Blum’s Blog

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

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.

 

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

(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.

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.

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!

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.

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.

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.

 

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.

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.

 

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.

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.

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.

 

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!

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.

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.

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.

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. 

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.

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.

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.

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).

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.

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.

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.

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.

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.

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.

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.

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.

“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.

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.”

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.

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.

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!

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.

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.

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.

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.

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.

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.

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.

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.

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.

“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.

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).

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.

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.

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.

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.

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!

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.”

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.

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.

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.”

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.

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.

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.

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.

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.

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.

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.

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.

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.

Family Legacy Planning: It’s All About Football

Happy Thanksgiving to all! If your home is like mine, part of the day’s traditions will include a football game, with some of us glued to the TV to cheer on the Dallas Cowboys (while others just tolerate it as background noise). Preserving holiday traditions helps keep families connected. Whether yours are more about football or desserts, I applaud the importance of keeping those traditions alive. As Tevye sang in “Fiddler on the Roof,” “without our traditions, our lives would be as shaky as a fiddler on the roof!”

While I’m in a football state of mind, I’ll repeat a favorite metaphor from Jim Grubman. Picture a football field. At one end is a highly skilled quarterback who hurls a perfect pass to the other end of the field. Standing around at the other end are a bunch of clueless receivers. They’ve never been to a practice. They don’t know the rules of the game. They’ve had no experience learning to work together as a team. What are the odds they’ll catch the pass and score a touchdown? Statistics say the odds are only 10%. The quarterback is the family patriarch/matriarch. The football is an inheritance. The receivers are kids and grandkids who have never been prepared for the inheritance coming their way. This football analogy helps us understand the importance of preparing heirs before the inheritance comes their way. That’s what Legacy Planning is all about: improving the odds that your heirs won’t fumble the inheritance football when it comes to them. As Matt Wesley urges, it’s time for the patriarch to move from being the quarterback to being the coach.

In recent weeks, my Family Legacy Planning series has been devoted to the topic of Business Succession Planning. Nowhere is business transition planning more complicated than in the National Football League. Media coverage is replete with family strife over control of an NFL franchise. It’s a hot topic, as the dollars are astronomical, and the transfer of team ownership is imminent. As Ben Fischer reveals in “NFL, Next Person Up,” (Sports Business Journal, Sept. 5, 2022), the average age of the 32 controlling NFL owners is 72. Only eight are below 65. Two of the league’s most powerful are Patriots’ Robert Kraft at 81 and Cowboys’ Jerry Jones at 80. Ready or not, change is coming.

NFL Commissioner Roger Goodell (himself 63 and purportedly contemplating retirement) is committed to developing the next generation of owners. The NFL provides apprenticeships in a junior rotational program, promoting the most talented to serve on committees. Every year, each team must report to the NFL who will take over in case of a sudden vacancy. Per Fischer, the ideal scenario is to create “legacy families,” keeping the business in families where the NFL is their top priority. The goal is to pave the way for a smooth transition when guys like Kraft and Jones are gone. The NFL is trying. “But a litany of factors, among them complicated estate planning and unpredictable family, legal and tax dynamics, figure to make orderly successions within a single family the exception rather than the rule.”

The NFL is waking up to the importance of estate planning. It now allows ownership to be transferred to trusts. It’s also lowered the minimum equity ownership of the family’s head to as little as 1%, recognizing the need for families to do planning to minimize estate tax and avoid a forced sale soon after the owner dies. Even with all the NFL’s efforts, challenges persist. Consider these examples:

  • The requirement that teams file an annual succession plan began after Tennessee Titans owner Bud Adams died in October 2013. Adams divided the ownership equally among three branches of his family, leading to a war over which would have power and control over the team. By requiring the annual designation of a successor, the NFL hopes to avoid a repeat of that strife when an owner dies.
  • Alzheimer’s disease forced Denver Broncos owner Pat Bowlen to turn over control to President Joe Ellis in 2014, followed by litigation among his kids over who would succeed him. The result? The team was put up for sale in February 2022 and sold four months later to a group led by former Walmart chairman Rob Walton for $4.65 billion, the highest price ever paid for a US professional sports team.
  • Houston Texans owner Bob McNair died in 2018, leaving the team to wife Janice with son Cal running the show. In the next three seasons, the team fired a general manager, two coaches, and a president. To add insult to injury, the Texans won just four games in two seasons and fell to 17th in attendance.
  • Washington Commanders’ owner Dan Snyder is reportedly considering a sale of the franchise, a team he bought in 1999 for $750 million that now has an estimated value of $5.6 billion. The prospective sale comes after repeated scandals, including accusations of a toxic work environment. There’s a lot of speculation of who a new buyer might be, but any transaction would have to be approved by 75% of NFL team owners. The situation is messy, to say the least, and not the kind of ideal transition the NFL desires.
  • One of the most painful stories involves Joe Robbie, owner of the Miami Dolphins. At his death in 1990, Robbie left behind a wife Elizabeth and nine children. His Pourover Will sent his assets to a Living Trust, and unknown to Elizabeth and most of the kids, he named three of the children as co-trustees. The co-trustees sold part of the franchise to Wayne Huizenga (former owner of Blockbuster Video), infuriating Elizabeth and the six other children. A family feud erupted that tore the family apart. When Elizabeth died almost two years after Joe, she left nothing to two of the kids and only $200,000 each to two other kids. The family had to sell 85% of the Dolphins franchise and 50% of Joe Robbie Stadium to pay a $45 million estate tax bill and to satisfy a claim Elizabeth filed against Joe’s estate.
  • Tom Benson, owner of the New Orleans Saints (as well as NBA Pelicans basketball franchise) changed his Will at age 87, only a month after a court found him mentally competent. The legal battle, filed by daughter Renee and grandchildren Rita and Ryan, cited powerful evidence of incapacity and alleged Benson was being manipulated by his third wife of 10 years, Gayle, then age 68. The new Will gave sole power over the franchises to Gayle, stating: “I specifically provide that Renee Benson, Rita LeBlanc, Ryan LeBlanc, and all of their descendants shall have no interest whatsoever, and no legacy or other inheritance or benefit of any kind shall be paid to any of them under this will or otherwise.” Benson had previously designated granddaughter Rita to control the teams, but everything changed after an argument erupted between Gayle and Rita at a 2014 Saints game. Needless to say, Gayle (who once ran a home jewelry business and was twice previously divorced) won that fight.

The lessons from these NFL horror stories abound. Suffice to say that the solution lies in tackling the problem long before the team owner dies. As my Family Legacy Series continually reiterates, we should learn from the best practices of the 10% who win the Super Bowl of Family Legacy Planning. Don’t fumble the ball like those 90% who fall victim to “shirtsleeves to shirtsleeves in three generations.” Your estate planning advisors can help you embark on regular family meetings, create a family governance structure, engage in thoughtful business succession planning, and preserve your family values and heritage—starting right now with some special Thanksgiving traditions!

I wish you all a joyful and meaningful Thanksgiving, filled with gratitude for our abundant blessings.

Marvin E. Blum

Marvin Blum is in an NFL state of mind at AT&T Stadium, wishing all a Happy Thanksgiving (and a Dallas Cowboys win!).

In Search of “Family Glue”

Last week’s post recapped a “Lasting Legacy” evening where I was honored to share the stage with the Coors beer family. I described how the Coors family connection remains strong even among fifth generation descendants of Adolph Coors. Today’s post focuses on my part of the presentation: “In Search of Family Glue: Improving the Odds of Multi-Generational Success.”

After Coors sisters Melissa and Carrie shared secrets of their success, I revealed that the Coors story is the exception. A staggering 90% of families fall victim to the adage “Shirtsleeves to shirtsleeves in three generations.” Only 10% of families can tell the Coors story. There is much to learn from them. The bulk of my speech highlights best practices of the ten percenters like Coors. Click here to review my PowerPoint from that presentation.

In a nutshell, I identified 9 best practices of successful families for us to emulate:

  1. Family Meetings
  2. Family Travel
  3. Education Program
  4. Governance Structure
  5. Family Mission Statement
  6. Business Succession Planning
  7. Preserve Family History
  8. Family Traditions
  9. Legacy Letter

I concluded by shining a light on a 10th best practice—Family Philanthropy. By creating a charitable structure in your estate plan, you leave your heirs two inheritances: (1) a traditional inheritance to provide for their security and needs; and (2) a second inheritance giving them the opportunity to use the family assets to give back.

Family Philanthropy is a gift that keeps on giving, not only to the recipients of grants, but also to the donors. Those who give get back more than they give. I described a Family Foundation as a “laboratory” where family members come together to practice group decision making as they jointly select causes to support. As they manage foundation funds, they learn about investing and money management. Through private philanthropy, they can set a vision for their community and shape the future of the place where they live. Moreover, these interactions create connectedness and powerful family glue.

It was a privilege for me to share my thoughts on building family connection. The goal is to create an interdependent family who will be there for each other. In my 44 years of law practice, as well as in my own life, I’ve learned that when adversity strikes, there’s no support system more critical than your family.

I urge everyone to take intentional steps to strengthen your family and create family “glue.”

Marvin E. Blum

Marvin Blum speaking at “Lasting Legacy” seminar sponsored by Tailwind Philanthropic Advisors and The Miles Foundation. Blum shared tips on how to create “Family Glue” and improve the odds of multigenerational success.

Family Unity: An Evening About Glue & Beer

I was honored to speak recently at a “Lasting Legacy” seminar sponsored by The Miles Foundation and Tailwind Philanthropic Advisors as one of two presenters. My topic was “In Search of ‘Family Glue’: Improving the Odds of Multi-Generational Success.” So there’s the “glue.” Where’s the beer come in? The other presenter was the Coors beer family, a real-life example of multi-generational success and keeping the business in the family.

The event kicked off with a Q&A session with sisters Melissa Coors Osborn and Carrie Coors Tynan, two Generation 5 (“G-5”) descendants of Adolph Coors who founded The Coors Brewing Company in 1873 in Colorado. Adolph passed the company down to G-3: grandsons Joseph and William. Joseph’s 5 sons and William’s son (all members of G-4) all work in the Coors business. Now G-5 is taking up the mantle. Melissa heads up the Coors Family Office. Carrie heads up the Adolph Coors Foundation.

Melissa and Carrie gave an enlightening peek behind the curtain to illustrate how the Coors have preserved family glue for five generations. They credit their ancestors for setting a clear vision, not just for the company, but also for the family.
Many business owners cultivate a solid business culture; the Coors have also cultivated a solid family culture.

The Coors cohesiveness is no accident. Melissa and Carrie revealed how their forefathers intentionally created a governance system. Their ancestors also instilled in them a strong work ethic. Their father made it clear that career choices needed to generate sufficient income for their needs. There would be no “trust babies” relying on a trust distribution to cover their lifestyle.

At family meetings, the sisters shared how they mix business and fun. To provide levity when things get too heavy, there’s a variety of stuffed animals down the center of the table. Each symbolizes a different behavior trait. One example that stuck with me was tossing a donkey at a relative who was acting like a you know what. Laughter erupts, and the tension subsides. Every family needs a system to address conflict—this was a new way for me.

Selecting Melissa and Carrie for their governance roles makes an important point when selecting a successor manager: don’t overlook the females in the family. Statistics show that females fare extremely well in taking over a family business. According to a Merrill Lynch study:

  • Women make more values-based decisions rather than just going for the bottom line. They see money as more than a way to finance the life they want to live but also as a way to meet commitments to themselves and to people and issues they care about.
  • Women live, on average, five years longer than men. Women may be around longer to run the business.
  • Women graduate in higher numbers from college and graduate school today than men (57% of recent college graduates).
  • 42% of women ages 18-64 have a bachelor’s degree or higher.
  • A mother typically spends a lot of energy maintaining the emotional cohesiveness of a family and keeping the peace among family members. This mindset can be a positive force in a business.

So that’s the “beer” story. The Coors example is inspiring. Next week’s post will focus on the “glue” as I share tips on how to create some “super glue” to keep your legacy intact for future generations.

Marvin E. Blum

Marvin Blum was honored to share the stage with members of the Coors family at a “Lasting Legacy” seminar. The program discussed how to create “Family Glue” and celebrated the Coors family legacy, a prime example of multi-generational success.

When Your Business Succession Solution Isn’t Your Kids

In last week’s post, I shared the story of my son Adam breaking the news to me that he didn’t want to become a lawyer and join me at The Blum Firm. Like many family business owners, I had to come to grips with the fact that the next generation (G-2) wouldn’t be taking over the business. What are the business transition choices when G-2 isn’t the solution? As I concluded last week, there are a lot of options. Let’s explore some here.

As I’ve expressed numerous times, I’m in the camp with many others who often look to Warren Buffett for guidance. The “Oracle of Omaha” is adopting a blended approach. Although none of his children will step into Buffett’s shoes and take over management of Berkshire Hathaway, G-2 will still play an important role. Son Howard and daughter Susan are on the Berkshire Board of Directors “not for operational decisions, but to retain the ‘culture.’ … All three of my children are devoted to maintaining the culture of the place…. They have an unusual amount of devotion to that.” (Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021). Son Peter will also play a role in the family enterprises as director of the Susan Thompson Buffett Foundation (named for Buffett’s late wife) which oversees the family’s charitable giving. This hybrid approach is instructive when the business ownership remains in the family, yet someone other than G-2 handles the day-to-day operations. G-2 can still play an influential role on the board of directors, helping to preserve the family legacy and protect the all-important business culture.

There are numerous other solutions to consider when exploring the options for transitioning a family business. PNC’s Editorial National Practice Group provides an excellent overview of choices in the article “Lowering the Hurdles to a Successful Family Business Transfer” (PNC Insights, Nov. 5, 2021). Here’s a recap of their ideas, as well as some others:

  • Leveraged Buy-Out: If the goal is for some or all of the next gen to purchase the business (as opposed to receiving it as a gift or bequest), G-2 could borrow from a third party, pledge business assets as collateral, and use profits to repay the loan.
  • Installment Sale: The business owner carries a note, and the buyer uses profits to pay off the note over a term of years. The terms are ideally pre-arranged in a Buy/Sell Agreement entered into long before the event that triggers the buyout.
  • Self-Cancelling Installment Note (SCIN): The seller receives a cash flow until the note is paid in full, but any unpaid balance of the note is forgiven when the seller dies. The buyer pays a premium (either a higher price or higher interest rate) for the cancellation privilege.
  • Sale for a Private Annuity: This is similar to a SCIN, except payments continue for the life of the seller, and then terminate at the seller’s death.
  • Non-Qualified Deferred Compensation: The business continues to pay compensation to the owner after retirement. Such payments are deductible by the company, whereas installment payments aren’t. However, the recipient pays ordinary rather than capital gains tax rate.
  • Charitable Solutions: Transfer the business to a CRUT (Charitable Remainder Unitrust) which makes an annual payout to the owner, with the trust assets passing to charity at the owner’s death.
  • Sale to a Grantor Trust: Do a “freeze” sale for a note to lock in the value in the owner’s estate. Explore a sale to an Intentionally Defective Grantor Trust (IDGT), Spousal Lifetime Access Trust (SLAT), and/or 678 Trust (also known as a Beneficiary Defective Trust or BDT). Because of Grantor Trust tax rules, there is no tax on the sale, and the owner continues to pay income tax on the trust’s income for as long as he’s willing, further reducing his estate tax.
  • Retain Key EmployeesUsing Equity – Grant to employees stock, stock options, restricted stock, non-voting stock, ROFRs (Rights of First Refusal). Using Non-Equity – Grant phantom stock, SAR (Stock Appreciation Rights) Plans, non-qualified deferred compensation, executive bonus arrangements, Stay Bonus Plans/Golden Handcuffs.
  • ESOP (Employee Stock Ownership Plan): An ESOP is a qualified employee benefit plan that buys stock from the owner. Through careful structuring, the owner can defer tax on the sale of his stock by reinvesting in qualified securities. If the owner holds the replacement property until death and gets a basis step-up, the owner’s family completely avoids income tax on the sale.
  • Sale to a Third Party: In many cases, this is the choice that makes the most sense for the family, yet hardest when there’s a strong emotional attachment to the business.

In upcoming posts, we’ll dive into the practical and psychological issues at play in selling a family business. As a foreshadowing, I’ll offer some words of wisdom from Denise Logan, author of The Seller’s Journey. Logan speaks of the feeling you have the day you drop off your oldest child at college. I remember that pit in my stomach when Adam left for UT. Per Logan, that’s the same feeling a founder has when he sells his business. For that reason, more than 70% of owners fail to follow through with selling their businesses. To improve the odds of making it to closing, Logan stresses that advisors must tend to not only the transaction, but also the owner’s transition, helping the owner cope with the prospect of life after selling a business.

As we explore both the “head” and “heart” side of selling your business baby, I’ll offer examples and tips. There’s a way to get there. Even the Rockefellers sold Rock Center.

Marvin E. Blum

Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021 available here.
PNC Insights, Nov. 5, 2021 available here.

Marvin Blum gives a shout-out to his hero Warren Buffett for his wisdom on transitioning a business.

The Day Adam Told Me: “I Don’t Want to Be a Lawyer”

I wrote last week about how to improve the odds of passing down a family business to the next generation. Understandably, when founders love their business, most want it to stay in the family. I can relate. As I was pouring my heart and soul into building my law practice, I always assumed my son Adam would one day join The Blum Firm and help keep the Blum legacy alive.

