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Exploring Aging
Did you know that in the next 20 years a wave of wealth will pass from baby boomers to the next generation? Did you know $84,000,000,000,000 that's trillion with a t, is about to move from the older American generation to Gen X and Millennials in just 2 decades. Think about it, 20 years ago it was 20 4. 2004, George Bush was president and Facebook was born. What will the next 20 years bring?
Speaker 1:Well, I can tell you this, it's going to bring the great wealth transfer. If you are wondering what the future might hold, stick around as we hear from Emery Thomas, a retired financial planner and advisor with decades of experience as he shares the valuable insights he has on this edition of the Exploring Aging Podcast. You're listening to the Exploring Aging podcast, and we're glad you've joined us for the ride. I'm your host, Ray Sanders. And joining me in studio are my cohost, doctor Bill Pierce and Greg McNeese.
Speaker 1:Guys, are you ready for another great podcast? I'm ready.
Speaker 2:I'm ready too. I'm really interested in this subject.
Speaker 1:It's gonna be a good one. That's for sure. So let's let's just unpack it a little bit. I'm kind of curious as we get started today, how familiar are you guys with this phenomena that we mentioned earlier in the program known as the great wealth transfer. This was a new one for me.
Speaker 1:Greg, doctor Pierce, tell me what you know.
Speaker 3:I know on because I've read it.
Speaker 1:Okay.
Speaker 3:That's all I know about it.
Speaker 1:So you're gonna be ahead of us. You're the sharpest Well,
Speaker 4:I don't know about that.
Speaker 3:I didn't say that. I just said I've read about it.
Speaker 2:I talk to people about it all the time.
Speaker 1:Really?
Speaker 2:Yeah. I mean, this is such the the the conversations I have are about this often. And I'll tell you what, a lot of people tell me after the fact and they tell me about all the mistakes they make.
Speaker 1:Oh, man.
Speaker 2:So I'm looking forward to hearing how to do it right from memory.
Speaker 1:Well, it seems to kind of make sense, but a lot of us, I think, don't really have it in our minds that people that hold all the wealth in the world right now are getting older and something's gonna happen with it, you know. But well, Greg, you've brought someone in studio with you today and I would love for you to introduce your guest and have him tell us a little bit about this idea of the great wealth transfer.
Speaker 3:Sure. Well, I met, mister Thomas, back earlier this year. And, in talking with him, I realized he was a retired financial planner and had spent decades, in the field. And as we began to kind of think about, podcast, he's a his he's his name just kept coming back to me as here's a guy who's lived it, breathed it. And because he's in Western Oklahoma, he understands from a financial perspective, individuals inside the church and outside the church who you know what?
Speaker 3:They've made money. They've lost money. I mean, talk about ranchers and farmers. And in Western Oklahoma, it's either feast or famine. And, so he understands the plight of investing in individuals.
Speaker 3:And so, he comes and is I think he's gonna share with us today a a wealth of information, for us.
Speaker 1:Well, Emery, we're really glad that you're here, and, we had a chance to speak just before the program. About once a month, I head out to West Texas out near your neck of the woods. And I always tease everybody. I feel like I'm I'm, chasing tumbleweeds out that far.
Speaker 4:I have a few of those.
Speaker 1:I have a few of those. And you start getting out there, I mean, you are definitely moving out to the west. I didn't check. Did you check? Is he wearing boots today?
Speaker 3:I didn't check.
Speaker 1:Well, something tells me he probably at least owns a pair.
Speaker 4:I bet so.
Speaker 1:Well, you know, here's the deal. Here's what we know. Baby boomers owned about half of the country's wealth. Did you guys realize? Half of the country's wealth.
Speaker 1:Half. Half. In America, the wealthiest top 1% control as much as the bottom 90%.
Speaker 3:That's a lot. That is a lot. When you think about
Speaker 1:it, that's why. 1%. 1%. The oldest boomers, and they they say that they kind of look at it this way, born 1946 to 1964 are 78 this year, and the youngest are turning 60. You know, boomers work hard for their money.
Speaker 1:They've come out of a, you know, a season in our country where, you know, they've they've worked hard, they're trying to save, they're trying to do the right thing. And so now they're in this position to where they're starting to think about transferring their values. Or not their values, but their valuables. But that's my next point. I often when I hear this idea of transferring valuables, what about our values?
Speaker 1:And what what role do our values play in how we transfer our valuables? Are are people gonna do with our hard earned money what we would have done with them? So that's something I hope we can we can talk about. So Emery, we're so glad you're here, and I've heard great things. And and so I just wanna start to unpack that.
Speaker 1:You retired as a financial planner and advisor with decades of experience. My first question for you right out of the shoots is are boomers ready to simply hand over their hard earned money to the so called okay. Forgive me, guys. So called trust babies. So please help us better understand the options boomers and olden older adults have, for getting their houses in order as they look to this next generation and manage their estate plan.
