate you, certainly has made a permanent impact on me. Those of us who live in safety truly have no problems, as the things we consider to be a “problem” pale by comparison to the challenges faced by my family is Israel.

I’ll close with three Hebrew words from a favorite song we chant: “Am Yisroel Chai” – the People of Israel Live!

Marvin E. Blum

(1) Marvin Blum and his family celebrating grandson Ollie’s upsherin, his first haircut, overlooking the Holy City of Jerusalem. 
Middle Picture: Noam Buskila (the same singer at the far left of Ollie’s upsherin photo) now sings to bring hope to the Israel Defense Forces, guitar in his front and gun on his back. What a difference a week makes! (2) In a bomb shelter at the King David Hotel, Marvin Blum’s son-in-law Ira Savetsky (far right) leads worship services, while daughter Lizzy and granddaughters Stella & Juliet (lower left) join in the songs of prayer. 

A Week in Israel: From Highest Highs to Lowest Lows Read More »

Senator Feinstein’s Other Battle, Through the Eyes of President Reagan’s Daughter

Senator Dianne Feinstein, who died last week, was the longest serving woman in the U.S. Senate. Last week’s post told the story of her battle against her stepdaughters. Today’s post focuses on another battle she fought—a conflict not about money. This struggle dealt with Senator Feinstein’s health and the impact of declining health on both the afflicted person and the caregivers.

The story is told through the eyes of Patti Davis, daughter of another politician. From her own experience watching the decline of her father President Ronald Reagan, Davis wrote “Floating in the Deep End: How Caregivers Can See Beyond Alzheimer’s.” Most recently, Davis provides an introspective recap in a guest essay for The New York Times. In it, she gives a heartfelt overview of the challenges faced by both the one suffering from dementia as well as the one providing care to a loved one with that dreaded disease.

Although Senator Feinstein’s diagnosis has not been revealed, Davis recognizes familiar signs: “the looks, the behavior . . . When Senator Feinstein returned from her lengthy time away, it was painfully illuminating to see her tell a reporter that she hadn’t been away at all, that she had been right there the whole time.” Davis understands the desire to preserve dignity and control over their lives. “They want to go to work, drive a car, live on their own.” Yet “for people losing their cognition, terror can be a constant companion. Confusion nips at their heels, and they reach desperately for the person they once were.” Davis describes how a trip to the Reagan Ranch, once her dad’s favorite place on Earth, made him agitated and frightened by the expansive green miles he once loved. Dementia narrows the boundaries of one’s world.

Beyond the impact of dementia on the patient, Davis also laments the impact on the caregiver. “It unleashes a torrent of emotions in caregivers. There is a fear of the unknown, . . . and there is a haunting awareness that everything you once relied on is falling apart.” Davis describes “caregiver stress” and “caregiver burnout” to the point that their own health can be put at risk.

Aside from the emotional issues, loved ones must also address legal and financial matters. Davis speculates on the challenges Senator Feinstein may have confronted in giving her daughter a power of attorney to act on her behalf. “For a son or daughter to assume autonomy over a parent’s life and say, ‘I’m making the decisions now,’ is a role reversal for which there’s no preparation.”

In my work as an estate planning lawyer, I often counsel families dealing with that role reversal. When a child approaches a parent to address dementia issues, it can be a difficult conversation. It helps to have an objective person on the team to help the family navigate these potentially turbulent waters. For example, a longtime client held a family meeting in my conference room so I could break the news to the patriarch that he could no longer drive. Having that message come from me made it easier for the patriarch to accept it. As dementia progressed, the caregiving process gradually led to a move to a memory care facility.

Whether or not Senator Feinstein’s “untold story” parallels President Reagan’s situation remains to be seen. However, when health challenges arise, caregivers need to know they are not alone. There are excellent resources to help. The Blum Firm would be honored to help provide families in need with appropriate estate planning solutions and caregiving support.

Rest in peace, Senator Feinstein.

Marvin E. Blum

President Reagan’s daughter Patti Davis observes similarities between Senator Feinstein’s health decline and her father’s, highlighting the challenges faced by both the afflicted person and the caregivers.

Senator Feinstein’s Other Battle, Through the Eyes of President Reagan’s Daughter Read More »

Inheritance in a Blended Family: Senator Feinstein vs. the Blum Girls

For 50% of today’s wedding couples, it’s not their first trip to the altar. Moreover, 65% of those remarriages involve children from a prior marriage. Even in the best of blended families, it sets the stage for potential conflicts. As an estate planning attorney, my advice is to get in front of it. Plan ahead and be specific, reducing the risk of later friction among family members.

One such high profile battle involves Senator Dianne Feinstein. A recent New York Times article describes it as a “bitter legal and financial conflict that pits her and her daughter, Katherine Feinstein, against the three daughters of her late [third] husband Richard Blum” (no relation to me). Though Feinstein and Blum were both rich in their own right, that still doesn’t prevent fights over money. Feinstein’s daughter has filed two lawsuits on her mother’s behalf against trustees of trusts established by Blum: (1) to force the sale of a beach house, being used by Blum’s daughters at Feinstein’s expense; and (2) to compel distributions from Blum’s life insurance proceeds to pay Feinstein’s significant medical expenses. Blum’s trustees dispute the lawsuits as “a stepdaughter engaging in some kind of misguided attempt to gain control over trust assets to which she is not entitled.” They attribute this feud to a “long-standing animosity” between Feinstein’s daughter and the daughter’s three stepsisters.

At issue is how to interpret language in a marital trust established by Blum for his wife of 40 years. At Feinstein’s death, the assets will pass to Blum’s three daughters. That creates a natural tension, as anything spent now will reduce what the Blum daughters inherit later. As Dustin Gardiner discusses in a recent Politico article, questions arise: Does Feinstein need to spend her own money before she can access money in the trust? Does Feinstein’s “medical care” include paying for a security guard and a caretaker? When the trust is silent on questions like these, the trustees are left trying to determine what Blum intended. The more explicit the trust language is, the better. Don’t make the trustees have to guess which sets the stage for an ugly blended family feud like this one.

Unfortunately, such family feuds in today’s modern family are not uncommon. The perils of inheritance are especially acute in a blended family. In addition to friction involving stepchildren and stepsiblings, the spouses themselves are at higher risk. Consider this sobering statistic: 60% of remarriages end in divorce. As an estate planner, I urge couples about to marry again to cover as many hard questions as possible in a prenup, and to be explicit in drafting trust provisions.

Many of the solutions involve life insurance. In a recent speech I gave on Life Insurance Planning Opportunities, I included a section called “Blended Families Require Extra Considerations” addressing five scenarios:

  1. Don’t Pit Stepchild Versus Stepparent
  2. My Spouse Would Never Cut Out My Kids (Right)?
  3. Equal or Equitable Between Sets of Children?
  4. Use of Life Insurance and Prenup Planning
  5. Quandary Over IRA Beneficiary

Click here to review that PowerPoint.

The Blum Firm is committed to helping families thrive from generation to generation. Our family legacy planning initiative is especially critical in helping non-nuclear families navigate the challenges. We would be honored to help your family protect its most precious assets—not just your financial capital but also your human capital.

Marvin E. Blum

Senator Dianne Feinstein’s public battle with her third husband’s daughters highlights the perils of inheritance in a blended family.

Inheritance in a Blended Family: Senator Feinstein vs. the Blum Girls Read More »

Congratulations to our 2023 Super Lawyers

Super Lawyers has named 6 Blum Firm attorneys to the Texas Super Lawyers list!
 
Super Lawyers recognizes the top attorneys nationwide. Their selection process involves the creation of a candidate pool, evaluation of the candidates by the Super Lawyers’ research department, and peer evaluation by practice area. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Super Lawyer is a distinction earned by only 5% of the lawyers in Texas.  
 
Marvin E. Blum, Estate Planning & Probate Law
R. Dyann McCully, Estate Planning & Probate Law
Len Woodard, Business & Corporate Law
John R. Hunter, Estate Planning & Probate Law
David C. Bakutis, Estate & Trust Litigation 
Jennifer P. Sibley, Estate Planning & Probate Law
 
Congratulations to these talented attorneys!

Congratulations to our 2023 Super Lawyers Read More »

Out of the Mouths of Babes: Lessons from My Granddaughter Stella

Stella Savetsky is the first born of our five grandkids. Each is equally precious, but for several reasons our 10-year-old granddaughter Stella is truly a special soul. Laurie and I are grateful for having recently spent lots of quality time over the summer with Stella, during which time she taught us many important life lessons.

Let me roll the clock back to the significance of Stella’s birth. In the family tree that starts with my mother’s parents, Meyer and Pauline Oberstein, I fall in generation three (G-3), along with 17 others. Our daughter Lizzy is one of 62 descendants in G-4, a number that will surely grow much larger as the 12 G-3 kids of my uncle Rabbi Leonard Oberstein continue to have a lot more babies. G-5 will one day likely be filled with hundreds of cousins, but the fact will always remain that the very first member of G-5 was Stella.

To appreciate the significance of a G-5 with hundreds of Jewish cousins, you have to realize that it’s a miracle there’s a G-1 with Meyer and Pauline at all. They both barely escaped Hitler when they came to America in some of the final waves of Jewish immigration before World War II. Hitler’s plan was to wipe out the world’s Jews, and indeed he killed one-third of us, including some of our relatives who weren’t as fortunate as my grandparents. In the words of my son-in-law’s “Unkie” (a Holocaust survivor) upon seeing Stella, her birth proves that “We beat Hitler.”

Last week in New York, I attended a profound Sabbath class by Rabbi Shlomo Farhi of the Safra Synagogue. Amplifying the significance of Stella’s birth, Rabbi Farhi taught that, while marching to their death, Jewish Holocaust victims sang in Yiddish: “mir veln zey iberlebn,” which translates to “we will outlive them.” Nazis stole those marchers’ lives but not their spirit. Five generations later, Stella is living proof that indeed “we DID outlive them.”

As the leader of her generation, Stella bears a heavy responsibility. I’m proud to say she’s setting quite an example. Each week on Instagram she posts “Stella’s Torah Corner.” In that short video, Stella teaches that week’s Torah portion, in her own creative way with her own dramatic flair. She reaches thousands each week who would otherwise miss out on important Torah teachings. If you haven’t seen it, check out Lizzy Savetsky on Instagram and learn along with me from “Stella’s Torah Corner” every Friday. I had to substitute teach for her once, and let me tell you, it’s a lot harder than it looks!

Stella makes it a point to open her heart to everyone she meets. She once told me that at school she pays special attention to those who are alone, seeking out the kid who has no one with whom to talk. She is a very loving and devoted friend.

On the final day of her last visit to Fort Worth, she said to us “Let’s make it count.” I asked what she wanted to do, expecting some kid entertainment activity. Her answer: “I want to go see Bobbie,” the name we call my mother Elsie, her 92-year-old great grandmother. Visiting her great grandmother was Stella’s idea of making the day count.

Stella is growing up way too fast for us. She recently reminded us that her childhood is mostly in the rearview mirror when she no longer needed her lovey “Ray Ray,” from whom she used to be inseparable. Her words “I don’t need Ray Ray anymore” still sting in my heart and bring tears to my eyes.

In Jewish tradition, a girl takes on adult Jewish responsibilities at age 12 at her Bat Mitzvah. Boys do the same at age 13 at a Bar Mitzvah. Stella’s Bat Mitzvah is only about a year away. The date is already set—November 10, 2024. No doubt her Bat Mitzvah year will be filled with meaningful moments and lessons. Stay tuned. I’ll keep you posted.

Yes, Stella is growing up fast, but what a caring and beautiful young lady she’s becoming. Laurie and I are a very proud and grateful Mimi and Zaidy. We look forward to continuing to learn from Stella’s gigantic heart as we watch her future unfold. Little ones can teach us very big life lessons.

Marvin E. Blum

Marvin and Laurie Blum’s granddaughter Stella teaches important life lessons through her words and actions, such as her weekly “Stella’s Torah Corner.” This episode received 56,500 views.

Out of the Mouths of Babes: Lessons from My Granddaughter Stella Read More »

Attorneys Blum, Bakutis, Morris, and Light Recognized by ‘Best Lawyers in America’

We are proud to announce that four of our attorneys have been selected by their peers for inclusion in the 30th edition of The Best Lawyers in America®– Marvin E. Blum, David C. Bakutis, R. Keith Morris III, and Austin B. Light.
 
The Best Lawyers in America is one of the legal profession’s oldest and most respected peer-review publications.
 
Marvin E. Blum founded The Blum Firm over 40 years ago and has broad industry experience in estate and tax planning, asset protection, business planning, business succession planning, charitable planning, and family legacy planning. This is Marvin’s ninth year being selected for inclusion in The Best Lawyers in America for his work in Trusts and Estates Law.
 
David C. Bakutis is widely recognized as a leading fiduciary litigator in the Dallas/Fort Worth metroplex. David has consistently been recognized as among the Best Lawyers every year since 2006 in Trusts and Estates Law.
 
R. Keith Morris, III is a leading probate and guardianship litigation attorney, practicing across Texas including the Houston and Dallas/Fort Worth areas. This is Keith’s third year being recognized for his work in Trusts and Estates Litigation.
 
Austin B. Light was selected for the second year in a row for inclusion in Best Lawyers: Ones to Watch® in America in the areas of Corporate Governance and Compliance Law and Mergers and Acquisitions Law. Austin is experienced in advising clients on a variety of compensation-related plans as well as compensation and employee-related aspects of public and private transactions, including mergers, equity and asset acquisitions, restructurings, and private equity transactions, in addition to estate and tax planning.
 
Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Lawyers are neither required nor permitted to pay a fee to be listed. Best Lawyers: Ones to Watch in America recognizes lawyers who are earlier in their careers (in private practice less than 10 years) for their outstanding professional excellence.
 
Please join us in congratulating Marvin, David, Keith, and Austin!

Attorneys Blum, Bakutis, Morris, and Light Recognized by ‘Best Lawyers in America’ Read More »

Family Travel Opportunity? Say Yes!

Laurie and I were invited to a cousin’s wedding in Baltimore and debated whether to go. You know the narrative: we’re so busy; we’ve been doing so much traveling lately. It’s easy to talk yourself into saying no. Then a friend said, “You’d go if this were a funeral. The groom is the grandson of your uncle Rabbi Leonard Oberstein, your mother Elsie’s brother. Go and visit with your family. This is a no-brainer.” The practical voice in my head succumbed to the passionate voice in my heart. We went to the wedding, and I’m so glad we did.

The rewards of going began immediately upon entering the synagogue. Arriving early, I grabbed a visit with Uncle Leonard, an Orthodox Rabbi with 12 kids. I asked: “How many grandkids do you have now?” His answer: “I think it’s 52.” His wife Feigi confirmed the number, but no doubt that number will continue to grow as his kids keep having more kids. Great grandkids were also actively arriving. Every person in this growing multitude is my cousin.

As my dozens of cousins began arriving, I began catching up with them. There were so many meaningful updates, but I’ll share one that really grabs my heart. A first cousin, Eliezer, one of the world’s leading oncologists who is researching early detection of pancreatic cancer at NYU, has an eight-year-old daughter battling cancer in her neck. The family has been consumed with prayer and efforts to save her. Talking with another first cousin, Chaya, the mother of the groom, we learned of her own efforts to pray for her niece’s recovery. Only weeks before her son’s wedding, Chaya donated a kidney to a stranger, praying that G-d would hear her prayers and heal her niece. Soon thereafter, the family received word that the cancer is in remission. Here’s to medical wonders and the power of prayer!

There were so many more stories, including my visit with another first cousin now seven years sober after battling addiction. Every Saturday night he hosts a gathering in his home of men struggling with all forms of addiction, so they can provide each other with some group support.

The wedding was off-the-charts festive. This branch of my family is very religiously observant, preserving the traditions of my grandparents from Eastern Europe. Men and women were seated separately at both the ceremony and the dinner, followed by energetic circle dancing (men dancing with men and, on the other side of a high curtain, women dancing with women).

Upon leaving, my uncle invited us to his home the next morning for bagels and schmears, “immediate family only.” Laurie and I arrived to dozens and dozens of bagels and dozens and dozens of cousins. We spent three hours gathered around the kitchen table with revolving waves of bagel-eating relatives. I huddled with my uncle and learned family heritage stories I’d never heard before.

I knew that all my grandparents came to America before World War II, barely escaping Hitler. What I didn’t know is that Leonard found my grandmother Pauline’s passport and the story it revealed. Pauline’s passport claimed she was a citizen of Poland, even showing her name is Pola to sound more Polish. But Pauline lived in Ukraine; she never lived in Poland. When Ukraine wouldn’t allow them to leave, the family smuggled across the border into Poland and paid bribes to get Polish passports so they could come to America. Moreover, they got in under the wire as one of the last waves of immigration before the borders closed. It’s a miracle my family and I are alive. This heritage of miracles brings me so much perspective and gratitude.

I’ve previously written that author Mitzi Perdue says the number one most important contributor to family connection (and even successful business succession) is family travel. I’m a believer. With my loud internal practical voice, I almost missed out. Yet by going, I came away enriched by strengthened family ties and an expanded awareness of my heritage.

So now my daughter Lizzy is asking Laurie and me to join her family later this month on a trip to Israel to celebrate her son Ollie’s third birthday and first haircut (“upsherin”). The answer is an enthusiastic “yes!” Stay tuned. I’m sure I’ll have some lessons to share.

Marvin E. Blum

Left: Marvin and Laurie Blum with Rabbi Leonard Oberstein (Marvin’s uncle) at the wedding of one of Rabbi Leonard’s grandsons. Right: Rabbi Leonard and Feigi Oberstein with some of their 12 kids, 52 grandkids, and 6 great-grandkids (so far).

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Estate Sale Leftovers Become Another Person’s Treasures

Last week’s post, “Don’t Sweat the Small Stuff,” addressed the challenges of dividing personal effects among the heirs and concluded that in a Will, there’s no “small stuff.” Even mixing bowls and fishing poles can become precious family heirlooms. However, after all the precious items have been claimed by one heir or another, what becomes of the leftovers? Solution: An estate sale.

Don’t jump to the conclusion that estate sales are a bunch of junk. Indeed, stories abound how one man’s “junk” becomes another man’s “treasure.” Such are the revelations from Janelle Stone in “The Opulent World of the Estate-Sale Queen of Dallas” (Rachel Monroe, The New Yorker, Nov. 4, 2022). For Janelle Stone’s estate sales, people have been known to camp out for four days to be first in line. “Her sales typically last two days, during which she might sell more than a million dollars’ worth of antiques, vintage couture, and tchotchkes.”

Stone admonishes that there are no more “garage sales.” She describes her work as “treasure hunting.” In her second sale, she actually found a long-lost diamond in a sock. Stone even discovered an 18-karat pocket watch in the back of a drawer and $10,000 tucked between the pages of a book. “The most scandalous things that she has found are, alas off the record.” (That has my imagination in overdrive.)

Boston art dealer David Kantrowitz describes more “‘Antiques Roadshow’-type moments” where tchotchkes turned out to be treasures: “a $15,000 gold cuff bracelet that a son almost threw away, a $20,000 pair of midcentury armchairs from an attic home office, and a $25,000 silver-plated box on a hall shelf. One of his latest finds: A tchotchke on a kitchen counter in an apartment of a 98-year-old man turned out to be a sculpture appraised at $4,250.” His daughter didn’t even like it, and was happy to sell it and buy a pair of earrings, “something meaningful to her to remember her dad by. ‘They’ll be from him,’ she said.” Kantrowitz also found a diamond wedding ring and band in a hazardous-waste bag in the back of a closet. (Ashlea Ebeling, “Pass On Your Heirlooms, Not Family Drama,” Wall Street Journal, July 30, 2023).

I have my own estate sale stories. When I served as an executor of an estate, my law firm had a similar treasure hunt as we prepared for the estate sale. There was a massive book collection requiring us to turn through each page, as we regularly discovered money hidden between the pages. We even found a folded piece of paper that looked like a kid’s “fold, cut here, and paste” project from school. It turns out that “art project” was the real deal, a piece of “art” valued at $400,000!

A word of advice: Prepare a “Red File” revealing information your executor needs to know, such as valuable art objects and where you hide your buried treasure.

Proceeds from the estate sale pass to heirs under the residency clause of the Will. As for the final items that no one buys, donate the leftovers to charity. No doubt, someone will later discover yet more treasures at the local Goodwill or Salvation Army store.

Marvin E. Blum

Marvin Blum’s wife Laurie displays some estate sale treasures (antique chest, cloisonne horses, and china) acquired over the years by the Blum family.

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Don’t Sweat the Small Stuff? There’s No “Small Stuff” in a Will

Grandma’s mixing bowl. Grandpa’s fishing pole. We’ve all been told: “Don’t sweat the small stuff.” Isn’t this just “small stuff?” Wrong! According to Kansas attorney Tim O’Sullivan, when someone dies, the disposition of personal effects is the “second greatest risk to family harmony,” second only to choosing the right fiduciary. (“Why Family Harmony is a Frequent Casualty of Most Estate Plans,” The Journal of the Kansas Bar Association, Feb. 2020). Stories abound of heirs fighting mercilessly over how to divide nostalgic possessions like bowls and poles.

O’Sullivan’s article offers a treasure trove of advice about handling a decedent’s personal treasures. Here’s a “baker’s dozen” of the best tips:

  1. Create a “Personal Effects List” with detailed instructions. My mother-in-law had quite a collection of family heirlooms with sentimental value. We’re grateful she left a detailed list to allocate them among Laurie and her three sisters. Unfortunately, in spite of good intentions, most never get around to preparing such a list. When you do make the list, be sure to update it periodically.
  2. Send a copy of the list to your estate planning attorney and keep the original in a sealed envelope with your other original documents. Otherwise, such lists “sometimes have a habit of coincidentally ‘disappearing.’“ If more assurance is desired, the list can be formalized as a Codicil to a Will or as an Addendum to a Living Trust.
  3. Even better than a list (or in addition to it), consider making a video of such items for identification purposes and tell the provenance and family heritage of such items in the audio portion of the video.
  4. The executor should change the locks on the residence soon after death. If not, “a child may ‘jump the gun’ and employ ‘self-help’ by surreptitiously taking items from the parent’s residence.” O’Sullivan’s partner calls this the “pickup doctrine,” referring to the pickup truck that is commonly used in this “pick up” process.
  5. Avoid an overly broad definition of tangible personal items that pass outright to your loved ones, limiting the definition to items of personal usage or those with sentimental value. “Big ticket” items, especially those with little emotional attachment (such as “cars, airplanes, and boats, as well as valuable paintings, artworks and collections”), are usually best distributed under the residuary clause.
  6. Ask each child for a list of items they want, in order of preference, with the understanding that honoring such requests is not assured. Parents can take such preferences into account in preparing their Personal Effects List.
  7. Create a distribution procedure for items not on the list. First, give the children 90 days to reach a division by agreement among themselves. Failing such agreement, or for the leftovers, consider one of the following procedures.
  8. For undistributed items, one option is the “random sequential lottery method, with the sequence being reversed in each subsequent round having the same participants.” One by one, each participant selects one item. Make sure a minor child is represented by a trustee or guardian. If the parent desires financial equality, have an estate salesperson put a value on all such items, and any overall differential among the children in the value each received can be adjusted out of the children’s shares of the residuary estate.
  9. Another option is distribution by auction, either public or (more likely) private. Consider giving each child an equal amount of “virtual money” to use in bidding on items. Bidding can either be an open process or done by sealed bids.
  10. Appoint an independent fiduciary to make the division. Although “probably the most protective of family harmony, …independent financial fiduciaries would not be expected to welcome being burdened with this degree of discretion.” I describe this method as appointing a “King Solomon” to divide the personal effect “babies.”
  11. Second marriages create especially delicate situations for children and a stepparent dividing the personal assets. If dad leaves his estate to his kids, the surviving stepmom may have a homestead right to reside in an empty house if the furniture in it went to his kids.
  12. Clarify in the Will if the estate is expected to bear the cost of packing and shipping such items to the child. If silent, the child should be required to pick up the items within, say, 45 days or else either (i) the child would bear the cost of packing and shipping or (ii) the fiduciary can sell the items and distribute the proceeds to the child.
  13. Authorize the executor to electronically duplicate family pictures, videos, letters, and personal records and disseminate among all heirs who want them, with costs borne by the estate.