Then one day during Adam’s undergrad years at UT, we had the conversation that awakened me to the fact that Adam’s head wasn’t in the same place as mine. Laurie and I were walking with Adam along downtown Austin’s Sixth Street when he announced: “I don’t want to go to law school. I want to be a banker.” What? I didn’t even know what a “banker” was, at least not the kind Adam meant. I only knew of Laurie’s “banker” career as a bank officer at Fort Worth National Bank. Adam meant a Wall Street “banker,” and before long he headed to New York for an investment banking career at Goldman Sachs. At least Adam did accommodate me by becoming a CPA (though he never practiced accounting), but he tried to get out of that too. When he hit me with the line, “I don’t plan to take the CPA exam,” I wasn’t as accepting. I replied: “You had the misfortune of being born into the wrong family; becoming a CPA is not optional.”

Lizzy had the same potential to join The Blum Firm, given her superb academics and math skills, as well as her heart for helping others, but I learned from Adam not to even hold out the hope. Indeed, when she turned down UT Business Honors to study music business at NYU, reality hit that neither of my kids would join me at The Blum Firm. Neither wanted to follow my footsteps, get up every morning, put on a suit, and “go talk to people about dying.” (Of course, my life’s work is so much more than that, as my fervent passion is to help families create and pass down a meaningful legacy.)

So, here’s the message to family business owners: Don’t assume the next gen is the solution to your business succession plan. I advise all business owners to conduct an honest assessment of their heirs. Do they have the necessary skills to run the business? Do they have the passion and desire? Would they prefer to chart their own career path? Could passing the business down to the next generation lead to family friction that’s just not worth it?

Estate planning advisors can help you determine if an in-family transition is the right solution for your business. It’s better if these conversations are conducted by an advisor who knows you and your family. Parents often have a blind spot about their children’s true abilities. Kids are often reluctant to share their true feelings with their parents for fear of offending them. An advisor with good communication skills (one who has both “head” and “heart”) can interview the stakeholders and provide an objective assessment. Furthermore, whatever is decided, that decision needs to be monitored and subject to modification based on future developments. Business succession planning is never a “one and done” decision, but a dynamic and continuing process like all other aspects of estate planning.

In one case, an 80-year-old father was keeping the business going to pass down later but believed his 60-year-old son was “not yet ready” to take it over. In interviewing the son, the consultant learned that the son really had no interest in running the business and was ready to retire. Imagine the dad’s surprise.

Family business consultant Jeff Savlov tells of a St. Lucia rainforest tour guide business “Oliver & Son” where Oliver Sr. gave top-quality tours, yet a tour experience with Oliver Jr. was the opposite. Oliver Jr. lacked both his father’s skills as well as his father’s interest. “In family businesses, success or failure often hinges on intentionally and proactively developing the next generation. That requires effort to find out if they have interest, desire and ability – supporting/developing them if they do and finding alternatives if they don’t.”

Shark Tank TV personality Kevin O’Leary (aka “Mr. Wonderful”) speaks to this issue in “Kevin O’Leary on the Wealth-Destroying Mistake He Sees Too Many Family Businesses Make” (Eric Rosenbaum, CNBC Leadership Insights, Nov. 14, 2021). “One of the biggest mistakes of all made by successful first-generation founders is when a family patriarch or matriarch assumes the right decision is to turn the business over to their children…. When businesses are wildly successful, it’s often because the founders, a mother or father, have tremendous operational skills but those execution skills may not be present in the subsequent generation. That’s why we see American wealth evaporate within four generations.”

If your business succession solution isn’t to pass down the business to your kids, there are abundant other solutions. In upcoming posts, I’ll address those choices. Some involve ways to structure a sale to insiders (such as certain family members or key employees) using various leveraged buy-out approaches and Buy/Sell Agreements. Others involve deferred compensation arrangements. Still others involve the use of charitable techniques. We will also explore how to keep key employees engaged, either through equity or non-equity incentives. We will also examine the practical and emotional issues involved in selling a business to a third party, whether to a private equity buyer or otherwise. The key is to work with advisors who can help you identify the solution that’s the best fit for your family.

For those clinging to the hope of keeping the business in the family, click on this link to review last week’s post “No One Owns the Tree” to improve the odds of success. But this a decision that requires a heavy dose of reality. If passing down a business to your children isn’t the right business transition plan, don’t force it.

Marvin E. Blum

Jeff Savlov’s Family Minute Business Blog available here.
“Kevin O’Leary on the Wealth-Destroying Mistake He Sees Too Many Family Businesses Make” available here.

Marvin Blum’s son Adam Blum and daughter Lizzy Savetsky hiking in Colorado. As both are charting their own paths and neither became a lawyer, Marvin’s succession plan for The Blum Firm requires a solution other than his kids.

How to Keep a Business in the Family: “No One Owns the Tree”

Last week’s post described how a family business like Blum’s Café can become like another member of the family. When a family is attached to their business, it’s a strong psychological and emotional pull. The founder’s dream is usually to pass the business down from generation to generation. But to keep a business within the family, you have to cultivate the family to run it. It doesn’t happen automatically.

Consider the example of Hobby Lobby founder David Green. Here’s what I learned in a conversation with Mr. Green in 2019.

  • To pursue his idea of making picture frames in his garage in 1970, Green borrowed $600 from an Oklahoma bank. After one year, he repaid the loan and tried to borrow $1,000, but the bank refused.
  • In 1972, he opened his first Hobby Lobby, a 300 square feet store. Green opened his second store in 1975. He continued to grow, one store at a time.
  • By 2019, there were 900 stores carrying 100,000 items with 40,000 employees and sales of $5.5 billion.
  • Green began involving his children and grandchildren in the business early on, along with their spouses. “We treat in-laws the same as family.” The family gathers in person for team building exercises each month to build trusting relationships and open communication.
  • Green funded 100% of the voting stock into the Green Stewardship Trust, a dynasty trust Green compares to a “ministry.” Heirs are taught that they are stewards of the business, not owners.
  • He describes the Hobby Lobby business as a tree. “No one owns the tree.” Each family member has the opportunity to work in the business and enjoy the fruits of their labors. Per Green, this arrangement “avoids the friction that ownership causes.”

If the goal is to pass the business to further generations, it’s critical to prepare them for it. In “Plan a Smooth Succession for Your Family Business,” (Harvard Business Review, Sept. 13, 2022), Amy Castoro and Fred Krawchuk emphasize that G-1 needs to engage G-2 in the business at a young age. Teach heirs the history of the company, both the ups and the downs. Younger heirs need to shadow family business leaders. The goal is to develop trust, so each believes the other is “sincere, reliable, caring, and competent.” G-1 and G-2 need to agree on written criteria to show when G-2 is ready to take over. As G-1 ages, he must resist the temptation to tighten his controls over the business and instead honor the standards for readiness that were co-established.

I often describe the mentoring process as having G-2 “ride around in the truck” with G-1. One of my clients did precisely that with his son-in-law for several years, so G-2 was ready when G-1 died unexpectedly. Because the son-in-law was trained, the business continued without interruption, avoiding potential disaster. As Mike Benedict of BOK Financial says, “Few things are more frightening than losing the captain of the ship without guidance on what to do in such an event.”

For additional guidance on “Keeping It in the Family,” click on this link for my tips on timing, training a successor, management transition, a cash flow for all owners, and an exit strategy for all owners.

Remember, engaging in planning to pass a business to heirs isn’t only for mega-sized businesses like Hobby Lobby. In “Saving the Family Business in a Beach Town Where Money Talks” (New York Times, Aug. 12, 2022), Alyson Krueger highlights three mom-and-pop shops. In each, the children speak with pride of carrying on a family business. The stories of Daunt’s Albatross Motel, Montauk T-shirts, and Gig Shack on New York’s Long Island are heartwarming.

In each case, the kids grew up embracing the business as if it were another family member. Even though they could close the business and sell the real estate for a fortune, “it was more important to all of us to continue the family tradition” and keep the business alive. That’s how it feels when you love your business like it’s family.

Marvin E. Blum

Marvin Blum learned from Hobby Lobby founder David Green that a family business is a tree that no one owns. Heirs are stewards of the business, living off the fruit but protecting the tree for future generations.

How a Jukebox Paid for My Bar Mitzvah

This post in my Family Legacy Planning series continues to shine a light on Business Succession Planning. Most of the business succession stories covered in the media involve mega-sized family-owned businesses: NFL teams, major chain stores, media empires, huge conglomerates. We’ll get to those later, but first, let’s come back to earth. Most family businesses are small, yet succession planning is as vitally important to that family as it is for the mega business owners.

I can relate to small business owners. I grew up in such a family. In our home, Blum’s Café was like another family member. It was as if my parents had three children: Irwin, me, and the business. Dinner conversation focused on how business was that day. The opening line at the dinner table was always “How was gesheft (Yiddish word for business) today?” Everyone worked in the business.

As is typical, the business started out small. My father opened an industrial restaurant in Fort Worth’s meat-packing district when I was an infant. Growth was slow and organic, often driven by the need for more money.

As my Bar Mitzvah was approaching, my parents wanted to build up a fund to pay for it. How did they do it? They put in a jukebox—5 cents per song! They literally grew my Bar Mitzvah fund one nickel at a time. When my mom called my dad early in the day before she arrived to be cashier, if music wasn’t playing, she’d say: “Julius, go put a nickel in the jukebox and get the music going.” It worked. I had a first-class Bar Mitzvah, and 55 years later I still cherish the memories.

As college was approaching for Irwin and me, my parents were even more ingenious. The meat-packing workers all wore white frock coats, which by day’s end were literally covered in blood. To pay for college, my parents started a frock rental business and installed a laundry. All the area employees started their day in our café to rent a frock (and hopefully buy breakfast while they were at it.) The profits paid for all of our University of Texas expenses, allowing Irwin and me to graduate debt-free.

When a need arose, I learned early on that you go to work to make it happen. Julius Blum trained us: “The only helping hand you need is the one at the end of your own arm.” His other motto was: “If you take care of your business, it’ll take care of you.” I’m a believer.

After college, Irwin joined the business full-time and expanded the café operation into J. Blum Co., a full-blown meat-packing supply business. As I’ve recounted in previous posts, Irwin was running the business single-handedly after my father died and my mother retired. When Irwin died unexpectedly two weeks after his pancreatic cancer diagnosis, our succession solution was mom Elsie. (See post from March 1, 2022 “Business Succession Planning: Not Every Family Has an Elsie.”) My mom emerged from retirement in her mid-80’s to run the business and fully manage the transition.

As an estate planning lawyer, Irwin’s death was a wake-up call for me. I’m now a major advocate for business succession planning. We were fortunate to have Elsie as a business transition solution, but don’t depend on luck. The smarter approach is to have a succession plan in place, ready to activate when the time comes. And as I learned, that time can hit you completely out of the blue.

Marvin E. Blum

Blum’s Café installed a jukebox to pay for Marvin Blum’s Bar Mitzvah, one nickel at a time.

Is Someone in Your Family Hurting?

Is someone in your family hurting? That’s a provocative question. The fact is, for almost every family, the answer is yes. Furthermore, if someone in a family is hurting, generally the whole family feels it. Try as we may to sweep it under the rug, the issue seeps back into our brain and preoccupies us. As I advocate for Family Legacy Planning and Business Succession Planning, the reality is that such processes are impeded until we address what’s hurting us.

Last week’s post coincided with Rosh Hashonah (the Jewish New Year), ushering in a season of reflection, repentance, and spirituality. As sundown tonight marks the beginning of Yom Kippur (the Day of Atonement), I’ll continue to honor the spirit of this holy season with an “estate planning” lesson from renowned Rabbi Shlomo Farhi of New York. My daughter Lizzy attended Rabbi Farhi’s class on one of the central themes of this season: “T’shuvah” (Hebrew for Repentance, though the actual translation is to “Return”). During these Holy Days, we are challenged to turn around and return to more righteous living. Rabbi Farhi shared this parable: A tightrope walker walked down the rope, turned around, and walked back up the rope. When asked which was harder, walking down or walking up, the tightrope walker answered: “Neither journey was the hardest part; the hardest part was turning around.” When we want to change course from a path we’re on, the hardest part is to turn around. After that, we’ve accomplished the toughest part of the journey.

A few years ago, I had a wakeup call at the Annual Conference for FOX (Family Office Exchange) where I learned that most families are indeed hurting. The agenda included all the expected topics for high-net-worth families engaged in legacy planning: estate planning, tax planning, family governance, family education, investing, money management, philanthropy, etc. But there was one topic on the agenda that surprised me: addiction. The presentation from addiction counselors generated the greatest interest of all. It turns out that almost every family was dealing with addiction at some level, and that hurt dominated the family’s psyche. As an estate planner, I learned the importance of meeting a family in the place where it is. In my journey to practice “holistic” estate planning, I realize the need to recognize when a family is hurting and accommodate that in the estate plan design and process.

An effective estate plan needs to fit the family’s reality. We need to engage in honest conversations and design an inheritance appropriately. Trust provisions need to address that reality. Making trust distributions outright to an impaired person can be poison to that person. Trustees need to be empowered to adjust distributions to take into consideration a beneficiary’s dependency.

With my daughter Lizzy’s permission (indeed, encouragement), I will share our own family’s struggle with addiction. In the summer of 2021, Lizzy began her season of reflection with an honest look in the mirror and bravely recognized her dependence on alcohol. On August 1, 2021, she took the hardest step and turned away from a behavior she wanted to change. We are very grateful and proud that Lizzy is now on a sobriety journey, her last drink now more than 14 months ago. As she walks the tightrope back to a life without alcohol, we all recognize the risks. But, she accomplished the hardest part when she turned around. Her journey is not easy, but she wisely chose a support system to help her stay on course.

Lizzy has been very public about her battle against alcoholism, in hopes it’ll give others the courage to turn around and follow her path. That’s why she urged me to share this message, hoping it’ll reach someone who may need help and hope. (To learn more of Lizzy’s story, follow her on Instagram at @LizzySavetsky.)

The third prong of the Blum family mission statement is spirituality. In this season of spirituality, I feel moved to send encouragement to all families who are hurting. At The Blum Firm, we have cultivated resources who may be able to help. Please reach out to us if you’d like information on counselors or programs that come highly recommended. And please know that we’re here for you, with both “head“ and “heart,” to help you design an inheritance plan that’s best suited to your family.

Marvin E. Blum

Left: Putting the Blum family’s mission of spirituality into action when Marvin Blum’s daughter Lizzy Savetsky and her family traveled to Israel this summer to dedicate a Torah to the Israeli army. Right: Dr. Ira Savetsky and Lizzy Savetsky in a ritual presentation of the new Torah, celebrated like a wedding.

What’s Your Unfinished Business?

This post is coming to you on the Jewish New Year, Rosh Hashonah, marking the start of the year 5783 in the Hebrew calendar. A central theme during these Holy Days is a call to action, symbolized during our prayer service by the loud blasts of the shofar (ram’s horn). We reenact this ancient ritual to wake us up, literally and figuratively. The sounding of the shofar ushers in the Ten Days of Repentance, culminating on Yom Kippur, the holiest day of the Jewish year.

This theme of a wake-up call brings to mind a sermon I heard recently in New York. Our daughter Lizzy and her family moved back to New York a few weeks ago after a 3-year chapter in Dallas. Laurie and I went to check out their new surroundings, including their new place of worship, the Alt-Neu (Yiddish for “Old-New”) Synagogue. At Shabbat services, Rabbi Benjamin Goldschmidt alerted us that this is the time of year to “get your affairs in order.” When the doctor tells you that, it’s bad news. This time, the warning is coming not from the doctor, but from the Almighty. The rabbi asked us to think about what that phrase means to each of us. He challenged us to ponder the question: “What’s your unfinished business?”

There are so many aspects to this question, but as an estate planning lawyer, having your “affairs in order” brings to my mind the importance of having a Will. If you don’t have a Will, you should. And, if you have one, is it up-to-date?

I’ll share some shocking statistics. It’s been reported that 73% of those who die in Texas each year die without a Will. Even more startling: 46% of high-net-worth parents have not executed a Will.

Most know the reasons a Will is important, but I’ll recap a few highlights:

  • You designate who will inherit your assets instead of letting state law direct it.
  • You select the person to serve as executor to oversee the passage of your assets.
  • If you have minor children, you name the person to serve as guardian of your kids (the most important provision of all).
  • If you own a business, the Will addresses who will own your business after you’re gone.

That last point ties into the segment I’m now doing on Business Succession Planning. In the last few weeks, I’ve been spotlighting the need to plan for the transition of your business. There are two different elements to address: (1) ownership of your business and (2) management of your business. Ownership is directed by your Will and/or trusts, where you designate who will own your company after you’re gone. Possibilities include leaving the ownership interests to a trust for your family, controlled by a trustee whom you appoint to be in charge. It can also entail creating voting and non-voting stock, so that control rests in hands you deem best suited. Your plan may include a Buy-Sell Agreement, outlining the terms for a buy-out if a family member exits the business. These concepts deal with who will own the company, but that’s different from who will manage it. In a Business Succession Plan, you also address who will run the business, which may or may not be the same persons as the owners. Business owners need both: a Will to direct who will own the company, and a Business Succession Plan to designate who will manage it.

Every person who is 18 or older needs a Will, otherwise the state has one for you that you may not like. Even if you have a Living Trust, you still need a “Pourover Will” to “pour over” any assets you own at death into the Living Trust. Without a Will, estate administration will be far more cumbersome.

As you heed this wake-up call from the shofar and make your own list of unfinished business, give some thought to whether you have an up-to-date Will. And if you own a business, take the extra step to create a Business Succession Plan. This season of reflection is the perfect time to get your affairs in order.