Speaker 1:So it's all yours, Emery.
Speaker 4:Well, to begin with, it's not one of those things you just sit down on Saturday night with your wife and talk about, and you
Speaker 1:decide it Monday morning, you go see somebody and get it done.
Speaker 4:Mhmm. It's a it Monday morning you go see somebody and get it done. It's a process. And it's a process that you should start years before the time comes to make the actual transfer. You need and we you talked you mentioned transferring valuables and transferring values.
Speaker 1:Yeah.
Speaker 4:If you're at the time in your life to transfer your valuables, you missed transferring your values. You should have done that years ago. You should have done it with your children, and now you should be doing it with your grandchildren. They should be with you. They should see the way you live your life.
Speaker 4:They should see the things that you put value on, the things that you think are worth living for. They should see that. You should teach tithing when they're little. You should have taught your kids that when they were 6 and 7. And and if if they don't teach it to their to their kids, to your grandkids, then you should.
Speaker 4:Mhmm. But those values now come down through the years. At the end of your life, it's hard to transfer values. People are gonna be looking at the dollar sign instead of that.
Speaker 1:This is a real issue because we live in a in a day and age when people don't know even what to call people when they greet them at the grocery store. You know, which pronoun do you use? I mean, I mean, what what do you support with your your your life efforts, your causes that you support with your money and your time? But these are things that we hopefully I love the phrase, I think it applies here. So much of what we want our kids to remember isn't taught, it's caught.
Speaker 1:And I I think what you're saying is if they haven't caught it by now, the the values thing may be an issue. But it does play in in terms of maybe you directing them at least what you hope they would do with some of the the funds and and the assets. But anyway, go ahead.
Speaker 4:Well, when you give something away, you've given it away.
Speaker 1:That's true.
Speaker 4:Don't I I tried to get my clients to not try to control everything from the grave. Mhmm. Because life changes. 5 years after you're out of the picture, their lives may be very, very different than you ever thought about them being. Mhmm.
Speaker 4:So just don't do it. You really need to prepare your children, prepare your grandchildren to receive whatever portion of your estate you're gonna send their way. Get them ready for it. Talk about it. The clients I had who had the the healthiest ending to their lives, And one of my clients died just this year.
Speaker 4:She was a 102. Wow. And I remember working with her kids. And her kids are almost well, they are. They're my age, but they were her kids then.
Speaker 1:So they're in their forties?
Speaker 4:3 months. I wish. I'm on the leading edge of the boomers. Okay. You know?
Speaker 4:And and and there there's something to be said about that. I mean, most of us, our fathers or our parents were in the military in the 2nd World War. If not, like my dad didn't get to go because he was too young for one war and too old for the next one, but all his friends did. And so he had a really strong impression of what the war was like, and and when those guys came back home, they were looking to raise families that were going to be better off than they were. They insisted that we get a better education, that we do this and we do that, and I think that's why the baby boomers have so much wealth.
Speaker 4:We were taught to work, accumulate. Obviously, everybody didn't follow that, but I think as a bulk that the generation did, and so you have the largest single concentration of wealth in 1 generation possibly the earth has ever seen.
Speaker 1:Yeah. I believe in him. I really believe it.
Speaker 2:I love it that we started talking about transferring our values before we started talking about money.
Speaker 1:Mhmm.
Speaker 2:And I think everybody sorta has an idea about where they wanna transfer their wealth. But how do you make sure it actually happens? What do you have to do to make sure it goes where you want it to go?
Speaker 4:If you're really set on that, do it before you die. Mhmm. Go ahead and go ahead and fund those things that you want to fund.
Speaker 1:Oh.
Speaker 4:You know, do it. Do it yourself, and then you know it's done. Mhmm. The Bible tells us that we should leave funds for our children's children. Mhmm.
Speaker 4:So I
Speaker 2:take that verse.
Speaker 4:I take that to mean that that we're to pay attention to our grandchildren, that we should be there with them. And I think showing them is so much better than telling them. Take them with you, talk to them about what you're doing and why you're doing it, and talk to them about the rewards of doing that. And and I have and I this is just me.
Speaker 2:Mhmm.
Speaker 4:But I was saved when I was 8 or 9, and I really was saved. I'm not one of those that had to get baptized again when I was 22, and I have always felt that God just opened doors for me to walk through. Mhmm. I never had to look for a job. I've had 4 in my whole career, and they came to me.
Speaker 4:I didn't come to them. Mhmm. And I always thought God just opened those doors, and all I had to do was just walk through it. We've ended up with quite a bit of wealth, not on global standards, but certainly on Western Oklahoma standards. We've ended up with some and I think it's there because God trusted me with it to do with it what he wants done with it, and it's interesting.