There are no perfect solutions, but following O’Sullivan’s tips improves the odds of avoiding sibling warfare over that mixing bowl or fishing pole.

Marvin E. Blum

Marvin Blum’s wife Laurie with her grandmother’s silver tea service. Laurie’s mother left explicit instructions for the disposition of her personal effects among her four daughters. Let’s follow her example.

Don’t Sweat the Small Stuff? There’s No “Small Stuff” in a Will Read More »

Take a Walk – Alone, No Phone

On a recent Austin weekend to babysit our grandkids Lucy and Grey, I took a walk along Lady Bird Lake while they were napping. Remarkably, a simple thing like an afternoon walk, alone with no phone, opened my mind to powerful revelations. I highly recommend it.

Our lives are busy and hectic. We rarely take a moment to be in the moment, to just “be” and not “do.” My afternoon stroll calmed my ever-racing mind.

During the pandemic, I heard a virtual presentation “Mind in Motion” by psychologist, Leigh Weinraub that resonated with me. She said, “The mind is a hurricane, always racing forward and backward.” It requires intention to stop the racing and be in the moment. Being present in the “now” is comforting. We are free from worrying about the future “might be’s” and free from regret over past “might have been’s.” On my walk, I found that peace of being totally in the present. My mind slowed down.

Author Ryan Holiday echoes this theme in his book, Stillness Is The Key. Coincidentally, he recommends taking a walk, without a phone and without music, to find the stillness. Per Holiday, epiphanies only come when you are quiet. The most meaningful thoughts come to us when we’re in silence. Songwriters Hank Williams and Vince Gill both expressed how their creative juices ignited in stillness; they could just sit down and let the pen flow.

Holiday also advocates how a deep appreciation for nature’s beauty nourishes us: “Drink it in, and achieve stillness for the soul.” Walking along Lady Bird Lake, I found that nourishment. I noticed the purple wildflowers and thought of Alice Walker’s line, in The Color Purple: “I think it pisses G-d off if you walk by the color purple in a field somewhere and don’t notice it.” I noticed.

What else did I notice? I noticed the calm that came over me, accompanied by abundant gratitude. Looking at the Austin skyline, I reflected on all the good in my life associated with that city. Austin is where:

  • I met my wife Laurie, the love of my life.
  • I forged a lifelong best friendship with Talmage Boston.
  • I connected with wonderful friends who still are a part of my daily life.
  • I received a superior education in law and accounting.
  • With that education, I embarked on a dream career as an estate planning attorney.
  • My son Adam and his family live a beautiful life in Austin.
  • Laurie and I have the privilege of enjoying two precious grandchildren here – Lucy (4) and Grey (2).
  • The Blum Firm opened an office in Austin that is vibrant and thriving, thanks to a stellar team running it and the terrific support of the Austin community.

I am filled with gratitude for the blessings that came to my mind in the stillness of my walk. One final expression of gratitude came to my mind: my thanks to Lady Bird Johnson for her commitment to beautifying America, in whose memory Town Lake was renamed Lady Bird Lake. Her spirit lives in every wildflower that blooms along that trail. Lady Bird’s legacy is forever a gift to us. May we all search for a way to leave behind a legacy that will be a gift to future generations.

Marvin E. Blum

Left: Marvin and Laurie Blum are grateful for all that Austin offers, especially the privilege of babysitting grandkids, Lucy, Grey (and Basil!). Right: A walk along Lady Bird Lake provides Marvin with the stillness to soak up all the blessings that Austin represents to him.

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Rock Star Fiascos: Lessons from Elvis Presley, Prince, & Michael Jackson

Celebrities captivate us. Some are good role models who live exemplary lives and inspire us to emulate them. But unfortunately, big fame often leads to self-destructive behavior. The self-destruction of rock stars is nothing new. In fact, it was the subject of my daughter Lizzy’s thesis at New York University titled “Archetypes and Antecedents of the Rock Star.” Lizzy studied cases of famous lives who imploded over the centuries, and she drew parallels about fame contributing to their downfalls. The estate planning world is replete with rock stars whose messy lives carried on after their deaths, leaving behind messy estates. Let’s turn their sad stories into teachable moments.

I recently posted about the Queen of Soul Aretha Franklin’s estate planning disaster. After five years of battling by her four sons, a Michigan court declared Aretha Franklin’s notebook scribbles (found months after her death, buried under couch cushions) to be her Will. In leaving behind a mega-sized mess, Franklin is in the company of many of her entertainment colleagues. Let’s learn lessons from the estate fiascos of three other rock stars: Elvis Presley, Prince, and Michael Jackson.

I’ll begin with “The King,” Elvis Presley, truly a gift that keeps on giving us estate planning lessons. At his death in 1977, Elvis left an estate of roughly $5 million. “His spending had drained his earnings, which had long been limited by his business arrangement with this longtime manager Col. Tom Parker.” In desperation, Elvis had even sold future royalty rights from his recordings to RCA for $5.4 million, half of which went to Colonel Parker. Elvis’s estate went into a trust for daughter Lisa Marie, with her mother Priscilla Presley as a trustee. Lisa Marie began what “her lawyers have called her ‘11-year odyssey to financial ruin.’” Co-trustee Barry Siegel explains that “‘Lisa’s continuous, excessive spending and reliance on credit’ drove it into significant debt.” Consequently, the family today owns only 15% of Elvis Presley Enterprises, which operates Graceland (Elvis’s Memphis home).

Lisa Marie died on January 12, 2023, at age 54, estranged from her mother. Following her daughter’s death, Priscilla discovered that in a 2016 document Lisa Marie removed Priscilla (as well as Siegel) as co-trustees, replacing them with Lisa Marie’s daughter Riley Keough (age 33), son Benjamin Keough (who died by suicide in 2020 at age 27), and twin girls Finley and Harper Lockwood (age 14). Priscilla filed a petition challenging the 2016 amendment, as she failed to receive notice while Lisa Marie was alive (as required by the trust), her name is misspelled, it was neither witnessed nor notarized, and she questions the authenticity of Lisa Marie’s signature. Just recently, Priscilla and her granddaughter Riley have reached a settlement whereby Riley will serve as sole trustee and Priscilla will be a “special adviser” to the trust for an undisclosed annual amount. Although the Elvis brand takes in more than $100 million a year, the Presley family receives only 15%. It’s a shame that Elvis’s music legacy continues to be marred by financial disasters, even decades after his death. Lesson: it’s critical to select the right trustee. Imagine if Elvis had named a professional trustee with the skills to manage this situation prudently.

Let’s turn now to another “King,” the “King of Pop.” Michael Jackson’s popularity has soared since his death in 2009 from a fatal overdose of propofol and lorazepam. Based on his rising post-mortem fame, the IRS challenged his estate’s claim that at the time of his death, Jackson’s name and likeness was worth only $2,105. The IRS asserted the publicity rights associated with Jackson’s image were worth $434 million. On this issue, the Tax Court largely sided with the estate, valuing that asset at only $4.15 million. The court held that post-death success was irrelevant, as the value depended on Jackson’s reputation at the time of his death, when he was at a career low. The estate asserted “that his image had been rendered all but worthless by stories about skin bleaching, his obsession with plastic surgery, prescription drug abuse, odd parenting choices—such as covering his children’s faces in black veils or Spider-Man masks in public—and allegations that he molested young boys who visited [his home] Neverland.” Furthermore, he owed $500 million, was on the verge of bankruptcy, hadn’t filed personal income taxes in three years, and more than 60 creditors surfaced claiming he owed them money.

The Michael Jackson IRS tax case hung over the heads of his children until it was finally resolved in 2021, some 12 years after death. In a 271-page opinion, Tax Court Judge Mark Holmes grappled with the issues. “At the peak of his career, Jackson was one of the most famous people on Earth, with some of the most popular records ever released. And since his death, he has been one of the world’s top earning celebrities…. But the tax case turned on the value of Jackson’s public image at the time of his death. His reputation had been badly damaged, and since 1993, Judge Holmes noted, Jackson had no endorsements or merchandise deals unrelated to a musical tour or album.”

Although Jackson’s estate prevailed on the value of his image rights, other famous people should take note. In doing their estate plans, celebrities need to pay attention to Jackson’s “name-and-likeness fight” and recognize that his case “has tax-planning consequences for any actor, musician, politician, or athlete famous enough to earn beyond the grave.” Such is the “toughest issue” in the estate of Prince. “Estate-tax attorneys for Prince…must attempt to put a precise financial value on his name, image, and likeness…. The estate-tax challenge is setting a cumulative value on Prince’s profit potential on the day he died.” Indeed, Prince’s estate went to war with the IRS, as the government asserted that his estate was worth double what the estate’s administrator reported ($163.2 million vs. $82.3 million). They finally settled on a $156 million valuation.

Prince died in 2016 from a fentanyl overdose, setting up not just the IRS war, but also a six-year battle over who would inherit his estate. Why? Because, remarkably, Prince died without a Will. More than 45 people reportedly came forward as potential heirs to the estate, with many claiming to be a wife, child, sibling, half-sibling, or other relative. Suffice it to say it’s been a circus at the courthouse.

In stereotypical fashion, Prince lived a turbulent life. “Like his character in Purple Rain, ‘The Kid,’ Prince clashed with his father.” A young Prince even had to move out of his family home and live with a friend, to get away from his father. “Prince’s relationship with his family was never simple. His parents had children from several marriages, and over the years these eight brothers and sisters fell in and out of favor with their famous family member.” By leaving no Will, it’s highly unlikely Prince’s wealth passed into the hands he intended.

The obvious lesson from Prince’s death is to create a Will. In her Washington Post article “Don’t Do Your People Like Prince Did. Leave a Will,” Michelle Singletary puts it bluntly: “If you don’t have a will, you are being selfish and irresponsible. I know. I’m being harsh. And I mean to be.” She continues: “But get over your misgivings and stop procrastinating. This isn’t just about you…. Prince opens [“Purple Rain”] by saying, ‘I never meant to cause you any sorrow. I never meant to cause you any pain.’ Well, what do you expect will happen when you die not having taken care of your business? Your love song to your family should be your own will.”

Singletary says it so well and persuasively, I won’t even try to improve on her words. Let’s learn from the mistakes of these rock stars and get our estate plans in order.

Marvin E. Blum

Sources:

  • Matt Stevens, As a Film Revives Elvis’s Legacy, the Presleys Fight Over His Estate, N.Y. TIMES, Mar. 9, 2023.
  • Devin Leonard, Michael Jackson Is Worth More Than Ever, and the IRS Wants Its Cut, BLOOMBERG, Feb. 1, 2017.
  • Ben Sisario, Michael Jackson’s Estate Is Winner in Tax Judge’s Ruling, N.Y. TIMES, May 3, 2021.
  • Richard Rubin, What Is Prince’s Legacy Worth? The Tax Man Wants to Know, WALL STREET JOURNAL, Apr. 27, 2016.
  • Keith Harris, Prince’s Heirs Apparent: A Look at the Siblings Who Stand to Inherit His Fortune, BILLBOARD, May 11, 2016.
  • Michelle Singletary, Don’t Do Your People Like Prince Did. Leave a Will, WASHINGTON POST, May 3, 2016.
  • Matt Stevens, Riley Keough to Pay Priscilla Presley to End Family Trust Dispute, N.Y. TIMES, Jun. 13, 2023.
  • Chloe Melas and Alli Rosenbloom, Lisa Marie Presley Leaves Behind a Music Fortune and a Family Dispute, CNN, Feb. 3, 2023.
  • Anousha Sakoui, Priscilla Presley Agrees to Settlement in Dispute Over Lisa Marie Presley Estate, L.A. TIMES, May 16, 2023.
  • Ben Sisario, I.R.S. Says Prince’s Estate Worth Twice What Administrators Reported, N.Y. TIMES, Jan. 4, 2021.
  • Adrian Horton, Prince Family and Advisors Settle Distribution of Singer’s $156M Estate, THE GUARDIAN, Aug. 2, 2022.
  • Daniel Kreps, Prince Estate: Sister, Five Half-Siblings Named Heirs, ROLLING STONE, May 20, 2017.

Elvis Presley, Prince, and Michael Jackson lived messy lives and left behind messy estates. Let’s learn from their fiascos.

Rock Star Fiascos: Lessons from Elvis Presley, Prince, & Michael Jackson Read More »

Retire? Not me!

Today is my 69th birthday. Growing up, I thought I would have retired by now. Everyone was supposed to retire at 65, right? It seems that almost every day someone asks me when I plan to retire. But as I celebrate this birthday today, I have no intention of retiring, ever!

Of course, I’m realistic. When the day comes that my mind or body gives out, I’ll hang it up. I have empowered my partners John Hunter and Amanda Holliday to make that call if I’m unaware. So far, so good. I’m hoping the gene pool I’ve inherited from my mom allows me to mimic her. Thankfully, my mom, Elsie, is 92 and still 100% sharp and going strong!

Since I know I won’t be here forever, I’m making sure my business has a succession plan in place, unlike Logan Roy of HBO’s “Succession” series that I’ve written about. Speaking of “Succession,” WealthManagmement.com ran a follow-up article I wrote about the succession planning failures in the show where I proposed the Mara family, owners of the New York Giants, as basis for the next succession drama. The family and the football franchise have certainly had plenty of sensational headline-worthy happenings to use as inspiration. To read the article, click here.

The U.S. retirement age was set at 65 in 1935. Of course, lifestyles and longevity in 2023 are a world away from 1935. My best friend, Talmage Boston, makes this point in his article, “Baby Boomers are Delaying Retirement, and it’s Not Just Because of Finances” (Dallas Morning News, Nov. 8, 2020). Talmage’s thesis is that “60 is the new 40.”

Furthermore, those fortunate enough to be engaged in a fulfilling career aren’t inclined to walk away while still healthy. Talmage cites examples: cellist Yo Yo Ma, Saturday Night Live producer Lorne Michaels, investment guru David Rubenstein, infectious disease specialist Dr. Anthony Fauci, media mogul Oprah Winfrey, and Supreme Court Justice Ruth Bader Ginsburg (who worked until her death at age 87).

Per Talmage, “deciding when to retire is an issue still on the table, though clarity about it has recently kicked in, thanks to my law school best friend Marvin Blum. Marvin has been one of the leading estate planning lawyers in the country for decades and has a thriving firm. He continues to love his work and enjoys warm-hearted fellowship with his colleagues at the office. Here’s his explanation for why retirement is not on his radar. ‘Staying present and engaged with my estate planning practice and law firm brings me energy and peace at the same time.’” I’m grateful to be able to keep doing what I love. Thanks, Talmage, for including me in such esteemed company and telling my story so generously.

The Wall Street Journal echoes this theme in “When Will I Retire? How About Never” (by Demetria Gallegos, April 20, 2023). Gallegos tells the stories of 16 people who have no intention of retiring, still finding meaning in their careers. I’ll add one more to the list: Stanley Johanson, my UT Law professor and mentor and the man responsible for my own fulfilling career.

It was 45 years ago that I had a “eureka” moment in Johanson’s class and discovered my destiny as an estate planning lawyer. Johanson, about to start his 61st year as a UT Law professor, is still as sharp and charismatic as ever. Like me, the word “retirement” isn’t in his vocabulary. Professor, thanks for turning me onto estate planning and thanks too for the inspiration to follow in your footsteps and wake up every day energized with a purpose.

Marvin E. Blum

Marvin Blum (front row, left of center) is following the example of his mentor, Professor Stanley Johanson, pictured at the celebration of Johanson’s 50th year on the University of Texas Law faculty. Ten years later, Johanson is still going strong and shows no intention of retiring.

Retire? Not me! Read More »

Getting Real—My Daughter’s Sobriety Journey

One week from today is my 69th birthday. But today, August 1, 2023, marks another special family “birthday.” I’m proud to announce that today marks my daughter Lizzy Savetsky’s two-year sobriety birthday, 24 months since her last drop of alcohol. It may shock some for me to express this so openly, but I do so with my daughter’s blessing and encouragement. Lizzy publicly shares her sobriety journey in hopes of reaching and helping someone who also struggles with this disease.

For those who don’t know Lizzy, I urge you to check out her story on Instagram (@lizzysavetsky). Lizzy is an open book. She dedicates her life to speaking out on important causes, especially all things Jewish and all things Israel. She is known internationally as social media’s leading voice to fight antisemitism.

Lizzy even turned her own difficulties with infertility and pregnancy into a movement to destigmatize pregnancy loss. Fueled by her three miscarriages, Lizzy founded Real Love, Real Loss and raised funds to dedicate a Torah to Israel’s front-line soldiers in memory of all the lost souls that mothers carried but never got to meet.

While pursuing her activism, Lizzy became aware that alcohol was not her friend. Lizzy found the inner strength and courage to take up the fight against her demons. In typical Lizzy fashion, she uses her story to spread awareness. Hitting the speaking circuit, Lizzy’s openness is giving hope and saving lives.

In my estate planning work, I am aware that many families are dealing with addiction. I shared previously of a wake-up call I had while attending an annual conference for Family Office Exchange (“FOX”). In the day-long seminar on tax planning, estate planning, investing, and money management, the family office topic that attracted the most interest was addiction. Almost every family attending the conference was dealing with the problem of substance abuse at some level.

I was astounded by the revelation, and it contributed to me shifting my estate planning practice from “head” to “head and heart” planning. Families are hurting. Estate planners have a unique seat at the table to help. The estate planning process is more than a Will. My mission is to expand estate planning into legacy planning and use our tools to help strengthen families.

I join my daughter in being a champion to help families face issues and resist sweeping them under the rug. Lizzy’s courage helps me be a better lawyer. As a grateful dad, I salute you, Lizzy, for living a purposeful life. Your mom and I couldn’t be more proud.

Marvin E. Blum

Marvin Blum salutes his daughter Lizzy Savetsky, today two years into her courageous sobriety journey.

Getting Real—My Daughter’s Sobriety Journey Read More »

What I Learned from the Deaths of My Father and Brother

What positives could possibly come from losing both my father and my brother to pancreatic cancer? A recent column by acclaimed author Arthur Brooks poses an intriguing oxymoron: thinking about your death can actually increase your happiness. Per Brooks, “contemplating your mortality might sound morbid, but it’s actually a key to happiness.” How is that possible?

Brooks says, “Death is hard to think about. We tend to avoid the subject…But when we focus on death, that increases the stakes at play in the present, and clarifies what we should do with our time.” Realizing our days are limited makes us realize how precious they are. It helps us focus on filling our time with joy and meaning. Brooks promotes prioritizing “love and relationships.” He asks, “Are you neglecting your family life today? Your friendships? Your spiritual development?”

Brooks begins his column with the inspiring story of Randy Pausch, the Carnegie Mellon professor who taught his last class on September 18, 2007. In that last lecture, Professor Pausch announced his diagnosis with terminal pancreatic cancer. Although he would soon leave behind a wife and three young kids, his message was “a celebration of life and love…” Pausch was putting on a masterclass in happiness by leaning into the reality of his own death.”

Here’s another story of a 43-year-old who is turning his terminal cancer diagnosis into something positive. In his final weeks, Nick Hungerford, co-founder of Nutmeg which sold for $700 million, is creating the charity Elizabeth’s Smile (named for his young daughter) to support children who lose a parent to terminal illness. He described it as a “‘great privilege’ to ‘feel the love’ of his family and friends despite facing death.”

This gets very personal for me, given that my father and my brother Irwin also died too young from pancreatic cancer. As a parting gift to me, Irwin held onto life long enough to provide blood for genetic testing, dying only moments later. Thankfully, comparing my blood to Irwin’s revealed no known gene predisposing me to cancer. Nevertheless, losing two first-degree relatives to pancreatic cancer still puts me in the “high risk” category. I enrolled in an early detection program at UT Southwestern, and so far my seven annual MRIs have come out clean. As I approach my 69th birthday in two weeks, I don’t take my health or my life for granted. As Brooks teaches, I’m filled with gratitude, and my top priorities are spending time with loved ones and creating memorable moments.

At this year’s Berkshire Hathaway Annual Shareholders Meeting, I asked Warren Buffett to share estate planning advice, and his answer shows he and Arthur Brooks are aligned. Buffett suggests writing your own obituary now and “reverse engineering” to live life in a way that will make that obituary come true. As an assignment from my TIGER 21 group, I actually wrote my obituary. Like Buffett, I recommend it. It’ll set your priorities straight.

In writing my obituary, I was guided by another author by the name of Brooks—David Brooks—and his book The Road to Character. David Brooks helped me distinguish between “Resume Marvin” and “Eulogy Marvin.” The focus of my obituary is not on my resume lines, rather on what really matters in living a meaningful life. On their deathbed, people don’t say they wished they’d worked harder or had more things. According to Arthur Brooks, what they care about is “activities that yield meaning, such as practicing religion, appreciating beauty, or spending more time with loved ones.” I’ve also actually been told by clients on their deathbed that having their estate plan in order provided them peace of mind, the feeling of a parting gift to their family.

Being aware that each of us will one day be gone doesn’t have to be morbid. Let’s use that awareness to make the most of each day, get our affairs in order, and work on creating a lasting legacy. As Arthur Brooks concludes: “Look at the sapling you plant today, and imagine your great-granddaughter sitting under the mature tree.” Let’s go plant a tree that will one day yield fruit and shade for our loved ones, known in Hebrew as an “etz chaim”—a tree of life.

Marvin E. Blum

This old Blum family portrait shows Julius, Elsie, Irwin, and a very young Marvin Blum. Daddy and Irwin both died way too young from pancreatic cancer. Now it’s just Mama and me.

What I Learned from the Deaths of My Father and Brother Read More »

Does This Look Like a Will to You? A Jury Says It’s Aretha’s

It’s alarming how many people die without a Will. I’m particularly shocked how many people of high net worth put off estate planning. By failing to plan, they leave behind a mess for their family. Such is the case with the “Queen of Soul.” Aretha Franklin’s four sons have been battling over her estate since her death five years ago.

At issue is whether any of these were Franklin’s Will:
#1 – 2010 handwritten papers (signed on each page and notarized) found in a locked cabinet.
#2 – 2014 handwritten pages found in a spiral notebook under couch cushions, with multiple scrawlings, crossed-out words, and insertions.
#3 – A draft of a Will she was preparing with her estate lawyer, to which she referred in three voicemail messages months before she died.

If none qualifies as a legitimate Will, Michigan law would divide the estate equally among Franklin’s four sons.

The case went to trial last week. Jury verdict: the document behind “Door Number Two” wins—the 2014 scribbles which her niece discovered under the couch cushions (many months after Franklin’s death) is the official Will.