To one and all, I send the Hebrew greeting “L’Shana Tova” (“To a Good Year”).

Marvin E. Blum

Marvin Blum sounding the shofar on the Jewish New Year, a wake-up call to get your affairs in order.

We’re in a “Perfect Storm” for Business Succession Planning

As part of the segment I’m doing on Business Succession Planning, I want to share planning tips I recently presented at Bank of America’s Business Owner Conference. It was easy for me to relate to the audience of business owners, as I grew up in a family business. I understand the attachment they feel to their business, and the reluctance to plan for the day they are no longer here to run it. For people who wake up every day with entrepreneurial energy, it’s hard to imagine the day when someone else is in the captain’s chair. But if business succession planning is done carefully, it will address not only the financial aspects of the transition, but also the psychological aspects. Indeed, it’s the psychological aspects that usually produce the greater challenge.

Why is now the “Perfect Storm” for such planning? Ever since the COVID pandemic, I’ve noticed a heightened awareness of our mortality. Many who behaved as if they’ll live forever began to realize that one day they’ll be gone. As I often say, it’s a WHEN, not an IF, you’re no longer here to run the business. And for those who feel “indispensable,” I often respond with the Charles DeGaulle quote: “Cemeteries are full of indispensable people.”

Therefore, now is the time that more and more business owners are seeking advice on planning tools to pass on their business in the most tax-efficient and family-efficient way. To summarize these tools, I prepared a PowerPoint with seven ideas for business owners to consider. Click on this LINK to review my Bank of America presentation.

Business Succession Planning is not a “one size fits all” endeavor. Each family needs to create the structure that’s the right fit. In my speech, I hit the highlights of “squeeze & freeze” planning techniques, such as Defective Grantor Trusts, 678 Trusts, and SLATs. In addition to locking in the doubled estate tax exemption before it sunsets in half (on December 31, 2025—only three years from now), these trusts also protect all future appreciation from the 40% estate tax. Unless you plan around the estate tax hit, the federal government is your 40% silent partner in your business. Passing business ownership into trusts not only saves tax, but it also protects the business from an owner’s creditors and divorce. Moreover, by using trusts to own the business, you can also carefully select the trustee who will oversee the management of the business when you are gone.

In addition to addressing business ownership, management, and taxes, the plan needs to also address family dynamics. A skilled consultant can help the family navigate the process, doing it in a way that strengthens communication among family members and builds trust. As family consultant Tom Rogerson wisely says: “A strong business won’t sustain a family, but a strong family will sustain a business.” You can’t effectively plan for a family business’ continuity without also planning for family continuity. In addition, the family business is typically inextricably woven into the family’s identity. Letting go of a family business leaves a void in a family’s identity. It also leaves a void in the founder’s self-image and can have a profound effect on self-esteem. Therefore, the plan also needs to help the family “fill the gap” when business ownership and/or management changes hands.

A final note: now is the perfect time to start. Those who are waiting until “the time is right” are often caught by life’s surprises. As Tom Rogerson says, “It’s rarely too early to plan, but frequently too late.” Similarly, life insurance producer Todd Healy confirms: “Five years too early is better than five minutes too late.” Healy analogizes to having an antidote already on hand in case you get a snakebite: “If you don’t have a snakebite kit on hand, by the time you get bitten by a snake, it’s already too late.” A word to the wise: don’t wait until the snake bites to have a kit in place.

I will continue to build on all these themes as we delve deeper into the world of business succession planning. Starting next week, we’ll explore real life stories of business-owning families. I look forward to sharing lessons we can learn from those who did it right, as well as those who didn’t.

Marvin E. Blum

Marvin Blum speaking at Bank of America’s Business Owner Conference on the “Perfect Storm” for Business Succession Planning.

Follow Queen Elizabeth’s Example

As part of the Business Succession segment in our Family Legacy Planning series, I want to pay tribute to a family business matriarch who died last week, Queen Elizabeth. Yes, Queen Elizabeth was part of a family business: the “Royal Firm,” an enterprise with $28 billion in assets. Queen Elizabeth sets an example to put in place a robust transition plan for the family enterprise.

First and foremost, she trained a successor who stands ready to step into her role. Prince Charles has been groomed all his life to now take over the monarchy as King Charles III. One of the primary elements of a business continuity plan is to select and train a successor. Certainly, the lifelong grooming of Charles is an extreme example, but the key is to identify a successor and become his coach. As we often say in Texas, have him “ride around in the truck” (or in this case, the royal carriage) with you to learn first-hand how to do the job.

The Queen also had a plan in place for her farewell and burial known as “Operation London Bridge.” Including that element in your succession plan is a big gift to the family during the first days of grief. The Queen’s plan was activated by sending Prime Minister Liz Truss the code language: “London Bridge is down.” What followed is an orchestrated series of communications to key contacts, media announcements, and fully planned events. Follow the Queen’s lead and leave instructions for your burial, memorial service, obituary, photos, etc. Making those decisions immediately following a loved one’s death is a heavy challenge. Your family will be grateful for the guidance.

Queen Elizabeth also had a plan in place for her assets. The $28 billion in the Royal Firm stays intact, similar to a trust arrangement, to provide ongoing funds to operate the monarchy and maintain the palaces. In 2022, the Royal Firm provided a Sovereign Grant of approximately $100 million to cover such expenses and maintain her household. Providing your family with a source of funding to sustain your business and legacy assets (whether through life insurance or a reserve fund) is likewise important, even if the amount needed has a few less zeros on it.

The Queen also owned approximately $500 million in personal assets. These assets include some $70 million she inherited in 2002 from the Queen Mother’s paintings, stamp collection, china, jewelry, and horses, as well as the Queen’s investments and real estate. It is reported that most of those personal assets will pass to King Charles III. Questioning whether leaving an unequal inheritance to her children will create issues is a topic I covered in my posts on sibling warfare due to unequal inheritances. (See my posts dated July 19July 26, and August 2, 2022.) Perhaps in the royal context, King Charles’ siblings will be more understanding (or perhaps not?).

Another element of a thoughtful transition plan is to engage in planning to minimize estate taxes. That’s one aspect where the Queen got off the hook. In 1993, Parliament passed a bill exempting the estate of Queen Elizabeth from paying the 40% inheritance tax. As no one in the U.S. enjoys that benefit (unless they were lucky enough to die in 2010, the one and only year with no federal estate tax), I urge all to implement techniques to minimize the 40% U.S. estate tax. In next week’s post, I’ll address some of those “squeeze & freeze” tools available while we’re still in the Golden Age of estate planning.

Rest in peace, Queen Elizabeth, and our gratitude to you for living an exemplary life, all the way to the end.

Marvin E. Blum

Queen Elizabeth created a thoughtful succession plan for her royal duties, her assets, and her final farewell. Let’s follow her example.

Don’t Be Like HBO’s “Succession’s” Logan Roy: Switch from Quarterback to Coach

In last week’s post, we shined a spotlight on the complicated relationship between the family business and the business founder. I frequently describe Business Succession Planning as “the most neglected area of estate planning.” Many founders have a deep emotional attachment to their family businesses. They can’t bear the thought of planning for the day they are no longer running the business. In my own upbringing, the family business was to be nurtured and raised, almost like it was another child in the family. I can still hear my dad Julius Blum’s voice: “If you take care of your business, it’ll take care of you.” Yet with all that love and affection, only one-third of family businesses successfully pass from G-1 (Generation One) to G-2. Even worse, only 10% pass from G-2 to G-3.

Why the low survival rate? The HBO hit “Succession” offers one cause. Billionaire Logan Roy, although in his 80’s, refuses to yield control of his global media empire Waystar Royco to anyone, even his four adult children. Although fictional, the show’s writers drew inspiration from real-life media moguls the Redstones (who control ViacomCBS Inc.) and the Murdochs (who control The Wall Street Journal). It’s hard for the founder to pass down control. But for the health of the business, there comes a time when the patriarch needs to switch from being quarterback to being the coach (in the words of renowned family consultant Matthew Wesley).

Though the “Succession” story may be painful, many business-owning families can relate. If nothing else, it’s instructive on how toxic behavior can destroy a business and a familyThe Wall Street Journal covered this topic in “Succession’s Family Business Drama Hits Close to Home for Some Fans” (November 5, 2021). The article describes how the show “pinched nerves every now and then” for Steve Smith, owner of a family architecture firm: “We identified that this is what we don’t want the family to become. The show has put that top-of-mind again and again and again because it’s so addictive to watch.”

“Succession” is even part of the curriculum in a course at Northeastern University called Examining Family Business Through Film. Professor Kimberly Eddleston describes the show as “a case study in how some founders feel entitled to run their companies until they die, and how some potential successors feel unworthy to take over.”

At The Blum Firm, we have witnessed too many real-life dramas on family business succession. Seeing those has caused us to develop “Business Succession Planning” as one of our law firm’s main offerings. There’s no one-size-fits-all solution. Regardless that the solutions are each unique, the process is generally the same. Hence, we created a Ten Step Business Succession Planning Roadmap:

  1. Start the Process
  2. Create an Action List
  3. Form a Planning Team
  4. Manage Expectations
  5. Identify the Issues
  6. Define the Desired Outcomes
  7. Search for a Solution
  8. Get Buy-In from Key Stakeholders
  9. Address the Challenges
  10. Implement the Solution

We’ll walk you through the specifics in the coming weeks. Suffice to say that at the end of the process, you’ll identify a solution that fits your business and your family. You’ll improve the odds of preserving the family business as a meaningful legacy for future generations. Our goal is to put you in the category of Alan Rosen, CEO of family cheesecake empire Junior’s Restaurants and Bakery, who fought his senior generation to expand beyond their original one store in Brooklyn. Learning from Logan Roy’s mistakes in “Succession,” Rosen is committed to a smoother business transition: “I, unlike Logan Roy, will have a plan.” The Blum Firm would be honored to help you have a plan, too.

Marvin E. Blum

Marvin Blum draws lessons from the TV series “Succession” to help in real life business succession planning.

Business Succession Planning: Every Ending Is a New Beginning

One of the toughest challenges in estate planning is to plan for the transition of a business when the founder is gone. There are so many business and financial, as well as psychological and emotional, aspects to consider. That’s the reason most put off doing business succession planning. They just don’t want to open that can. However, as my colleague Tom Rogerson often says: “Failing to plan is planning to fail.” Failing to carefully plan for the continuity of a business often leads to a bad outcome—bad for the owners, bad for the family, bad for the employees, bad for the customers, bad for the suppliers, bad for everyone involved.

Because of the reluctance of business owners to plan for who will run the business WHEN (not IF) they are gone, I am launching a segment of my Family Legacy Planning Series devoted to Business Succession Planning. In the coming weeks, we’ll explore the do’s and don’ts of succession planning. We will study real life examples of families who did it right and families who did it wrong, learning from their successes and their failures.

Interestingly, the idea for this segment on business transition planning came to me when hearing a sermon from Rabbi Zev Weiner. While in Los Angeles to celebrate our granddaughter Juliet’s 8th birthday, we attended Shabbat services at Young Israel Synagogue. I learned that the Gemara (Rabbinic commentary) teaches why Jewish law on divorce comes BEFORE the Jewish law on marriage. Rabbi Weiner explained that all endings (whether it be divorce, death, job termination, or even the end of a month) are viewed in Judaism as new beginnings. Upon any such ending, the focus is to look to the opportunities that lie ahead, opportunities to start over, find happiness, renewal, rebirth. That’s why marriage teachings come AFTER divorce teachings in Jewish law.

It then dawned on me: the death of a business founder brings an opportunity for business continuity, perhaps even improvements, expansion, a better way. It also creates the opportunity for the founder to create a lasting legacy that endures for generations to come. A life ends, but a legacy begins.

By the same token, TV producer Norman Lear recently celebrated his 100th birthday with two words of advice: “over” and “next.” When something is finished, declare it OVER and don’t dwell on it. Immediately move on to what comes NEXT. That philosophy has served Norman Lear well, a man who continually recharges his creative juices and is still working in his 101st year. But when his time is over, someone else will pick up where he left off and bring on what’s next. Similarly, when any business founder’s work is “over,” it’s important to have a plan in place for what comes “next.”

I look forward to diving deep into business succession planning and exploring all the opportunities it offers.

Marvin E. Blum

Marvin Blum’s granddaughter Juliet celebrates her 8th birthday, marking the end of one year and the beginning of another, filled with the promise of new opportunities.

If You Don’t Document It, It Didn’t Happen

My daughter Lizzy has become our family’s historian, taking the lead on photographing the moments of our lives. When anyone objects, she admonishes: “If you don’t document, it didn’t happen.” Lizzy is right about the importance of “documenting” our stories, whether it be in photos, videos, or writings. If we don’t intentionally record our history, one day those treasured memories will vanish.

Documenting your legacy is an important part of the estate planning process. Estate planning is so much more than writing a Will. Estate planning is a reflective process, a time to assess what you want to pass down to your heirs aside from your financial assets. Each of us needs to view ourselves as an ancestor. As an ancestor, the goal is to enrich the lives of our descendants, not by making them “rich” with money, but by making them the recipients of a rich and meaningful legacy.

In his article “Our Legacy,” Blake Amos of Trinity Valley School describes our legacy as “what we leave as a pathway for our kids to follow.” Amos continues: “Our legacy is being created whether we are intentional about it or not…. Our legacy is being created every day, so let’s commit to shaping it with intention, thoughtfulness, and care.” As we do so, Lizzy would add, let’s also document that legacy with intention, thoughtfulness, and care.

In the last two weeks, I’ve described the process of creating a video of my mother Elsie’s life story. The feedback has been heartwarming. A number have requested a sampling of the video that includes her “Southern Belle” accent. Click on this LINK for an updated one-minute teaser video with a couple of quotes in Elsie’s own voice, in particular a snippet where she confesses to being a “flirt” to snag Julius when they first met at a Brandeis camp.

I am now gathering photos to slot into the video, and in doing so, I realize how right Lizzy is to urge us to take pictures. How much I wish there were more photos to aid in visualizing significant places and events. What I am noticing is that an important source of photos often comes from weddings. I’ll put in a plug for investing in excellent wedding photography. Some describe an expensive wedding as “driving a car off a cliff,” as Monday morning comes around fast and it’s all over. Not true. Those wedding memories live on for lifetimes, especially through pictures that future heirs will cherish. We keep a photo album of each of our kids’ weddings on our coffee table, and it’s soothing to peruse them from time to time. There’s even research that proves that looking at family photo albums actually lowers blood pressure.

In addition to documenting your story through audio/visual and photos, it’s also important to prepare a written history. Here are a couple of tips on writing your story:

  • Kasia Flanaghan with EverydayLegacies specializes in personal writing coaching and editing to help you write your story.
  • Pat Hawkins recommends StoryWorth, a Christmas gift from his kids that provided Pat a question each week to answer in writing, which was then compiled into a book after a year. Quoting a Jesuit priest who said “The shortest distance between two people is a story,” and a friend who said “An untold story is a secret,” Pat concludes: “It’s my hope that reading the stories in this book will shorten the distance between you and me, and that these no-longer-untold stories will help create a family legacy.”

Indeed, documenting those stories through videos, photos, and writings will not only prove that they happened, but will weave together a memorable legacy. Preserving a family legacy can help preserve a family. As you engage in estate planning, remember to document a family legacy as part of that process. Your heirs will look back on you, their ancestor, and thank you.

Marvin E. Blum

Left: Wedding of Marvin Blum’s parents, Julius and Elsie Blum, 72 years ago. Wedding photos are often the best source of documenting a family’s history. Right: Elsie Blum today, with her five great grandchildren.

Tips to Create Your Life Story

I revealed last week that I’ve embarked on a video project to document the history of my mother Elsie, and through her, my ancestors. Today, I’ll share more about the process of creating “The Elsie Blum Story.”

First question: Why do it? I’ve emphasized repeatedly the value of a family knowing its heritage in order to remain connected and thriving for years to come. David Issay, creator of StoryCorps, cites research demonstrating that stories connect and heal us. Families yearn for connection. Retelling family memories helps families continually reconnect. We recently had a Blum cousins’ reunion where we sat around retelling old family stories that we all already knew, but everyone left that lunch feeling a deeper bond to each other. Documenting your life story keeps those golden moments alive for future generations. Bruce Feiler reaffirms: “The single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.”

Next question: How to do it? Technological advances make it easier to document your history. The choices range from books, to audio recordings, to videos, to recorded Zooms, to custom-produced films. Resources continue to emerge, including these options:

  • Live On Services – Records a Zoom interview with Ruth Luban prompting you to share treasured memories, traditions, and stories. The extended package incorporates up to 50 photos into the recording.
  • Axcelora – Creates a brief audio recording that goes out at death in a link to loved ones.
  • Life Stories Company – Helps you write your private memoires and create a Life Legacy Book.
  • EverydayLegacies – Records a video/audio history of your family heritage stories.
  • Wells Fargo Family & Business History Center – Generates an oral history in your own words and voice.
  • Epic Bound Books – Publishes a coffee table book.
  • Legacy Commissions Films – Produces a custom family legacy film.

Regardless the route you choose, my advice is to do it now. One reader this week shared: “I wish I knew more about my grandparents’ beginnings and tried to get my mother to tell her stories into a recorder, with no success. I need a kick in the a—to get started.” Well, I’m here to give you that kick, and urge you to engage a service to help make it happen. Many shy away from telling their story. It’s normal to find the process intimidating. When my mom tried to back out, having a third party there to encourage her made all the difference. We worked with Ruth Luban at Live On, who kept the conversation flowing and pulled out some stories from Elsie that I’d never heard. Click on this LINK for a one-minute teaser video of “The Elsie Blum Story.”