Speaker 4:Every time a need comes up and and we can meet it, we do, and nothing changes. My accounts tend to just come back overnight. It's just like almost magic, and I have shown that to my kids and I've shown that to my grandchildren. I mean, we can take a large chunk out for like the Christian school there in the town where we live. I like what they're doing just a bunch, and we can fund them pretty good sized dollars.
Speaker 4:And then 6 months later, I go back and look at my accounts, and they're back where they were. Mhmm. That's God taking care of them.
Speaker 1:That's God's economy. That's what I call that, God's economy. Exactly.
Speaker 2:Well, you've shared your testimony when you got saved. You're talking about tithing and about stewardship. I'm loving this.
Speaker 4:Well, I did that with my clients. Western Oklahoma was the place for me to live. We didn't grow up there. We grew up in North Carolina in Chapel Hill, very busy place, and then we ended up in in where we live in western Oklahoma. But back when I started my business, I went out and door knocked, and for 3 months before I could even open an office, I just door knocked, and I met the nicest people.
Speaker 4:It was in June, July, and August. That was just terrible. It was odd. And everywhere I went, you knock on the door, Well, come on in here, boy. I was a boy back then.
Speaker 4:I was a lot younger than I am now. Come on in here and have something to drink. It's hot out there. We want to close the front door. I'd knock on the door.
Speaker 4:They'd never seen me before, and you're inside. You know? And so I got to tell my story and I got fed in water just about everywhere I went. It was a good experience. Cold calling is difficult.
Speaker 4:It's not something I'd volunteer to do again, but it certainly was a good experience, and I got to meet some wonderful people, just wonderful folks, and and when I retired, I didn't mind giving up the responsibility of managing people's life savings. I did a good job of it. I did because they were successful and so was I, but what I really miss is just my clients. They were like extended family. I mean, I went to birthdays.
Speaker 1:I
Speaker 4:went to I don't know how many funerals I went to over 40 years. I went to the hospital. I had clients that I went and picked them up and checked them into the hospital. I was on the emergency call list and then when they were ready to go home, I went and got them, took them home, and Jane fed them, cooked meals for them for several days until they could get back on their feet. That kind of relationship was awesome, and I never worried about another brokerage firm stealing my clients.
Speaker 4:Wasn't going to happen.
Speaker 1:Yeah.
Speaker 4:And we'll talk about that again later when we talk about some other things here. We'll talk about your clients or your friends talking to people that they don't know that just called on the phone.
Speaker 1:Yeah. Right. Well, I think we just figured out the secret. You know, they always say that behind every good man's a great woman. And, now I'm really curious about your wife's cooking.
Speaker 1:Yes. Because it sounds like somebody can fry it up in the pan. Yes. Bill, I think you've got a hot question you wanna ask, Emery.
Speaker 2:Well, I think I just asked it, Ray. How do we make sure that our assets go where we want them to go? Like like like, the question to expand on a little bit would be, do we need a will? Do we need a trust? What do what what kind of instrument do we need?
Speaker 2:I know your answer was, first, think about doing it now. Mhmm. And I like that. Okay. If we don't get it all done now, what do we need?
Speaker 2:What kind of instruments do we need to put into place to make sure things go where we want them to go?
Speaker 4:Okay. We can talk about that. Now that that's a little complicated because it's different with every client.
Speaker 1:It
Speaker 4:depends on the size of your estate, and it depends on the nature of your estate. I mean, a lot of my clients, when they got down close to the end, sort of in the last chapter, they had a house was paid for, a car that was paid for, and everything else was in if it was in securities, it was liquid. Mhmm. So it was simple. Those people, the easiest and the cheapest way to do that, and cheap doesn't mean I mean, it just means inexpensive, is to go in and put a TOD, a transfer on death, or a POD.
Speaker 4:Some people call it that, which is a pay on death, and you can do that everywhere on your account, and then that becomes what's called a non probate transfer. It means someday somebody walks into that institution with a death certificate, and the lady at the front desk takes it, looks it over, holds it up to the light, and then she goes in there and she erases your name and puts somebody else's name on it. I mean, that's how that works. Simple. No lawyers, no court costs, or anything.
Speaker 4:Now not everything can work that way, but most things can. In Oklahoma, where we are, there's a new situation for real estate, which we'd never had before, because now you can do it on your real estate. I didn't know that. Yep. On your farm, on your house.
Speaker 4:You can create a deed. I don't remember the exact name of it, but any attorney can do that, and that should not be very expensive. Matter of fact, the attorney secretary would probably do it for you, but you can go in and put names on on deeds who's going to get get your stuff, and if 5 years later little Johnny messes up and Janie does well, you can go back in and revoke that thing and do another one. So it's not something that's forever.
Speaker 1:How long is that how long has that, law been in effect? How new is that?