Now the work begins to decipher and interpret it. To get an idea of the task at hand, look at this excerpt:

The jury concluded that the smiley face paired with “Franklin” represents her signature. “The process of interpreting a deceased person’s intentions from the lines of a handwritten document can be a confusing, contentious process, one that made for a gripping story line in the HBO series ‘Succession.’ In the show’s final season, the family patriarch’s heirs struggled to decode penciled-in addendums to [patriarch Roy Logan’s] last wishes that were found locked in a safe.”1

The 2014 Will changes the outcome from what Michigan law would dictate if no Will were deemed legitimate. The 2014 Will excludes eldest son Clarence Franklin, suffering from a mental illness and under a legal guardianship (though a recent settlement provides him an undisclosed percentage of the estate.) Youngest son Kecalf Franklin is the big winner, receiving more of his mother’s personal assets, including two of her four houses and her cars. Furthermore, the 2014 document omitted a requirement from the 2010 version requiring that sons Kecalf and Edward “‘must take business classes and get a certificate or a degree’ to benefit from the estate.”2

Franklin’s third son Ted White II asserted that the 2010 document signed on each page, notarized, and kept under lock and key should take precedence over papers found in a couch. The jury disagreed. Unsurprisingly, Ted and Kecalf did not appear to speak to each other at the trial.

Consider the pain and disharmony that could have been avoided if only mom Aretha had left a clear expression of her wishes. Out of “R–E–S–P–E–C–T” for your heirs, please do thoughtful, legally-documented estate planning as a gift to your family.

Marvin E. Blum

1 Julia Jacobs, Is Aretha Franklin’s True Will the One Found in the Couch or a Cabinet?, N.Y. TIMES, Jul. 9, 2023.
2 Ed White, Jury Decides 2014 Document Found in Aretha Franklin’s Couch is a Valid Will, ASSOCIATED PRESS, Jul. 11, 2023.

Out of “R–E–S–P–E–C–T” for your family, learn from Aretha Franklin’s mistake and create a clear, legally-documented estate plan.

Does This Look Like a Will to You? A Jury Says It’s Aretha’s Read More »

“I’m Leaving Nothing to My Kids” – Really?

In last week’s post, I conveyed my concerns about the upcoming $84 trillion transfer falling into unprepared hands. This topic was a particular focus of the legacy planning workshops Tom Rogerson and I recently presented in Detroit and Houston.

In those workshops I reported that many parents respond to the concern of wealth ruining their kids by saying they won’t leave anything to their kids. A recent example is a power couple from the entertainment world, Ashton Kutcher and Mila Kunis. Kutcher’s Twitter post that they don’t plan to leave any money to their children ignited a “nepo baby” stir. The debate is that nepo babies born to famous parents benefit from nepotism and get an unfair advantage, risking entitled behavior.

Accordingly, Kutcher “said he and Kunis plan to give their reported combined net worth of about $275 million away to charity rather than their children.” They “don’t want their children to become spoiled and entitled, and want them to be motivated to work hard.” (“Aston Kutcher and Mila Kunis’s plan to leave no money to their children is causing a stir on social media amid the ‘nepo baby’ debate,” available here).

Discussing the concept of disinheriting kids with the workshop attendees, here’s what I reported. I hear this statement from parents often. Though many parents profess that they’ll leave little or nothing to their kids, the reality is that when I read their Wills, it still leaves the bulk of their wealth to the kids. It appears easy for parents to say they’re leaving their kids nothing, but hard to actually pull the trigger. A case in point is Anderson Cooper saying over the years that his mother Gloria Vanderbilt was going to leave him nothing, yet Gloria’s Will said otherwise when she died. Even Warren Buffett admits he’s leaving his children a larger inheritance than he originally claimed.

Given that most parents indeed leave their wealth to their children, the focus needs to be how to prepare heirs for the inheritance coming their way. Leaving money to kids doesn’t have to disincentivize them and steal their drive, if you follow certain steps. Charlie Carr recommends these steps in “How to Avoid Entitlement” (available here).

  1. Help your kids develop a work ethic. Make them work, starting in their childhood, whether in the family business or doing the lawn.
  2. In order for the next generation to gain such a work ethic, they must first see it modeled in the older generations. Take them to work with you to see you have a real job and really work hard.
  3. Make your kids earn their way in the business, working their way up into senior positions.

The other aspect of battling entitlement is to pass down strong family values. I recently attended a Northern Trust Wealth Planning Symposium where Barbara Bush (granddaughter of Pres. George H. W. Bush and Barbara Bush) illustrated how the Bush family instilled values in their heirs. Although famous and powerful, the Bush grandparents modeled humility and service, as well as love of family and gratitude. In restaurants, granddaughter Barbara noticed that George and Barbara would stop and interact with each person on the waitstaff. She shared a powerful story that as children, twins Barbara and Jenna (daughters of Pres. George W. Bush and Laura Bush) were bowling in the White House bowling alley and called the kitchen to bring them two peanut butter and jelly sandwiches. Grandmother (and First Lady) Barbara Bush soon appeared and said furiously, “This is not a hotel; it’s a home!” She made them go straight to the kitchen to apologize. Children of privilege don’t have to grow up spoiled.

For those of us who haven’t consistently delivered the Barbara Bush message to our children, Adrienne Penta offers words of encouragement for “Raising Kids With Wealth” (available here). Penta says it is never too late. “The question is: How do you stop a pattern and change course? The first step is acknowledging that we are on the wrong path. The second step is communicating course correction: ‘As your parents, we don’t think we have set the right tone for how we think money should be used. Let’s rethink it, starting with what matters most to us as a family.’ The conversation starts with values, which can then serve as a north star for a family’s financial plan, including allowances for young children, estate planning, and philanthropy.”

For those of you out there like me who haven’t always delivered the right message to our kids and grandkids, Penta’s words bring comfort. It’s never too late.

Marvin E. Blum

Marvin Blum and Tom Rogerson at Houston workshop, guiding parents on estate planning to create empowered, not entitled, heirs.

“I’m Leaving Nothing to My Kids” – Really? Read More »

When It Comes to Your Family Legacy, Don’t Wish, Don’t Hope, Don’t Dream—PLAN!

Watching an Avis Car Rental television commercial, I heard these words that got my attention: “Don’t wish, Don’t hope, Don’t dream…PLAN!” Ironically, that message also applies perfectly to my initiative to work with families to plan a lasting legacy.

I recently teamed up with my colleague Tom Rogerson to present Family Legacy Planning workshops in Detroit and Houston. In researching and preparing to teach these workshops, I always become the student, learning even more in this vast landscape of helping families build a legacy.

My research focused on the massive wealth transfer that is coming. As members of two aging populations—the “Greatest Generation” and “Baby Boomers”—die over the next couple of decades, it’s projected that $84 trillion will pass down to the next generation. Statistics show that, by and large, this largesse is passing into unprepared hands.

For the first 35 years of my career, my primary focus was to help clients avoid paying the 40% estate tax. Indeed, the opportunities to do so are so effective that many dub the estate tax a “voluntary tax” paid only by those who volunteered to not plan around it. As I said in last week’s post, my poster child for this proposition has often been the Sam Walton family, founder of Walmart and Sam’s Club. If one of the world’s richest families can avoid estate tax, then so can a family of any size of wealth.

In all candor, The Blum Firm has become so good at helping families avoid estate tax that our planning has effectively almost doubled the sizes of inheritance. That’s a good thing as long as the inheritance is put to good use. But, I had some wake-up calls as all too often I witnessed inheritances tearing apart families. So, over the last decade, I have expanded my focus to helping strengthen families and prepare heirs for the inheritance coming their way, what I often call “head & heart” estate planning.

That focus was the driving force behind the Detroit and Houston workshops I taught with Tom Rogerson. I started by reflecting on how estate planning has evolved since I graduated from UT Law School 45 years ago. In illustrating that “It’s Not Your Daddy’s Estate Planning Anymore,” I stressed that estate planning is more than having a Will. Modern estate planning also includes:

  • Planning for incapacity
  • Protecting assets from creditors/divorce
  • Minimize tax (income tax and estate tax)
  • Business succession planning
  • Prenup planning
  • Special needs trusts
  • Charitable planning
  • Living Trust to preserve privacy and avoid probate
  • Ancillary documents (Powers of Attorney, Healthcare Proxy, Living Will, HIPAA Waiver, Declaration of Guardian, Beneficiary Designations)
  • Elder law
  • Red File

After describing how an Estate Plan has expanded, I built on that theme to illustrate how to “Supercharge Your Estate Plan into a Legacy Plan.” Just like an Estate Plan is more than a Will, a Legacy Plan is more than an Estate Plan. Legacy planning is a holistic process aimed at strengthening the family. Aspects of legacy planning include:

  • Identifying family values, purpose, and vision
  • Building the estate plan around the family purpose instead of around money
  • Creating trusts that mentor the beneficiaries to become empowered rather than entitled
  • Preparing heirs to be responsible inheritors
  • Engaging in family enrichment activities and education
  • Opening up communication channels and building trust
  • Establishing a family governance structure
  • Preserving family heritage and traditions
  • Onboarding in-laws and next generations
  • Creating a meaningful family legacy to pass from generation to generation

Legacy Planning recognizes that there’s more to family wealth than money.

Tom and I continued the workshop by offering practical solutions to help families build a Legacy Plan, sharing best practices from successful families. In upcoming posts, I’ll share some of those best practices, along with other highlights from our presentations.

I’ll close this post by sharing how gratifying it is to work with families and witness their success. With permission from a long-time valued client, I’ll share this message Jane sent me:

“Thanks to you, Marvin, for helping our family get off on the right track all those twenty plus years ago. I am so proud of our four children and how they are using their inheritance as well as their own resources to ‘do the most good’ in their own communities—with adult grandchildren following closely behind. My deceased husband would be blown away to know how many people, programs, and projects he has helped as we all used his resources to begin this journey. I especially realize how very fortunate we are to have benefitted from your counsel when I observe and hear the sad tales of others, who apparently received no preparation at all. Thank you for helping our family be a success story!”

Jane also shared that her family, now numbering 34 in size, conducts an annual family retreat each June with close to perfect attendance. Jane, this is music to my ears, and gives me the juice to propel me forward in this important work to help families succeed.

Marvin E. Blum

Marvin Blum with Tom and Cathy Rogerson of GenLeg Co., co-presenting workshops in Detroit and Houston on “Supercharging Your Estate Plan into a Legacy Plan.”

When It Comes to Your Family Legacy, Don’t Wish, Don’t Hope, Don’t Dream—PLAN! Read More »

Welcome Shawn B. Williamson, J.D.

We’re proud to introduce the newest addition to our fiduciary litigation team—Shawn B. Williamson!

Shawn is based in our Houston office. He earned his law degree from South Texas Collee of Law cum laude. Prior to pursuing his law degree, he taught public school in the Houston area for ten years.

He is an experienced negotiator with a focus on probate/fiduciary litigation. His experience also includes probate administration, guardianship matters, a broad range of civil litigation issues, appeals, and property divisions involving agriculture and mineral rights.

Shawn’s expertise has been recognized by Houstonia magazine, most recently as Business Litigation Lawyer of the Year for 2022.

Shawn serves on the Board of Directors for the Henderson Charitable Foundation which serves to enhance the local community through performing arts.
 
Shawn and his wife Kim have two children. In his personal life, Shawn enjoys trying new coffee shops, hiking, metal detecting, competitive board games, and cheering on the Houston Astros—that is, when possible while keeping up with two young children!
 
Please join us in welcoming Shawn!

Welcome Shawn B. Williamson, J.D. Read More »

Learn All About Marvin and Estate Planning in One Hour Podcast

I was recently asked to be interviewed for a one-hour podcast, and I said yes. I’m glad I did. The interviewer is David Spray, a Houston CPA and fellow Longhorn, President of Export Advisors. David created a “get to know Marvin” experience, starting with my eureka moment at UT that directed me into estate planning, my early “big law” days when I saw a gap I wanted to fill, and the creation of The Blum Firm to fill that gap. The podcast tells the story of my career journey from solo practice to now, diving deep into the current “Golden Age of Estate Planning” with tips on how to create a lasting legacy. If you want a snapshot of who I am and what’s hot in the world of estate planning, take a listen at https://www.IC-DISCShow.com/043 or watch the video here.

David’s thoughtful questions gave me an opportunity to share my unique approach to estate planning that gets to the head and the heart of the matter. We talk about the impact of politics and policy, lessons learned from Congress’s recent efforts to empty out much of our toolbox, and the current two-year window before Trump tax cuts vanish. We discuss the “Use it or Lose it” deadline when the $12,920,000 exemption sunsets in half, and how you can “have your cake and eat it too” with trusts that preserve access, control, and flexibility. We make lemonade out of the rising interest rates by revealing tools that actually work better in a higher interest rate environment. We talk about the “win-win-win” world of philanthropy that benefits society, keeps a family connected, and saves taxes, using real-life stories to show how. I’m amazed how much territory we manage to cover in an hour; it’s really a crash course in estate planning.

David also pulls out some personal reflections and stories I rarely share. I reveal some communication challenges that surfaced in our own home during the pandemic, and how Tom Rogerson of GenLeg Co. came to our family’s rescue. Admittedly, I’m a cobbler who discovered my own shoes needed some repair.

David surprised me with this question: “What advice would you give to your 25-year-old self?” I would have told that Marvin to fight the temptation to let my mind race forward and invent lots of “what if’s” to worry about. I had lots of sleepless nights over “what if’s” that never happened. Think of all that wasted energy. And as to the challenges that I never anticipated but actually happened, I worked through all of them just fine. Maybe this hits home with some of you?

The final question is a profound one: “Barbeque or Tex-Mex?” Listen to my shout-out to Joe T. Garcia’s Mexican restaurant where we celebrate many Blum family special times.

I closed the podcast with a thought that I’ll use to close this post: Ten years from now, I hope you’ll look back on 2023 and be proud of the estate planning you did to set your family up for success. The opportunity has never been better. Let’s seize it!

Marvin E. Blum

Marvin Blum was honored to be interviewed on David Spray’s IC-DISC show, providing a heartfelt reveal about estate planning and his own career journey.

Learn All About Marvin and Estate Planning in One Hour Podcast Read More »

Make the Economic Downturn Work for You

When I spoke recently at a Business Owners Conference sponsored by Bank of America/Merrill Lynch, I learned that 50% of owners will sell their business over the next 10 years. Much of the conference was devoted to one primary goal: how to maximize the sales price. When it was my turn, I built on that with a corollary goal: how to minimize the tax bite. The two goals work together, as maximizing the sales price and minimizing tax both operate to leave more in the family’s pocket at the end of the day.

Minimizing tax is aimed at saving both income tax and estate tax. To reduce income tax: we explore Section 1202 Qualified Small Business Stock (QSBS), charitable remainder trusts (CRTs), installment sale techniques, transfers of business interests to charity prior to sale, investing proceeds in Qualified Opportunity Zone deals, and other tools. To reduce estate tax: we turn to “squeeze & freeze” planning. The “squeeze” comes from business entity structures that achieve valuation discounts. The “freeze” involves transferring discounted business interests to trusts, such as Defective Grantor Trusts (DGTs), Spousal Lifetime Access Trusts (SLATs), 678 Trusts, Grantor Retained Annuity Trusts (GRATs), and charitable trusts.

In my speech, I used the Walton family (founders of Walmart and Sam’s Club) as a poster child for avoiding estate tax. Because of the Walton family’s success, many dubbed the estate tax a “voluntary tax.” My thesis is that if the Waltons (one of the world’s richest families) can avoid estate tax, so can you. I followed up with examples of our own clients who erased millions of dollars of estate tax by “squeeze & freeze” planning. Moreover, several of the techniques allow you to: (1) retain control, (2) retain access, and (3) retain flexibility so you’re not locked into an estate disposition that you later wish to change.

In talking to business owners who own 100% of their company, I admonished that unless they engage in tax planning, they actually have a silent business partner who owns 40% or more of their company: the U.S. Government.

Other speakers lamented that we are in an economic downturn. It isn’t October 2021 anymore. With interest rates soaring, the market has cooled considerably. I turned that lament on its head with the counter-intuitive announcement that today’s economic downturn makes now the perfect time to do “squeeze & freeze” planning. The market cooling works to our advantage, as we can now transfer assets out of the estate at lower valuations. This works for not only a family business but indeed any package of investment assets. Instead of being distressed over market conditions, use this as an opportunity. Don’t wait until a recovery to engage in planning. Pre-recovery planning beats post-recovery planning. It is far more tax efficient to plan when values are lower.

Furthermore, there’s no guarantee the techniques we use will be available in the future. Congress came within two votes of shutting many of these tools down in 2021. Had Congress passed that law, those who had already planned would have been grandfathered. Act now and lock in the benefit of today’s tools.

In estate planning, time is not our friend. The earlier you plan, the better. I illustrated this point with the following timeline assuming a $10 million sale with a $1 million gift to charity:

The earlier on the timeline you plan, the bigger the valuation squeeze. Furthermore, making the charitable transfer before the sale, you report $9 million proceeds, less the charitable gift. If you make the gift after the sale, you report $10 million proceeds, less the charitable gift. If you do squeeze planning now, years from now you’ll give yourself a big pat on the back and be proud of the dollars you saved your family by planning early.

My mission is to help families who wish to pass down a business legacy to future generations beat the odds and achieve success. About 90% of U.S. businesses are family-owned, yet the survival of these businesses shrinks to 30% after Generation 2, 12% after Generation 3, and 3% after Generation 4.

For those families who opt to sell the business, I want to help them reach the finish line. The biggest obstacles are not financial, but psychological. It’s hard to part with your business “baby.” For that reason, I closed by urging all sellers of family businesses to focus not only on the transaction, but also on the owner’s transition. As I so often preach, there’s more at stake here than money.

To view a copy of my PowerPoint, “Planning in a Perfect Storm for Business Owners,” click here.

Marvin E. Blum

Marvin Blum’s recent speech at a Business Owners Conference (sponsored by Bank of America/Merrill Lynch) stressed why lower valuations make this the ideal time to do estate tax planning.

Make the Economic Downturn Work for You Read More »

I’m Fort Worth Proud!

I’ve always been one of Fort Worth’s biggest champions. Even going back to my youth when we were known mostly as a “sleepy town,” I was full of local pride. Legend has it that around 1875, a Dallas attorney claimed this place was so quiet that he saw a panther asleep on a downtown Fort Worth street. We embraced that sleepy image and even adopted the panther as a local mascot.

Perusing the Summer 2023 issue of Fort Worth, Inc. magazine which recognizes “The 400 Most Influential People in Fort Worth,” it’s evident that times have changed. I’m honored and humbled to be among this group of community leaders. Fort Worth is now a dynamic, thriving hub of activity. Texas Monthly acknowledges our “gaudy 4 percent increase in population since 2020, bringing the population to 956,709 (number 13 on the list [of the nation’s largest cities]). This makes Cowtown the fastest-growing big city in the country by a wide margin.”

Many may need to read that line again or feel the need to check the article for themselves. In fact, a recent survey asked a focus group to guess Fort Worth’s rank, and the response came in that they thought of us as 50th in size, rather than 13th.

Many long-time residents prefer staying under the radar. Like it or not, the secret is out. We’re still Cowtown but also so much more. A recent marketing campaign dubbed us “Cowboys & Culture,” spotlighting the happy marriage here of rodeo and the arts. I recently completed a 42-year stint as Treasurer of the Fort Worth Symphony, a world-class orchestra. On top of that, we have the Van Cliburn International Piano Competition and fabulous art museums. The list goes on and on.

Even with our growth, Fort Worth remains a warm and welcoming community where we are here for each other. As an estate planning lawyer dedicated to helping clients live a fulfilling life, I stress the importance of being part of a supportive community. Research shows that being connected to others not only improves the quality of life but even our health and longevity. For me, Fort Wort is such a community.

Though some still think we’re just a suburb in Dallas’ shadow, this town “where the West begins” has its own prominent identity. The next time you hear the country tune “Does Fort Worth Ever Cross Your Mind?,” the answer will likely be “Yes!”

Marvin E. Blum

Marvin Blum is proud of his Fort Worth roots and honored to be among the 400 locals recognized by Fort Worth, Inc. magazine. Let’s celebrate all that Fort Worth has to offer!

I’m Fort Worth Proud! Read More »

Succession Planning Tips for Your Business and Your Family

Last week’s post addressed the challenge of transferring an enterprise’s leadership to a successor, whether that enterprise is a business, a royal family, or any family. I gave Queen Elizabeth high marks for doing a better job than Logan Roy of the HBO series “Succession.” I also praised Bernard Arnault (“the world’s richest person”) for his thoughtful process “to pass on the baton, dividing up key roles in the LVMH Moët Hennessy Louis Vuitton empire among his five children.” (Andrew Ross Sorkin, “Family Drama,” The New York Times DealBook Newsletter, May 27, 2023.)

Now that HBO has aired the final episode of “Succession,” author Sorkin predicts that the search is on for the next family succession drama. Many speculate that the fictional Logan Roy was modeled after Rupert Murdoch. Sorkin suggests the aforementioned Arnault dynasty as a likely candidate for the next TV succession drama. He pictures a season finale “inspired by the glitzy reopening of Tiffany after LVMH bought the brand in a turbulent acquisition.” (See last week’s post where I hailed Arnault’s succession process as a role model approach.)

Per Sorkin, other real-life family dramas that could provide the needed dirt for a succession feud include:

  • •The Sacklers: Owners of Purdue Pharma which produced the painkiller OxyContin, who fell from grace for their role in the opioid crisis, even having the Sackler name stripped from a wing of the Metropolitan Museum of Art in New York.
  • The Maras: Owners of the New York Giants, whose split into two factions reached the point that a Venetian blind was installed to divide their stadium luxury suite.
  • The Safras: One of the world’s richest bankers, Joseph Safra cut out son Alberto from his Will, resulting in Alberto now suing his two brothers and his mother.
  • The Kushners: Real estate mogul Charles Kushner’s feud with his brother-in-law landed him in jail, while son Jared married Ivanka Trump and “then raised billions from the Saudis,” and son Joshua married a supermodel.

Speaking to the challenge of getting succession right, in his article “How to Do Succession Better Than Logan Roy,” Miles Nadal offers these tips to help the business leader pave the way:

  • Accept that a transition is inevitable.
  • There are no shortcuts; expect it to take at least three to five years.
  • Identify talent with a different skillset from the founder, as it’s different to maintain an empire than to create it.
  • Begin detaching and delegating.
  • Resist the temptation to intervene.
  • Let them fail; the learning process from solving problems is more valuable than being rescued and right.
  • Put more energy into strengthening the company culture than into teaching the nuts and bolts of running the business. (Remember, “culture eats strategy for breakfast” from my post of April 4th.

In closing, as an estate planner committed to not only helping businesses successfully transition but also helping families do the same, I submit that these same principles apply to every family. As family consultant Matt Wesley teaches, there comes a time when the patriarch and matriarch need to move from being quarterback to being coach.

Marvin E. Blum

Marvin Blum pays homage to Bernard Arnault, owner of Tiffany & Co. and other luxury brands, for Arnault’s thoughtful approach to succession planning.

Succession Planning Tips for Your Business and Your Family Read More »

Who Did “Succession” Better: Queen Elizabeth or Logan Roy?

Finding a successor to fill the business founder’s shoes is a challenge. In Texas, we often recommend choosing the heir apparent early and letting him “ride around in the truck” with the founder for several years. By the time the successor takes over the family “ranch,” he’s ready. Moreover, the rest of the stakeholders have been prepared to accept the successor in that key role.

The most compelling example of “riding around in the truck” is King Charles III. Then Prince Charles “rode around in the carriage” for more than 70 years, being groomed by Queen Elizabeth II for his role heading the monarchy.