Do some advance preparation to make sure you include the most important topics and stories. We used a chronological approach, starting with memories of my mother’s parents and my father’s parents and their escape from oppression to immigrate to America. The focus then shifted to Elsie’s childhood in Montgomery, Alabama during the early Civil Rights movement, followed by marriage to Julius, moving to Fort Worth to raise Irwin and me, to more recent years as a grandmother and great grandmother. The video concludes with inspiring stories of the strength Elsie modeled when she coped with the heartbreaking loss of Julius and Irwin. In her sweet southern accent yet “Steel Magnolia” resolve, Elsie advises future generations to stay strong through adversity and follow her example by clinging to faith, family, and productive work.

I’ll conclude with the words of Ruth Luban in a Live On blog post Preserving Family Heritage: “The fact is, we’re all walking stories, every single one of us. We came into the world with a story on our backs, lifting the life stories of our parents and forbears. Those stories embody traditions, tribes, geopolitical whereabouts, and cultural patterns that inform what our lives will become…. And many people simply don’t realize that their stories actually matter…. Participants have reported how transformative it was to recollect, to attune, to acknowledge their life history…. [That] story is the tapestry within which people thrive.”

I urge you to give your heirs the gift of your life story. It will be a gift that will keep on giving.

Marvin E. Blum

Elsie Blum agreed to do a Zoom video recording of her life story as long as her son, Marvin Blum, sat by her side. The result is a gift the Blum family will forever treasure.

Update on Elsie: Preserving My Mother’s Story

Every family has a story. Those stories make your family unique. As psychologist Marshall Duke explains, “Ordinary families can be special because they each have a history no other family has.” In writing this weekly Family Legacy Planning series, I’ve revealed stories about my own heritage, especially the stories of my four grandparents immigrating from Eastern Europe to America to escape persecution against Jews.

Research shows that heirs who know more about their family heritage, especially examples of ancestors’ resilience, have higher self-esteem and are better equipped to handle adversity. The best way to teach younger generations about their heritage is by telling stories. For that reason, I’ve become an active proponent to encourage people to document their stories. If not, these precious family jewels will get lost over the generations.

As I advocate for preserving stories, I’ve become the proverbial cobbler who is now taking care of my own shoes. I am now engaged in a full-blown effort to create “The Elsie Blum Story.” I can’t claim the credit for this idea. The seed for it was actually planted when Sam Daniel sent me the following email after reading of my brother Irwin’s unexpected death from pancreatic cancer at age 65, and how Elsie jumped in at age 85 to take over the family business:

Your weekly stories are now a must-read in my inbox! Your story about Irwin touched me deeply. Now this story about your mother is incredible to read! Elsie is a hell of a woman, and I mean that nicely! I think a wonderful way to honor her legacy is to sit down with her for a series of discussions about the family history. At Elsie’s age, she is a walking, talking wealth of stories and knowledge about your family history. Record her voice speaking about her life, your father’s life, her parents and your father’s parents. I wanted to do this with my mother before she passed, but alas, she developed dementia and was gone in a matter of months. Needless to say, I regret that lost opportunity.

Sam’s email was a wakeup call to record my mother’s voice before dementia or death come along (often unexpectedly) and then it’s too late. I wanted that history to be told in Elsie’s charming “Lady Bird Johnson” deep South accent. Fortunately, Elsie at age 91 is still going strong, and 100% sharp mentally. I teamed up with “Live On” to help create a video history of Elsie’s story. A few days before filming began, my mom expressed some reluctance (a common occurrence). She agreed to proceed on the condition that I sit next to her throughout the filming. Thankfully, we have now completed several hours of recordings, and the evidence is preserved. We now begin the next step of converting that footage into a final product.

In next week’s post, I’ll share more specifics about the process of creating “The Elsie Blum Story” and explore various options for documenting a lasting family history. I’ll also share a one-minute “teaser” video of Elsie’s story.

Elsie update: As the attached photo shows, Elsie has now added “runway model” to her resume, selected by The Stayton to model in their recent fashion show. Though her mind is still completely sharp, after two falls in the last couple of years, she agreed it was time to retire her high heels and use a walker. Some may have too much pride to admit the need for walking assistance, but Elsie is a role model to stand tall, use a walker, and walk with dignity. To anyone who is unsteady, please follow Elsie’s lead and take the safe route. It’s not worth falling.

Marvin E. Blum

Elsie Blum, adding runway model to her resume, an inspiration for future generations to stand tall and walk with dignity.

Unequal Inheritances: Tips from Experts

In last week’s post, I shared a few samples of the high-octane reaction to the topic of sibling strife over unequal inheritances. I brought home the point that such warfare is not exclusive to the mega-rich. Last week’s real-life stories came from families of all levels of wealth.

In today’s post, I want to offer tips I received from other advisors. Like me, they’re in the trenches learning the “do’s” and “don’ts” from seeing inheritances in action, the ones that worked and the that went awry.

From a life insurance advisor:
I wish families could see how dangerous it is to family harmony to try and split things like businesses and land among three and four kids. Obviously, I am biased to the insurance industry as a solution but the creation of cash at death for the purpose of estate division can be a huge key to maintaining the relationships in the family. If people truly realized its power, they would be actively pursuing getting as much life insurance coverage as they can.

From a family counselor/life coach:
Having a third-party mentoring the children to prepare them for what is in their future is a great remedy and it reduces the risk of relational issues. It doesn’t eliminate the risk, but it does reduce it.

From a trust officer:
I am in favor of equal division to avoid family conflict. Another problem we see is pot trusts (a trust for multiple beneficiaries where distributions are made to the individual beneficiaries as needed, and there’s no score-keeping)—nobody is happy if one sibling has more needs than others. It is better to have an estate split into equal separate trusts, with the irresponsible sibling having a corporate trustee and the other siblings serving as their own trustee. That way the siblings understand that each of the siblings received the same amount from the parents’ estates and that everyone’s shares are in trust.

From another trust officer:
Seriously consider naming a corporate trustee, if for no other purpose than to administer the estate before the split and each child can take over their own trust at that point. Naming a corporate trustee to serve for the first few years only can often diminish the tendency of the heirs to go after each other. This is especially effective if the corporate trustee is brought into the conversation with the adult children and it is understood that getting through the estate tax filing, any probate, and the initial winding up of the decedent’s dealings is not only not fun, but it can be exhausting and beyond the capability of heirs. And, by the time each heir hires their own lawyer to represent them as fiduciary (in that scenario no one generally believes their interests are truly aligned, someone always believes the other heir is somehow going to try to take advantage of the situation), it quickly becomes obvious that the corporate fiduciary appointed to just get through the administrative phase of the estate is well worth the cost.

Once the estate distributes to the resulting trusts, the heir can become the sole trustee at that point and can do what they want. They can move the assets from the corporate trustee, or if the corporate trustee has done its job well, retain the relationship as a value-added partner.

Experience has shown me how ugly it can get when mom and dad swore in our conference room “our children definitely get along well, they won’t have any problems.” What is always underestimated is the influence of the siblings’ spouses as well.

From a financial advisor:
Thanks for another important article. I’m observing over time that more and more of my work and of the value that my practice offers to families has to do with developing thoughtful ways to increase family communication and understanding of the hopes and wishes of the parents, as well as their kids. Of course, this then interconnects with every other aspect of the family enterprise from business management to family governance to estate planning to portfolio management.

I couldn’t have said it better myself.

A final tip from me: When parents are debating leaving an unequal inheritance to their kids, I often advise them to consider making unequal distributions to the kids while the parents are alive, without keeping score. However, when it comes to the Will, leave the estate in equal shares. A Will is a permanent document, and having a reminder of inequality out there forever can continue to sting. If kids aren’t equally capable of managing the assets, leave the assets in equal trusts for each child, and carefully select the appropriate trustee to manage each of the trusts. That way, ownership is equal, even if management is not.

There is no “right” or “wrong” answer; no “one size fits all.” The key is to engage in a thoughtful process, seeking guidance from estate planning advisors who bring experience, wisdom, objectivity, “head,” and “heart” to the table. Every family wrestles with its own dynamics. Address the issues; don’t sweep them under the rug. I urge you to consult with experts who are here to help your family build a lasting and meaningful legacy.

Marvin E. Blum

Tribute to sisterhood: the first post-pandemic reunion of Marvin Blum’s wife Laurie and her three sisters. Even during the separation, the four sisters stayed closely connected on Zoom and by phone, fulfilling their parents’ mission for the family to always remain close. (Left to right: David and Linda Usdan, Peggy and William Adler, Laurie and Marvin Blum, and Diane and Barry Wilen.)

Title: Sibling Warfare: Reader Reactions

My Sibling Warfare post on June 28th, together with last week’s post on unequal inheritances, have really struck a nerve. Not surprisingly, many families are struggling with sibling conflict. The feedback I’ve received has been so informative that I’ll share some highlights with you.

The five stories of family feuds in my June 28 post created quite a stir. WealthManagment.com picked up the article and published an edited version here entitled “Five Famous Families Undermined by Sibling Conflict.”

Those five examples illustrate what can happen when sibling rivalry grows into fighting of epic proportions. Although those five families are all mega wealthy, I’m reminded that family infighting is not limited to the ultra-rich. In the feedback, I learned stories of sibling strife in families of moderate means that are equally toxic.

Several stories involved leaving the family home to only one of the kids, for reasons that appeared fair to the parents, yet the news was not well-received by the other kids. Part of the distress was related to financial disparity of the inheritances but much more was due to hurt feelings. In these stories, the prevailing view was for the parents to do their best to explain their reasons, and even if there’s no buy-in from all the children, at least there were no surprises when the Will was read.

Other stories I received involve family businesses left unequally to the kids. Again, the parents had valid reasons for the unequal division, such as leaving more to those active in the business and attempting to make up the difference by leaving other assets to those not active in the business. In one extreme case, the entire business (considered the family’s premier asset) went to one kid and real estate (of much lower value) to the other kid. The one getting the real estate felt slighted, but watch what happened. Fast forward years later and the business was bankrupt while the real estate soared in value.

One mother shared with me an ongoing internal debate over her plan to leave the estate equally to her four children in an effort to preserve family harmony but was concerned about one child being of much lesser means. The mother held a heart-to-heart family meeting to explain her intentions and seek a moral commitment from the children to be there for each other and use the inheritance to support a sibling, if ever needed.

Yet another story involved two siblings, one very responsible and the other terribly irresponsible. Their parents left both halves of the inheritance to identical restrictive trusts in an effort to protect the irresponsible one. The result was that the responsible sibling felt punished for their sibling’s irresponsibleness.

These are all heart-wrenching, real-life examples reminding us there are no perfect answers. As an advisor stressed to me, an estate plan should not be set in stone, as adjustments may be necessary as life unfolds. Estate planning is an art, not a science. Estate planning advisors have a unique perspective and can offer valuable guidance in helping parents address these thorny issues.

In next week’s post, I’ll share some of the valuable insights I received on this topic from life insurance, financial, life coach, and trust advisors. Stay tuned.

Marvin E. Blum

Two of Marvin Blum’s five grandkids, sweet siblings Lucy Blum (age 3) and Grey Blum (age 1). The Blum family mission is to keep this loving sibling connection going strong throughout their lives and keep pouring down the love to future generations.

Leaving Unequal Inheritances to Your Kids: Fair or Poison?

My post 3 weeks ago on “sibling warfare” generated a hot reaction and a request for me to dive deeper into that topic. I’ll start that today by addressing a controversial topic that often leads to sibling warfare: leaving unequal inheritances to your kids. This topic was the subject of a February 19, 2021 New York Times article by Susan B. Garland titled “The Unequal Inheritance: It Can Work, or It Can ‘Destroy Relationships.’” I have confronted this issue many times in my 44 years as an estate planning lawyer, as clients struggle with the question of “equal vs. fair.” Do I leave my estate equally to my kids, or do a do an unequal division because that would be more fair?

In considering the pros and cons, be aware that this is a bombastic decision. True, equal isn’t always “equitable,” but Garland cautions that “unequal inheritances can trigger sibling fighting after a parent dies. Some feuds end up in court.” Perhaps that’s why, in spite of the many reasons to go unequal, most opt to go with equal. A survey of bequest intentions reported that 93% plan to divide their estate equally among their children, regardless of the children’s financial circumstances. (Source: “Love and Legacy: Are Children’s Affections Related to Parents’ Bequest Intentions?” by Matthew Sommer and HanNa Lim, Journal of Financial Service Professionals, Jan. 2022.)

Even with the overwhelming majority opting for equal inheritances, many parents still wrestle with this decision. Here are 10 reasons parents may leave assets unequally.

  1. One child may be struggling financially, while others are well-off.
  2. One child provided care to an elderly or ailing parent.
  3. One child has kids and the other doesn’t.
  4. One child has a disability.
  5. One child is responsible financially and the other is a spendthrift.
  6. The parents paid for one child’s expensive education or gave them a house.
  7. The parents bailed out a financially irresponsible child over the years.
  8. It’s a blended family where the relationship with stepchildren vs. biological children isn’t equally strong.
  9. Parents leave kids different types of assets, such as a brokerage account to one (that increases in value) and a house to another (that declines).
  10. You love your grandchildren equally and set aside a portion of the estate to go per capita to grandkids, even if one child has 2 kids and the other has 4.

In the final analysis, if you’re going to leave assets unequally, family counselors urge making an effort to get buy-in from all the kids. Garland quotes Arline Kardasis of Elder Decisions: “To head off sibling strife, parents should explain their decision to each child individually or as a group, or even seek mediation.” As do many others, I’m always eager for a dose of wisdom from Warren Buffett and his Vice Chairman Charlie Munger. My family and I attend the Berkshire-Hathaway annual meeting each year, and when I asked Buffett and Munger to share their views on inheritances, Buffett concurred with the notion of going for buy-in: “There may be circumstances where one child has much more of an interest in one type of an asset or another, and you want to make sure your definition of equality in terms of handling different kinds of assets meshes or at least is understood by the children so they don’t think that you gave a farm or a house or something of that sort that resulted in inequality when you thought it was equality.” On the other hand, Buffett’s 98-year-old sidekick Munger was more circumspect. Sharing the concern of many who steer away from unequal inheritance, Munger (a man known for his directness and brevity) said simply: “If you’re going to treat them unequally, that is poison.” (Click on this link for an article sharing my reactions to the 2022 Berkshire-Hathaway Annual Meeting.

Garland sums up the risk: “No matter what the parents’ reasoning may be for leaving unequal bequests, experts advise that they understand how such a decision can hurt the people they care about most.” She quotes Harry Margolis, an estate lawyer in Boston: “Inheritances are often seen as a proxy for love. It’s hard to give unequal amounts and not have a child feel that Mom loved me less or more. Even an investment banker who doesn’t need the money has feelings.” Bottom line: If you’re going down the unequal path, proceed with caution. You may be laying the groundwork for sibling warfare.

Marvin E. Blum

Marvin Blum’s son Adam with Charlie Munger, Vice Chairman of Berkshire-Hathaway. In response to Marvin’s question, Munger cautions that unequal inheritances are “poison.” Proceed with caution in order to build a lasting family legacy.

MCA Is a Cause That Makes My Heart Sing. What’s Yours?

Our recent Family Legacy Planning posts have stressed the importance of relationships and social interaction in improving the quality and quantity of our lives. Developing that theme further, I think of the various communities we belong to and how those interactions benefit us. We all belong to a number of communities: family, friends, work, church/synagogue, clubs, civic groups, etc. Today, I want to focus on the many benefits of civic engagement. One benefit is that it provides us a community, as we build relationships with an organization’s volunteers and staff. That, in and of itself, is enriching. But civic involvement provides us with so much more.

I’ve emphasized before how author Jay Hughes teaches that wealth comes in multiple forms—Financial Capital being just one of five. The other four are Human Capital, Intellectual Capital, Social Capital, and Spiritual Capital. Civic engagement runs across all of these capitals, but in particular Social Capital is where we give our time, talent, and treasure to society, building relationships in the communities where we live, while also providing the family with a life of meaning. Author Chaim Potok challenges us in The Chosen to live a life with meaning: “It is hard work to live a life with meaning.” Civic involvement provides a pathway to live such a life.

Over the years, I’m grateful for the numerous causes where I’ve had the opportunity to serve. Most have to do with the arts and education, especially those providing opportunities for young people to thrive. Chief among these have been Trinity Valley School, Fort Worth Symphony, Texas Cultural Trust, B-Sharp Youth Music Program, along with my school and religious affiliations. But one that is really grabbing my heart, and the focus of today’s post, is The Multicultural Alliance (“MCA,” formerly the National Council of Christians and Jews, “NCCJ”). This organization started in Fort Worth in 1951, and I’ve been actively involved for over 30 years. I’m now in my third stint of serving as MCA’s Presiding Chair. Over these 70+ years, the mission has stayed the same: to fight bias, bigotry, and hate while working to build inclusive communities. It’s important work, but never has it been as important as it is now. Today, more than ever, we need MCA to break down barriers that separate us and bring people together.

We are living in turbulent times. The rise in hate crimes is beyond tragic. Earlier this year, our own community experienced the horror of a terrorist taking members of Colleyville’s Beth Israel Synagogue hostage. The hostages were saved by the heroic bravery of Rabbi Charlie Cytron-Walker. Rabbi Charlie’s wife Adena served as MCA’s Vice President of Programming for the last 15 years. So this terrorist act hit home. Rabbi Charlie is a member of our close-knit MCA family.