Speaker 4:Maybe 5 or 6 years.
Speaker 1:Oh, goodness. Okay. Well, this is good information.
Speaker 3:Yeah. So let me ask this, Emery. So I have, I have 2 children, 2 adult children, young adult children. So my wife and I, we have a will, and we have a trust, that we obviously, our assets upon death fund, you know, the trust. And then there's we figure out the trust articulates what happens there.
Speaker 1:Yes.
Speaker 3:So I think what I hear you saying is a person could have a POD, a TOD, and not necessarily have the wills and trust. Is that correct?
Speaker 4:Absolutely. It just depends on your estate and what you've got. I mean, if you've got a larger estate and or not necessarily larger, but a lot of different things in your estate, that might not work. Mhmm. Then you're going to need a will, and if you need a will, you probably need a trust also, not necessarily, but probably.
Speaker 4:If I can think of a client who is anticipating passing on and all they have is money in the bank and a house, and they've got 4 kids,
Speaker 1:well,
Speaker 4:they're not going to leave the house to any one of those kids. They want it sold and the money divided up. Right. So a simple will will take care of that, really take care of that, and wills shouldn't cost much. I mean, surely you can find an attorney in your church that you can cry on their shoulder and they'll do it for a few $100.
Speaker 4:Wills just shouldn't cost much. Beyond that, if you have an estate that's complicated, and by that I mean, let's say you have a farm in Beckham County and another farm in the county next door and another farm on the other side of the the state. With that, you also own minerals in several different areas. Maybe you inherited some land like Jane did in North Carolina. You know, that that becomes complicated, and in a case like that, a trust makes perfect sense, because you transfer everything you own into the trust, and then the trustees manage it.
Speaker 4:Trustee or trustees manage everything, and when a trustee passes on the other trustees, you've spelled it out who moves up the ladder. That way when when somebody's gone, I mean they can take a copy of the trust and go down to where you do car titles and go in and get the car title changed. They can do everything because you've given them the authority to do it with. Sure.
Speaker 1:Let's talk about a couple of terms that have come up here for our listeners. You've talked about probate. I've often heard try to avoid the hassles of probate. Let's talk about what is probate. We've also talked about beneficiaries.
Speaker 1:We've talked about trustees. Give us kind of a a layman's term, explanation for what those terms mean.
Speaker 4:Okay. I have to talk about Oklahoma
Speaker 1:Okay.
Speaker 4:Because it's different. It's different in Texas. It's different in every state. They're they're very similar, but the processes are a little bit different Okay. In each state.
Speaker 4:But in Oklahoma, you truly don't want to die without a will. Everybody ought to have one, because if you don't and there's a question about a title, it's got to go to court. If you have a will and they're going to process it, then that's called a probate, and whoever you've named to be your administrator on the will has to go to court, get an attorney, go to court, not necessarily get an attorney, but they probably should, go to court and become have the court verify that they're the administrator of that state, and then they can go out and do stuff, and if it's liquidated to the estate, if it's given away, they get it all in order, and then they have to go back to the court and make sure the court approves all of those distributions. Well, that's time consuming. If you've left it to somebody who has a job and needs to work and can't, that's a problem, and it also costs money.
Speaker 4:But if you do a trust in Oklahoma, you also do a will, and the wills are called spillover wills. Everything that you buy or accumulate, you should, when you get it, put it in the name of your trust, but everybody forgets something. There's something that's left out, and that's why you have to have this little pour over will or spill over will, but that's a real short will, and it just says anything that I didn't put in the trust, I'm leaving it to the trust. Mhmm. You know, and you just have to have that.
Speaker 2:I've seen a lot of people who do not have that. They you know, they and they end up leaving something out of the trust, and they have to probate.
Speaker 4:Absolutely. Mhmm.
Speaker 1:You
Speaker 4:know? And you really don't wanna have to probate anything if you can avoid it. Mhmm. You really don't, but now the trust trust at least in Oklahoma are really, really useful things. Let's say you've got 4 kids and 3 of them are responsible and do everything that you trained them to do and the other one's not.
Speaker 4:Well, if you're going to leave your state and however you're going to leave it, whatever you're going to leave to the one that's not, you can specify in there that it doesn't go directly to him or her, that it goes to a trust that will be set up when your death happens, and you name somebody as the trustee, and the other kids aren't going to like it if you name them, so you need to find somebody else probably, but they can get their share, and you can set that one up in a trust, and you get to specify everything about the trust. Under what conditions does he get money? Are you going to pay it out to him by the month? Are you going to give him a living, or are you going to hold it until he's 50 and then let him have it then? You know, Anything that you can think of, you can do in a trust.
Speaker 4:There's not a legal or illegal thing there unless you specify that he robbed the bank, you know, and you're not going to do that. Nobody's going to specify an illegal activity, but that works, and and there's lots of families who need that.