Another family of business royalty also deserves praise for getting in front of the transition. It’s the family of Bernard Arnault, owner of Louis Vuitton, Christian Dior, Tiffany & Co., and other luxury brands. Arnault has been grooming his five kids since their early childhood. (“The World’s Richest Person Auditions His Five Children to Run LVMH, The Luxury Empire,” Nick Kostov and Stacy Meichtry, Wall Street Journal, Apr. 19, 2023.)

Arnault drilled the kids in math from early on, even himself studying a math textbook on a flight to Paris after a grueling trip to Asia. “I need to refresh my memory,” said Mr. Arnault to one of his top lieutenants.

The children were encouraged to attend top schools and study engineering. The goal was to develop a rational mindset allowing them to analyze a situation or problem very quickly. Arnault also pairs each of his children with executives who mentor them and keep an eye on their performance. The five kids watch Arnault in action, accompanying him on business trips and negotiations. Now that’s riding around in the truck (or jet)!

Arnault (age 74) is still in the driver’s seat in the truck. LVMH recently raised the retirement age for its chairman and CEO to 80. When the time comes to hand over the wheel, he will choose based on merit. The kids are expected to fall in line. They’ve been taught from a young age to work through disagreements and put the interests of the company first.

Here’s the status of Arnault’s five, each filing a key role:

  • Oldest child (and only daughter) Delphine (48) is CEO of Christian Dior.
  • Antoine (45) is CEO of the company that holds the family’s stake in LVMH.
  • Alexandre (30) is Executive Vice President of Tiffany & Co.
  • Frederic (28) runs Tag Heuer watch brand.
  • Jean (24) is Director of Marketing & Development at Louis Vuitton’s watches division.

Unfortunately, in the world of business succession, Arnault is an outlier. Most media accounts reveal stories of families in disarray after the founder dies, with no one designated or prepared to succeed. The HBO hit series “Succession” is a fictional case-in-point, which just aired its last episode on Sunday. Each week, millions tuned in “to watch the entire Roy family scheme, plot, and backstab their way to replacing the company’s patriarchal founder,” Logan Roy. (“How to Do Succession Better Than Logan Roy,” Miles S. Nadal, Quartz, Mar. 6, 2023.)

Author Nadal draws parallels to Shakespeare’s King Lear, Macbeth, Coriolanus, and Hamlet, other fictional examples of “the brutal realities of succession.” Perhaps Queen Elizabeth II learned lessons from fellow countryman Shakespeare and became determined to get it right. She was certainly a better role model for succession than “Succession’s” Logan Roy.

Marvin E. Blum

King Charles was groomed early on to be successor to the throne, shown here 54 years ago, following his investiture as Prince of Wales, riding around in the carriage (the royal version of a “truck”) next to Queen Elizabeth and her ever-watchful eye.

Who Did “Succession” Better: Queen Elizabeth or Logan Roy? Read More »

Grateful for My Strong Family “Stock”—The Story of My Uncle Joe Weinstock

My son Adam is a voracious reader. He often sends me articles that serve as inspiration for my own writings. One recent example was the obituary of an American immigrant success story, bringing me a rush of memories of another American immigrant success, my Uncle Joe Weinstock. May is Jewish American Heritage month. In honor of that observance, I write this tribute to a pillar of Jewish American Heritage, my Uncle Joe.

Uncle Joe had no kids, but without question, he was the patriarch of our family. My own success would not have been possible without my heritage from him. Indeed, I wouldn’t even be alive were it not for him.

The article Adam sent me was about the death of John Pappajohn, not the pizza guy but an insurance executive turned venture capitalist. Pappajohn emigrated to the US from Greece. “Showing an early entrepreneurial impulse, he scavenged for metal, rugs, building materials or other scrap he could sell,” (James R. Hagerty, “John Pappajohn, Iowa Venture Capitalist Who Focused on Medical Plays, Dies at 94,” Wall Street Journal, May 5, 2023.) His father died when John was 16, leaving John to support his mom and younger brothers Aristotle and Socrates. Pappajohn’s work ethic and ingenuity rewarded him with wealth, which he used for greater good by donating $100 million to philanthropic causes. In addition to Pappajohn’s immigrant work ethic and philanthropy, two more things about him conjure up Uncle Joe in my head: (1) Pappajohn wore a “PMA” lapel pin, standing for Positive Mental Attitude; and (2) he described himself as the “rah rah” guy, always inspiring and motivating others. In so many ways, Uncle Joe was the Jewish immigrant version of John Pappajohn.

Uncle Joe (actually Yosef, Hebrew for Joseph) was born around the turn of the 20th century in a tiny village in Ukraine called Polona, in the Volyn region, heartland of chasidic Judaism. He was the third of six children born to Eliezer and Leah Weinstock. It was a difficult time for Jews in Ukraine. After a pogrom roughing up the Jews and poking out Eliezer’s eye, Joe saw the handwriting on the wall and embarked on a ship for America. Instead of disembarking in Ellis Island, Uncle Joe’s ship was part of the “Galveston Movement,” funded by New York philanthropist Jacob Schiff to address overcrowding of immigrants in the Lower East Side and the resultant antisemitism. A young, penniless, Joe was met at the Galveston, Texas pier by Rabbi Henry Cohen and the Jewish Welfare, who placed him in Troy, Alabama. Imagine the challenges faced by a religious European Jew in Troy, Alabama, but Uncle Joe managed to remain an observant Jew his entire life. He got a horse and wagon, going from house-to-house peddling fruit. His “Positive Mental Attitude,” grit, and ever-present smile made him successful.

Ten years later, after World War I, Uncle Joe had saved up enough money to bring over his parents and three younger siblings (including my grandmother Pauline, my mother Elsie’s mother). He didn’t have enough money yet to bring over his two older siblings Elke and Enoch, by then married in Europe. Then it became too late. Although Joe’s mother Leah (who shared a bed with my mother Elsie) prayed nightly that Elke and Enoch were still alive, Hitler got to them before Joe could bring them to America.

Joe ran an ad for a wife in the Yiddish newspaper“Volyner yunger man zucht Voliner maidel,” (young man from the Volyn region seeks a young woman from the same area, in other words a religious wife). Rose Pass from Columbus, Ohio answered the ad. They married and settled in Montgomery. (While at it, they matched up Rose’s sister Ruth with Joe’s brother Moshe— two for the price of one ad!)

Joe started a furniture store and bought rent houses. He never worked on the Sabbath, and he opened and closed the synagogue every day. Uncle Joe always had a song in his heart and on his lips. He too was a “rah rah” guy, lifting up others everywhere he went. In my mind, I can hear him singing one of his favorites, “Adon Olam,” (Lord of the Universe). He was always happy, famously saying, “I never had a bad day in America.”

Beginning in the 1950s, Joe and Rose made an annual pilgrimage to Israel for the High Holidays. When the local newspaper, The Montgomery Advertiser, interviewed him about those trips, they asked, “Do you have family in Israel?” Joe’s answer: “Yes, all the children of Abraham, Isaac, and Jacob are my family.”

Joe supported Israeli businesses every chance he could. Once in Tel Aviv, he entered a tailor shop and asked the proprietor if he was a good tailor. The man rolled up his sleeve and showed his concentration camp number, answering that his tailoring skills were how he managed to survive the Holocaust. Joe bought a new suit from that tailor every year.

In 1967 at the outbreak of the Six Day War, Uncle Joe rallied the gathering at the country club in Montgomery. Uncle Joe’s pitch: “You all know the story of Joseph in the Bible. Joseph was a Jewish boy who went to Egypt and got rich. Did he forget his family in Israel? No, he took care of them. We, too, have to help our brothers and sisters in Israel.” Although Joe wasn’t rich, he started the pledging at $5,000 (a huge sum to him, especially in those days), and the crowd followed suit. They had to at least match Mr. Weinstock. He also regularly mailed small amounts to families all over Israel. “I want them to have a challah for Shabbos.” His favorite charity was the Jewish National Fund, site of a tree planting known as the Joseph and Rose Weinstock Grove in Israel. Joe was doing his part to make Israel’s desert bloom.

As part of my Family Legacy initiative at The Blum Firm, I speak often of the importance of preserving family heritage. Knowing stories of our ancestors’ resilience gives us strength to overcome adversity when it strikes in our lives. My daughter Lizzy Savetsky recently gave a speech with that message: “When heavy winds blow our way, it’s the deeply rooted who aren’t blown away. What does that mean to me? My deep roots come from my ancestors. That’s the source of my strength and survival, that I want to pass down to my three children.” Lizzy and I and our whole family are grateful to Uncle Joe for giving us deep roots. Our family has the roots to survive, because we know we come from “good stock,” WEINSTOCK.

Marvin E. Blum

Marvin Blum’s Uncle Joe Weinstock (left) was the family patriarch who passed down an empowering legacy to his heirs, seated here next to his father-in-law, Mr. Pass, and his wife Rose.

Grateful for My Strong Family “Stock”—The Story of My Uncle Joe Weinstock Read More »

Winning the Lottery at “The Woodstock for Capitalists”

This past weekend, the Fort Worth Report published an article on my question for Warren Buffett at this year’s annual Berkshire Hathaway Shareholders’ Meeting—often called “The Woodstock for Capitalists,” according to reporter Bob Francis.

Francis equated my being chosen to ask a question—the first question, in fact—to winning the lottery. As soon as I was handed my numbered ticket for a chance to ask a question, I knew I would be lucky. I looked down at it and I told the guy right then, “This is my year.” I said, “I’ve got this.” And he looked at me and said, “How do you know that?” I said, “Because you just handed me my lucky number.” He’d handed me number 18.

My question for Buffett was about the problem of most parents failing to prepare their kids for the inheritance coming their way. In particular, if the estate includes a family business, most parents fail to do business succession planning to plan for who will run the business on the day when, not if, the founder is no longer there to run it.

The article, “Fort Worth attorney Blum draws a lucky number at ‘Woodstock for Capitalists,’” is here. My post upon returning from the meeting, with additional information, is available here.

Marvin E. Blum

Marvin Blum “won the lottery” at this year’s Berkshire Hathaway Shareholders’ Meeting.

Winning the Lottery at “The Woodstock for Capitalists” Read More »

Pearls of Wisdom from Omaha

For many years, our family has been enjoying an annual pilgrimage to worship at the altar of the Oracle of Omaha. Saturday is jam-packed with advice from Warren Buffett (92) and Charlie Munger (99), the sharp-minded and sharp-tongued duo. Each person attending draws his own pearls of wisdom. Here are a few of my golden nuggets.

The day begins with a hilarious video production. This year’s film featured Oscar-winning actress Jamie Lee Curtis, spoofing with Buffett about having a sexual obsession with Munger. Curtis chided that Berkshire Hathaway is a lousy name and should be re-dubbed “Mungeritaville.”

This year’s meeting was streamed live on CNBC. Buffett lamented that the telecast was airing alongside a competitive broadcast, the coronation of King Charles. As consolation, he anointed Berkshire Hathaway’s own royalty: “We’ve got our own King Charles,” the inimitable Charlie Munger.

As I wrote in last week’s post, I was honored with the opportunity to ask my third question, dealing with the importance of preparing heirs for the inheritance coming their way. Buffett delivered an answer I labeled a “Master Class in Family Legacy Planning.” See last week’s post for details (link).

In his typical sharp-edged tone, Munger opined that “a vast diversification of common stocks is an insane idea.” He considers it better to own your three best ideas, admonishing to “ignore advice that leads to the ‘de-worse-ification’ of portfolios.”

Continuing the theme of this year’s annual letter to shareholders, Buffett acknowledged he’s made a lot of investment mistakes, but got a few things right. “Try to get a few things right and sooner or later you’ll have a lollapalooza.” But try to avoid mistakes so big they take you out of the game. “Spend less than you earn, and practice deferred gratification.”

Speaking of making the right decision, Buffett announced my personal favorite of the day: “If you make the right decision on a spouse, you’ve won the game.” He also captured my heart with this investment advice: “Your best investment is always in yourself and in your own earning power.” Buffett added this advice for a meaningful life: “Write your own obituary and try to figure out how to live up to it.” He described the process as “reverse engineering,” writing your obituary now and then living so as to make your obituary come true.

Regarding artificial intelligence (“AI”), the duo acknowledged it’s good for searching all the legal opinions that have been issued over prior decades. But Buffett asserted that AI “can never replace Charlie” and can’t tell jokes (at least not as good as Charlie’s jokes).

Capitalism is a success story, versus an economy like Russia’s where, per Charlie, “they pretend to pay us and we pretend to work.” Moderate social safety nets are needed, but the growth from capitalism helps those at the bottom better than a wide social safety net.

Speaking almost as if directly aimed at me, Buffett warns that even if someone could sell their company at age 65 and make a lot of money, why would you want to retire at 65? Obviously, neither Buffett nor Munger ever wanted to retire, and neither do I!

I always enjoy their foray into lessons for living a meaningful life. Don’t do any unkind acts, or you’ll end up like plenty of people who die with money, but without friends. In being kind, “praise by name, criticize by category.” Avoid toxic people. “Get them the hell out of your life, and do it fast!” If the toxic person is in your family, “it’s a very tough problem,” but do your best to minimize them in your life.

Per Charlie, Elon Musk “likes taking on the impossible job. We’re different. We like taking on the easy job. We don’t want that much failure.” This was in response to a question quoting Charlie as saying he’d rather hire someone with an IQ of 130 who thinks it’s 120, than someone with an IQ of 150 who thinks it’s 170.

Discussing Berkshire’s investment in NetJets, Buffett teased about Munger’s frugality. Charlie used to fly coach from Los Angeles to Omaha for the annual meeting. He said he was surrounded by a lot of rich Berkshire shareholders also in coach, who would clap when Charlie entered the coach section. Warren joked that they couldn’t get Charlie to fly private on NetJets until they put a coach seat in the plane for him.

Charlie also quipped that he stopped practicing law in 1962. “The modern law practice in a big firm is like a pie-eating contest. If you win, you get to eat more pie.” He advised lawyers to stay away from that kind of law firm. I couldn’t agree more! That’s precisely why I created The Blum Firm, providing a quality of life and culture where our team can thrive.

This sampling gives you a taste of the quick wit and brilliance of the two geniuses. What a privilege to learn from them! Charlie turns 100 next year, and Warren will be 93. If you’ve ever considered going, I suggest you join us in Omaha next year. As my son Adam warns me whenever I’m tempted to skip a year, it could be the last one. I certainly hope not!

Marvin E. Blum

Marvin, Laurie, and Adam Blum with a cardboard cutout of Warren Buffett enjoying the 2023 Berkshire Hathaway Annual Meeting.

Pearls of Wisdom from Omaha Read More »

A First at The Blum Firm: Boston Attorney Christopher Beck’s Swearing-In Ceremony

We recently experienced a first at The Blum Firm. For the first time in the firm’s 43-year history, we conducted a swearing-in ceremony here to admit an attorney to the State Bar of Texas. It was a big deal, and we treated it as such.
 
Christopher Beck, a tax attorney practicing in Boston for the last 15 years, moved his family to Texas to join us at The Blum Firm. A member of the Massachusetts Bar, Christopher speedily completed the Texas requirements to add another Bar membership to his resume. Upon notification of his acceptance, the last step in the process was for Christopher to accept the oath of office to become a Texas lawyer. I was honored when he asked me to administer the oath. I’d never done that before. What a privilege to officially welcome a man of such outstanding character and skills to the Texas Bar!
 
We feel especially fortunate to add Christopher to our team. The Blum Firm specializes in estate and tax planning. As the IRS receives an $80 billion infusion to “beef up” enforcement, we saw the need to likewise “beef up” our tax controversy practice, in anticipation of a more active IRS. Christopher brings substantial experience to The Blum Firm in IRS audits and tax litigation, as well as skills in domestic and international tax planning. His expertise in cross-border transactions is especially timely and welcome, given the increase in the number of our clients engaging in inbound and outbound activities. In this digital age, it’s a smaller and more mobile world. The Blum Firm stands ready to advise on all the tax-related issues associated with that mobility.
 
The highlight of the swearing-in ceremony was witnessing the pride on the faces of Christopher’s wife, young daughter, and young son. Those kids absorbed the significance of watching their dad pledge to devote himself to an honorable career. It was a life lesson they’ll never forget and will undoubtedly influence their own career devotion someday. As I recently learned from Warren Buffett, our kids are watching us more than listening to us. Those two wide-eyed youngsters were clearly watching.
 
To top off the celebration in true Blum fashion, we ended with a dessert buffet. When I asked what his kids like for dessert, Christopher answered “anything chocolate.” Those are some smart kids! Maybe they’ll one day have their own swearing-in ceremonies at The Blum Firm. I hope I’m around to administer the oath.
 
Marvin E. Blum

A First at The Blum Firm: Boston Attorney Christopher Beck’s Swearing-In Ceremony Read More »

My Third Question to Warren Buffett and “King Charles” Munger

Our family’s annual pilgrimage to the Berkshire Hathaway Annual Meeting includes an early Saturday ritual. Those wishing to ask Warren Buffett and Charlie Munger a question head to a lottery drawing. The few holders of winning tickets get the opportunity. This year was my third time to get lucky and be chosen to ask a question.

Ten years ago, my son Adam convinced me to enter the lottery for the first time. I had beginner’s luck. My first question to Buffett was about his estate plan, seeking an answer to his famous thesis: “I want to leave my children enough so that they can do anything, but not so much that they can do nothing.” I asked: “How much is that?”

Buffett answered: “I think that more of our kids are ruined by the behavior of their parents than by amount of the inheritance. Your children are learning about the world through you and more through your actions than they are through your words. From the moment they’re born, you’re their natural teacher. And it is a very important and serious job, and I don’t actually think that the amount of money that a rich person leaves to their children is the determining factor at all. In terms of how children turn out, I think that the atmosphere, and what they see about them and how their parents behave are more important.”

Two years later at the 2015 Annual Meeting, I got lucky again. Sticking with the subject of estate planning, my second question to Buffett was about the role of philanthropy in his estate plan, including his decision to sign Bill Gates’ “Giving Pledge.” I said: “Today, I’d like to ask about your decision to sign The Giving Pledge, promising to give away at least one-half of your assets to charity. Can you talk about your views on philanthropy and how to balance leaving an inheritance to your family versus assets to charity?”

Buffett’s answer was: “Well, that depends very much on the individual situation, and actually I’ve promised to give over 99% in my case, but that still leaves plenty left over. …So the question is, ‘where does it do the most good?’ And, I think limited amounts do some real good for my children, so I’ll be sure that they have that or they already have it to a degree. And on the other hand, when I look at a bunch of stock certificates in a safe deposit box that were put there fifty years ago or so, they have absolutely no utility to me. Zero. They can’t do anything for me in life. …So, here these things are that have no utility to me, and they have enormous utility to some people in other parts of the world. They can save lives. They can provide vaccines. They can provide education. They have all kinds of utility. So why in the world should they sit there for me or for some fourth generation of great-grandchildren or something when they can do a lot of good now? So that’s my own philosophy on it. But I think everybody has to develop their own feelings about it and should follow where they go. I do think they might ask themselves ‘where will it do the most good?’”

At the following year’s Annual Meeting and each one after that, I continued entering the lottery with no success, until this year. This year, my ticket number was “18,” and I knew it was going to be my day. Eighteen is my lucky number. In Hebrew, the number 18 is represented by the letters Chet (8) and Yud (10), which spells the word “chai,” the Hebrew word for “life.” Upon receiving ticket 18, I thanked the lottery guy and assured him it was my year to win. As I predicted, the number drawn was indeed “18,” and my adrenaline started rushing.

It is intimidating to stand in the spotlight in a room of some 50,000 people, with cameras rolling on live CNBC TV coverage and hear your voice echoing and reverberating as you nervously power through your question. While asking, I was twice interrupted with applause, boosting my confidence. My question this year continued the estate planning theme, focusing on preparing heirs for an inheritance. Even before I finished my question, Buffett jumped in to answer, eager to weigh in. He and Munger then spoke eloquently for more than seven minutes, providing a master class in Family Legacy Planning, my estate planning passion. I am gratified and honored by their enthusiastic response.

Here’s a summary of Buffett’s response to this year’s question as reported by Yahoo Finance: “Responding to a question from an estate planning attorney [Marvin Blum], Buffett said it was imperative to include your heirs in your estate planning. According to Buffett, if the first time children are hearing about the thoughts and wishes of the deceased [parent] is when they read the will, the parents have made a terrible mistake. Buffett went on to suggest that if you intend your heirs to act responsibly and ethically with your bequest, it’s important that you live the ideals you want to pass on to them.”

This year’s “Woodstock for Capitalists” meeting coincided with the coronation of King Charles III, the new monarch of the United Kingdom. Buffett had earlier teased that we had our own King Charles—“King” Charlie Munger. I tied into the other King’s crowning, citing then Prince Charles’ tutelage as the ultimate example of preparing an heir to take over the family kingdom. To use a Texas idiom, Prince Charles “rode around in the truck” (or should I say “carriage”) with his “mum” for more than 70 years, observing and learning from Queen Elizabeth’s commitment to duty and service. Let’s draw inspiration from the British Royal Family and follow advice from Berkshire’s royalty to prepare our heirs for the inheritance coming their way. Long live the Kings, both King Charles III and “King” Charlie Munger, now 99 years old, going strong and as sharp as ever.

Each of my three questions at the Berkshire Hathaway Annual Meetings generated significant media coverage. The press is evidently eager to hear the “Oracle of Omaha’s” wisdom on estate planning, a welcome break from all the questions about investing.

  • Information on the media coverage of my questions to Warren Buffet over the years is available here.
  • A transcript of the Q&A for this year’s question, including Buffett’s complete answer, is available here.
  • CNBC was the exclusive host of this year’s meeting. My exchange with Buffett is available as part of CNBC’s recording of the morning session available here, beginning at the 56:24 mark.
  • A transcript of my 2015 question and Buffett’s complete answer is available here.
  • A transcript of my 2013 question, along with Buffett’s complete answer and the subsequent discussion is available here.

In the words of Tevye in Fiddler on the Roof and symbolic of my lucky “chai” 18, “To life, to life, l’chaim!”

Marvin E. Bum

All eyes were on Marvin Blum at the 2023 Berkshire Hathaway Annual Meeting as he poses a question to Warren Buffett and Charlie Munger, the third year Blum was selected as one of the attendees chosen to ask a question.

My Third Question to Warren Buffett and “King Charles” Munger Read More »

The Inspiring Story of Rose Blumkin

As our family embarks this week on our annual pilgrimage to Omaha for the Berkshire-Hathaway Annual Meeting, it brings to mind my all-time favorite example of a family business sale. In recent posts, I addressed the challenges owners face in selling their family business “baby.” Those are choppy waters to navigate. Not all ships complete the voyage successfully. The story of Rose Blumkin’s sale to Warren Buffett is especially legendary.

Tales abound how a small company with a quality product grew by mega proportions after acquisition by Berkshire-Hathaway. Mrs. See’s candy is a case-in-point. Today’s focus is on another business matriarch anointed by Buffett: Rose “Mrs. B” Blumkin.

Berkshire bought 90% of Mrs. B’s Nebraska Furniture Mart for about $55 million in 1983. Buffett declared that Mrs. B, an “89-year-old carpet sales woman would ‘run rings around’ the best corporate executives and business school graduates in America.” (Theron Mohamed, “Warren Buffett: Elderly Carpet Seller Better than America’s Best CEOs,” Business Insider, Dec. 26, 2022.) As usual, Buffett’s prophecy proved true.