Under the superb leadership of our President Dr. Cheryl Kimberling, MCA sponsors numerous programs to educate us, opening hearts and minds. One of our signature programs is Camp CommUNITY (formerly Camp Anytown), where high school students from diverse backgrounds undergo a transformative experience over five days. Campers return home with a newfound acceptance of others, no longer seeing differences as something to fear, but rather as something to embrace. Given that our world has become more divided than ever, now is MCA’s time. MCA builds bridges of understanding to bring us back together. My daughter Lizzy was a camper and later a counselor, and I served as an adult advisor, and the experience was life changing for both of us.

(In 2016, I was honored and humbled to receive MCA’s Annual Award at that year’s MCA Awards Dinner. To learn more about my passion for MCA, click here to read my acceptance speech.)

I share all of this to encourage others to find a cause that (in the words of Lady Bird Johnson) “makes your heart sing.” MCA does that for me. Furthermore, MCA operates on a very limited budget, so every donation truly moves the needle. In selecting a cause to support, it adds to the satisfaction if you know you’re doing something that directly impacts and advances an important mission.

As I advocate for Family Legacy Planning, I cannot overstress the benefits of civic engagement. The Blum Firm specializes in helping families incorporate into the estate plan a charitable structure that’s right for you. Philanthropy (whether it be your time, your talent, your treasure, or all three) is a laboratory for building a legacy. A family coming together to support meaningful causes creates powerful family glue. It brings generations together, fostering family communication and trust. Siblings and cousins develop group decision-making skills. Philanthropy strengthens the family’s Social Capital and builds deeper connections among family members. Not everyone in a family can work in a family business, but everyone can play a role in family philanthropy. Civic activity not only benefits the community, but the family who does it gets back considerably more than it gives. It’s truly a “win-win.”

Marvin E. Blum

Marvin Blum, Presiding Chair of The Multicultural Alliance, at this year’s MCA Awards Dinner, promoting the MCA mission to fight hate and build inclusive communities.

Procrastinating Planning? Heed this Warning from “Ray Ray”

For those of us who are putting off something until “tomorrow,” I recently had a wake-up call to remind us that time is zooming by faster than we realize. The wake-up jolt happened as my daughter’s family was packing for their move from Dallas back to New York. The story centers around my oldest grandchild Stella (age 9) and her little baby doll (or “lovey”) that she named “Ray Ray.” (Warning: You may want to have a Kleenex handy.)

Like most little kids, Stella became attached to Ray Ray as an infant. It’s common for kids to cling to a comfort object like a blankie, stuffed animal, or other soft object. It provides them security, especially at bedtime or when adjusting to a new situation. Stella took Ray Ray everywhere, and cared for her as if she were her own little baby. We all understood how much Ray Ray meant to Stella. Once when Stella dropped Ray Ray from her stroller on an evening walk, I retraced our steps with a flashlight and found Ray Ray on the street, thankfully before a car ran over her. Another time, when movers were packing Stella’s family for a move from New York to Dallas three years ago, they accidentally packed Ray Ray in a box. It was weeks before Stella and Ray Ray were reunited, and it was quite a heartwarming reunion to witness. I knew the day would come when Stella would move on from Ray Ray, but I wasn’t prepared for how it would affect me. That day came a couple of weeks ago, and I’m still fighting back tears.

Packing for this move, we were determined to avoid the mistake of Ray Ray winding up again in a moving box. When we gathered Ray Ray and other items to keep separate, Stella announced this gut-punch: “I don’t need Ray Ray anymore. I don’t care if you bring her with us.” All of a sudden, I felt the swift passage of time. I didn’t feel any older, but in a flash, Stella was no longer a little girl. It called to mind lyrics from Babes in Toyland that always gets to me: “Toyland, toyland, little girl and boy land…. Once you pass its borders, you can ne’er return again.” Time marches on; it doesn’t wait till we’re ready.

Here’s my takeaway: For all those things we’re putting off till the future (whether something we need to do or a joy we’re postponing), the future is now. Time flies, and as we get older, it speeds up even more. As Chaim Potok alerted us in The Chosen, in the big scheme of things, a lifetime is no more than “the blink of an eye.” The key is to fill that blink with meaning. My wife Laurie’s grandfather Albert Herzberg said to do that, you have to be intentional. He lived by a “three a day” motto: Before his head hit the pillow at night, he required himself to do three “good turns” each day. Laurie’s mother Aimee Kriger lived by that motto too. It’s hard to do, but it certainly adds up to a life filled with meaning.

Is there something you’re putting off? Estate Planning? Red File? Legacy Letter? Business Succession Planning? Family Meeting? Stella reminds us that time is sweeping by faster than we think.

I can hear Tevye & Golde in “Fiddler on the Roof,” singing at their daughter’s wedding:

“Is this the little girl I carried?
Is this the little boy at play?
I don’t remember growing older,
When did they?…

Sunrise, sunset. Sunrise, sunset,
Swiftly fly the years.
One season following another,
Laden with happiness and tears.”

Now where’s that Kleenex?

Marvin E. Blum

Left photo: Marvin Blum’s granddaughter Stella clinging to her lovey “Ray Ray” three years ago, rescued from a moving box after weeks of separation: “Reunited and it feels so good!” Center photo: Ray Ray, thankfully still “alive” after a long journey from New York to Dallas. Right photo: Stella Savetsky today (age 9), growing up faster than her grandfather Marvin Blum can handle.

Sibling Warfare: Let’s Battle This Epidemic

It seems every day the media is reporting on another family falling off the rails. One sibling is suing another. A couple of weeks ago, I wrote about Rabbi Danziger’s words when Laurie and I were exchanging wedding vows, and that message applies here. When conflict erupts, step back and remember that we don’t all see things the same way. Try to respect the viewpoints of others, listen more, and be thankful for the variety of spices in the Havdalah spice box. The world is sweeter because it’s a blend of different spices. But look, I’m not naïve. Rabbi Danziger’s words worked for Laurie and me. But when siblings are on the brink of war, it takes more than a spice box to resolve it. Let’s explore that.

Every family struggles with conflict. Sibling rivalry is the norm. Our own two kids come from the same gene pool and had the same upbringing, but in so many ways they’re as different as day and night. Probably every parent can relate. When they were little, Adam and Lizzy were always sparring. Laurie and I couldn’t do anything to stop it. I felt better when our wise family friend Jack Belz told us to just embrace it: “They’re developing valuable negotiation skills that will serve them well in life.” Laurie’s sister Diane Wilen, Ph.D. psychologist, comforted us too: “That behavior is developmentally appropriate.”

Yet when kids get older and the fighting gets to epic proportions, that’s another story. The typical response is to try to sweep it under the rug. It’s risky to open that can of worms. Maybe if we ignore it, it’ll go away. News flash: The conflict doesn’t go away. It festers. Eventually, if not addressed, the volcano erupts. Vesuvius often explodes after Generation One (especially the matriarch) is gone. Consider what happened in these five cases that all received widespread media attention.

  1. Barclay: British billionaire twins Frederick and David Barclay owned the Ritz Hotel near Buckingham Palace. Frederick and his daughter Amanda were having private conversations to explore the sale of the hotel, but video footage caught David’s son installing a bug in Frederick’s chair. Brother David’s family captured 1,000 separate conversations Frederick had with prospective buyers, lawyers, bankers, and trustees. Frederick sued David’s family for this “commercial espionage on a vast scale,” alleging that David’s sons were trying to freeze out their cousin Amanda. “The Barclays need to remember that 60% of family business failure is because of a lack of open communication and trust. Without rebuilding this, all their businesses, a large part of the family wealth, and the family bonds themselves, will be gone.
  2. Feil: New York real estate mogul Louis Feil left his $7 billion dynasty to his four children (one son Jeffrey and three daughters) in equal shares. Jeffrey ran the business and received a sizable salary, but distributed just $300,000 per year to his sisters. The three sisters sued, alleging that Jeffrey was starving them out so he could buy them out at a discounted price. The family lost its glue when the parents died. According to Jeffrey, when his father died, “the binding of the book came loose,” and when mother Gertrude later died, “the pages fell out.” A better succession plan would have provided a substantial cash flow for all four business owners.
  3. Angelos: Louis Angelos filed suit against his brother John, alleging John manipulated the family to take control of Baltimore Orioles baseball team and the rest of the family fortune. “Louis Angelos’ lawsuit depicts his brother as manipulating, misleading and intimidating their mother to gain more power over the family fortune. In one instance, when Louis Angelos asks her why she puts up with John’s abuse. She allegedly replied, ‘He’ll go ballistic.’ ” Those are some ugly family dynamics.
  4. Spanos: After the death of their parents, two of the four Spanos children were named as co-trustees of a family trust owning a substantial part of the Los Angeles Chargers football team. Sister Dea filed suit seeking removal of brother Dean as a co-trustee. Dea contends that Dean’s decision to move the Chargers to Los Angeles from San Diego was financially ruinous. She also alleges Dean breached fiduciary duties by diverting $105 million of trust funds to various debts, and borrowing $60 million “for the wasteful purchase of an airplane for Dean’s and Michael’s use that has no legitimate business justification.” Siblings Michael and Alexis are siding with brother Dean, “united in support of our parents’ and grandparents’ wishes.” A key takeaway: When creating trusts, select fiduciaries very carefully, and be especially cautious not to pit siblings against each other as co-trustees.
  5. Briscoe: Former Texas Governor Dolph Briscoe’s goal was to keep his 600,000 acre ranch in the family long after his death, to be shared equally by his three children. Oldest daughter Janey died in 2018 leaving no heirs, and now the surviving siblings Cele and Chip are fighting in Uvalde County court over how to divide up Janey’s portion of the family fortune. Cele and her kids accuse Chip “of manipulating his frail older sister into signing documents that disinherited them from her estate, tilting control of the Briscoe ranching fortune to him and his two sons in contravention of their grandfather’s wishes.” Chip contends that Cele “drifted away from the family business after moving to Dallas and marrying into a dynasty with a fortune of its own” and is “using the litigation to force a breakup of the family holdings.” Governor Briscoe must be rolling over in his grave. It’s unfortunate he didn’t structure his estate plan to leave his estate to a dynasty trust, instead of relying on the hope that heirs would abide by his wishes to keep the ranch intact.

These are but five examples; there are countless more. The mistakes made in each of the five above cases provide some guidance on what not to do. Create a thoughtful trust structure that reflects the family’s mission and values. Select fiduciaries carefully and avoid pitting siblings against each other. Hold family meetings with exercises to improve communication and trust. Ideally, conduct such activities while Generation One is still around to provide influence and family glue. Consultant Matthew Wesley asks heirs to make a “moral commitment” that they’ll never sue each other. Seek a more collaborative and private resolution. Similarly, author Mitzi Purdue’s family indoctrinates heirs early on that “quarrels stay in the family”–don’t air your dirty laundry in the courtroom. Don’t try to go it alone. There are excellent consultants who can help your family. Laurie and I have engaged them to great success in our own family.

I don’t claim to have all the answers, but this I do know. Don’t ignore the problem of sibling strife. It will come back to haunt your family.

Marvin E. Blum

Sources

  1. Barclay: Ellen Milligan, “Bugging the Ritz, Private Investigators and Billionaires at War,” Bloomberg (www.Bloomberg.com), May 20, 2020.
  2. Feil: Sarah Rose and Peter Grant, “Real Estate Family Wars With Itself: Feil Siblings Grapple with Empire Created by Their Father,” The Wall Street Journal, September 2, 2013.
  3. Angelos: Jeff Barker and Jean Marbella, “Five Angelos Family and Orioles Secrets Brought to Light in Brother’s Lawsuit,” The Baltimore Sun, June 10, 2022.
  4. Spanos: Adam Schefter and Kimberley Martin, “Dean Spanos Sued by Sister, Accused of ‘Misogynistic’ Behavior as Legal Battle Continues Over Control of Los Angeles Chargers,” ESPN (www.ESPN.com), June 10, 2022.
  5. Briscoe: Laura Kusisto and Anne Tergesen, “Squabbling Heirs Rock Former Texas Governor’s Ranching Empire,” The Wall Street Journal, January 14, 2022.

Marvin Blum’s kids at play 32 years ago. Adam putting a headlock on Lizzy was playful back then, but be on guard to make sure little sibling quarrels don’t turn into grownup sibling wars.

You Want to Stay in Your Home Forever? Consider Elsie Blum’s Alternative

In last week’s Family Legacy Planning post, I presented the case that social interaction improves both the quality and quantity of life. I ended by saying this week’s post would tell my own mother’s story. This email describes the journey of Elsie Blum increasing her social interaction at age 90, and the positive impact on both her and on the rest of the family.

Here is the dilemma many adult children in my shoes face: an elderly parent is living alone in their own home and fiercely wants to stay there. However, their quality of life is declining. They may need health care. The house requires constant maintenance and repair. They are alone and often lonely. Such is the Elsie Blum saga, a story with lots of trials and tribulations, but fortunately a very happy ending. I share this story with the hope it may help others in a similar situation.

After my father died in 2003, my mom began hanging out with some new girlfriends and poured herself into daily volunteering at our synagogue. She was healthy, busy, independent and life was good. Then, 3 years ago, she fell and broke her pelvis. The one-year recovery process was excruciating. She insisted on returning from the rehab facility to her multi-level home where we installed chairlifts on the stairs and lots of handicap bars. We hired round-the-clock care, which was a very unsatisfying solution. No one was happy. But she recovered and regained her independence. Then, a year ago, she fell in her kitchen and broke her hip. Same song, second verse. Once again, she wanted to return from the rehab facility to her home. This time, we were determined to find a different solution.

I struggled with telling her what she didn’t want to hear. Then, the words of my sister-in-law Lea Ann (wife of my deceased brother Irwin) made all the difference. She said, “If Irwin were here, he’d just make arrangements for Elsie to move to a community living environment, and it’d be done!” Irwin was a “can do—get it done” kind of guy. We were both deeply devoted to my mom, but my style was different—I wanted to go all lengths to try to please my mother. My wife Laurie instantly agreed with Lea Ann, and when my mom told us to find full-time care so she could go home, Laurie told her, “We’re not going to do that. We tried that before, and it didn’t work.” Elsie objected, but instantly replied: “Well, if I’m not going to live at home, then I’m going to live at The Stayton.”

We had been trying for years to get my mom to move to The Stayton, a luxury high-rise independent living environment with great food and activities. She had refused to even go look at it. In her mind, it was a “nursing home.” It’s SO not a nursing home. It’s more like walking into a Ritz Carlton Hotel. When she opened the door to the idea of moving there, we jumped on it instantly. The very next morning, we arranged for Laurie, Lea Ann, and me to tour The Stayton, meeting my mother’s decorator Brad Alford there to help us select a residence. As we were leaving her rehab room, she cautioned me not to commit to anything. Hearing Lea Ann’s words in my head, I answered: “This is Irwin Blum talking now. If we find the right place, we’re going to lock it in. I don’t want to take the risk of losing it.” We went to Stayton, and all the while there, I was channeling my brother Irwin.

We found the perfect apartment. Brad Alford decorated it to become a showplace, truly breathtakingly beautiful. The first couple of days were rocky, as Elsie was not a happy camper. That all changed by day 3, when she began meeting the other residents. She marveled at how friendly everyone there was. That was about one year ago. Since that day, my mom has never dined alone. Every day is filled with meaningful activities—programs, concerts, lectures, even Stayton business meetings (which she especially loves, given her head for business). She’s part of a loving and close-knit community. Her face looks younger and relaxed. No more home maintenance. No more loneliness. I mean it when I say she actually seems happier than I’ve ever seen her in my whole life. She has peace of mind, and so do we.

My mom lives in the independent living section, but if ever needed there’s assisted living, skilled nursing, rehabilitation, and also memory care. Thankfully, at 91, she’s going strong and has no need at this time for those other areas. (Please G-d, I hope I have those genes—there’s at least a 50% chance!) I’m convinced The Stayton is adding years to her life, and not just more years, but quality years. I suspect Elsie would say she wished she’d moved to The Stayton ten years ago. We can’t wind the clock back. But as family therapist Brad Nowlin (whose mom Sallie and her husband Joe also live at The Stayton) wisely posited: “When’s the best time to plant a tree? Twenty years ago. When’s the next best time? Now.” We just planted a tree.

The moral to this story: Although many elderly desperately cling to the idea of staying in their own home for the rest of their life, there’s very likely a better solution. They just don’t know it. Elsie would be happy to talk to them.

Marvin E. Blum

Marvin Blum’s mother Elsie Blum with granddaughter Elizabeth Savetsky, living her best life at age 91 at The Stayton.

Ten Keys to a Long (and Good) Life

In today’s post, I continue exploring the first part of the Blum Family Mission Statement: “It’s all about relationships.” In my research on the value of relationships, I discovered a powerful connection between relationships and longevity. It comes as no shock that interpersonal connections improve both the quantity and quality of life, but what does shock me is how high social interaction falls on the list of top reasons for longevity.

By and large, The Blum Firm’s client base beats the life expectancy lottery. We want to help our clients enjoy a positive senior experience. Legacy planning is not just about improving the quality of life for your heirs, but also about enriching your own life experience. To that end, we engage actively in aspects of “Elder Law,” a label that didn’t exist when I started my law practice. With our Red File checklist, we encourage clients to provide instructions on their care in case of incapacity—not just where they want to live or who will be the caregivers, but also favorite foods, TV shows, colors, etc. We promote planning to avoid guardianship, encouraging the use of financial and medical powers of attorney. We also provide expertise to help protect clients from the tragic epidemic of elder financial abuse, whether from con artists, caregivers, and even family members who prey on the elderly. Our mission is to help clients improve not only the length of their days, but also the quality of those days.