Speaker 1:So I'm getting a handle on, probate and all that. I'm more on wills, more on trust. I know Bill's ready to ask a question, but I wanna jump ahead of Bill just a little bit while we're talking about trust. It even sounds funny when you say it. Revocable, irrevocable.
Speaker 1:What I mean, tomato tomato. What I mean, what is this? Yeah. What are we talking about here?
Speaker 4:Well, they they those are really important terms. Revocable trust is one that you write and you set it up and you have the right to change it any day you want to. You have the right to rip it up if you want to. It's revocable. An irrevocable trust is a whole different ballgame.
Speaker 4:That's a dinosaur with a different head. The irrevocable trust, you set it up, you fund it, and you can't unfund it. You can't change it. You can't go back and do anything to it. There are ways to do that, because in bottom line, there's nothing you can do that you can't undo, but to change it, you'd have to go to court and convince a judge, and the judge would issue an order to change that irrevocable trust.
Speaker 4:So it's rare that you would do an irrevocable trust. There's times when you might want to
Speaker 1:But most people are doing a revocable.
Speaker 4:Absolutely.
Speaker 1:Okay.
Speaker 4:And I'm thinking people who get married 4 or 5 times. Okay. Well, I mean, I had clients who did that and they might have an irrevocable trust just so that they'd never lose any of it.
Speaker 3:Protecting.
Speaker 4:Yeah. Yeah. Yeah. Protecting stuff.
Speaker 1:Alright. I got ahead of you, Bill. Sorry. Go ahead. Yeah.
Speaker 1:You you had a question.
Speaker 2:Well, I mean so we know what it costs to prepare a will.
Speaker 1:Several
Speaker 2:$100 if you have a lawyer that goes to church
Speaker 4:You're you're exactly right. I'm not kidding. I told everybody, my Methodist friends, my Catholic friends, I said, there's an attorney in your church. You go get him to do it
Speaker 2:or her. So if we end up getting a trust and many, many people need a trust, what would that cost?
Speaker 4:Alright. To begin with, every attorney, like every doctor, has the right to do surgery, but that doesn't mean you want every doctor doing surgery on you. Same thing is true with attorneys. A general attorney, you don't want setting up your trust, and I have lots of friends who are general attorneys, and they would not slap me for saying that. You want an attorney that specializes in trust, that that's the major part of their business, because trust law changes from year to year.
Speaker 4:In Oklahoma, it seems like it changes more often than that, but you've got to have an attorney that's up to date on that and fully understands how to set them up to accomplish what you want to do, and what you want to do is entirely different than the person who was there just for you. So trusts are going to start at several $1,000 and go up, and if it's an honest attorney, it's not based on the value of the estate. It's based on how much work they have to do to make your estate, whatever its size, go the way you want it to go.
Speaker 1:So several thousand is kinda almost like saying I'm a little bit pregnant. What does several mean? I mean I'm listening, I'm going several thousand, 2,000, 3,000, you know, 1 dollar, 2 dollar, who's gonna make it threes in auction? What are we talking?
Speaker 3:Less than 5?
Speaker 4:We set our trust up the year that I retired, 2015, and it was $4,500. Okay. And mine's not complicated. We have 3 kids, you know, and it wasn't a real complicated trust.
Speaker 1:What's the least you got to expect?
Speaker 4:Maybe 2,000. Okay. So 2 to $5,000.
Speaker 3:So let let me interject here, Ray. So in our Baptist life, if you will, those of our listeners who are longtime Baptist would remember the name of the Baptist Foundation of Oklahoma. Mhmm. A couple years ago, they changed their name to Water's Edge Uh-huh. Ministry Services.
Speaker 3:And they have a component within that ministry, that does estate planning. And so they have a staff and a team of people who would go, maybe if Emory called and said, hey, I need to talk about my estate. I don't have anything. So they would send someone out and begin a relationship and begin to talk through all these terms that we've just kind of talked about. They would explain that to Emery and to his wife and begin to help create this.
Speaker 3:And so what they do is when you leave a charitable gift upon your death, to a like ministry, like faith ministry, it reduces that cost to basically nothing. If you're doing a basic if you're doing a will or even a trust. Trust, you may have to pay a little bit, but it is greatly reduced. And so, you know, when someone's looking at a a thousand, 2,000, or 4,000 plus dollar financial legal, cost, by contacting Waters Edge, that may be an option for our listeners to consider, as they look at how do I create a a good estate plan, that will stand up at my death.
Speaker 1:That's a strong incentive. So what you're telling me is if I don't have a will, I don't have a trust, and my estate plan in order, I can contact Waters Edge and they would sit down and talk with me, no obligation, then they would they would even complete it for me
Speaker 3:That's correct.