Like my four grandparents, Mrs. B immigrated from Eastern Europe as a young child, just in time to escape the Holocaust. She arrived in America penniless and not knowing a word of English but loaded with wit, wisdom, and a tireless work ethic. Similar to my Uncle Joe who pushed a fruit cart to send money home to bring over his parents and siblings, young Rose did the same by selling second-hand clothing.

In 1937, Rose sold all her home furnishings and appliances to raise $500 to open Nebraska Furniture Mart. Over the years, her children and grandchildren joined her, growing the business to today’s sales of $1.6 billion and more than $80 million in after-tax profits.

Buffett saw the writing on the wall in 1983 and convinced Mrs. B to cash out. She reluctantly agreed to sell, citing two reasons: (1) to create liquidity to pay high estate taxes; and (2) to avoid having her kids squabble over the company after she was gone. Rose and her family stayed on to run the business.

The story gets better. After she retired at age 95, Mrs. B found she couldn’t stand retirement. (Is anyone surprised?) Only months later, she opened a competing store across the street called Mrs. B’s Clearance and Factory Outlet and quickly grew it to Omaha’s third largest carpet store. Buffett couldn’t resist—he bought her new store within five years and merged Mrs. B’s two companies. As author Mohamed points out, Buffett “joked that he wouldn’t let Mrs. B retire again without signing a non-compete agreement.”

Rose Blumkin worked until 103 and then died a year later in 1998. Retiring was probably a mistake. Her grandchildren and great-grandchildren now run Nebraska Furniture Mart.

As we now head to Omaha, I’m inspired to go pay tribute to Mrs. B’s legacy.

Marvin E. Blum

Rose Blumkin, pictured on her scooter in her Omaha carpet store, ran (or wheeled) rings around other CEOs, enticing Warren Buffett (right) to buy her store. Blumkin grew Nebraska Furniture Mart into the nation’s largest furniture store before retiring at 103.

The Inspiring Story of Rose Blumkin Read More »

Planning in the Perfect Storm

Marvin Blum and Frank Leffingwell spoke at Business Owners Conferences in April 2023 sponsored by Bank of America/Merrill Lynch on “Planning in a Perfect Storm.” Knowing that 50% of owners will sell their business over the next 10 years, Marvin and Frank focused on the goal of minimizing the tax bite to leave more in the family’s pocket at the end of the day.

Slide Deck: Planning in a Perfect Storm (Marvin Blum, 4-26-2023)
Slide Deck: Planning in a Perfect Storm (Frank Leffingwell, April 27 2023)

Planning in the Perfect Storm Read More »

Don’t Beat Yourself Up Over Investment Mistakes

When Warren Buffett’s annual letter to shareholders goes out, my son Adam is among the first to devour every word and send me highlights. As the Blum family prepares to leave next week for our annual pilgrimage to the Berkshire-Hathaway Annual Meeting, I want to share some of “Warren’s Wisdom” with you. We all make investment mistakes along the way. In Buffett’s annual letter, he owns up to his mistakes. I learned an important lesson: Don’t be hard on yourself.

Berkshire fans glorify the investment acumen of Buffett (92) and his partner Charlie Munger (now 99!). If only we had their investment skills! But Buffett humbly shares the reality in his annual letter: “Over the years, I have made many mistakes… In 58 years of Berkshire management, most of my capital-allocation decisions have been no better than 50-50.” The key is to be resilient. Stay the course, and continue taking measured risks. Don’t retreat to a “disappointing investment” like a “high-grade 30-year bond.”

Buffett modestly confesses that in those 58 years, he’s made only “about a dozen truly good decisions—that would be about one every five years.” So, for those of you (like me) who have made some bad investments over the years, don’t beat yourself up. Buffett concludes: “The lesson for investors: The weeds wither away in significance as the flowers bloom. Over time, it takes just a few minutes to work wonders. And, yes, it helps to start early and live into your 90’s as well.”

Consistent with this lesson, I learned that investment guru Richard Rainwater (the pride of Fort Worth, may he rest in peace) had a similar track record. Rainwater’s management of the Bass family money got off to a rocky start. Sid Bass revealed: “For the first two years, every single deal I did with them, I lost every single penny.” (Skip Hollandsworth, “Richard Rainwater—The Invisible Man Behind One of the Year’s Biggest Deals,” Texas Monthly, September 1996).

Rainwater ultimately grew the Bass’s $50 million oil inheritance into a $5 billion fortune (Hui-yong Yu, “Richard Rainwater, Billionaire Texas Investor with Foresight, Dies at 71,” The Washington Post, Sept. 28, 2015.) Yu discloses that those early losses ate up $20 million of the $50 million inheritance.

At this year’s TIGER 21 annual conference, real estate mogul Sam Zell added further support to this thesis. Not every deal will be a home run, or even a triple, double, or single. “Baseball players get paid $25 million if they get a hit one out of every three at bats.” Just being right on a portion of deals will more than offset the losers.

For those like me who have missed plenty of at-bats over the years, I hope this makes you feel better. We’re in good company. And remember, as I’ve quoted my mentor Jay Hughes in past posts, financial capital is only one of five sources of wealth. Don’t minimize the importance of human, intellectual, social, and spiritual capitals. I’ll punctuate that message with the brilliance of my wife of 44 years, Laurie: “In measuring your success in life, dollars and cents isn’t the right way to keep score.” Now I really feel better!

Marvin E. Blum

Marvin Blum’s son Adam Blum, pictured here with Warren Buffett, as the Blum family prepares for its annual pilgrimage to attend the 2023 Berkshire-Hathaway Annual Meeting.

Don’t Beat Yourself Up Over Investment Mistakes Read More »

Spring Cleaning: Time to Clean Up Mistakes in Your Will

Spring has sprung, and with it comes the perfect time for some spring cleaning. For me, that takes me outside to spruce up my yard (or as we call it in the Blum family, “Marvin’s Garden”). But spring is also the ideal time to do an estate plan clean-up.

Cheryl Winokur Munk offers some great tips in “The Biggest Mistakes People Make With Their Wills” (Wall Street Journal, Feb. 16, 2023). Here are some of her ideas, along with a few extra tips of my own:

1. Not having a Will: The statistics are shocking on the number of people who don’t have a Will, even among high-net-worth individuals. Among the many who overlook having a Will are young adults. If you or your kids are 18 or over and don’t have a Will, the state has one for you, and you won’t like it.

2. Procrastinating: Though it’s tempting to keep putting off estate planning, time is not our friend. The pandemic reminded us that we’re all mortal. Moreover, tax laws are likely to change, taking away some of the best tools in the estate planner’s toolbox. Note that the $12,920,000 exemption cuts in half at midnight December 31, 2025, so it’s a “use it or lose it” situation.

3. Leaving an Inheritance Outright Instead of in Trust: In addition to the risks of passing assets into unprepared hands, leaving an estate outright exposes it to creditors, divorce, and estate tax. A carefully crafted trust can protect the inheritance for future generations.

4. Overlooking Digital Assets: Take steps to make sure someone has your passwords and private keys so they can navigate your digital wallet when you’re gone.

5. Not Updating Regularly: Your assets change, as do the people in your life, so make sure to check whom you’ve named as beneficiaries, guardian for your kids, executor, and trustee. The Blum Firm’s rule-of-thumb is to update your Will at each presidential election.

6. Failure to Change Beneficiary Designations: Many forget that certain assets pass outside a Will, such as life insurance, retirement benefits, and pay-on-death bank accounts. Those “non-probate” assets pass to the person you’ve named on a Beneficiary Designation Form, regardless of what your Will says.

7. Not Drafting for Flexibility: Circumstances change, so don’t set things in stone. Make bequests with formulas or percentages instead of dollar amounts. Give beneficiaries a Special Power of Appointment and designate Special Trustees with power to amend.

8. Your Will Is a Public Document: Preserve privacy with a simple “Pourover Will” that leaves your assets to a Living Trust (which is a private document). Retitling assets into the Living Trust while you’re alive avoids probate.

9. Don’t Forget a Charitable Inheritance: Leave your family two inheritances—a trust to provide for their needs, as well as a charitable vehicle they can use to benefit causes meaningful to your family. In addition to carrying on your tradition of giving, such a charitable inheritance creates powerful family “glue.”

10. Leaving Your Heirs in a Cash Crunch: Engage in “squeeze & freeze” planning to reduce estate taxes and explore life insurance solutions to provide needed liquidity.

11. Don’t Ignore Family Dynamics: Face reality about your family and create a thoughtful plan that heads off resentment and conflicts. Engage in facilitated conversations to open up channels of communication and build trust. Otherwise, when G-1 dies, these simmering issues tend to erupt like a volcano.

12. You Need More than a Will: A Will only tells who inherits your assets. Add a Red File to provide other information such as assets, key contacts, and business succession instructions; an Ethical Will (or Legacy Letter) to speak your heart to your heirs; and a FAST Trust to fund family meetings, family enrichment, and travel to foster ongoing family connection.

Let’s enjoy spring and all the promise it offers us. Here’s hoping these tips from “Marvin’s Estate Planning Garden” will inspire you to do some important spring cleaning.

Marvin E. Blum

Caption: For Marvin Blum, spring cleaning means sprucing up “Marvin’s Garden,” but it’s also a great time to spruce up your estate plan and clean up any mistakes in your Will.

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“Can We Talk?” It’s Time to Be Candid About Family Dynamics

These were my opening words to the Dallas Council of Charitable Gift Planners: “Can we talk?” (spoken in a New York accent, channeling comedian Joan Rivers and her famous opening line). Having witnessed case after case of what happens when an inheritance falls into unprepared hands, I know all too well the disruption it causes in a family. Joan was joking, but this is no laughing matter. It’s time to “talk” candidly about family disharmony.

I’ve been helping families plan and pass down estates for 45 years. I can say with authority that, in one way or another, every family deals with challenging family dynamics. When you throw an inheritance into that mix, it’s like adding fuel to the fire. As the famous quote goes: “You never really know a person until you’ve shared an inheritance with them.”

Here are a few stories I’ve witnessed that served as wake-up calls to shift me from “head” estate planning to “head & heart” estate planning:

  • A well-meaning grandparent left a trust that doles out a monthly allowance to a grandchild, who now lives a sad and unproductive life in the grandparent’s mansion. The grandchild has no reason to get out of bed in the morning.
  • Siblings at war over control of a family business, a business that has provided generously for three generations, yet is now the source of intense jealousy and hate.
  • Battling siblings challenging a deathbed Will that left family legacy assets all to one child instead of equally to all three.
  • Attending a conference for owners of Family Offices, where the session garnering the biggest turn-out and interest wasn’t a session on investing, tax planning, estate planning, or money management. It was a presentation on substance abuse and addiction. Every family in attendance was dealing with this problem at some level.
  • My own brother’s death at age 65, where the reality hit me hard that a stack of estate planning documents isn’t just about trust structures and saving tax; those documents affect lives. We need to think carefully about the impact of our planning on loved ones we leave behind. It’s not just a bunch of words.

I give a lot of speeches on the topic of Family Legacy Planning, searching for ways to help families improve the odds of multi-generational success. I’ve shared a similar PowerPoint with you before, but for convenience, here’s a link to my recent Dallas speech “In Search of ‘Family Glue.” The statistics are daunting, as 90% fall victim to the adage “shirtsleeves to shirtsleeves in three generations.” In this speech, I covered the “Best Practices” of the 10% who succeed.

We will soon wrap up the eight-day Passover holiday, and it brings to mind a part of our Passover Seder celebration where the youngest in the room asks “The Four Questions.” During the Seder, we offer answers to those questions. Similarly, I opened my speech with a different version of Four Questions, along with suggested answers. Here’s a recap of that Q & A:

  1. Q: What keeps you awake at night? A: It’s usually not your money or your investments; most of the time, it’s your family—wanting them to live happy, productive lives.
  2. Q: To what end have I created this wealth? A: My hope is that the assets I leave behind will be used for good and not tear apart my family.
  3. Q: What’s the right amount to leave your kids? A: It’s the amount they’re prepared to receive.
  4. Q: Are your kids and grandkids ready for the inheritance coming their way? A: If not, it’s important to start taking intentional steps to prepare them for it.

As a final point, I’ll reiterate that the “inheritance” that’s passing down to your loved ones isn’t just money. As Jay Hughes teaches in Family Wealth: Keeping It in the Family, the word “it” doesn’t mean money. “It” refers to five sources of family wealth: Financial Capital, Human Capital, Spiritual Capital, Social Capital, and Intellectual Capital. Hughes quotes a grandmother who got “it” when she said: “Our family has always been rich, and we’ve sometimes had money.”

Wishing all a meaningful holiday experience during this spiritual season,
Marvin E. Blum

Marvin Blum had the recent privilege of speaking about “Family Glue” to the Dallas Council of Charitable Gift Planners.

“Can We Talk?” It’s Time to Be Candid About Family Dynamics Read More »

Congratulations to Kandice R. Damiano and Beth Hampton

Kandice R. Damiano and Beth Hampton have been recognized as 2023 Texas Rising Stars in Estate Planning & Probate by Super Lawyers®.
 
Kandice Damiano is Partner in The Blum Firm’s Fort Worth office. She focuses her practice on a range of estate and business planning matters involving trusts, closely-held entities, taxation, and high net worth individuals and their families. This is Kandice’s sixth time to be honored as a Super Lawyers Texas Rising Star.
 
Beth Hampton is Senior Associate in The Blum Firm’s Fort Worth office. Beth represents clients in a variety of probate and guardianship matters. This is also Beth’s sixth year to be honored as a Super Lawyers Texas Rising Star.
 
Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations, and peer evaluations. 
 
Please join us in congratulating Kandice and Beth!

Congratulations to Kandice R. Damiano and Beth Hampton Read More »

Culture Eats Strategy for Breakfast

In last week’s post, I expressed gratitude that some hard lessons learned early in my career informed me how to build a caring culture at The Blum Firm. My mission was to create a firm where every team member could thrive, and no one would dread coming to the office. We spend most of our waking hours at work. It needs to be a positive experience.

I shared the journey of my connection with Ed Copley, who grew from being my once feared boss at a big law firm to now being my beloved colleague and Senior Counsel here at The Blum Firm. In discussing that miraculous evolution with my best friend Talmage Boston, I gained some powerful insights. Talmage had run into Ed recently and they talked about how happy Ed is at The Blum Firm and how close Ed and I have become. Talmage credits the environment at The Blum Firm for creating an atmosphere where co-workers can bond and find career satisfaction: “In our personal lives, relationships are everything. In the workplace, culture is everything.”

Talmage followed up that wisdom with a quote from Peter Drucker I’d often heard but never fully understood: “Culture eats strategy for breakfast.” Jacob Engel, in an article for Forbes Coaches Council, enlightened me. “Culture is the secret sauce that keeps employees motivated and clients happy.” Engel uses two stories to illustrate his point.

1. Everyone at Nathan’s security services business had a can-do attitude. Leaders modeled humility, confidence, and integrity. The company’s culture included:

  • Caring about each other and their customers.
  • Empowering everyone to do their best.
  • Striving for feedback, collaboration, and diversity.
  • Reaching for the stars without fear of failing, and if you fail, “at least you will land on the moon.”

It’s no wonder that Nathan’s team gave their all, and his business prospered. “It wasn’t empty talk or something nice on the wall. They knew that the company’s culture was the secret sauce behind their success, and they religiously followed it.”

2. In contrast, Charles put emphasis on processes rather than culture. Instead of caring about each other, there was constant infighting. No one took responsibility for failures. “Culture starts at the top, and as long as the leaders were finding excuses for nonperformance, everyone else did the same.” Is it any wonder Charles’ business was suffering? Processes and strategy, unsupported by a strong culture, will not sustain a business.

Moreover, creating that culture starts at the top. I continually strive to strengthen our culture at The Blum Firm. I’ve been told that even the simple things like my morning walk-arounds to greet each person one by one makes a difference in their day. So do our monthly birthday celebrations and Wednesday lunches. Building a strong culture requires constant care and feeding, and we can always improve. I’ll keep working at it forever.

Culture “eating” strategy signifies that culture is paramount, and it gobbles up processes, rules, and strategic plans for breakfast. Structures are important, but they take a back seat to culture. Putting primary emphasis on strategy and prioritizing it over people (such as adopting a new strategic plan and pushing out good people) destroys culture, which in turn destroys a business. Reacting to my post “It Takes a Team,” attorney Zachary Oliva summed it up: “Culture drives everything!”

As I learned from my mentor Tom Rogerson of GenLegCo., culture drives the success of a business, but it also drives the success of a family. These same principles, modeled by a family’s leaders, can build a strong family culture. Elaborate estate plans with trusts and entities are important, but for a family to succeed and prosper from generation to generation, those strategies must be built on a solid family culture foundation.

Strong core values, caring about each other, celebrating each person’s strengths, honest feedback, encouraging and empowering one another, modeling good behavior—those are the building blocks for a rock-solid culture, essential to sustaining both a business and a family.

Marvin E. Blum

Join Marvin Blum in intentionally creating a strong culture for your business (and your family).

Culture Eats Strategy for Breakfast Read More »

Ed Copley & My Journey from Fear to Friend

I’ve written recently about my journey to create and grow The Blum Firm. As with most endeavors, the path from then to now wasn’t a straight upward sloping line. Especially in the early years, it was more of a roller coaster, replete with mistakes (aka “teachable moments”) and a lot of self-discovery. I’d like to share how one such early “mistake,” seasoned by the passage of time and my corresponding maturity, grew into one of my greatest blessings.

In the summer of 1976, after my first year of law school, I worked in the tax department of Price Waterhouse, and the experience was a perfect match for me. The following summer, I decided to intern at two law firms—one in Fort Worth and one in Dallas—to learn more about a law firm career path. As a Fort Worth boy, my hometown law firm was an easy fit. On the other side of the Trinity River, the Dallas law firm experience was a challenge for me—bigger, faster, and more high-octane. Was it also a fit? Not so much.

The head of the tax department at the Dallas firm was a brilliant, hard-working, and hard-charging man with massive responsibilities on his shoulders. I admired him but was too intimidated to try to forge a connection with him. Once I decided that firm wasn’t the place for me, I made no effort to build a relationship with him. Given how that clerkship went, I assumed he had no interest in me either. I also assumed I’d likely never have contact with him again. His name: Ed Copley.

For decades, that name struck fear in me, conjuring up negative memories of that clerkship experience. As decades unfolded and my Fort Worth law practice grew, it turns out that Ed Copley and I indeed reconnected. He was representing a matriarch in a complicated estate planning transaction that required her children to hire their own lawyer. Lo and behold, the children hired The Blum Firm, arousing fear in me that my relationship with Ed Copley would be tense.

To my surprise and relief, my interaction with Ed was the opposite. He was collegial and welcoming of my input. He treated me, many years his junior, with respect. My fear of Ed Copley melted away.

The story gets better. As The Blum Firm grew, we opened a Dallas office which quickly became vibrant. Our Dallas staff included a senior attorney, Kent McMahan, who had just retired as head of the Trust & Estate department at Fulbright & Jaworski. Still robust, Kent continued his career at The Blum Firm, serving as a powerful mentor to our team. Sadly, Kent passed away, leaving a vacancy I wanted to fill with another senior attorney. Guess who I called to recruit? You got it—Ed Copley!

For the last seven years, Ed has been Senior Counsel at The Blum Firm, bringing extraordinary wisdom, intellect, and kindness to our firm every day. Ed is the consummate role model. We all look up to him and learn from him. Most of all, I regard Ed as a close friend, and our relationship is one of the greatest blessings in my career.

If someone had told me in 1978 that one day Ed Copley would be working at a law firm with my name on the door, I’d have never believed it. What a difference 40 years can make! It still blows my mind, and it teaches me so many lessons. First is to fight off our fears and intimidations and be open to connecting with people in positions of power. They don’t bite, and we can learn so much from them. I now realize the problem wasn’t Ed; it was me. Second is to believe that feelings can change. We evolve and heal, if we will just be patient and have faith. And finally, every “failure” is a learning experience and opportunity to grow. I look back now on that “Big Law” clerkship where I wasn’t a fit and am grateful it helped inform me how to chart a career path and build a law firm (and law firm culture) of my dreams.

To my dear friend Ed, thank you for not giving up on me and for teaching me so much.

Marvin E. Blum

Marvin Blum’s journey with Ed Copley (right), Senior Counsel at The Blum Firm, has come a long way from its rough start in the summer of 1977.

Ed Copley & My Journey from Fear to Friend Read More »

Life Insurance May Be Your Family’s Ideal Solution

Let me clarify at the outset that I don’t sell life insurance. However, The Blum Firm is a big fan of life insurance as a solution to many estate planning challenges. In my speech this month to the Dallas Estate Planning Council, I described seven situations where life insurance came to the rescue (click on this link for my presentation on “Life Insurance Planning Opportunities”).

I started my speech by mentioning that I’m about to attend the 45th reunion of UT Law School’s class of 1978. I reflected on the estate planning world of 1978 compared to estate planning in 2023. If an estate planner from 1978 came back to hear my speech, he would hear a whole new vocabulary and wonder, “What is this foreign language Marvin’s using?” SLATs, Blended Families, Loan-Regime Split Dollar, Mixing Bowl Partnerships, PPLI, Life Settlements, FAST Trusts—none of those were part of estate planning parlance when I started my law practice 45 years ago. Their heads would be spinning.

In this new world of estate planning, planners think “outside the box” to derive creative solutions to address our clients’ needs. Many of those solutions involve life insurance. Here’s an overview of the topics I covered:

  • Each spouse’s SLAT (Spousal Lifetime Access Trust) may buy life insurance on the other spouse to replace assets in the deceased spouse’s SLAT that will benefit the children at the first death.
  • If you love your grandchildren equally, consider a life insurance policy that passes equally to your grandkids, per capita rather than per stirpes.
  • For today’s “Blended Family,” I identified five situations where life insurance can help preserve family harmony.
  • Loan-regime split dollar life insurance can help you “have your cake and eat it too,” removing assets from the estate but preserving a stepped-up basis at death.
  • Using a “Mixing Bowl Partnership” can enable you to shift basis from one asset to another, allowing you use an appreciated asset to buy PPLI (Private Placement Life Insurance) without incurring tax on the gain.
  • Before cancelling a policy, consider selling it in a Life Settlement, often for far more than the policy’s cash value.
  • Create a FAST (Family Advancement Sustainability Trust) funded with life insurance to pay for family retreats, family travel, maintenance of legacy real estate assets, and overall family enrichment after G-1 is gone.

I closed by urging estate planners to address these topics with our clients. Not only will it help our clients and their families achieve their goals, it will also help show our clients that we truly care about them. I concluded by quoting Teddy Roosevelt: “People don’t care how much you know, until they know how much you care.”

Marvin E. Blum

Marvin Blum was honored to speak about “Life Insurance Planning Opportunities” to the Dallas Estate Planning Council on March 2, 2023.

Life Insurance May Be Your Family’s Ideal Solution Read More »

White Belt: Mind; Black Belt: Heart—The Martial Arts of Estate Planning

No where is the struggle of listening to your heart versus your head more potent than when engaging in estate planning. When designing an inheritance, my clients are often torn between doing what their head tells them when their heart is pulling in the other direction. I submit that in estate planning, it’s not an “either/or” (head or heart) but a “both.” And for the sake of multi-generational success, the heart is the more dominant force.

This message became clear to me on a recent trip with my wife Laurie to Lake Austin Spa to celebrate our 44th wedding anniversary. For those who know me, it comes as no surprise that I spend such spa getaways going from one fitness class to another, driven to make every minute productive. (I’m not resting on vacations; as my mother-in-law often said: “I’ll rest when I die.”) As the photo reveals, one such class was Tai Chi, taught by fitness guru David Robbins.