There are certain factors that contribute to long life that are beyond your control, such as genetics. But there are many actions that are within your control. Julianne Holt-Lunstad is a researcher at Brigham Young University who studied tens of thousands of middle-aged people. She examined their lifestyle: their diet, their exercise, their medical status, how often they went to the doctor, whether they smoked or drank, etc. After seven years, she and her colleagues reported their findings. Psychologist Susan Pinker also reports on such research in her 2017 Ted Talk entitled “The Secret to Living Longer May Be Your Social Life.” Here, in descending order of importance, are the top ten contributors to living longer:

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.

According to Pinker, “face-to-face contact releases neurotransmitters that foster trust, reduce stress, kill pain, and induce pleasure.” She distinguishes between in-person and digital interaction, as the greater benefit comes from interacting in person with people as you move through your day. Social integration doesn’t have to be a close friend. It can be the conversation with a mailman. For years, my wife Laurie delivered Meals on Wheels and had meaningful visits with her “clients” as she brought meals into their homes. She was told countless times from both her clients and their family members what a difference that visit made in the day.

Bottom line: Close personal relationships and face-to-face interactions are the top two keys to living both a long and a good life. In next week’s post, I will apply this proposition to my own mother’s situation. Watch for how Elsie Blum, at age 90, improved her life by moving to a wonderful senior living community at The Stayton in Fort Worth.

Marvin E. Blum

Elsie Blum (left) with son Marvin Blum and daughter-in-law Laurie Blum, improving both the quantity and quality of Elsie’s life through social interaction.

It’s All About Relationships: My Best Friend, Talmage Boston

A few weeks ago, I dedicated a post to the first prong of the Blum Family Mission Statement: “It’s All About Relationships.” I dedicated the post to my fellow Canoe Brothers, a brotherhood rooted in our shared UT law school experience. Today, I want to single out one of such Canoe Brothers, my best friend Talmage Boston. Our connection was forged by sharing a law school experience and all the times together thereafter. This weekend, Talmage is being honored in Houston by the Texas Bar Foundation, receiving the coveted Dan Rugeley Price Memorial Award for his leadership in the legal profession and his writing talents. The Canoe Brothers will be there to cheer for Brother Talmage, who has been a role model to many, but especially to me. My friendship with Talmage has enriched my life immeasurably.

I first met Talmage at our college dorm Dobie Center on The University of Texas campus. We had a lot in common: each of us a dedicated student, solidly committed to family, faith, and friends. Yet in other ways, Talmage was light years ahead of me—outgoing, confident, athletic. Those were the days of the Vietnam war and Watergate, and Talmage was politically outspoken as Chair of the Texas Union Ideas & Issues Committee. He even ran for UT Student Body President and almost won (beat out by the first female to serve in that role). In my view, Talmage was the proverbial “Big Man on Campus.”

In our senior year, Talmage approached me with the idea of becoming roommates the following year at UT Law School. I was honored and flattered. I deliberated a bit, as I’d never had a roommate (other than my brother Irwin), and there was also the subject of religion. All of my Jewish friends lived with other Jewish people. It was natural for young Jews to stick together, as the Jewish connection is powerful both religiously and culturally. My close friend Karen Cortell (now Reisman) even raised the question: “Marvin, what about the fact Talmage isn’t Jewish?” I knew Talmage had many Jewish friends and respected people of all backgrounds. I decided to take the risk.

(Of course, there was the time I brought my week of kosher food for Passover, along with a kosher skillet to warm it in, and came home to discover pork chops being fried in it. Let’s describe that as a “teachable moment.” I cherish the memory.)

Talmage opened me up to a world outside the classroom. My social life soared, even joining with Talmage to throw some pretty spirited parties (the themes of two of them—“Africa” and “Mexico”—conjure up some crazy memories). Talmage looped me into his friendships with campus leaders and later with national political, literary, and sports heros, such as the late, great Bobby Brown. Talmage taught me to have the courage to seek anything you want. (“The worst they can say is ‘no’.”) He even gave me the determination to go after Laurie, the girl of my dreams, and joined me on a trip to London to “run into” Laurie and her family and convince her to marry me. (It worked!) That’s true friendship.

Through continued shared experiences, my 50-year friendship with Talmage just keeps growing. Talmage encourages me to continually grow and reinvent myself. In that regard, Talmage as an accomplished speaker and author of several books is a true role model. He champions my painting and my writing, urging me to write a book on Family Legacy Planning. (Maybe someday?)

I’m still Marvin and he’s still Talmage, but we’ve been a great influence on each other in ways both profound and whimsical. He even has me joining him to sing my heart out at outdoor concerts. Talmage is good. I’m not, but he taught me “who cares?” One such night in song was at a concert of Eagles songs, and the title of their hit “Take It to the Limit” fits Talmage to a T! All of us who know and love Talmage would agree he lives life by “taking it to the limit.”

I urge everyone to find a friend who stretches you and completes you, the way Talmage fills in the gaps for me. Talmage recently sent the Canoe Brothers a quote of Ralph Waldo Emerson from FDR’s January 1945 inaugural address: “The only way to have a friend is to be one.” The search for friendship requires each of us to make an investment. The more we invest, the greater the ROI (return on investment). Invest in a relationship with someone who brings out your best and challenges you to grow.

I’ll close with the two ending stanzas in Henry David Thoreau’s poem “Friendship,” which so aptly depicts the intertwined roots of my friendship with Talmage.

Two sturdy oaks I mean, which side by side,
Withstand the winter’s storm,
And spite of wind and tide,
Grow up the meadow’s pride,
For both are strong

Above they barely touch, but undermined
Down to their deepest source,
Admiring you shall find
Their roots are intertwined
Insep’rably.

Marvin E. Blum

Left photo: Talmage Boston and Marvin Blum (right) on Europe trip in 1978—growing a beard was Talmage’s idea, always stretching Marvin out of his comfort zone. Right photo: Marvin Blum (left) and Talmage Boston donating the “Blum & Boston Scholarship” at UT Law School in honor of a lifelong friendship that started during their law school years.

Family Friction? Be Thankful for the Variety of Spices

Last week’s post focused on the polarization in government and the impact on tax law. Each side stakes out its position and tries to force its views on the other side. Even when there’s plenty of common ground, no consensus emerges. Witness this week’s renewed debate over gun legislation. There is no spirit of compromise—it’s all or nothing. If you can force together 51 Senate votes, it’s “all.” If you can’t, it’s “nothing.” This dysfunction isn’t limited to government. Such partisanship behavior also spills over into families.

I wrote recently that 2022 is the “Year of the Wedding” after so many COVID wedding postponements. Marriage creates a perfect storm for polarization. I know firsthand. Laurie and I are a match made in heaven, but even we had our share of tension 43 years ago as we joined together in holy matrimony.

Laurie and I each came from spiritual homes with a strong Jewish identity, but different practices and traditions. Our situation is certainly not unique. The tendency is to cling to how your family did it as the “right” way—the perfect recipe for “I’m right” and “You’re wrong” behavior. I shared this struggle with Rabbi Harry Danziger who officiated at our wedding. While we were standing under the chuppah exchanging vows, Rabbi Danziger provided an eloquent solution.

Our wedding was on a Saturday night after the ceremony of “Havdalah” marking the “separation” between Shabbat and a return to the ordinary work week. The sabbath endows us with a higher soul, symbolized in the Havdalah service by savoring the fragrance of a mixture of spices in a spice box. In a subtle reference to our different viewpoints, Rabbi Danziger urged us to celebrate those differences by recalling the Hebrew spice box prayer: “We thank G-d for the variety of spices.” The world is a sweeter place because we each bring to it our own spices: our own experiences, beliefs, traditions, and customs. I began to see our differences as a spice box that could blend into a sweeter aroma. Indeed, that’s the home Laurie and I created, where we blended our upbringings in a way that created a spiritual Jewish home that’s right for us.

In his article in The Atlantic “A Gentler, Better Way to Change Minds,” Arthur Brooks offers these tips on building consensus:

  • View those who disagree with you as valued voices, worthy of respect and attention. Go out of your way to welcome them into your circle.
  • Don’t take rejection personally. You can love someone with whom you disagree.
  • Listen more. When it comes to changing someone’s mind, listening is more powerful than talking.
  • Cultivate openness, non-discrimination, and non-attachment to views in order to transform others. For your values to truly be a gift to others, you must first weaken (though not abandon) your own belief attachments.

I’ll add one more tip to this list. Ancient Greek Stoics saw conflicting viewpoints in a positive light. The Daily Stoic Life teaches the value of being part of a Scipionic Circle, surrounding ourselves with peers who see things differently and stretch our minds. “If you’re not exposing yourself to new ideas, how will you get better?… If you’re not being challenged, how can you become wise?” Adopt a new perspective on conflict. Don’t dodge it, embrace it. Families who look at conflicting beliefs through this lens can build mutual respect, find common ground, reach consensus, and emerge with a sweeter spice box of honored viewpoints.

Marvin E. Blum

Wedding of Marvin and Laurie Blum (1979) celebrating the blending of spices.

Tax Planning in the Age of Dysfunctional Government

I have a great love for teaching. It brings me joy to share my knowledge of estate planning and help families achieve multi-generational success. One such opportunity was last week, when I spoke in Tyler at the Texas Society of CPAs East Texas Expo.

At the start of my speech, it occurred to me that my last speech in Tyler was in November 2016, the morning after election day. I woke up that morning to the news that Donald Trump defeated Hillary Clinton. As I drove to Tyler, I was processing the impact of that outcome on tax planning. My whole speech changed.

Regardless of your political views, it’s indisputable that Trump’s election ushered in an era of polarization and partisanship. Early in the Trump presidency, the 2017 Tax Cuts and Jobs Act became law, passing without one Democrat vote. We entered a world where bipartisan support of legislation became more and more rare.

We are now in an age where the pendulum swings far right, then far left, back and forth, continuously over-correcting. Gone are the days when the pendulum hovered in the moderate zone near the middle of the curve. The problem is exacerbated by the primary system for selecting nominees, an electoral process that tends to favor extreme left and extreme right candidates.

In this age of extremism, tax law has become a ping pong ball. Each side uses tax law to advance its agenda. The result is an ever-changing tax landscape. We never know what’s coming.

But, we do know what the tax law is today. As tax law changes, Congress almost always grandfathers planning completed before the new law passes. My message in Tyler was this: take advantage of planning opportunities we have today while we’re still in the “Golden Age of Estate Planning.” To review my planning recommendations, click here for my presentation Last Chance Tax Planning: The Golden Age of Estate Planning Won’t Last Forever (If You’re Not Doing Estate Planning Now, What Are You Waiting For?).

In next week’s Family Legacy Planning email post, I’ll address how the dysfunction that’s happening in government is also happening in families. In my mission to help families heal and prosper, I’ll offer some insights and tips on building consensus.

Marvin E. Blum

Marvin Blum speaking on “Last Chance Tax Planning” at the TXCPA East Texas Expo in Tyler.

A Favorite Annual Experience in Our Family

In last week’s Family Legacy Planning post, I shared that the first prong in the Blum Family Mission Statement is Relationships. It takes work to build solid relationships. They don’t come together unless each party invests 3 T’s: Time, Transparency, Truth, all of which leads to the critical fourth T: Trust.

I quoted Malcolm Gladwell for the proposition that relationships and shared values grow out of shared experiences. To repeat Gladwell’s wisdom: “You can’t share values with others until you share meaningful experiences with them…; the relationship, trust and friendship has been shared through the experiences first.” Therefore, for families and friends to build trusting relationships, they must share meaningful experiences. I urge all families to create traditions for heirs to spend meaningful time together, keeping the family connected long after the matriarch and patriarch are gone.

I also encourage families to endow those experiences in the estate plan, so the funds will be there to cover the cost. In past posts, I quoted Mitzi Purdue who credits her ancestors for setting up a trust to cover the cost of family reunions (every 12 months on the Sheraton side of the family with more lavish trips, and every 18 months on the Purdue side of the family with more modest trips). Purdue asserts that those trips are the single biggest reason both sides of her family have remained connected over the years, as well as the single biggest reason their family business continues to thrive.

In thinking about the close connectedness of my wife Laurie’s family, I realize those strong relationships are no accident. Four Kriger sisters grew up in Memphis but now live in various states, and the next generation has spread out across the country even more. However, the Kriger family is intentional about regular family gatherings. These gatherings are a tribute to their deceased parents, who made it clear that family closeness was a top priority. One of those traditions is an annual family trip to Omaha to attend the Berkshire-Hathaway annual meeting. It’s an important ritual that has been continuing for over a decade.

After a two-year break due to COVID, it was good to be in Omaha again for this year’s annual meeting. People are always curious about our takeaways from Warren Buffett and Charlie Munger, who entertain the crowd of some 30,000 Berkshire groupies with their wit and wisdom, answering questions all day with only a one-hour lunch break. Buffett (age 91) and Munger (age 98) are an inspiration. At their advanced ages, there is no sign of mental slippage. They are role models for us to always keep our brains active and never quit learning.

Two times in the past, I was fortunate to be selected to ask questions, and that was a special highlight. The first question was for Buffett to discuss his estate plan and to elaborate on his famous line: “I want to leave my children enough so they can do anything, but not so much that they can do nothing.” Click here for Buffett’s answer. The second question was to ask Buffett to discuss his philanthropy and how he decided to become a philanthropist. Click here for his answer. I have found that people care what Buffett and Munger say, so at future meetings I’ll try to seek more guidance from them on estate planning topics.

Here are some other takeaways from this year’s meeting:

  • The number one reason for Berkshire’s success is the company’s culture. Create a positive work environment where people feel they are part of a family who cares about them. Hire the best people and set them free to soar. That’s certainly my goal at The Blum Firm.
  • The second half of life offers the best opportunities. Learn from mistakes you made in the first half of life, and that sets you up for success in the second half of life. Don’t beat yourself up over mistakes. Even Warren and Charlie made plenty of mistakes.
  • Be forgiving when your team makes mistakes, as long as it’s not a slip of integrity. Buffett and Munger are unequivocally supportive of their team, as long as the employee behaves with utmost integrity.
  • Don’t panic over stock market declines. See it as an opportunity to pick up bargains. Ride out the waves, and you’ll win over the long run.
  • Maintain a sense of humor. Warren and Charlie made every topic fun and enjoyable, no matter how serious. I believe their sense of humor helps sustain them.

The Kriger family is already making plans for next year’s annual meeting. Here’s hoping Buffett and Munger will still be going strong next year, but given what I just saw, I’d put my money on them.

I urge you to come up with some meaningful experiences your family can share. It’s essential in building and sustaining family connection. As you consider the possibilities, perhaps you’d like to join us next year in Omaha!

Marvin E. Blum

Marvin and Laurie Blum (far left) with family members on an annual outing to the Berkshire-Hathaway Annual Meeting—building relationships by sharing meaningful experiences.

It’s All About Relationships—Meet the Canoe Brothers

Early on in this Family Legacy Planning series, I stressed the importance of each family creating a Family Mission Statement. The process involves (1) discovering the values that family members hold in common, (2) jointly developing a vision for the kind of family they want to be, and (3) merging those values and vision into a written expression of the family’s guiding principles. As each family member embraces that mission, it helps the family develop a core. Indeed, the mission statement guides the family through decisions and helps keep it on track and unified. Ideally, the family mission guides the whole estate planning process.

The Blum family adopted a three-pronged mission statement:

  1. Relationships
  2. Productive Work
  3. Living a Meaningful & Spiritual Life

For us, it all starts with relationships. I’d like to dive deeper into that first prong of our mission statement. The seed for it was actually planted years ago when Fort Worth community leader Gretchen Denny said to me: “Marvin, it’s all about relationships.” That statement struck me as profound, yet a bit puzzling. I was too young to fully understand where Gretchen was coming from. Why did that beat out everything else we strive for in life? Gretchen, widowed at a young age when her attorney husband Sam Denny died way too early, realized that more than anything else, relationships are what fulfills us and nurtures us. As I’ve gotten older, I now get it. That’s why it earned the position of first place in our mission statement.

Harvard professor and author Arthur Brooks supports my thesis in his article in The Atlantic “10 Practical Ways to Improve Happiness.” In addition to being there to support and nurture us, relationships actually tops the list on how to increase our happiness. An international team of researchers identified 68 ways to raise happiness, then narrowed it to ten and ranked them. Note how Brooks’ description of number one and number two echo my emphasis on relationships:

  1. Invest in family and friends. The research is clear that though our natural impulse may be to buy stuff, we should invest instead in improving our closest relationships by sharing experiences and freeing up time to spend together.
  2. Join a club. The “social capital” you get from voluntarily and regularly associating with other people, whether or not you do so through a formal club, has long been known to foster a sense of belonging and protect against loneliness and isolation.

I am witnessing firsthand how relationships are enriching my life. It started 47 years ago when I entered The University of Texas Law School and bonded with an extraordinary group of classmates. Over the years, those friendships have deepened. Thanks to the efforts of my best friend Talmage Boston (“the connector”), we have not only remained connected, but we continue to grow closer. The reason those friendships have grown into lifelong relationships is because a core group of us share meaningful experiences with each other. Certainly, sharing the law school experience was bonding, but we are even more glued together because of regular activities we do together, especially an annual canoe trip on the Guadalupe River. We call ourselves the “Canoe Brothers.”

