Whoa! I was definitely not prepared for the meeting I just had with my client. Going into the meeting, I thought I was well prepared.

However, I came to realize that emotions have a way of clouding what appears to be very straightforward decisions. The meeting was to facilitate the client transferring substantial assets to his youngest son. The transfer was for estate tax planning purposes and to bring the youngest son up to parity with his older brothers based on earlier transfers the father had made to them. Prior to the meeting, we also had multiple discussions about how the transfer would have had no impact whatsoever on the client’s control of the asset or on his income. It was supposed to be a slam dunk, no brainer meeting. However, it turned into a classic case of emotional hijacking.    

After going in circles about the impact to the client’s control or income, which was zero as previously mentioned, it became apparent that I was not dealing with rational thinking, but fear-based emotions. Upon exploring the feelings behind the hesitation, my client indicated he was afraid of giving up everything he had worked hard to create. Gifting these assets even went as far as feeling he was giving up his purpose in life, bringing into question his will to live, further exacerbated by recent health issues.   

In an effort to have reason triumph over emotions, I reminded him about the purpose for gifting the assets, first and foremost being, playing a game against the IRS. From a net worth perspective, it didn’t matter if the net worth was being built in his name alone or in the family name. Further, to give away assets for tax planning doesn’t mean he had to give up his desire to get up in the morning and stop doing what he does best. A transfer on paper was not being done to limit his involvement in the business or to prohibit him from his life’s passion. I reminded him that he has over $10M in investable assets that he was not bringing into this transfer conversation. I suggested that since real estate made him feel secure, then perhaps he should invest some more of his portfolio into real estate. In contrast, I suggested that if he earned a meager 5% off the investment portfolio, he was secure. He could take out half a million dollars a year without depleting the principal. In addition, I described several other advanced estate planning techniques that would preserve his control and his income.   

In the end, I left the meeting feeling defeated and drained. It was like we were staring at death’s door all day. I had been talking to a man who was fighting a losing battle between reason and emotion. Despite my best efforts, the client  was clearly not ready to make the transfer. I fought valiantly, but in the end, I recognized that this was an emotional conversation and no amount of technical expertise would address his disparaging feelings about the transfer. He felt he would be giving up his reason to live.   

Emotional hijackings occur frequently in the family business – succession planning arena. Simple straightforward events, symbols and processes bring greater meaning to some than others. The trick is, if you find yourself in a similar situation, allow yourself to step away, acknowledge your feelings and identify if you are allowing emotions to triumph over reason.  

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