Tai Chi, like other Eastern disciplines, is a mix of body, mind, and spirit. At the end of the session, Robbins challenged us to interpret the phrase “White Belt: Mind; Black Belt: Heart.” I’m no karate kid, but I figured out that in the struggle between the two, the heart takes precedence over the mind. In the world of martial arts, a white belt is a beginner while a black belt represents skill, strength, and experience. A mature person puts his full heart into every effort. While your mind is an important part of the process, to achieve a successful outcome requires a heavy dose of heart.

What does this have to do with estate planning? In my 45-year law journey, I spent my beginning white belt years focused on the “head” side of planning. My primary attention was on the technical and tax aspects of estate planning. As I’ve ventured on toward the goal of becoming a black belt estate planning lawyer, I figured out the critical importance of the “heart” side of planning. It takes both—head and heart.

Numerous wake-up calls lead me to this place: inheritances gone bad, sibling warfare, and unprepared heirs. I repeatedly hear my TIGER21 colleagues say what keeps them awake at night isn’t money or investments, but it’s family matters. Experiencing life cycle events like my brother’s death and the births of my five grandkids awakened me to the role of estate planning in creating a lasting legacy. I took a deep dive into the waters of “FAST” trusts, family meetings, family governance, and preserving a heritage. I understand the need to be intentional about achieving multi-generational connectedness (“interdependence”). It takes more than “hope” for a family to remain strong over the years. Hope is not a strategy.

In my search for a label for this type of estate planning, I’ve considered many options: Family Legacy Planning, Qualitative Estate Planning, Holistic Estate Planning, the Soft Side of Estate Planning, Family Governance Planning, and Family-Centered Planning, but the one I keep coming back to is “Head & Heart” Estate Planning. My Tai Chi class makes me think that label may sum it up the best.

The Blum Firm welcomes the opportunity to assist with both the “head” and the “heart” aspects of your estate planning.

Marvin E. Blum

Marvin Blum’s Tai Chi class at Lake Austin Spa reaffirmed his commitment to “head & heart” estate planning.

White Belt: Mind; Black Belt: Heart—The Martial Arts of Estate Planning Read More »

In Search of “Family Glue” – Improving the Odds of Multi-Generational Success

Marvin Blum spoke to the Dallas Council of Charitable Gift Planners on March 14, 2023, to present “In Search of ‘Family Glue’- Improving the Odds of Multi-Generational Success.” Every family deals with challenging family dynamics. When you throw an inheritance into that mix, it’s like adding fuel to the fire. 

The statistics are daunting, as 90% fall victim to the adage “shirtsleeves to shirtsleeves in three generations.” In this speech, Marvin covers the “Best Practices” of the 10% who succeed.

Slide Deck: In Search of Family Glue (3-14-2023)

 

In Search of “Family Glue” – Improving the Odds of Multi-Generational Success Read More »

Planning for the Other “Baby” You Raised—Your Family Business

I was recently honored to deliver the keynote address for a symposium sponsored by the Purposeful Planning Institute. The topic was the one I frequently describe as “the most neglected area of estate planning:” Business Succession Planning. Click here for a copy of my PowerPoint.

In the realm of “head and heart” estate planning, transitioning a family business draws heavily from both the head and the heart. All business transfers present challenges for a founder, whether the transfer is to family members, insiders/employees, or outside third parties, but the sale to third parties tends to be most challenging. Indeed, unless we pay sufficient attention to the owner’s personal transition, the transaction almost always fails. Here are three examples where The Blum Firm successfully shepherded the process of selling a business through to closing.

  • Founder and his wife observed that they had done their job educating their children and setting them up in good careers. Ready to retire, charitably inclined, and seeking a steady lifetime stream of income, they transferred their business to a Charitable Remainder Trust (“CRT”). (Note that there are special income tax considerations that apply when transferring a business to a CRT.) The CRT sold the company, deferring income tax on the sale. The tax was paid gradually over the years as the CRT made annual payments to the couple (and later, after the husband died, to the surviving wife). In addition to financial peace of mind, the couple enjoyed knowing that their favorite causes would benefit when the remaining trust funds pass at the survivor’s death to a Donor Advised Fund.
  • The owners of a legacy family business received an unsolicited offer for considerably more than they thought the company was worth. Resisting the temptation to give a quick “yes,” they hired a broker to take the business to market. Four more suitors surfaced and engaged in a bidding war. They ultimately sold to a strategic buyer who paid four times the original offer, in cash. Each child owned some shares and received a generous payout. The bulk of the proceeds went to the parents, who then created a Family Foundation which they enjoy operating. Since the children each have their own wealth, the parents are leaving their estate to the Family Foundation.
  • The self-made creator of a major enterprise was eager to monetize the value of his business and lighten the burden of being the sole “captain of the ship.” He declined multiple offers from private equity firms for fear they might burden the business with debt and lay off employees (whom he considered like family). Instead, he sold the business to a major conglomerate, getting the value out of the company but under an arrangement where he could stay on and run it for as long as he wishes. Also charitably minded, the founder and his wife are donating a substantial portion of their wealth to a Family Foundation.

These three transactions addressed the founder’s head needs as well as heart needs, thereby making it to the finish line with a successful closing. Estate planning advisors are uniquely positioned to help business owners address both the quantitative (head) and qualitative (heart) aspects of business succession planning. I applaud the work of the Purposeful Planning Institute for training advisors to deal with both aspects—in their words, “to fuse the technical aspects of Estate Planning and Wealth Management with relational and legacy planning.” I was honored to be on the PPI Symposium faculty and serve as a champion for the cause.

Marvin E. Blum

Marvin Blum delivers keynote on “Business Succession Planning” for the Purposeful Planning Symposium.

Planning for the Other “Baby” You Raised—Your Family Business Read More »

Be Spontaneous and Make a Memory!

I’m an estate planning lawyer who urges people to be careful planners. In my own life, I’m a cobbler who wears my own shoes. I try to plan every detail and contingency in my life. On top of that, I’m extremely practical. That’s me—pretty much a boring, practical planner. (At least I’m self-aware.) I don’t do spontaneous.

So picture this scene. Last Thursday night, after a full week of travel, work, and events every evening, I was desperate for a weekend to recharge. A text arrives. It’s my New York daughter Lizzy, who just scored two Saturday tickets to “Funny Girl,” a perfect father-daughter outing. My immediate response: “I can’t do that. It’s too last minute.” Lizzy wasn’t accepting that. Her reply: “YOLO.” I figured it out—You Only Live Once. My wife Laurie added: “One day, you won’t be able to travel. Do it while you can. Also, you’d drop everything for something bad, so why not drop everything for something good?” Minutes later, I’m booking a 24-hour trip to New York.

I’m writing this post on the flight home, tired but grateful that I broke out of my practical planner mold. Last night with Lizzy was a mountaintop moment we’ll both cherish forever. The show was terrific, but more than that, we made a lifetime memory. Lizzy and I share a lot of the same wiring. The highs and lows of Fanny Brice’s journey as an entertainer resonated with both of us. We felt that joy and pain deeply, and it was even richer because we felt it together.

I had almost backed out. Lizzy discovered that the title role was being performed by an understudy. After a brief internal debate, I proceeded with the trip and figured if it’s not performed by Barbara Streisand, what’s the difference if it’s Lea Michele or someone else? Good decision. The understudy was brilliant.

The last time I did something spontaneous was 12 years ago. Leaving an event, friends invited Laurie and me to join them for five days on a yacht—leaving the very next morning! Again, the practical planner in me instantly declined. Then Laurie set me straight. I reversed my decision, and we had the best getaway ever. I’m grateful to have a wife and daughter who challenge me when my brain is yelling “this makes no sense.” Sometimes we should get out of our comfort zone and do things that make no sense to us. The reward is worth it.

At this point in my life, my top two priorities are relationships and memorable moments. Being practical almost deprived me of a chance to check both those boxes. I suppose a little spontaneity looks good on me, maybe once every dozen or so years.

I’ll close with this wisdom, which sums up my night with Lizzy (sing along with me): “People, people who need people, are the luckiest people in the world.” Indeed, I am.

Marvin E. Blum

Marvin Blum made a spontaneous trip to New York to join his daughter Lizzy Savetsky at “Funny Girl,” totally out of character but totally worth it!

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Putting a Big Red Bow on Your Estate Plan

I spent Valentine’s Day in Midland, Texas, talking about putting a big red (Valentine-worthy) bow on top of your estate planning package. After signing the package of estate planning documents, our work is not complete until we add the bow on top. The red bow is a “Red File,” a collection of information your family needs to know that is not in your estate planning documentsClick here for a copy of my presentation.

We have described the Red File in a previous post (see “Create a ‘Red File’ to Prepare Your Heirs for What’s Coming”), but the topic is so important it merits covering again today. A Red File provides your family with a roadmap to guide them in four key areas:

  • Your care during incapacity
  • Estate administration upon your death
  • Succession planning for your business
  • Creating a lasting legacy

It includes items such as key contacts, passwords, caregiving wishes, and heartfelt reflections.

A Will tells who inherits your assets, but it doesn’t tell what you own or where those assets are located. Handing an executor a Will without more information is like telling them where to drive your car but not telling them where the keys are.

Like most estate planning tasks, it’s tempting to postpone creating a Red File until “later.” However, playing the waiting game is risky. Once dementia sets in or a traumatic brain injury occurs, it’s too late. Furthermore, death often comes without advance warning. The leading cause of death in the U.S. is heart disease. For two-thirds of women and half of men, their first symptom was death—not chest pain, not discomfort in an arm, not shortness of breath.

Given the uncertainties, I urge all to complete our Red File checklist. This guide is forever a work-in-progress. If you think of items we should add, please forward your ideas to us. We welcome your input to continue improving this valuable roadmap for your loved ones.

Marvin E. Blum

Marvin Blum speaking to the Midland-Odessa Business and Estate Council on “A Red File: Putting a Bow on Top of Your Estate Plan.”

Putting a Big Red Bow on Your Estate Plan Read More »

A Red File

After putting all the elements of the estate plan in place, what’s next? The final, and almost always overlooked step, is a Red File. A Red File is a roadmap containing critical information to guide the family through a loved one’s incapacity, estate administration, business succession, and creation or continuation of a lasting legacy. The Red File covers the items missing from even the most carefully crafted legal documents, such as key contacts, passwords, caregiving wishes, and heartfelt reflections.

The Blum Firm’s Red File Checklist available here 

Slide Deck here: Marvin Blum at the Midland-Odessa Business & Estate Council on February 14, 2023, for “A Red File- Putting a Bow on Top of Your Estate Plan”

Slide Deck here: Marvin Blum at the Lion Street Trusted Advisors Conference on July 13, 2021, for “The Final Wrap Up – A Red File. Putting a Bow on Top of Your Estate Plan”

A Red File Read More »

It Takes a Team – and I’m Mighty Proud of Ours

In a recent post I told the story of my journey to create and build The Blum Firm, learning from mistakes along the way (see “When Failure Happens, Send a Thank You Note”). I shared my efforts to create a caring culture, partnering with like-minded colleagues driven to provide first-class estate planning to our clients.

Today I’d like to share an experience from eight years ago that affirmed my efforts were bearing fruit. I received a call out of the blue from the CFO of a family office, engaging in a nationwide search for new estate planning counsel. Months later, the CFO called back to say that after an extensive search, The Blum Firm emerged in first place. Honored and humbled, I wanted to learn more about who we were through their eyes. Why us? The response:

  • The top credentials of our attorneys.
  • The creative “outside the box” planning we provide.
  • The size of our team, as a deeper bench would enable us to staff multiple projects simultaneously.
  • The younger age of most of our attorneys—more likely to be here to assist G-3 and G-4 in years to come.
  • Our reputation for quality work and service.

We’ve now represented this family for eight years, and I’m gratified they often serve as a reference for us. In describing The Blum Firm to others, they add another element to the list—the caring service and responsiveness of our team.

In today’s post, I want to pay tribute to The Blum Firm’s amazing staff. In addition to assembling dedicated attorneys, we take equal effort to hire the best and brightest for the other half of our law firm family. Our paralegals, legal assistants, and all the other members of our support team repeatedly go above and beyond to help us achieve our mission: caring for our clients and each other, collaborating with other advisors and among ourselves, and creating a community of character and talent. Each takes pride in bringing his or her best to work every day. And there’s no ego—we just want the best solutions for our clients.

I’ve seen this commitment in action day after day. Winding the clock back to 2000 when a tornado destroyed our office, our team engaged in the two-year herculean task of sorting through hundreds of boxes of mixed-up papers laden with razor-sharp glass shards to put our clients’ files back together. We’ve been there for client emergencies, literally 24/7, to provide urgent documents and, even more importantly, peace of mind. Hospital visits, home visits, funerals, literally and figuratively handholding for recently widowed spouses—there’s a can-do spirit and a positive attitude. We’re here for you, and we care.

The Blum Firm work community is truly a family. On this Valentine’s Day, I’m sending love to this extraordinary team.

Marvin E. Blum

Marvin Blum pays tribute to The Blum Firm team for always going above and beyond.

It Takes a Team – and I’m Mighty Proud of Ours Read More »

The Role of Litigation Attorneys in Estate Planning

Marvin Blum and Keith Morris, two of our attorneys at The Blum Firm, co-authored an article in this month’s issue of Trusts & Estates magazine on “The Role of Litigators in a Modern Estate Planning Practice.” 
 
The article tracks the evolution of The Blum Firm from its early days as a solo-lawyer firm to its current expansion of over 30 attorneys. With a larger team, the firm is able to offer clients more specialized services, including trust and estate litigation.
 
The addition of fiduciary litigators to our practice has proven invaluable. Their knowledge and perspective have helped fine-tune how we draft documents and how we approach delicate situations. 
 
Marvin (as an estate planner) and Keith (as a litigator) pooled their perspectives to write the article. Check out the article here or here.

Senator Dianne Feinstein’s public battle with her third husband’s daughters highlights the perils of inheritance in a blended family.

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You Can’t Take Your Leftovers with You—So How Much Do You Leave to Your Kids?

My 10-year-old granddaughter Stella Savetsky posts a weekly Instagram video, Stella’s Torah Corner, teaching that week’s Torah portion. I always learn a lot from her posts, including her most recent one on the portion Beshalach. After escaping slavery in Egypt, Jews wandering in the desert received daily manna from heaven to sustain them. Whatever manna they didn’t finish at the end of the day was destroyed. They couldn’t take the leftovers with them. Stella wisely provided a Torah lesson that resonates with her estate planning Zaidy: when you die, you can’t take your leftovers with you. Accordingly, you need to plan carefully for where those leftovers should go upon your death. Guiding people in that important decision just happens to be my life’s work.

When parents consider where to leave their “leftover” assets, the knee-jerk reaction is to leave them to their kids. However, after careful analysis, the decision is actually more complicated. How much is the right amount to leave your kids? Returning to the article featured in a couple of my recent posts “The Getty Family’s Trust Issues” (The New Yorker, Jan. 23, 2023), Evan Osnos declares: “The question of how much to leave your kids has been with us since the Ice Age…. [W]hen inheritance patterns reach extremes, they wreak social and political havoc.” All are familiar with stories of inheritances gone bad. Osnos cites two famous examples: “Even some of America’s greatest entrepreneurs saw inheritances as a handicap—a ‘misguided affection,’ as Andrew Carnegie put it. William K. Vanderbilt, a descendant of Cornelius, observed, evidently from experience, that inherited wealth was ‘as certain a death to ambition as cocaine is to morality.’”

What’s the answer? Warren Buffett’s famous advice is “enough so they can do anything, but not so much that they can do nothing.” My position is that the right amount of inheritance is the amount your heirs are prepared to receive. Any amount is too much if it lands in unprepared hands. Having witnessed all too often the disastrous consequences of money going to the unprepared, I embarked on a Family Legacy Planning initiative to encourage families to engage in a thoughtful family meeting process to equip future generations with the skills (financial and emotional) to handle whatever amount is coming their way.

Parents often joke with me that they plan to spend their last dollar on the day they die. Obviously, that only works if you have a crystal ball telling you that date. The reality is that, in the end, there will be “leftovers” to distribute. Here’s my suggestion for a three-part inheritance to leave your heirs:

  • A portion as a traditional inheritance passing to a trust that provides for the health, education, maintenance, and support of your heirs, protected from creditors and divorces;
  • A portion to a charitable vehicle, such as a private foundation or donor advised fund, giving your heirs a second inheritance they can use to benefit causes important to the family; and
  • A portion to a FAST Trust (Family Advancement Sustainability Trust) where funds are not to be distributed to beneficiaries but are to be spent only on family enrichment activities such as family retreats, family travel, preserving a heritage, maintaining a legacy property, and providing programs to educate the family on philanthropy, entrepreneurship, and other worthwhile endeavors.

As you ponder where to allocate your leftovers at death, I urge you to work with advisors to guide you through a thoughtful process. The goal is to design an estate plan that improves the odds of multi-generational success, passing assets down to responsible, empowered (and not entitled) heirs.

Marvin E. Blum

Marvin Blum’s granddaughter Stella Savetsky posts Stella’s Torah Corner on Instagram to teach the weekly Torah portion. Last week’s post contained an estate planning lesson.

You Can’t Take Your Leftovers with You—So How Much Do You Leave to Your Kids? Read More »

Pay Attention to the Signs

Last week’s post explored themes covered by The New Yorker magazine’s article “The Getty Family’s Trust Issues” (Jan. 23, 2023). In writing the article, author Evan Osnos interviewed me for my views on current trends in estate planning. There’s a lot happening in the world of trusts, estates, and tax planning.

For over three decades, we have been living in the “Golden Age” of estate planning. As Osnos quoted me in the Getty article: “‘Conditions for leaving large sums have never been better,’ noting that ‘Congress has not closed an estate-planning loophole in over thirty years.’” However, in the world of my wise friend Mary Staudt, it’s time to “pay attention to the signs.”

Until recently, the estate planner’s tools in our golden toolbox were by and large flying under the radar. Then came 2021. As the pendulum started swinging from Trump-right to Biden-left, writers like Osnos began exposing our tools to the general public. Multiple articles in mainstream media began igniting a public outcry to “Tax the Rich,” as displayed in the photo of Rep. Alexandria Ocasio-Cortez’s met gala gown. Senator Bernie Sanders cleverly labeled his legislation “For the 99.8% Act,” asserting that the tax increases would only hurt 0.2% and would help 99.8%. Senator Elizabeth Warren touted her “Billionaire’s Tax,” which actually applied to anyone with a net worth of $100 million, but the “billionaire” label was more bombastic. Provisions such as these came within two votes of becoming law.

Political turbulence and anti-rich public sentiment are sending a warning call that one of these days “a change is gonna come” (to quote Sam Cooke). With that backdrop, here’s my take on current trends in estate planning.

  1. Take advantage of “squeeze & freeze” tools to reduce estate tax while the opportunity exists. Those who complete planning before a law change will likely be grandfathered.
  2. Engage in “Use It or Lose It” planning to lock in the $12,920,000 estate tax exemption before it cuts in half at the stroke of midnight on December 31, 2025 (when Cinderella’s coach turns back into a pumpkin).
  3. Rising interest rates create a push to do a long-term lock-in of today’s low interest rates on intra-family loans but also make certain tools more attractive (such as Charitable Remainder Trusts and Qualified Personal Residence Trusts).
  4. Inflation and the rising cost of living are motivating parents and grandparents to do more to help kids financially now, when they need it, as opposed to waiting until later to inherit. Ways to help include low-interest loans (such as home mortgages), annual $17,000 gifts, medical/education payments, Section 529 Plans, and gifts to Defective Grantor Trusts.
  5. The economic downturn actually creates the ideal timing to do estate freeze planning such as 678 Trusts, SLATs, and DGTs. Resist the psychological urge to wait on planning until values recover, as pre-recovery planning beats post-recovery planning.
  6. As a premier advocate for both “head” and “heart” estate planning, I note that the pandemic has stimulated a trend to engage in Family Legacy Planning. We became more aware of our mortality, prompting introspection: “To what end have I created this wealth?” Sheltering at home made it more difficult to sweep family dynamics/dysfunction under the rug, encouraging facilitated family meetings aimed at improving communication and trust.

While these trends are on the rise, many still fall victim to the greatest obstacle in estate planning—procrastination. I urge all to recognize that time is flying by, and with all the signs that “change is a-coming,” the passage of time is not our friend.

Marvin E. Blum

The met gala gown worn by Rep. Alexandria Ocasio-Cortez is literally “A Sign of the Times” igniting public sentiment to “Tax the Rich.”

Pay Attention to the Signs Read More »

Meet Attorney Christopher G. Beck

We’re proud to welcome Christopher G. Beck to The Blum Firm! Christopher is an experienced tax attorney, recently relocated to Texas from Boston. He joins us as Partner in our Fort Worth office.

Christopher’s practice focuses primarily on domestic and international tax planning, tax compliance, and tax controversy. He brings a broad range of experience representing clients on cross-border transactions, compliance issues related to foreign assets, and a wide variety of tax audits.

Christopher grew up in upstate New York as the youngest of four siblings. In addition to academics, his high school passions were baseball, soccer, and art. He was voted “most likely to succeed” and “most artistic.”

Christopher earned his law degree at New England School of Law in Boston and went on to complete a Master of Laws in Taxation at Boston University School of Law. He received his undergrad degree from the University of California at San Diego, majoring in philosophy. While enrolled at UCSD, he spent a year abroad in Bologna, Italy, immersed in great culture, art, and food.

Christopher thought about returning to California after law school, but he stayed in Massachusetts after meeting a lovely lady. They are now married with two children. Christopher says they greatly appreciate the warm welcome they have received from the wonderful people of Texas and are excited for this next chapter.

Please join us in welcoming Christopher!

The Blum Firm

Meet Attorney Christopher G. Beck Read More »

Lessons from the Getty Family Estate Plan

In this week’s issue of The New Yorker magazine, Evan Osnos’ article “The Getty Family’s Trust Issues” contains a lot of important messages about Family Legacy Planning. Although the premise of the article is to explore how oil tycoon J. Paul Getty’s heirs have successfully avoided paying millions of dollars of tax, there is a lot to learn from the Getty family story beyond how they managed to save tax. As he was writing the article, Osnos contacted me to discuss not only Getty-type tax saving tools, but broader trends in estate planning. I was honored to provide input for the article about the planning opportunities in the “Golden Age” of estate planning but cautioned that the Golden Age likely won’t last forever.

First, let’s address some of the tools. Osnos points out that J. Paul Getty, America’s richest person, avoided estate tax on his art, property, and land by bequeathing them to a museum trust that established The Getty Center, one of the most visited of all America’s art museums. Paul’s son Gordon Getty, a San Francisco philanthropist, left four sons from wife Ann plus three daughters from an extramarital affair. Gordon included his three daughters in his estate plan by creating a trust for them called the Pleiades Trust, named for a group of Greek mythology sisters who had affairs with Olympian gods and were rewarded by becoming stars in the sky. Much of Osnos’ article is devoted to lengths taken by the Getty family to save tax, specifically by domiciling the trust in Nevada in order to escape California state income tax on the trust income. The trust tax arrangement is exposed by the Gettys’ disgruntled wealth manager Marlena Sonn.