On those canoe trips, we open our hearts and minds to hear each other’s life stories. We each bring our own values and opinions. We agree, we disagree, we debate, but we do it all with respect. Through this shared canoe experience, we build trust, and trust is the foundation for a lasting relationship. All of this is possible because we make the time to be together and share experiences. The renowned author Malcolm Gladwell expressed it perfectly: “You can’t share values with others until you share meaningful experiences with them. It is through these meaningful experiences that you come to know what their values are. Those you agree with and those you don’t; but the relationship, trust and friendship has been shared through the experiences first.”

As I urge families to engage in a legacy-building process, I stress the importance of family enrichment activities. Like the bonding that Canoe Brothers share on the Guadalupe, families likewise need intentional, regular experiences together. At The Blum Firm, we encourage clients to weave this priority into the estate plan. The safest way to foster lasting family unity is to set aside funds in a FAST trust dedicated to paying for family meetings, meaningful group travel, and other family enrichment. Endowing family experiences strengthens the ties that bind us. It’s the best inheritance you can leave your heirs.

Marvin E. Blum

Marvin Blum (back row, fifth from left) with law school classmates, now the “Canoe Brothers.” The motto on the t-shirts tells the bond of these relationships: “Behold, how good and pleasant it is when brothers dwell together in unity! Psalms 133:1”

I Do, Round Two: Second Marriage Estate Planning

I was honored to speak recently to the Midland-Odessa Business and Estate Council. I selected a subject that has become a significant part of our estate planning practice—second marriage estate planning.

Why is this such a hot topic? Consider these statistics:

  • 50% of today’s marriages are second (or third or fourth) marriages for at least one of the spouses.
  • 75% of people who divorce marry again.
  • 65% of remarriages involve children from a prior marriage.

Estate planning for the traditional “nuclear” family is less and less the norm. We are living in a world of the “blended family” (or, “modern family” as popularized on TV). More than half of Americans are part of a blended family.

Multiple marriages bring issues that the estate plan needs to address:

  • Onboarding a new spouse (perhaps with kids of his/her own) into a family unit
  • Relationships between children and a stepmother or stepfather
  • Relationships between stepsiblings
  • Age disparity between spouses
  • Wealth disparity between spouses

Such issues create a potentially hot family dynamic. The Blum Firm is committed to helping blended families create thoughtful estate plans, reducing the risk of later friction. We are also committed to helping families navigate these new relationships and foster a family’s human capital.

Here’s another sobering statistic: 60% of remarriages end in divorce. Accordingly, the responsible couple will do prenuptial planning to address the “what if” before saying “I do.”

In my speech, I identified 18 fact situations that could give rise to heartache if not properly addressed in the estate plan. A copy of my presentation on Second Marriage Estate Planning is available here. The Blum Firm is honored to share planning tips to help preserve family harmony in cases of “I Do, Round Two.”

Marvin E. Blum

Marvin Blum speaking to Midland-Odessa Business and Estate Council on “I Do, Round Two: Second Marriage Estate Planning.”

Declaration of INTER-dependence

Last week’s email told the story of how my support group (especially my brother Irwin) came to my rescue when the 2000 tornado destroyed The Blum Firm law office. I introduced the concept of INTERDEPENDENCEFamilies who are interdependent are there for each other, helping everyone thrive as we go through life’s ups and downs together.

As families become more affluent, there is a tendency toward each person becoming more independent. Dr. James Grubman describes this process in Strangers in Paradise. Grubman refers to new wealth generators as “immigrants to the land of wealth.” As families leave the land of the working class and immigrate up the wealth ladder, they travel away from interdependence, more and more to a land where each person is independent. Our American culture encourages that process. We strive to bring up our children to be independent and self-reliant. We are a country created out of a Declaration of Independence. Yet independence can go too far, even to the point of causing family estrangement. As family governance consultant Tom Rogerson puts it: “Independence is great, except when it fully cannibalizes interdependence.” Yes, we declare our independence, but this country was founded on a Constitution that begins: “We the people,” not “I, the person…”

Lower net worth families have tremendous interdependence. Why? It’s out of necessity. I can relate. Irwin and I grew up in a small house sharing a bedroom, sharing a bathroom, and we all pitched in to work in Blum’s Café. Dinner table conversations were about the family business and making ends meet on a tight budget. On the rare occasions when we bought a new car, my dad took us along to watch him negotiate. Irwin and I went door-to-door collecting coat hangers to sell at the cleaners, two for a penny. (Actually, Irwin sent me out to collect the hangers while he stayed back to “run the business,” but I felt honored as the kid brother to be included in his business venture.) That upbringing provided us a natural family glue. It’s no wonder we were always there for each other, tornado and all. I believe Irwin knows he could count on me too (and not just when “helping” him write all his papers for school). As I’ve shared before, the ultimate example was on Irwin’s deathbed from pancreatic cancer, when he held onto life just long enough to provide blood for a genetics kit, so that I (his only at-risk blood relative) could gather critical genetic information for my own health care. Irwin held onto life, knowing I needed that blood study, and then he died moments after giving blood.

Tom Rogerson uses a graph to illustrate the risks to family cohesion when they move away from interdependence.

The horizontal axis moves from low wealth to extreme wealth. The vertical axis starts with interdependence, then moves up to independence, and further up to an unfortunate state of dependence. The graph shows that as wealth increases, family members become more and more independent. Dinner conversations are more social (“How’s your golf game, Dad?”) and less consequential. Kids have their own bedrooms and go to summer camp, no longer learning how to work with and negotiate with siblings. They lose training on how to make decisions together. They become less and less connected.

The lower left corner fosters entrepreneurialism. That’s the environment that created the juice for most of today’s wealth creators to thrive. Moving toward independence, with each person in his own silo, is detrimental to entrepreneurialism and especially detrimental when kids enter a family business. They love each other, but they don’t KNOW each other deeply. At its worst, it can lead to lives of isolation and substance abuse, hence the arrow leading back up towards dependence.

The graph shows that there is a movement for families of extreme wealth to reconnect, to intentionally work on rebuilding relationships with each other. The goal is to reestablish communication and build trust. The best way to do this is to embark on regular family meetings with team-building exercises and group learning. A third-party consultant should facilitate the meetings. Parents should join as participants and not run the meeting. The estate plan needs to adapt as well, using trusts to encourage family togetherness, enrichment, and mentorship of heirs. The goal is to build self-esteem and empower heirs, rather than create entitled “trust babies” waiting on their monthly distribution, deprived of incentive to get out of bed. Ultimately, the family creates a “familiness” culture where they are woven together in a family fabric, as Irwin and I were there for each other during the tornados of our lives.

I am grateful to Tom Rogerson, Jim Grubman, and other mentors who have awakened me to this new age of estate planning. I am an eager proponent of “qualitative” estate planning to go along with the “quantitative,” or estate planning that is both “heart” and “head.” I want to thank all of you who are encouraging me to share my passion to help families build a legacy and thrive from generation to generation. As commercial real estate broker Bill Zei of Dallas graciously wrote me: “Your writings help me stay mindful of how deeply important it is to stay united with family.” I’m honored to be a champion for that cause. At your urging, I will continue to share the lessons from the “soft” side of estate planning in my evolving journey as a holistic trusts and estates lawyer. The Blum Firm welcomes the opportunity to help you incorporate legacy planning into your estate plan.

Marvin E. Blum

Striving for an INTER-dependent Blum family, where we are all there for each other, including for the two little boys having a hard time. Marvin and Laurie Blum flanked by daughter Lizzy’s family (left) and son Adam’s family (right).

When Life Throws You a Tornado

The most recent topic in our Family Legacy Planning series is the importance of resilience. Specifically, I wrote last week of how Laurie and I overcame the heartbreak of a giving birth to a stillborn child by drawing strength from ancestors who’d endured inhumane atrocities yet survived. Reactions to that post were heartfelt and affirming, as many shared how they have likewise overcome rough times. Like me, their resilience was fueled by the strength of their family ties, as well as the support of a loving community of friends. One response particularly grabbed me. Here’s what my San Francisco colleague David Eckstein, CFA sent me:

I’d like to add my voice to the many who are thanking you for sharing your stories. This one reached me in particular. My wife and I have also faced tragic misfortune, including suddenly losing the oldest of our three sons a few weeks before his 27th birthday. Such times test our resilience and also tell us whether we have invested enough in our family and community to receive the support we need to get through times we can’t handle alone. We have been fortunate in that regard and consider ourselves blessed in spite of our losses. Thank you for all you’re doing to make a difference in your family, friends, clients and business acquaintances. It’s working!

The words “we have invested enough in our family and community to receive the support” particularly struck me. The support we receive isn’t automatic. We have to invest in these relationships, so we will be there for each other when needed. Like everything else in building a legacy, we have to be intentional to make it happen. Building a family legacy is arguably the most important investment we make in our lives.

I’ll expand on a story I’ve shared before about recovering from the 2000 tornado that destroyed my law office, and how that resilience was also empowered by the support of family and community. Leaving work on March 28, 2000, the sky was clear and there was no warning of the impending tornado that soon swept through downtown Fort Worth destroying the Bank One Tower and other structures. This was before technology was as advanced, when we were still dependent on paper. I didn’t even own a cell phone yet (what we then called a “car phone”). The Blum Firm was suddenly homeless, without access to any of our files. This is when my support group came to the rescue. Lifelong family friends Morty Herman and the Schuster family were early responders. Morty and the lawyers at Brown Herman law firm squeezed up and made room for us to office with them. When Bank One gave us a one-hour access to return to our destroyed space to grab belongings, Stuart Schuster loaned us a large van from their Marvin’s Electronics store. Allen Schuster provided us boxes from his storage facility business. “Take as many as you need.” My father showed up at my house and handed me $10,000, saying: “This may come in handy.”

But the number one hero in this story is my brother Irwin. As I shared in previous emails, we lost Irwin five years ago to pancreatic cancer, at age 65. One of my favorite Irwin memories is how he sprang into action to help me deal with the tornado devastation. Irwin wasn’t a man of words; he was a man of action. Irwin and I picked up the van and the boxes and drove to Bank One. Irwin drove the van like he was a professional truckdriver, undaunted by its massive size. Entering the parking garage, the rack on top was too tall for the height restriction and bounced off. Unfazed, Irwin hopped out, threw the rack in the back of the van, and kept rolling along to park in the garage. We were on a mission. We had a strict one-hour time limit to grab all we could.

We entered the office space. I was in shock. Everything in the office looked as if it had been picked up and thrown across the office. Desks and furniture were toppled over and broken. Wet paper was everywhere, full of glass chards from the shattered windows that imploded inward into millions of razor-sharp pieces. The building was formerly a glass tower that now had no exterior walls. Live wires were hanging everywhere. Birds were flying through the space. I was paralyzed. Irwin wasn’t. Irwin began assembling boxes, put on work gloves and a safety helmet, and started tossing in everything he could grab, filling box after box. I finally took his lead and joined in. We had to get moving; we only were allowed one hour.

We stacked the boxes floor to ceiling into elevators, then managed to force them all into the van. As we hit the highway, Irwin could only see out the side mirrors (though I’m not sure he ever looked). He’d hit the gas pedal and change lanes; I guess other vehicles just dodged us. Exiting I-30, he pulled into the drive-through at Whataburger for a burger and soda, and he ate it while driving home to store the boxes in my garage. Even for those who didn’t know Irwin, I’m sure you get the picture.

Irwin always looked out for me. He had a “take charge” personality and he enjoyed being the protective big brother, even well into our adult years. This story brings me to a new topic I’ll be developing in coming emails: the value of family INTERDEPENDENCE, as opposed to the customary concept of raising kids to be INDEPENDENT. My colleagues Jim Grubman and Tom Rogerson are also great advocates for this concept. I am grateful Irwin and I were interdependent, so we were there to provide family support for each other when needed. Life throws us curveballs and tornados. We need to be there for each other.

Marvin E. Blum

Fort Worth’s Bank One Tower, including The Blum Firm law office, destroyed by the 2000 tornado.

The Greatest Test of Resilience in My Life (and How Zaidy Got Me Through It)

Over the last several weeks of our Family Legacy Planning series, we’ve highlighted the importance of preserving ancestors’ stories of resilience. Heirs draw strength knowing they descend from survivors who had what it took to overcome life’s obstacles. Certainly, I’ve made it through hard times better by knowing I come from survivors who endured persecution. I’ve told the story of my “Zaidy” Eliezer Weinstock and what the Weinstock family endured when escaping Hitler, losing two children who didn’t make it out in time. The Weinstock family picked up the pieces and created a new life in America. In our family, we often gain confidence to handle problems by saying, “We come from good stock, WEIN-stock.”

When I started writing this series over a year ago, I never intended to tell my personal stories. My plan was only to share estate planning tips. However, in using some of my own stories to illustrate these tips, I’ve received on outpouring of encouragement to continue sharing. After the recent emails about my ancestors’ hardships, I was asked to describe a time when I applied those lessons in my own life. At your urging, I will open up about the single hardest moment I have faced in my life. I’ve shared this before, but with your indulgence, I’ll provide more detail, hopefully offering to all the gifts of faith, love, and hope.

After Laurie and I were married a couple of years, we rejoiced at becoming pregnant with our first child. It was a perfect pregnancy all the way up through the ninth month. Laurie went into labor and we headed to the delivery room, stopping along the way to buy a disposable camera (remember those days?). When my mom called on the phone in the delivery room, she greeted me by saying, “Hello, Daddy!” It was then I shared a disconcerting update—the nurse was having trouble finding the baby’s heartbeat. We remained hopeful, as sonogram technology was still fairly new and maybe there was some technical glitch. The doctor arrived and the news became grim. We’d lost the baby. No one ever understood why or what happened. It was a mystery we’d have to live with forever. That was February 11, 1982. We buried our baby girl and returned home to an empty nursery.

We were devastated. I wasn’t ready to disassemble the crib, but Laurie told me we had to do it. We hid away all the shower gifts Laurie had received from her co-workers at Fort Worth National Bank. Laurie returned to work, daily confronting the question in the elevator: “What’d you have?” Laurie found the courage to answer each time, “We lost the baby.” You’ve likely gathered by now that I married a woman of phenomenal strength. Laurie’s a sweet, gentle Southern girl, but lives up to the stereotype of a “steel magnolia.”

We were grateful to be pregnant again within a few months, but as you can imagine, we were filled with trepidation. Laurie wouldn’t even tell anyone she was pregnant. About halfway through the pregnancy, we were at a symphony event and Roz Rosenthal nodded toward Laurie’s tummy with a question mark on her face. That night, I told Laurie it was time to let the word out.

On the morning of February 10, 1983, about a month before the due date, I went to work like a normal day. Laurie soon called that she thought she felt a contraction. There had been no signs of early labor. Was this a false alarm? We weren’t taking chances. We met her doctor at the delivery room who confirmed that this was the real thing. Soon after midnight, February 11, 1983, Laurie gave birth to a healthy baby boy. I’ve always believed that Laurie and the Divine willed it to be, that February 11 should be a miracle day for us. Exactly one year to the day after losing our first baby, we were blessed with Adam.

I’ll share another fact I’ve not revealed before. We saved the Hebrew name we were going to use for our first baby girl, with the hope we’d someday have a daughter. That name was Pesha Ita, the Hebrew name of my grandmother Pauline, the daughter of “Zaidy” Eliezer Weinstock. Within three years, our prayers were answered with the birth of Elizabeth Pauline (“Pesha Ita” in Hebrew). Our daughter is yet another miracle, as she carries the name of such a valiant ancestor, while she also carries in her the soul of a sister in heaven.

Fast forward to our daughter’s first pregnancy. Several weeks before Lizzy’s due date, we received an urgent call that her baby was under stress. Laurie and I rushed to the airport, got the last two seats on the next flight to New York, feeling an all too familiar déjà vu from our own first pregnancy. That was a scary trip—a nonstop flight with nonstop prayer. We rushed to Mount Sinai Hospital, and within the hour arrived a small but healthy baby girl Stella, the first member of the fifth generation in the Meyer Oberstein–Pauline Weinstock family tree. “Zaidy” Eliezer Weinstock was there for us once again. Never lose faith, and never underestimate the power of our ancestors to pull us through. They are angels on our shoulders as we go through life. May we preserve their memories and their stories forever.

Marvin E. Blum

Pictured left: The joy of motherhood, as Laurie Blum caresses her newborn son Adam born February 11, 1983, exactly one year after a stillborn birth. Pictured right: Marvin Blum experiences the joy of fatherhood with his infant son Adam.

Bringing Lessons of the Holocaust into 2022

The last several emails in our Family Legacy Planning series have revealed the atrocities suffered by my family in the Holocaust. My Zaidy’s eye was poked out in a Russian czarist pogrom in his village in Ukraine. My grandfather Meyer at age 9 escaped a firing squad in Poland when he was caught seeking work after curfew. My son-in-law Ira’s grandmother Miriam survived Auschwitz, coming out at 72 pounds. Her only surviving relative was her brother Adolf (“Unkie”), also imprisoned in forced labor and concentration camps. Profoundly, Unkie declared “We beat Hitler!” on his deathbed as he observed the birth of Jewish descendants, including my granddaughter Stella who started a new generation in our family. These Holocaust stories have stirred a powerful reaction, especially given the parallels with the atrocities now happening in Ukraine.

It’s a well-known proverb that “unless we learn from history, we are doomed to repeat it.” Considering the present-day Russian aggression, I fear we aren’t adequately learning from history. It’s critical that we preserve and pass down stories of ancestor survival to our heirs. The need is especially urgent as the generation of Holocaust eyewitnesses is rapidly perishing. That brings me to my message today. How can we best bring our ancestors’ stories into 2022?