Speaker 1:With the understanding that, upon my passing I'm going to designate a certain amount to some sort of Baptist cause or otherwise that they would designate or they'd work out. That's true. And have it all in order and probably the amount that I would designate, would probably be equal to or less than what I would have paid somebody anyway. Mhmm. So that's a pretty good deal.
Speaker 1:I mean so if you're listening out there, yeah. You know, we would love for you to think about think about Waters Edge. That's that's great. Now you may think, wait a minute, Waters Edge. Well, they just changed their name.
Speaker 1:So it's, you know, it's, the Baptist Foundation is what it's been known as. Do you have to be Baptist?
Speaker 3:No. They they will they will serve you as they'll serve you.
Speaker 1:So you can as long as you're web behind the ears?
Speaker 3:That's correct. If you got a heart beating, then they'll serve you.
Speaker 1:Alright. Great. Well, you know, we've talked about getting all this stuff ready. And we've all seen the movies and the, you know, the different TV shows where someone has passed and they bring the family in and they're trying to figure out, okay, who's gonna get the cash cow? When is it appropriate?
Speaker 1:How is it appropriate? What's the best way to communicate about these things? Do we let the cat out of the bag? Do we let everybody know exactly what's gonna happen? Do we divvy up, you know, the the the estate and let people know you're getting the south 40, and you're getting the north 40, and you're getting less than your brother?
Speaker 1:I mean, how do this could get messy.
Speaker 4:It certainly can. I spent a lot of time with my clients asking them to have their meeting with the family immediately. Set them down after you figured out what you want to do. Now you you really got to work through how you want to do things, but I wanted them to have the family in and go ahead and tell them. If some of them get mad, maybe you'll live long enough that they'll get over it, you know.
Speaker 4:Well, I had to be real practical.
Speaker 1:Yes. Yes.
Speaker 4:Because you're going to make some happy, some not, but you don't want lawsuits and you don't want the family to fall apart Yeah. The day after you die. You just don't want that. I would convince them, if they wouldn't do it, I would convince them to bring the family into my office. I said, Next time they're here, if it's Thanksgiving, I'll come in on Saturday.
Speaker 4:You get them all in here and I will walk you through that and we'll do it. I will say, this is what mom and dad have decided to do. Y'all may want to talk to them about it, but this is what they've planned to do, they've thought about it, they love all of you very, very much, but they want to do what's right for each of you, and each of you don't need what everybody else needs, and they've thought it through, and I'd like to tell you that they prayed about it, you know, and get it on the table and get it out there. Even the ones who don't like it will probably come around. At some point, they'll realize that they should be grateful for what they are getting.
Speaker 4:Uh-huh.
Speaker 1:And, you
Speaker 4:know, if you want to give Tommy the North 40 because Tommy's going to live out there and farm him, why not?
Speaker 1:Right.
Speaker 4:And Janie, who married an attorney in Oklahoma City, why would they want
Speaker 1:it? Right. Mhmm.
Speaker 4:You know, you you go through these logic things and then and I always had clients where the wife had had had an inherited farm from her family and then the husband had an inherited farm from his family and then they had this other thing in between that they bought since they'd been married.
Speaker 1:Mhmm.
Speaker 4:And those those situations were always different. Always. There was never 2 that were even similar, but they had to go through that. And it's just so much better to tell the kids. They will get over it.
Speaker 4:They will adjust it. I mean, when they were growing up and you corrected them, they got over that. Yeah. You know, and this is their legacy. It's their heritage, but you get to do it, and you don't want them messing it up.
Speaker 4:I can give you a story. I had one client. This was back in the early eighties, and, matter of fact, my son has his great great grandchildren as clients right now. Mhmm. But he came in, and he he was a some people know how to farm and some people don't.
Speaker 4:This guy knew how to farm. So he had his trust and his wife had a trust, and they had all things divided up. He had 2 kids, a guy and a gal, and the gal had married and gone off. His kids now are older than me. I don't know if they're still alive, but anyway, those 2 kids weren't happy with the way they divided things between those two estates, and she sued her parents.
Speaker 4:Oh. Big mistake. Oh, that was a big mistake, because that just didn't go anywhere, and if I remember correctly, the judge just threw it out. I mean, he just wasn't going to listen to it because both the parents were still alive, you know, and they were going to do what they wanted to do. Well, eventually, both parents were gone, and so she sued her brother for part of his estate, and that was just a mess.
Speaker 4:It was just a mess, and I always thought maybe that could have been worked out differently because I have a feeling that that brother and sister lived the rest of their lives without ever speaking to each other again, and that didn't exemplify their parents at all. Their parents were such good folks, really good good folks.
Speaker 2:I really like this advice of telling the family ahead of time, and I don't I don't think it's that common. I think most families don't know until until a death occurs. Now I got a I got a word here that I wanna know about. I'm curious in in all this, and that's the word taxes. So I'm thinking taxes when a when a person dies.