Osnos also references other favorite techniques in the estate planner’s playbook, notably SLATs, CRUTs, BDITs, and GRATs. He shares that the Gettys share the usage of such tools with other mega-wealthy families such as heirs of Walmart founder Sam Walton and casino owner Sheldon Adelson. Other dynastic families also receive shout-outs for their efforts to utilize such tools, including owners of Gallo wine, Campbell’s soup, Wrigley gum, Family Dollar, Public Storage, and Hot Pockets. Osnos also highlights the strategy of holding appreciated assets until death and getting a stepped-up basis, pointing out that Jeff Bezos would avoid tax on a hundred billion dollars of Amazon stock gains if he died tomorrow. To pay living expenses without having to sell the stock during life, many owners of appreciated stock borrow against the stock and live off the loan proceeds, holding the stock till death (described as “buy, borrow, die”).

The important point I want to make is that these techniques are perfectly legal. Osnos draws a distinction between tax avoidance (such as through use of these tools, which is legal) and tax evasion (such as failing to report income or overstating deductions, which is illegal). However, articles like this one and others are shining a light on many of the tools that in prior decades were flying under the radar. Most notably, “For the 99.8%” tax legislation proposed by Senator Bernie Sanders in 2021 aimed to kill a number of these tools but would grandfather anyone who had used them prior to the law’s passage. The law didn’t pass, but the publicity around it stirred up a public sentiment to “Tax the Rich,” as Rep. Alexandria Ocasio-Cortez’s met gala gown proclaimed in huge red letters. As I pointed out in Osnos’ article, “Now that the general public is aware, there is a growing outcry to shut down these benefits. This is a wake-up call that, sooner or later, the tax landscape will likely drastically change.” Those who wish to take advantage of the current opportunities would be wise to act now.

There is more to Osnos’ story about the Getty family than tax avoidance. He also describes competing philosophies among the heirs regarding the purpose of the family wealth. There are different views on where to invest and what causes to support. Dysfunction in the Getty family abounds. Old Paul had five divorces and five sons, whose weddings he didn’t even attend. After his death, the family feud was played out in public view in the courthouse, leading to a forced sale of Getty Oil to Texaco. One of Gordon’s daughters, a beneficiary of the Pleiades Trust, laments that her “abrupt transformation into an heir gave her little preparation for managing a fortune. ‘In exchange for the love I didn’t receive in my life, I got money,’ she said. ‘So, at first, I always felt misery and guilt, and I didn’t know what to do with it.’”

The Getty story is an extreme case of what drives my passion for “head and heart” estate planning. In conjunction with expanding someone’s inheritance through creative tax planning, the estate planning process must also prepare the heirs to be responsible inheritors. Over the last two years, my Family Legacy Planning series has focused on best practices to prepare heirs and bring a family together: family meetings, family governance structure, family mission statement, educating heirs, preserving family history and traditions, business succession planning, writing a legacy letter, family travel—the list goes on and on. Just like the Getty heirs, family members won’t always see eye-to-eye. Communication styles and love languages will differ. But a successful family addresses these matters rather than sweeping them under a rug. The end result is improved communication and trust, as well as family interdependence, so a family is there for each other as a support team when needed.

In my conversation with Evan Osnos, we took a deeper dive into current trends in estate planning. The conversation was stimulated by the Getty story, but my thoughts took off from there. In next week’s post, I’ll highlight more of the modern trends in estate planning that emerged from my involvement with the Getty article in The New Yorker. (The article is available here and here.)

Marvin E. Blum

The New Yorker article “The Getty Family’s Trust Issues” reveals not only Trust estate planning issues, but also issues of trust/mistrust among Getty family members. Marvin Blum was honored to be consulted for the article and quoted in it.

Lessons from the Getty Family Estate Plan Read More »

The Blum Firm Expanding Tax Offerings to Help Clients Respond to New IRS Challenges

You may have already heard the IRS will be receiving an additional $80 billion over the next decade due to the passage of the Inflation Reduction Act. Over $40 billion is earmarked for tax enforcement. As a result, the number of IRS auditors could double to over 30,000 by 2031.

In response to the expected IRS expansion, The Blum Firm is hiring a new Partner, Christopher Beck. Christopher is a skilled tax attorney with 15 years of experience assisting clients with domestic and international controversy, compliance, and tax planning. He has represented clients in a variety of civil and criminal tax examinations and audits, collection matters, and tax controversies.

Christopher routinely advises clients on tax controversy matters connected to both income tax and gift/estate tax. He also advises businesses and individuals on the tax consequences of cross-border transactions, advises expatriate clients on compliance issues relating to tax and information reporting, represents clients facing state and local tax audits, and represents clients entering into the IRS offshore voluntary disclosure programs with respect to previously undisclosed foreign assets.

Even before hiring Christopher, The Blum Firm had an active tax controversy practice, successfully representing clients in front of the IRS and United States Tax Court. Christopher will add depth in those areas and broaden the firm’s ability to help our clients as they navigate the more difficult tax challenges they will face in the coming years.

The Blum Firm, P.C.

The Blum Firm Expanding Tax Offerings to Help Clients Respond to New IRS Challenges Read More »

Should I Sell My Business to a Private Equity Firm?

When it comes to selling a business, some opt to sell 100% to a third-party buyer and completely walk away. However, others find it more appealing to “take some money off the table” but keep a stake in the business, keep management intact, and share in future growth. Before rushing to accept an offer, seek professional advice to help you find the business buy-out solution that best fits your family.

In “Private-Equity Firms Eye Family Businesses” (Wall Street Journal, Sept. 19, 2022), Miriam Gottfried explores the world of private equity business acquisitions. A private equity firm is a firm owned by investors who pool their money to buy businesses. Initially known for billion dollar deals to take big public companies private, private equity firms are now shifting focus to smaller family businesses. Very commonly, the bulk of the family’s net worth is tied up in the business. Such private equity deals offer owners another exit option when they wish to diversify their wealth.

Gottfried tells the story of the Lang family, owners of an 80-year-old pet food business, Ainsworth Pet Nutrition. Partnering with celebrity chef Rachael Ray, the firm was poised to take their brand to the mass market. The private equity firm L Catterton, recognizing the country’s growing obsession with pets, spotted an opportunity.

Rather than selling 100%, the Langs sold 42% but parted with control over operations. Under L Catterton’s management, the business expanded its product line and acquired one of the manufacturers of their merchandise. Fast-forward four years and J.M. Smucker Co. bought Ainsworth for $1.9 billion, earning the Lang family eight times what their stake was worth four years earlier.

Another example hits closer to home for me in nearby Greenville, Texas. Polara Enterprises, a 50-year-old family business, makes pedestrian signals to tell the blind when to cross at intersections. Owner John McGaffey held a “beauty contest” attracting 10 bidders (among them six private-equity firms) and sold a majority interest to Vance Street Capital. In acquiring a stake in Polara, Vance agreed to McGaffey’s conditions: no layoffs of its 80 employees, McGaffey holds a seat on the Board, and his son and son-in-law remain executives. “‘I would have loved to have just left it with my boys, but we felt we could get a lot further in terms of our technology if we could get an outside investor, said Mr. McGaffey. ‘I didn’t want to risk all of my own capital.’” McGaffey continues to own a minority stake that will further benefit him if Polara hits it big.

Gottfried offers other examples to illustrate private equity’s entry into the domain of American family businesses. Neal Rosenthal, owner of Manhattan’s Rosenthal Wine Merchant received nine bids, ultimately selling a majority interest to Incline Equity Partners but remaining as CEO. Realizing that his daughter had no interest in taking over, the 76-year-old Rosenthal achieved peace of mind: “I am confident that if I dropped dead today, my business would continue on without me.” Rosenthal Wine Merchant has since acquired one of its distributors and another wine business, but Rosenthal has the peace of mind that it’s not his capital at risk.

Private equity buyouts don’t always have a happy ending. Examples abound where they load up a company with debt, bring in new management, lose ties with the local community, or expand irrationally and break the back of a once profitable business. All can acknowledge the risks. But with a carefully structured deal, private equity offers a business-selling family another solution to consider.

If selling a business is a part of your family’s succession plan, it’s wise to hire a professional firm to help you consider all your options.

Marvin E. Blum

Marvin Blum addresses the trend of private equity firms buying family-owned businesses.

Should I Sell My Business to a Private Equity Firm? Read More »

Life After Selling a Family Business: The Challenges May Surprise You

In recent posts, I sounded an alert about the psychological challenges of selling a family business. It’s hard to part with your “business baby” that you gave birth to and raised since infancy. To improve the odds to making it to closing, Denise Logan cautions to plan for not only the transaction but also the transition.

The family needs to recognize how day-to-day life will feel after selling their company. It will likely feel very different, not only for those who work in the business but even for those who don’t. As author Paul Sullivan describes in “What’s Left After a Family Business Is Sold?” (New York Times, Aug. 9, 2019), “A company often holds families together by giving members a shared identity and conferring a status in the community established by previous generations. Without the company, the family’s perception of itself and its purpose can change, and it is often something that members are not prepared for.”

As a prime example, Sullivan tells the story of the Malt-O-Meal family who sold for $1.15 billion to Post Cereal. John Brooks’ grandfather started the cereal business in 1919, and it gradually grew to be the fourth-largest cereal maker in the U.S. Even four years after selling, Brooks “still felt a void in his life. Since the sale, the three branches of the family have gone their own ways, Mr. Brooks said. They are no longer bound by a company or annual meetings or feel the pride of going through the cereal plants around Minneapolis.”

Aside from the void, family members also have to deal with pressure when a high-dollar purchase price becomes public. Old friends may feel intimidated and treat you differently. New “friends” emerge. Who can you trust? Sullivan describes the awkwardness Sabrina Merage Naim felt when her father and uncle sold Chef America, the maker of Hot Pockets, to Nestlé for $2.6 billion. At the time, Naim was in high school. Naim said that at school, once people saw what the business sold for, friends said, “Oh my, you guys have money.”

Here are tips to help families adjust to life after selling a business:

  • Instead of passively investing the proceeds, establish a family office to actively manage the family’s investments, philanthropy, and shared family experiences. Intentionally engage in planned activities to enrich the family. A thoughtfully structured family office can help provide “glue” that the shared business used to provide.
  • Focus more on shared family values than on shared money. Ideally, that process starts long before the sale. Per Sullivan, “agreeing on family values takes time. But done right, those values can become a substitute for the company.” He refers to the Deary family who sold Great Lakes Caring Home Health and Hospice: “But years before the sale, the family had been formulating a plan for its wealth that focused on family values but also held the members accountable. A family scorecard, for example, tracks their progress on 40 items that the family has deemed important, including working hard, investing wisely, and protecting its legacy.”
  • To guard against dissipation of the wealth by high-living heirs (falling victim to the proverb “shirtsleeves to shirtsleeves in three generations”), recognize that passive investment returns rarely match those of a growing business. Brooks urges his Malt-O-Meal heirs to “withdraw no more than one percent a year of his share—still a large amount of money—so that the assets could continue to grow the way his family’s business did.” For future generations to adhere to such a policy requires regular family meetings to educate heirs on investing, family values, family heritage, and the purpose of the wealth. Getting “buy in” from heirs is critical.
  • Join a peer group of similarly situated colleagues. I am actively involved in such a group called TIGER 21. Attending meetings with like-minded peers in a confidential setting allows you to experience lifelong learning, share concerns, and get candid feedback. For me, TIGER 21 serves as my personal Board of Directors. Such a group can help business sellers adjust to life after a liquidity event.

If selling a business is in your family’s future, estate planning advisors can help you plan for all the post-sale challenges. The earlier you start, the better.

Marvin E. Blum

Marvin Blum cites the Malt-O-Meal family as an example of the challenges a family faces after selling a business, offering tips to help such a family adjust.

Life After Selling a Family Business: The Challenges May Surprise You Read More »

Matthew Rittmayer & Lani Sandu Promoted

The Blum Firm is proud to announce attorney Matthew Rittmayer has been promoted to Partner and attorney Lani Sandu has been promoted to Senior Associate!

Matthew G. Rittmayer, J.D., is Partner in The Blum Firm’s Dallas office. He is a graduate of Emory University and Texas Tech University School of Law. Matthew joined The Blum Firm in 2020.
 
Matthew has 13 years of experience, initially in litigation before transitioning to estate planning.
He enjoys helping clients establish estate plans that consider both the tax aspects and the non-tax aspects such as family dynamics and efficient transitions from generation to generation. He also works with clients on probate and guardianship matters. 
Outside of work, Matthew enjoys being a new parent, along with his wife Veronica.
 
Lani Payne Sandu, J.D., LL.M., Senior Associate, offices in our Fort Worth office. She has been with The Blum Firm since 2016. Lani is a graduate of Baylor University and SMU School of Law. Following law school, she went on to earn an LL.M. in Taxation from Georgetown University Law Center. Lani is fluent in both Spanish and French.
 
Lani has over 11 years of experience in tax and estate planning. Prior to joining the firm, she was with Deloitte & Touche LLP and KPMG LLP. Lani enjoys working with clients to tailor an estate plan specific to their needs. In addition to the preparation of wills, trusts, and other estate planning documents, her practice also includes probate, asset protection, formation of business entities, and charitable planning.
 
When not working, Lani can be found spending time with her husband and son, traveling, and cooking.
 
We are proud of the depth of talent we have at The Blum Firm and celebrate the enormous contribution Matthew and Lani make. Please join us in congratulating them!

Matthew Rittmayer & Lani Sandu Promoted Read More »

Time Makes Us Older But Wiser

Happy 2023! Thanks for going with me on this weekly journey of wisdom as I now start year three of my Family Legacy Planning blog. Last week, I put a wrap on 2022 by encouraging us to look back to see how far we’ve come from where we started. Observing that journey can inspire us to keep reaching for our full potential as we now embark on a new year.

My focus last week was on the challenge of remining physically fit as time passes. Today. I want to reflect on how the passage of time can improve our mental and emotional fitness. As Melissa Manchester sings in “Come in From the Rain,” “Time has made us older and wiser. I know I am.”

The two below photos show me with my law school buddies (the “Canoe Brothers,” as described in this May 22, 2022 post.) The “then” photo was on a trip to Port Aransas to celebrate graduating UT law school. Our bodies were fit but so were our minds. Our brains worked quickly with what Arthur Brooks describes as “fluid intelligence.” We had instant recall and could spit out calculations and thoughts quickly with precision. That sharp, razor fast intellect comes in handy in starting a legal career.

However, in his recent book Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life, Brooks explains a transition that occurs in our brains as we age. After about age 55, our brains work slower but there’s an improvement in our “crystallized intelligence.” We replace fluid intelligence with the ability to connect dots and see big picture patterns. This skill enables us to make better decisions and give better advice because it is seasoned with experience.

Clients often ask me to provide “gray-haired wisdom” based on my 44 years of real-life lawyering. Sharing guidance informed by my observations over the years may be even more meaningful to them than the lightening-fast reasoning of youth. The Canoe Brothers of the recent canoe trip photo have a different kind of intelligence than the guys in the Port Aransas photo, but it’s a kind of brain power that carries more wisdom.

Another shift that occurs over the passage of time involves our emotional fitness. Whereas “young Marvin” had a wish-list of things he hoped to buy one day, the “mature Marvin” has a different list. I have replaced my desire for things with a desire for relationships. My focus is now on having meaningful connection with thoughtful and thought-provoking people. I achieve that best by becoming part of stimulating communities, such as the Canoe Brothers, colleagues at work, civic groups, and a peer group like TIGER 21. According to Dr. Mark Hyman, “The power of community to create health is far greater than any physician, clinic, or hospital. Science now shows us that a sense of community is correlated to longer, healthier, and happier lives.”

Hyman continues with this advice: “If you want to build a community, volunteering, joining a class, and prioritizing time with loved ones are all ways to strengthen your social bonds and support your health in the process. Get involved in things you care about and your community connections will naturally fall into place.”

As we first look back to our early years and then look ahead to our tomorrows, let’s celebrate the opportunities that the future offers us—opportunities to gain wisdom, create connection with meaningful communities, and achieve not only stronger physical fitness but also stronger mental and emotional fitness.

Marvin E. Blum

Marvin Blum with the “Canoe Brothers” of then and now, a brotherhood bond strengthened mentally and emotionally by the passage of time. Left: Blum in upper right of pyramid, celebrating law school graduation. Right: Blum in center of front row, on a canoe trip with older and wiser law school buddies.

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Red File Checklist

Notebook or other centralized source of information that will aid an executor in navigating the waters of estate administration and will make a person’s wishes very clear in the event he or she becomes incapacitated.

Typically a spouse, child, or other loved one takes on the role of executor with only part of the instructions they need. They may know who is to receive mom’s assets, but what exactly did mom own? How many bank accounts did she use? What insurance policies did she have? Was there a safety deposit box? What bills did she owe? Are there magazine subscriptions to cancel? How do I access her email or shut down her social media accounts?

In Section 1, create a centralized file of personal information.
In Section 2, gather the information the family will need for any businesses managed.
In Section 3, create a plan in case of incapacity, including guidance for future care, preferences, and a clear expression of financial intentions. Many individuals assume a family member will take care of them in the event of incapacity, but few appreciate the number of decisions a guardian or caretaker must make on behalf of an incapacitated person. From housing situations to medical treatment to simple living and eating preferences, without guidance, a family member is left to simply guess at what their loved one wanted.
In Section 4, gather information about the legacy you want to leave behind—aside from money or assets.
Section 5 is a list of some of the additional resources available.
Most importantly, once you’ve created your Red File with all of this information, be sure to tell someone where it’s kept. And, be sure to update it periodically.

SECTION 1 – CENTRALIZED FILE OF PERSONAL INFORMATION

You and Your Family
– You– Full legal name, date and place of birth, copy of birth certificate, location of original birth certificate, copy of Social Security card, location of Social Security card, copy of driver’s license, location of driver’s license
– Parents– Mother’s full name, father’s full name, date and place of mother’s birth, date and place of father’s birth
– Children– Children’s full names, dates of birth, copies of children’s birth certificates, copies of adoption paperwork
– Stepchildren– Full names, dates of birth, how related to you
– Grandchildren– Grandchildren’s full names, dates of birth, parents’ names
– Marriages– Spouses’ full names, dates and places of marriages and divorces, copies of marriage certificates, copies of pre-nuptial and post-nuptial agreements, copies of divorce decrees
– Military Service– Branch of military, enlistment and discharge dates, rank at discharge, location of military service record and discharge document (form DD214)
– Contact Information– Phone numbers and addresses for family members and close friends

Legal Documents
– Financial/Durable Power of Attorney– Copy of document, location of original document, who has copies, effective now or upon incapacity, who is named (in order)
– Medical Power of Attorney– Copy of document, location of original document, who has copies, who is named (in order)
– HIPAA Release– Copy of document, location of original document, who has copies, who is named
– Declaration of Guardianship in Event of Later Incapacity– Copy of document, location of original document, who has copies, who is named (in order)
– Directive to Physicians/Living Will– Copy of document, location of original document, who has copies
– Funeral Arrangements Directive– Copy of document, location of original document, who has copies
– Appointment of Agent to Control Disposition of Remains– Copy of document, location of original document, who has copies, who is named (in order)
– Will– Copy of document, location of original document, who has copies
– Living Trust/Revocable Trust– Copy of document, location of original document, who has copies
– Trusts For Your Benefit– Copies of trust agreements, contact information for trust officers, contact information for trustees, what trust owns
– Trusts You Created– Copies of trust agreements, contact information for trust officers, contact information for trustees, what trust owns
– Disposition of Personal Effects– Codicil, Trust Addendum, or Memorandum addressing how to distribute personal effects

Financial
– Financial Accounts– For each checking and savings account, brokerage account, retirement account, annuity: Copy of one statement, contact information for bank/institution, account number, exact name on account, beneficiary designation, signers on the account, online login information, what account is generally used for, what bills are automatically debited from account, what income is direct deposited into account
– Credit and Debit Cards– For each card: Copy of front and back of card, exact name on card, financial account card is linked to (if debit card), copy of one statement (if credit card), what bills are automatically charged to card
– Advisors– Contact information for bankers, investment advisors, financial advisors, attorneys, tax advisors
– Financial Statement– Copy of recent personal financial statement
– Tax Returns– Location of tax returns for past three years, contact information for preparer

Assets
– Real Estate– Copies of deeds and mortgages, location of original deeds, mortgage information (payment amount, contact information for bank, financial account payment is automatically debited from), information on time shares, contact information for property management companies of rental properties
– Business Interests– List of business interests owned, how owner name is styled, contact information for business manager and/or partners, location of documents (corporate documents, buy-sell agreements, stock purchase agreements, appraisals), copies of promissory notes, what
happens to business interests at death
– Consolidated List of All Income Sources– Include source, frequency, amount for all retirement benefits, Social Security, IRAs, annuities, investment dividends, income from rental properties, business income, mineral royalties, trust distributions, disability benefits
– Vehicles (Including Boats, Recreational Vehicles, Trailers)– List of all owned (including make, model, year), location of original title, exact owner name on title, information on loans (including payment amount, contact information for bank, financial account payment is automatically debited from)
– Jewelry, Art and Collectibles– List of valuable items including location of each, copies of appraisals
– Bonds– List of bonds and where kept
– Safe Deposit Boxes, Safes, Storage, Locked Areas– For each: Location, location of your key or combination, who else has key or combination, list of contents
– Hidden Assets– Location of any assets hidden within the home your heirs should be aware of including location of any firearms, money hidden in the mattress, etc.

