Whoa! I was totally not prepared for the meeting I just had with my client. I thought I was. In fact, I was very prepared based upon our last meeting and all the decisions that had been made.  However, life, and clients, have a way of throwing you curve balls. Sybil showed up again!

The bottom line is that I came into this meeting ready to facilitate the client making some substantial asset transfers to his youngest son – it was supposed to be a slam dunk. The transfer was going to be of B-Member units in a real estate LLC.  The transfer was for tax planning purposes and to bring the youngest son up to parity with his older brothers on transfers that the father had previously made to them. The transfer would have had no impact whatsoever on the client’s control of the asset or on his income. Simple, right? No brainer, right?

 After going around and around about the gifting of these assets and the zero impact on his control and income, it became apparent to me that I was not dealing with rational thinking, but fear-based emotions. Upon exploration, the client indicated that he is indeed afraid of giving up everything he’s worked hard for. Further and deeper into our discussion, he suggested that he felt like he was also giving up his reason for getting up in the morning, obviously bringing into question his will to live (complicated by recent health issues). I reminded him that there are several things for him to consider – first and foremost is that we are playing a game against the IRS and did it really matter if the net worth was being built in his name alone or in the family name. Further, to give away assets for this purpose doesn’t mean that he has to give up his desire to get up in the morning and keep doing what he does best. A transfer on paper was not being done to limit his involvement or prohibit him from working in his business which he clearly had a strong passion for. I also 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 is what makes 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 half a million a year out of it without ever depleting the principal. I also 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 – and I was talking to a man who was fighting a losing battle between reason and emotion. Despite my best efforts to get the client to go ahead with the transfers he had previously decided upon,  it was clear he just was not ready and backed away hard. I fought valiantly, but in the end I recognized that this was an emotional conversation and no amount of technical expertise on how to get the job done was going to address his feeling that by moving forward with this transfer, he would be giving up his reason for living. Now, it’s time for me to go back to the drawing board and come up with a new game plan that will achieve this client’s succession goals while keeping him in his comfort zone.

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