Speaker 2:I'm thinking, how do how do we how do we take a look at taxes and minimize the amount we might have to pay or really unexpected tax bills that that occur that we don't how do we avoid those kinds of things?
Speaker 4:Well, in Oklahoma now, we don't have inheritance tax, so that one's off the books. Great. The federal estate tax is oh, it goes up every year. It was $10,000,000, and now I think it's 11 or 12. I really don't know what that number is right now, but it's it's above the value of 90% of the the the accounts that I had, so you don't have to worry about that.
Speaker 4:But now I had some people who wanted to give away forms to their go ahead and give them away to the kids. That's a mistake, because when you give it to them, the kid inherits your cost basis, and if you bought it in the forties, you only paid $50 an acre, maybe $35 an acre, and this is a 1,000 acre farm and now it's worth $12, 1500 an acre. So he will owe some taxes on it if he ever sells it, because his cost basis is almost 0, Whereas if you keep it in your estate and let it go through them, go to them after you die as an inheritance, they inherit it at today's cost or at the value on the day you died. They they try to hit that. So instead of inheriting it at $40 an acre, they're inheriting it at $1500 an acre or whatever it is now, so if they decide to sell it, they don't lose it all in taxes.
Speaker 1:Mhmm.
Speaker 2:Well, that's great advice. That's an area you could make a big mistake. Right.
Speaker 4:Absolutely. Mhmm.
Speaker 3:That's true. That's true.
Speaker 1:Well, that's great. That's that's good advice. Those are little tips. I I wanted to ask just a couple of just I'm dying to know. You just not every day you have a guy with this kind of experience that you get to, ask a question to.
Speaker 1:Just just what are some basic 1, 2, threes? It's like these are no brainers that you've just learned over the years in terms of wise investing. What are these like these are the 1 these are Emory's top 3.
Speaker 4:Well, the rules of investing probably haven't changed since Caesar was alive. You you first, you have to define define what it is you want your money to do. I mean, like, I had a lot of 70, 75, 80 year olds come in with with with CD deposits that weren't paying them enough to to live off of. So for those folks, we needed to invest for income. We needed to buy securities that would pay them a monthly income to pay the bills with.
Speaker 4:On the other hand, you'd have a 30 year old who came in whose parents just died and left him a half a $1,000,000. He doesn't need any income off of that. He's got a good job, so he wants it to grow. So see, those are very, very different areas, but now the secret to all of it is diversification. I mean, you diversify.
Speaker 4:Even the clients who only need income, they have to have a little growth in there because if they live another 10 years, what it's producing today won't be enough money. And where are you going to get the rest of it, if I've got it all? And you're taking interest on the whole thing. You don't have any way to manipulate it. So even on those clients, and there's 2 ways to get growth in their account, 1, if they came in with x number of dollars, you take a tenth of it and put it in something that grows, and you just leave it alone and you don't touch it until you need it to increase the income side.
Speaker 4:The other one is you can put it all into income but don't distribute all the income. Take 80% of the income and let the other 20 stay in there and grow. So you have to have growth no matter how old you are, no matter what you've got, you've got to have something there that grows. The younger you are, the more it all goes to growth. Does that make sense?
Speaker 1:Yeah, that does make sense.
Speaker 4:Sure. And looking at income things, you can buy stocks that pay good incomes. Usually that's like utilities. You can count on them. They pay the same thing typically.
Speaker 4:You can buy bonds. Municipal bonds are tax free. The income of those is tax free, or you can buy government bonds. You can buy corporate bonds. Corporate bonds will pay the most, and if you don't have a big problem with taxes, that's the way you get the most money.
Speaker 4:Probably the safest way to do it, and you would find advisors and since I'm not an advisor anymore, I can say this who would disagree with this, but you can buy mutual funds that are made up of bonds and take the amount of income that you want out of it and you can change it anytime you want to. So that works also. But you can also buy mutual funds that have income producing stocks, like a utility fund that has stocks and utilities all across the country. The benefit of a mutual fund is it's instant diversification, where you put in $100 or $100,000 you're immediately invested in probably a 1,000 other things, and so it's diversification. It also has professional management.
Speaker 4:There's somebody whose job depends on that thing working, and so they work very, very hard to make it work and produce what it's supposed to, so I sold a lot of mutual funds, and goodness there's 5 or 6,000 out there to pick from. I mean, there's no shortage of funds, but I liked funds because they tend to be a little more steady than buying individual stocks and certainly a whole lot less risk. K. So you gave mean you shouldn't own some stocks.
Speaker 1:You gave me define, diversify, and I'm thinking if you're gonna be a good preacher, you gotta have a third d. What's it gonna be? I've heard from that. Well, anything that'll fall in that category? Define, diversify, and
Speaker 4:If you're young enough, it's saving on a regular basis.