Home Utilities and Maintenance
– Electricity, Gas, Water, Telephone, Cable Television, Internet, Alarm Monitoring– For each: Copy of one statement, account number, contact information for provider
– House Cleaning, Lawn Care, Landscaping, Pool Maintenance, Pest Control– For each: Contact information for provider, copy of contract
– Home Repair Contacts– For each: Contact information and services used
– Community Association– Contact information, when fees are due and amount

Insurance
– Homeowner’s Insurance– Copy of policy, policy number, contact information for carrier and agent/broker, coverage information, deductible
– Auto Insurance– Copy of policy, policy number, contact information for carrier and agent/broker, coverage information, deductible
– Insurance on Valuables– For policies on jewelry, art, or other collectibles: Copy of policy, policy number, contact information for carrier and agent/broker, coverage information
– Business Insurance– For each worker’s compensation insurance, property insurance, general liability insurance, umbrella policy: Copy of policy, policy number, contact information for carrier and agent/broker, coverage information, deductible
– Health Insurance– For each coverage: Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information, deductible/co-pay information
– Long-Term Care Insurance– Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information
– Disability Insurance– Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information
– Dental Insurance– Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information
– Vision Insurance– Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information
– Prescription Drug Coverage– Copies of policy and insurance card, contact information for insurance company, member/group number, coverage information, deductible/co-pay information
– Medicare/Medicaid– Copy of card, coverage information
– Life Insurance on Your Life– For each policy: Copy of policy and beneficiary designation, policy number, contact information for carrier and agent/broker
– Life Insurance Owned on Someone Else’s Life– Copies of policy and beneficiary designation, policy number, contact information for carrier and agent/broker
– Veteran’s Benefits– Copy of Veteran’s Health Identification Card, information on any benefits currently receiving (pension, disability compensation, medical), information on additional benefits available (life insurance, health care, long-term care, rehabilitation, nursing and residential care, burial and memorial benefits), contact information for closest Veterans Affairs regional office

Medical
– Current Medical Issues– List of current health issues
– Current Health Care Providers– For each: Name, phone number, area of practice
– Medications– List of current medications including dosage and prescribing physician
– Supplements and Vitamins– List of all supplements and vitamins currently taking
– Allergies– List of all allergies including food and drug allergies
– Dietary Restrictions– List of dietary restrictions that need to be adhered to
– Pharmacy– Phone number and address of pharmacy where prescriptions are filled
– Medical Supply Company– Phone number and address for provider of any medical equipment or supplies used
– Medical History– Detailed medical history including vaccines received, surgeries, hospital stays
– Family Medical History– Information on ancestors’ medical health that would be good for future generations to know about in dealing with their own health issues
– Past Medical Records– Contact information for locations of past hospital stays or surgeries, contact information for former physicians

Funeral and Burial
– Legal Documents– Indicate if a Funeral Arrangements Directive or Appointment of Agent to Control Disposition of Remains is included with legal documents
– Grave Plots Owned– Location of plots, copy of deed
– Funeral Expenses Prepaid– Contact information for funeral home
– Funeral Plans– If no Funeral Arrangements Directive, indicate burial or cremation preference, religious considerations, any music preference, any scriptures or prayers to include
– Notifications– Contact information for anyone to notify when you die
– Obituary– Information you’d like included in your obituary
– Photos– Digital copies of lifetime photos you’d like shown at your memorial service

Other
– Subscriptions– List of all club memberships (including country club, gym, Sam’s Club, Costco), airline rewards programs, toll tag accounts, magazine subscriptions and newspaper subscriptions including membership numbers, renewal dates, and contact information for organization
– Post Office Box or Offsite Mailbox– Location, location of your key or combination, who else has key or combination
– Online Accounts– Website, username, and password for all online accounts including email accounts, online banking accounts, social media accounts, online shopping accounts, online entertainment accounts
– Computer Logins– Usernames and passwords to log onto each computer
– Mobile Device Locks– PIN lock for each device

SECTION 2 – BUSINESS CONTINUITY PLAN

For Each Business Managed With a Succession Plan in Place
– Contact Information– Whom family should contact for information on the succession plan
– Company Documents– Location of any buy-sell agreements or stock purchase agreements
– Ownership– How the company’s ownership will be structured
– Management– How the company’s management will be handled

For Each Business Managed Without a Succession Plan
– Contact Information– Contact information for all business partners, employees, advisors
– Emergency Instructions– Any information that will be immediately needed
– Company Documents– Location of all company documents including buy-sell agreements, stock purchase agreements, appraisals, promissory notes
– Management– Who should fill which roles in the company

SECTION 3 – PLAN FOR INCAPACITY

Care Provider
– Do you prefer to live at home with home health care attendants or with a family member? If with a family member, who?
– Is there an adult day care program available that you would be okay going to?
– If you can’t be cared for in a home environment, which long-term care facilities do you prefer?
– If the above-named facilities cannot be used, would you prefer that facilities with a particular affiliation or close to a particular person be given preference?
– If you don’t have children who can guide your care, who will implement your wishes for care during your remaining lifetime?

Personal Preferences
– Spiritual or Religious Advisors– Contact information for any spiritual or religious advisors you would like to continue to minister to you to the extent possible
– Spiritual Preferences– Any faith traditions or religious observances you want to continue
– Favorite Things– List of favorite foods, music, books, movies, television programs, activities, sports, colors
– Friends to Update– List of any people you would like kept informed as to your wellbeing including contact information, list of anyone you expressly want to not have access to you
– Palliative Care & Hospice– Your wishes regarding quality-of-life issues that occur during the course of a serious illness (see Section 5, item B)

Expression of Financial Intentions
– If you prefer to live at home with a family member, do you want a portion of your assets to be used to remodel the home (enlarge doorways to accommodate a wheelchair, handrails in the restroom, ramps instead of stairs, a bedroom that could accommodate a hospital bed) or to purchase a larger home? If so, how much? Will this be considered a gift or an advance against a future inheritance?
– Do you want to provide financial support to a family member or close friend who takes on the role
of caregiver? If so, will this be considered compensation or a gift?

SECTION 4 – LEGACY PLAN

Philanthropy and Gifting
– Do you have any outstanding charitable pledges?
– Are there any causes you support that you would like to continue to be supported?
– Do you have any ongoing gifting plans?

Family History and Culture
– Ancestors– History of family including names and hometowns of ancestors
– Accomplishments– List of family accomplishments
– Traditions– Traditions you want future generations to continue
– Values– Family’s core values and mission statement
– Legacy Letter– (Also known as an ethical will) written to future generations to communicate what you value most in life, your best memories and fondest moments, what you want for your descendants’ lives, wisdom you want to share

SECTION 5 – ADDITIONAL RESOURCES

A) Marvin Blum authored the article “Filling in the Gaps: Create a ‘Red File’ for Clients to Cover Issues Beyond Traditional Estate Planning” in the February 2017 edition of Trusts & Estates magazine. It’s available at www.theblumfirm.com/2017/Filling-in-the-Gaps.pdf
B) A great article about end-of-life planning was published in the October 2017 edition of D Magazine about Dr. Robert Fine, the head of palliative care for Baylor Scott & White. It’s titled “This Man Wants to Help You Die Better” and is available at www.dmagazine.com/publications/dmagazine/2017/october/palliative-care-baylor-robert-fine
C) Debbie Pearson authored a workbook which walks you through the decisions to make, the discussions to have, and the information to gather. The Blueprint to Age Your Way (Family Night Press, 2017).
D) There are consultants who can assist with planning for possible incapacity—aging life care professionals (also called geriatric care managers). These consultants know, for example, the going rate for in-home care, the physical obstacles to look for in a home environment, and which walker would be best. One national association of such consultants is the Aging Life Care Association. The ALCA website provides a resource to search for a list of aging life care experts near you.

Red File Checklist Read More »

The Once and Future Marvin

Here’s to the end of 2022 and welcome to 2023! Each new year brings the promise of new opportunities for personal growth. Before we look ahead, it’s good to wrap up 2022 with a moment of reflection. We can learn a lot about our future potential when we stop to look back at how far we’ve come from where we started.

As I reflect on my early years, my roots are in a loving family of modest means who instilled in me a commitment to family, hard work, and education. With both parents working in Blum’s Café, my preschool afternoons were spent with my Fort Worth grandmother “Bubbie” and her sister. I sat quietly as they watched “As the World Turns,” ate a chicken soup lunch, read the Yiddish newspaper, and napped. That recipe turned me into a scrawny, studious couch potato who watched a lot of TV and invented art projects to entertain myself.

Summers took me to Alabama to visit my mother’s parents. My grandmother Pauline’s cooking, combined with my sedentary lifestyle, soon fattened up that skinny little kid. I blame it on the banana pudding, sour cream coffee cake, and lots of bread with high fat schmears. By fourth grade, I was a chubby kid sitting in Mrs. Gulledge’s class on that fateful day when we learned the news that stands out as my premier childhood memory: President Kennedy spent his last night in Fort Worth’s Hotel Texas and then left for Dallas on the final journey of his life. I became fascinated with world events and was even more glued to the TV.

I start with those memories to compare and contrast the “then Marvin” with the “now Marvin.” I am still a lifelong learner and news junkie, but I gave up my sedentary ways in college. As my friends started to develop a beer gut, I went the opposite direction and discovered physical fitness. I was late to the party, but the benefit is that I developed fitness habits that are part of my daily routine to this day.

I write this post at my daughter Lizzy’s urging. She saw a photo of the young chubby Marvin and pushed me to promote the idea that aging doesn’t have to be a decline. She selected the side-by-side photos to contrast “fat Marvin” with my 2022 gold medal triathlon win.

This message brings to mind an excellent book aptly entitled Younger Next Year. Authors Chris Crowley and Jeremy James describe intentional steps we can take so our tomorrows can be healthier and stronger than our yesterdays. Now is a great time to start, for time flies and, as an inspiring song admonishes, before we know it “A Decade Goes by Without a Warning.” (Thank you to John Batton for recommending that song to me.)

I hope to inspire others to join me in channeling Merlin the Magician from the days of King Arthur, popularized in T.H. White’s The Once and Future KingLike Merlin, let’s attempt to live backwards and “youthen” rather than age. I recognize that prioritizing health and fitness doesn’t guarantee a long life. My brother Irwin was a fit 65-year-old who suddenly died of pancreatic cancer. The message is to do your best to improve the odds but remain realistic about the risks of aging.

As both a fitness guy and an estate planning lawyer, I’ll combine those roles into some recommended New Year’s Resolutions. Yes—eat heathier and get exercise but also make it a 2023 goal to take your estate plan on a “test drive” by asking, if I were suddenly gone, are all my affairs in order?

As we turn now our attention away from the past and toward all the promise that 2023 holds, I wish you a healthy, productive, and meaningful year.

Marvin E. Blum

A chubby young Marvin Blum contrasted against a 2022 triathlon winning Marvin. Looking back on examples of personal growth can inspire us to keep reaching to achieve our full potential.

The Once and Future Marvin Read More »

When Failure Happens, Send a Thank You Note

For last week’s 100th post, I channeled Ben Franklin and shared a mini “Poor Marvin’s Almanac,” a collection of some of my favorite sayings. Here’s another: You learn more from your failures than your successes. When my first job as a lawyer didn’t work out to my liking and I left to open my own firm, my father-in-law Abe Kriger wisely said, “Send them a thank you note.” Abe knew the law firm did me a favor. He assured me I would move on to bigger and better. Because of my dissatisfaction at my prior job, I formed The Blum Firm, which has become the source of immense career satisfaction.

Jim Collins echoes this theme in Good to Great, declaring, “The enemy of great is good.” A job that is just “good” can deter you from creating a career that is “great.” Failure, though painful at the time, opens the door for us to explore opportunities we would otherwise miss.

My prior job experience provided me with a goal when I started The Blum Firm. My mission was to create a work environment where people wouldn’t dread coming to work. I vowed to build a caring culture, one centered around caring for every team member and every client. This law firm camaraderie serves our clients well. Our “open door” environment encourages us to share ideas and stimulates our creative juices. This collaborative atmosphere enables The Blum Firm to generate “outside the box” solutions to address our clients’ needs.

The path from “then” to “now” hasn’t been a perfect upward slope. Failures continue to pop up that provide me with teachable moments. For example, as a young lawyer, I thought I could work with anyone. Early on, I teamed up with some colleagues who turned out were not a good fit. That partnership failed. But, the next time I selected partners, I got it right. I learned from my mistake that I’m extremely exacting and only mesh with others who share my style. Once when I was tempted to bend and hire a lawyer not up to those standards, my law partner Pete Geren awakened me by writing on that resume the words: “Not even close.” I never forgot that lesson.

In a family meeting I facilitated, the patriarch wanted to share his success story. He was surprised when his children preferred to hear about the failures he’d encountered along the way and what he learned from them.

In the Sabbath Torah portion 10 days ago, we read of Jacob wrestling with an angel. Jacob wins the battle. As a result, the angel blesses Jacob and rewards him with a Divine covenant. Like the Biblical Jacob, our greatest achievements and blessings often come to us only by prevailing through a struggle.

As we wrap up the year, may we resolve to see failure as an opportunity. As my son Adam says to me when failure happens, “Don’t be hard on yourself.” And when faced with a risky challenge that offers high-stakes rewards, let’s not allow the fear of failure to deter us. If the worst that can happen is that we fail, let’s remember that failure is a great teacher. The temporary pain is better than not achieving success because we never tried.

Wishing all a Merry Christmas and a Happy Chanukah!

Marvin E. Blum

Marvin Blum celebrates the holidays with his law firm family, grateful his early job failure paved the way to create The Blum Firm.

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My 100th Post: Poor Marvin’s Almanac

When The Blum Firm reached our 40th anniversary in late 2020, I was searching for a way to commemorate it. My law practice had always focused on tax and estate planning, but in the prior decade I had adopted a passion for also helping families create and pass down a meaningful legacy. My goal was to not only prepare the money for the family (passing down the largest possible inheritance), but to also prepare the family for the money (preparing heirs to receive that inheritance). I also began to understand that an inheritance is about a lot more than money. Families pass down not only their financial capital, but also their human, social, intellectual, and spiritual capitals. To celebrate the firm’s 40th, I decided to write a weekly series on Family Legacy Planning to offer tips on how to create family glue, improving the odds of multigenerational success.

When I launched this project, I anticipated telling everything I knew about legacy planning over the course of several weeks. Well, here we are 100 posts later, and I’m still writing. The feedback I’ve received has been immensely gratifying. Each week, I receive encouragement to share more, in particular personal stories from my own life journey. I never expected this blog to take off the way it has, but I am grateful to be reaching this 100th milestone.

In selecting a topic for today’s post, I’m channeling one of our Founding Fathers, Benjamin Franklin, whose Poor Richard’s Almanac became a site for him to offer some good old-fashioned advice for better living. Like everyone, I’ve accumulated a collection of my own words of wisdom. At the urging of a number of you, and inspired by Father Ben, I’ll share some random lessons in life that I hold dear. I’m careful not to push my advice on someone unless they sincerely want it, which brings me to my first piece of advice:

  • From an old “Dear Abby” column: Before you offer someone advice, first ask them if they want it. Unless they respond with an enthusiastic yes, the answer is no.
  • From my wife: Take the high road. (Sometimes we ask her where that is, and she always helps us find it.)
  • From my mother: The most important decision you make in life is who you marry. (I’m glad I listened!)
  • From my father: The only helping hand you need is the one at the end of your own arm.
  • From my son: Work smart, not just hard.
  • From my daughter (the family historian): If you don’t document it, it didn’t happen.
  • From my mother-in-law (always on the go doing “good turns” for others): Don’t go to bed at night until you’ve done at least one good turn that day.
  • From my father-in-law: You catch more flies with honey than vinegar.
  • From my former long-time assistant Mary Staudt: Pay attention to the signs. When someone tells you who they are, you should believe them– the first time.
  • From my best friend Talmage Boston: Ask for what you want. The worst that can happen is they say no, but they might say yes.
  • From a relative Donald Adler about family trips: Remember, it’s everyone’s vacation.
  • Two from my friend Bruce Moon’s mother: (1) Time speeds up; (2) It’s always something. (Isn’t that the truth!)
  • From a dear departed friend Anne Marie Hartsell: When you get upset, remember the “100-year theory.” Ask yourself: Will this matter in 100 years?
  • Marvin’s famous three: (1) Take a light courseload your first semester of college so you don’t dig a hole in your GPA; (2) Wedding planning is a recipe for friction, so the shorter the engagement, the better; (3) It’s never the “right time” to get married, have a baby, or start a business. You just have to do it.
  • I’ll wrap up with a favorite from Ben Franklin, which totally speaks to where my life is now: A true friend is the best possession.

I could go on and on, but I’ll close on that high note. This is just a random list that came to my mind today. I welcome hearing your favorite sayings so I can add them to my collection.

I dedicate these first 100 posts to all of you, whose encouragement has inspired me to keep writing. Many of you have even urged me to write a book on legacy planning. Maybe I’ll tackle that one day. In the meantime, I’ll try to keep these lessons coming ‘till my brain hits empty.

With gratitude,
Marvin E. Blum

Marvin Blum uses today’s post to offer words of wisdom, channeling Ben Franklin whose Poor Richard’s Almanac offered plenty of good old-fashioned advice.

My 100th Post: Poor Marvin’s Almanac Read More »

Sell a Business, Save a Family

In recent posts focusing on Business Succession Planning, I’ve recognized that often the best solution for the family is to bite the bullet and sell the business. As Denise Logan describes in The Seller’s Journey, that’s a bitter pill for most business founders to swallow. She likens it to the pit in your stomach the day you drop your oldest child off at college. Accordingly, Logan asserts that 70% of business owners fail to follow through to closing. To improve the odds, Logan urges advisors to focus not only on the transaction, but also on the owner’s transition. There are both head and heart issues at play in selling a business.

An example of a business sale success story that did make it to the finish line is Pac Paper, Inc. of Vancouver, Washington, manufacturer of paper sleeves for coffee cups and other paper products. The business had been in the family over 40 years, passed down by father to son David Morgan. Like most business owners, Morgan had no intention of selling the company, assuming it would stay in the family for generations to come. Out-of-the-blue, Morgan began receiving unsolicited call from competitors wanting to buy the company. It got Morgan thinking: who in the family was suited to run the business after him? Hard though it was to admit, Morgan came to the conclusion that the next generation wasn’t in a position to take over leading the business. He also realized that good offers wouldn’t stay on the table forever. Morgan and other co-owners accepted reality and sold the family business to a rival company. They knew that a sale was the best way to preserve family unity going forward.

For those in similar shoes to the Pac Paper Morgan family, there are steps to take prior to going to market that can help the family get the best price. My thanks to Kasper & Associates, a Fort Worth professional merger and acquisition firm, for providing me the following list entitled Business Exit: Tips to Maximize Value:

  • If possible, begin preparing to sell your business 1-2 years before the expected listing date.
  • Get all major shareholders and your spouse to agree with the plan to sell. Don’t assume your spouse or major shareholders will sign whatever is put in front of them to effect the sale. Seek professional help on this matter as needed.
  • Try to keep an open mind about the potential value and be flexible about the terms of a proposed transaction.
  • Explore tax savings strategies with your CPA or other tax advisor.
  • Replace family member employees unless they plan to remain with the business after it is sold.
  • In order to boost your company’s profitability, reduce or eliminate unnecessary perquisites you receive from the business.
  • Replace non-productive employees with productive ones.
  • Develop key employee job descriptions/resumes and an organization chart which includes all employees.
  • Execute employment contracts for key employees.
  • Reduce receivables; clean up your company’s financial reports; update inventory records.
  • Settle liabilities and pending litigation.
  • Spruce up the facility inside and out.
  • Upgrade your company’s technology and fine-tune customer records using up-to-date software.
  • Do post-retirement financial planning with your financial advisor.
  • Develop a relationship with a professional Merger & Acquisition Specialist 1-2 years in advance of anticipated listing date and request an opinion of current market value of your company.

I’ll add another point to this list:

  • Plan ahead to fill the void in your life created by selling the business. I’ll dive deeper into this point in upcoming posts and offer guidance from real-life experiences.

For those of you who are still struggling with the idea of ever selling your family business baby, I’ll close with wisdom from a family matriarch. Dennis Jaffe tells the story of a letter written by the wife of a business founder, read annually to future generations of the family. As precious to the family as the business that “Papa” built is, the matriarch acknowledges in the following Legacy Letter that circumstances could arise where they may have to sell the business in order to save the family:

“Greetings to all of you as you gather for the annual family meeting. I want you to think about a paradox—Money is important./Money is not important. There’s a lot of truth in both statements. You’ve come a long way, babies, but remember where you came from—know your roots. T. S. Eliot said, “Where is the life we have lost in living? Where is the wisdom we have lost in knowledge? Where is the knowledge we have lost in information?”

You need knowledge, wisdom, and vision. It’s our job to be good stewards of the gifts Papa left us. There are pitfalls inherent in having a family business. Be vigilant for the warning signs. I would rather you dismantle the family business than squabble over it.

I urge all to conduct an honest assessment of your family and determine if the best course is to keep the business or sell it. No matter how precious it may feel to preserve the business, preserving the family is even more precious.

Marvin E. Blum

Selling a family business is a heavy psychological lift but is often the best solution for the family. Marvin Blum offers tips to help business sellers achieve the best outcome.

Sell a Business, Save a Family Read More »

You’re Having a “Liquidity Event” and Making a Gift to Charity: The Order of Events Matters!

In my series on Business Succession Planning, I’ve identified three choices for transfer of a business: (1) transfer to family members; (2) sale to employees/insiders; and (3) sale to an outside third party. After a candid assessment, it often becomes clear that the first choice isn’t a workable option. That leaves the owner with a sale of the business, whether to inside parties or outside parties.

When an owner sells a business, it frequently is the first time the family has substantial liquid assets. That’s why the sale of a business is commonly referred to as a “Liquidity Event.”

On a light-hearted note, I’ve kidded with my wife Laurie that so many of the men I represent who’ve had a liquidity event go buy a bright blue blazer and seem to wear it everywhere they go. Laurie and I call it a “Liquidity Blazer,” and I lamented that I’ll never have a liquidity event enabling me to buy one. We were having this conversation when I was in Las Vegas to give a speech, walking around Caesar’s Mall to pass the time (since you won’t find me at a gambling table). There in the window of Brooks Brothers was the Liquidity Blazer of my dreams, and Laurie made me try it on—perfect fit, no need for alterations. Laurie convinced me that (even without a liquidity event) I deserved it, and I wore it the next day when I gave my speech.

On a more serious note, selling a business also provides the owner with the liquidity to satisfy long-held desires to make substantial charitable contributions. All too often, business sellers contact me AFTER the sale has closed for charitable giving guidance. If only I could wind the clock back, there’s a better order of events that could’ve saved them a lot of tax. Consider this example: Owner sells business for $10 million and then donates $1 million to charity, leaving the owner with $9 million before tax. Owner reports income of $10 million (for simplicity, assume a zero basis), and takes a deduction for the $1 million charitable gift, paying tax on $9 million. Rewind the clock: owner donates 10% of the business just prior to entering into the sales contract. At closing, owner receives $9 million, and the charity receives $1 million. Owner reports income of $9 million and takes a deduction for the charitable gift of a 10% slice of the business (appraised at close to $1 million in value), paying tax on approximately $8 million. Bottom line: by making the gift to charity BEFORE the sale, owner saves income tax on $1 million of the sales proceeds.

The following chart illustrates this timeline. To supercharge the family’s tax savings, note the recommendation to do “squeeze & freeze” planning well in advance of the sale. Such planning shifts the business into trusts that are out of the estate, avoiding the 40% estate tax at death. There are trust structures that allow you to achieve this outcome, yet retain access, control, and flexibility. The most popular trust options are SLATs, 678 Trusts, DGTs, and GRATs. Also note that making the charitable gift too close to the closing date runs the risk of an “assignment of income,” killing the above-described tax benefit. Also, be aware that a pre-transaction charitable gift of a family business needs to be made to a public charity or donor advised fund, in order to deduct the fair market value of the gifted business interest. Consult a tax advisor to help you achieve the best tax outcome.

To take these tax savings up to the limit, consider these two recent examples where the owner gave away the ENTIRE business: electronics giant Tripp Lite ($1.6 billion value) and outdoor apparel maker Patagonia ($3 billion value).

  • Barre Seid donated 100% of Tripp Lite to Marble Freedom Trust, a non-profit devoted to conservative causes. After the donation, the company was sold for $1.65 billion, with all the proceeds going to Marble Freedom Trust free of income tax.
  • The Chouinard family donated 2% of their Patagonia stock (all the voting shares) to a new Patagonia Purpose Trust, and 98% of their stock (all non-voting) to Holdfast Collective, a non-profit devoted to protecting the environment.

Neither family will pay any tax when Marble Freedom or Holdfast sells the business it owns, and all the proceeds will be committed to causes important to that family. Ironically, those causes are opposite: Marble Freedom funds efforts to stop action on climate change; Holdfast funds efforts to combat climate change. That’s yet another example of the polarized world we’re living in today. [Note that since these two nonprofits are politically focused, they are 501(c)4 rather than 501(c)3 organizations, so the contributions to them are not deductible, but the income they earn is exempt from tax. Furthermore, supporters can donate assets that the 501(c)4 sells and avoid capital gains taxes on the sale.] By donating a business to support charitable causes, the entire amount of the sales proceeds goes to charity without diminishing any of it to pay income tax on the sale.

Here’s the key takeaway: if you sell a business or other asset and want to commit part or all of the proceeds to charitable causes, make the gift BEFORE you sell.

Marvin E. Blum

Marvin Blum in his “Liquidity Blazer,” reminding all who sell a business to consider making charitable gifts of a business interest BEFORE you sell the business.

You’re Having a “Liquidity Event” and Making a Gift to Charity: The Order of Events Matters! Read More »