Speaker 3:Okay. Deposit often.
Speaker 4:Deposit often. Okay. I'll take it. I got it. In all seriousness, if I get a 20 year old that's out of is not going to college, he's working, and he would save a $100 a month, he can be a millionaire when he retires.
Speaker 4:And that's with mediocre investing. That's not being anything brilliant. They can do it, and any investment advisor can sit down and show you how to do that.
Speaker 3:So, Emery, let me ask this quick question. No. Our time is gone, but in today's financial world, you hear the word cryptocurrency. So talk to me about that real quickly. I mean, I know it's a huge deal, but real quickly, what what is that and should we do it?
Speaker 3:That kind of stuff.
Speaker 4:Well, if you take a dollar out of your pocketbook and you read on it, your wallet, it says US currency backed by the United States. Cryptocurrency is not backed by anybody anywhere. You can own it this morning, lose it this afternoon. There are people who have I've had clients who used it and made money off of it. I don't know how.
Speaker 4:It's one of those those vehicles that that the company that I worked for chose not to offer because of its risk, and when I say risk, risk should not be a 4 letter word. There's nothing wrong with that. We all take on some risk with whatever we choose to do, so I don't mean to say that, but there's levels of risk, and there are people who can can handle a lot of risk, and there's people who think they can't handle any until I explain to them how much they're handling already, and then they go, well, maybe you're right.
Speaker 3:A little more.
Speaker 4:You know, but the cryptocurrency isn't based on much of anything. It really isn't. It doesn't have anything backing it up, and there's some of them out there that have started at 10¢, 20¢ a share, and now they're 4 or $5,000 a share, so there's money to be made, but I would say it's But
Speaker 3:there's money to be lost as well.
Speaker 4:Well, I mean the ones who made it probably got it from the ones who lost it.
Speaker 3:Yes. Yes.
Speaker 4:You know? And and for for all of my clients, I didn't want a new cryptocurrency at all. I didn't know enough about it to to give them good advice, and then the firm I worked for didn't handle it, so I had no incentive to
Speaker 3:Sure.
Speaker 4:To get up on it.
Speaker 1:Yeah. Well, Emery, thank you so much. This has been a lot of great advice. I've got notes all over my notes, and so I'm not gonna get rid of those anytime soon. But we really appreciate you helping us consider how to manage our financial futures as we look at this phenomenon called the great wealth transfer.
Speaker 1:Mhmm. It's coming our way. You know, I'd I'd hope to ask you some more questions. And Greg and Bill just took all my time today. And one of them I wanted to get into was how to avoid fraud and scams.
Speaker 1:Man, this is another a whole another issue. You work so hard to get the money and then people rob you. We're not gonna have time to do that. But I'm gonna lean on you. I'm gonna put you on the spot right here on the air.
Speaker 1:We'd love to have you back. Thank you. Would you come? We can
Speaker 4:do that.
Speaker 1:Awesome. Greg, he told me I'd like him.
Speaker 4:I'll tell you.
Speaker 3:He's a good guy.
Speaker 1:You know, folks, today's podcast had a lot of great insight. Emery says he's gonna come back. So that's good. We'll be talking to him soon. So I hope you'll join us when we talk about on our next episode with Emery.
Speaker 1:We're just gonna call it how to avoid fraud and scams. You all good with that? Mhmm. That's good. We're gonna be ready to do that.
Speaker 1:So let me let me leave you with a closing thought. I think these guys were looking ahead and saw what I was gonna ask or say anyway. But my closing thought is this, and it's really based on Proverbs 1322 and it says a good person leaves an inheritance for their children's children. Emery I think it's fair to say that you're that kind of man. Mhmm.
Speaker 1:And thank you for thank you for bringing that up. And another thing that we say on here sometimes is heritage is what you are given and a legacy is what you leave. And so you are listeners, as you listen to all this today, you know there's somebody that you could reach out to whether it be Water's Edge or a good trusted advisor They'd be willing to to unpack some of these things for you. But the real question here is what legacy will you leave? What legacy do you want to leave?
Speaker 1:And if I took anything away from today's program from Emory, it's it's this whole thought of failing to plan is planning to fail. So take some time, sit down, don't let this be a mystery to you. Find someone that you trust, that you can talk to about these things. This is certainly something to consider, this great, wealth transfer. It's on its way folks, it's coming.
Speaker 1:So I sure hope you enjoyed today's podcast. I know you've enjoyed having Emery on the program with us and in studio. And we want to thank you, our listeners, for joining us as well. If you like what you've heard, hey, be sure and share the podcast with a friend. Let some folks know about it.
Speaker 1:So until next time, we encourage you as always to stay active and stay informed as we explore the realities of aging on the Exploring Aging podcast.