My daughter Lizzy Savetsky has a solution. Lizzy has a vast Instagram following and is using these stories to sound an alarm. We must never forget! Remember the people we come from and draw courage from them. Lizzy’s megaphone literally and figuratively awakens us that we cannot stand by silently while our brothers and sisters are persecuted and murdered. Laurie and I stand in awe of Lizzy’s heart and bravery.

Lizzy’s premise is that the ultimate way to preserve memories is to see where it happened with our own eyes. To that end, Lizzy joined a Heritage Trip to Poland sponsored by Jewish International Connection New York. Lizzy went to Auschwitz. She sat on the railroad tracks where cattle cars brutally transported millions of Jews to their death. She saw the barbed wire fences with the sign proclaiming the Nazi lie “Arbeit Macht Frei.” Indeed, work did not make them free. Lizzy stood in the place where her husband’s grandmother was forced to gather the possessions of gas chamber victims, finding her own mother’s monogrammed handkerchief and thereby discovering that her mother had been gassed to death. She saw a room filled with hundreds of thousands of shoes of victims and realized every shoe was once on a person’s foot. The six million victims were not statistics. They were the people who wore these very shoes.

When Lizzy returned, she wrote her reflections from being there in person, in the place where it happened. Click here to read her heartrending summary of the trip. Imagine the powerful disconnect to stand in a beautiful forest in Poland and try to reconcile how, in that very place of nature’s paradise, Nazis could line up thousands of Jews and shoot them into a ditch, many buried alive. Lizzy closes with a quote from the rabbi on their trip: “The Nazis tried to bury us, but they didn’t realize we are seeds.” Those tortured souls who were buried in that ditch are now sprouting new life, lives like my five grandkids Stella, Juliet, Lucy, Ollie, and Grey.

How does this message of family heritage and travel tie into The Blum Firm’s work in Family Legacy Planning? Here’s how. Every family has roots. It’s important for future heirs to go in person “to the place where it happened.” As Lizzy pointed out to me last week, it’s even more meaningful if a trip like this is taken as a family. Family travel, whether a roots trip or other travel, helps keep a family unified. I’ve previously quoted author Mitzi Purdue as she credits annual family travel as the foremost reason her family (heirs to Sheraton Hotels and Purdue Chicken) stays connected. In creating your estate plan, I strongly urge you to set aside funds in a separate trust to be used to pay for family travel and other family enrichment, like family meetings, training, and experiences. If you fail to fund it, my observation is that it stops happening after the patriarch and matriarch are gone. The fund can be a FAST Trust (Family Advancement Sustainability Trust) or any other trust vehicle. Consider dedicating a life insurance policy to fund the trust, a convenient way to provide the money without disrupting the rest of the inheritance.

The Blum Firm would be honored to help you build such a family enrichment fund into your estate plan. We want to partner with you to keep your ancestors’ stories alive and help future generations of your family stay connected.

Marvin E. Blum

Marvin Blum’s daughter Lizzy Savetsky on the railroad tracks at Auschwitz, feeling a connection to the millions of murdered Jews transported there in cattle cars, on those very tracks.

What Stella’s Birth Means (“We Beat Hitler” – Part 2)

Last week’s Family Legacy Planning post continued exploring the importance of preserving and passing down a family heritage. The focus was on the significance of the birth of my oldest grandchild, Stella. On both sides of her family, Stella descends from ancestors who miraculously escaped death in the Holocaust. Stella’s birth symbolizes victory over Hitler’s evil attempt to kill all the world’s Jews. Hitler killed one-third of the world’s Jews, but he didn’t win. Stella is living proof.

The last two weeks’ emails told stories of survival of two of Stella’s ancestors on her mother’s side, my “Zaidy” Eliezer Weinstock from Ukraine (who lost an eye in a Russian pogrom) and my grandfather Meyer Oberstein from Poland (who escaped a Russian firing squad as a young boy). Today, we turn to survival stories of ancestors on Stella’s father’s side, my son-in-law Dr. Ira Savetsky.

Ira’s grandmother Miriam Feuerstein was viciously uprooted from her girlhood home in Czechoslovakia and transported, along with her parents, to Auschwitz, the most infamous of Nazi concentration camps. One of her brothers, Yitzchak, was shot into a ditch when the Nazis wiped out the town. Another brother Adolf was taken to a Hungarian forced labor camp, and later to Mauthausen concentration camp. Miriam’s job at Auschwitz was to sort the clothing of those who had been burned alive in gas chambers. She discovered the tragic fate of her parents when she found her mother’s monogrammed handkerchief among the pile.

Miraculously, Miriam survived, coming out of Auschwitz at 72 lbs. She was able to find her brother Adolf, who had also miraculously survived. All their remaining family had been murdered. Miriam and Adolf immigrated to America and started a life in New York. For yet another miracle, Miriam recovered and later gave birth to a daughter Aliza (Ira’s mother) and a son Elliot. Aliza had 4 children. To help keep the memories alive, Aliza named one of her daughters Miriam, after her mother, and she gave her son Ira the Hebrew name of Yitzchak (the Hebrew name for Issac), after her uncle.

As I retell this story of survival, I realize the power of personalizing the horrors of the Holocaust and war. It’s hard to absorb statistics, like the killing of six million Jews, but this story reminds us that those were six million individual lives. As my dear friend Todd Healy responded to my email about Zaidy, “Thanks for personalizing it for so many of us who don’t have the connections to the tragedies that you do!” These are people, someone’s parents, sisters, brothers, children. They are not just numbers.

Ira’s family affectionately called their Uncle Adolf, “Unkie.” Unkie was like a grandfather to Ira. Thankfully, Unkie lived a long and productive life in America. On his deathbed, he reflected on the families he and his sister Miriam created, who were surrounding his bedside. Looking at them with awareness that each descendant of Holocaust survivors represents the continuation of the Jewish people, these were Unkie’s dying words: “We beat Hitler!”

As the attached photo of Unkie holding his great-great-niece Stella proves, indeed we did beat Hitler! Stella’s life has a purpose. Look into Stella’s eyes—there is hope for the world. Each of our lives has a purpose. As we discover our “why”—why we’re here, may that motivate us to each live a more purposeful and meaningful life.

Marvin E. Blum

Holocaust survivor Adolf Feuerstein (“Unkie”) holding his great-great-niece Stella Savetsky (Marvin Blum’s granddaughter). Stella is living proof of Unkie’s dying words: “We Beat Hitler!”

What Stella Means to Our Family Heritage (“We Beat Hitler” – Part 1)

I am overwhelmed by the outpouring of support I received from last week’s Family Legacy Planning email “I Am Ukrainian.” I told the story of my “Zaidy” Eliezer Weinstock who lost an eye in a Russian pogrom against Jews living in Polona, Ukraine. Miraculously, Zaidy escaped to America with his four youngest children, including my grandmother Pauline. Zaidy’s two oldest children, my Great Aunt Elke and my Great Uncle Enoch, remained in Ukraine and were murdered in the Holocaust.

It’s particularly gratifying to hear comments from those of you who were inspired by my story to share your own family heritage with your heirs. As an example, Bob Semple replied: “Your comments on knowing your family heritage are spot on. I am making sure my family knows our heritage.”

I cannot overstate the importance of preserving family history to pass down to future generations. Luther King’s response to me reinforces this message: “I could not agree with you more regarding the importance of preserving family heritage and building pride and respect around it. Families we have worked for that have stressed their heritage, as a general rule, hang together and have high self-esteem.” Passing down that history, especially stories of resilience, proves enormously strengthening to kids when facing obstacles of their own.

Many encouraged me to continue sharing my personal stories, so at your urging, I’ll do a bit more of that. My hope is to continue inspiring people to do the same. Every family has its own stories. I urge you talk to your relatives and uncover those stories, then write them down to preserve them for future heirs.

Soon after my Zaidy Eliezer arrived in the US, he spotted a young man at synagogue services, and invited him home to join the Weinstock family for Shabbat dinner. That man was Meyer Oberstein, a recent immigrant from the town of Tiktin in Czarist Russia (later Poland). It was love at first sight between Meyer Oberstein and Pauline Weinstock, and they soon married.

My grandfather Meyer Oberstein’s story is also miraculous. Meyer was nine years old when World War I broke out, and the Jewish towns and villages around Tiktin suffered great danger, dislocation, and starvation. As a young boy, Meyer was out one night after curfew trying to find work to earn money to help feed his family. He was caught by Russian soldiers who lined up a firing squad to shoot him. Then a miracle occurred. An old Russian commissar with a beard rode up on a donkey and asked why they were going to shoot the boy. The Russian soldiers responded that little Meyer was possibly a German spy. The old man told them to let Meyer go, that he was only a kid and not a spy. That is how close my grandfather came to death.

Hitler’s goal was to kill all Jews, and indeed he did kill one-third of the world’s Jews in the Holocaust. The best victory we can now have over Hitler is for more Jews to be born, perpetuating the Jewish people. We cannot bring back the lives lost, but with every new generation of Jews, we are resolving that Hitler did not win.

Fate brought Meyer from Poland and Pauline from Ukraine to Montgomery, Alabama, where they married and had four children, including my mother Elsie. Meyer and Pauline were Generation 1 for our family in America. My mother Elsie and her three siblings are Generation 2. My brother Irwin and I, along with our 16 first cousins, are Generation 3. My children Adam and Elizabeth, along with their cousins (numbering nearly 100), are Generation 4.

So where does my oldest grandchild Stella fit into this story? In the family tree that starts with Meyer and Pauline, the first member of Generation 5 is Stella Savetsky, born nine years ago to our daughter Elizabeth and her husband Ira. Generation 5 will eventually number in the hundreds, and Stella will always have the distinction of being the first member of that generation. Stella’s life has a purpose. Stella represents the continuation of the Jewish people and our resilience. We say in Hebrew, L’dor Vador, from Generation to Generation. Going all the way back to Moses and the children of Israel, Stella’s life is proof that the unbroken chain continues!

Marvin E. Blum

Starting a fifth post-Holocaust generation in the Blum family when Stella (in her father’s arms) and later Juliet (in her mother’s arms) became links in an unbroken chain to perpetuate the Jewish people. Pictured left to right: Adam Blum, Laurie Blum, Stella Savetsky, Ira Savetsky, Elizabeth Savetsky holding Juliet Savetsky, Marvin Blum, and proud great-grandmother Elsie Blum.

I Am Ukrainian

As part of our Family Legacy Planning series, we have stressed the importance of preserving family heritage. Statistics show that children who know more about their ancestors grow up with a higher self-esteem. Moreover, knowing stories of ancestors who overcame obstacles gives heirs confidence they too can be resilient when hard times strike.

In my own family’s mission to learn more about our past, I have discovered some powerful revelations. All four of my grandparents immigrated to the United States from Eastern Europe to escape the Holocaust. Many of my ancestors descend from Ukraine, from a town they called Polnoa, now known as Polonne or Polona. Given today’s war in Ukraine, I feel a strong solidarity with the Ukrainian people.

My family’s life in Ukraine was difficult. Jews were persecuted by the Czar. Our “Zaidy” (the Yiddish word for grandfather) even had one eye poked out in a vicious pogrom against the Jews. My great-grandfather Eliezer Weinstock (“Zaidy”) was among the lucky few who made it to America. He left behind all of his possessions except “the knowledge between his ears,” prompting him to say: “What you put into your mind, no one can take away from you.” Hence, our family put an emphasis on education and giving your all in a commitment to lifelong learning.

I always thought all of Zaidy’s family made it to America. I was shocked recently when our longtime paralegal Becky Samons made a hospital visit to my mother and asked her if she lost any family in the Holocaust. I expected her to answer “no” but, for the first time I learned, the answer was “yes.” Zaidy’s two oldest children, Elke and Enoch, were both married and unable to afford passage to the U.S. They remained behind and became victims of Hitler’s mission to exterminate all Jews. My mother recounts that she and her grandmother shared a bed, and their nightly prayers were that Elke and Enoch were still alive. But, they were never heard from again.

My one-eyed Zaidy never learned English, forever clinging to Yiddish, his mother tongue. In his late years, he went before an Alabama judge to apply for U.S. citizenship. Though unable to pass any test in English, the judge waived the formal requirements and proudly declared him a United States citizen, saying anyone who’d endured his plight was worthy of U.S. citizenship.

I am proud to descend from Ukrainian Jews who instilled in me values of family, education, and leading a productive and spiritual life. I am now the proud grandfather of five grandchildren. When time came for me to choose the name my grandchildren would call me, I was honored to select “Zaidy” as my name, a tribute to my Zaidy Eliezer Weinstock. Without question, being “Zaidy” will always be the most important part of my identity.

Marvin E. Blum

Marvin Blum’s “Zaidy” Eliezer Weinstock, a Ukrainian who lost an eye in a czarist pogrom against Jews.

Hot Topics for 2022 from The Blum Firm

Each year, The Blum Firm prepares an annual newsletter covering current topics in the estate planning, probate, and tax world. Our “Hot Topics for 2022” newsletter is now hitting mailboxes, and we’d like to share with you the headlines for the top ten we selected:

  • Is a Grantor Trust Right for You?
  • Win-Win-Lose: Trusts That Benefit Charity While Sticking it to the IRS
  • Wouldn’t You Like a $100 Million IRA Like Mitt Romney?
  • Do You Own Anything in Your Name Other Than Retirement Accounts?
  • I Want My Fair Share– Litigation in Time of Financial Uncertainty
  • Check Your Probate Knowledge
  • Family Legacy Planning
  • Could Forgotten Checklist Items Derail Your Estate Plan?
  • Estate & Gift Tax Numbers to Know in 2022
  • Guardianship Prevention Planning

About five years ago, we expanded our services at The Blum Firm beyond estate and tax planning. We have an outstanding team at the firm with substantial expertise in trust and estate litigation, as well as guardianship. As the above topics show, there are some hot developments in those areas. One ramification of the current tumultuous economy is that some family members are tapping every source for financial security during times of financial uncertainty. Those receiving less than they feel they should receive are increasingly turning to litigation, often over smaller amounts than would typically be litigated. It’s important to review your estate plan for potential disgruntled parties and consider taking extra steps to mitigate the risk of later litigation. At the same time, review the individuals you have named as executors, trustees, and powers of attorney to ensure that they are people you absolutely trust to act in accordance with your wishes.

In the guardianship area, we are working actively on “guardianship prevention” planning. This has become an especially hot topic with so many baby boomers reaching the age of potential cognitive decline.

Other highlights in our newsletter warn you to watch for assets that pass outside of a will to make sure they don’t derail your estate plan. We also alert you on how to avoid probate to maintain privacy for your estate and your heirs, especially critical in this age of open information. And there’s so much more.

If you’re not on our mailing list, please contact us with your mailing address so we can add you to our list. A digital version of our newsletter is available here.

Business Succession Planning: Not Every Family Has an Elsie

I have a confession to make. In last week’s Family Legacy Planning email, I identified “business succession planning” as the most neglected area of estate planning. I grew up in a family business. Here’s my confession: our family also neglected business succession planning. There, I said it. Sometime the cobbler’s own shoes need attention.

As it turns out, in failing to plan for the transition of our family business, we are in the company of millions of others. Consider these statistics: 90% of American businesses are family-owned or controlled, yet less than one-third of those businesses have a succession plan. The family is left unprepared when an unexpected event occurs, such as the death of the owner. That’s what happened when my brother Irwin died. Irwin ran our family business, and when he died only two weeks after his cancer diagnosis, we were caught off guard. Fortunately, we had a savior—my 86-year-old mother Elsie emerged from retirement and, over the course of a year, single-handedly shepherded the business through to a successful conclusion. We were fortunate she had the skills and strength to rescue us. There was no one else besides her who knew the business and could have done what she did. Had it not been for my mother, we’d have been in desperate shape.

But not every family has an Elsie. I urge all business owners to learn from our story and have a succession plan in place. That way, if you’re caught off guard and don’t have an Elsie, your family will know what to do.

Here’s the story of our family business. When I was an infant, my father Julius started our family business. It wasn’t glamorous. It was an industrial café in Fort Worth’s meat packing district. We opened before 5:00 a.m. and served meals to the packing house employees. It wasn’t air conditioned, and our customers came straight from the area killing floors, boning rooms, and rendering plants—covered in blood-stained work clothes. The sight was one thing; the smell was even harder to imagine. I grew up working alongside my parents and brother from the time I was a mere toddler—clearing tables, washing dishes, cooking, and (as soon as I could add) working the cash register. That business gave me an education unlike anything my friends and I learned at school. It was hard work, but it provided us an honest living. My father used to say: “If you take care of your business, it will take care of you.” Indeed, that was true.

As I said in last week’s email, like so many business owners, my parents lived and breathed their business as if was like another child in the family. That day’s business was the topic of conversation at dinner every night. I understand and respect how people become so attached to their businesses, all the more reason to plan for the continuity of that business when the day comes the founders are no longer there to run it.

Over the years, Blum’s Café gradually morphed into J. Blum Co. Meat Packing Supplies. We started selling the workers knives, gloves, rubber boots, hard hats, frock coats, and all the other things meat packers use in their trade. Then we expanded into selling those supplies to meat packing businesses. I continued working in the business throughout my school years. Motivated by that school of hard knocks, I went full force into my studies and opted to become a CPA/tax lawyer. But my brother Irwin stayed on in the family business. When my father died and my mother retired, Irwin ran the business. Irwin was a dynamo—working like a machine, running every aspect of the business and keeping most it in his head. When he died, the only one who knew what was in Irwin’s head was my mother. In her mid-80’s, Elsie jumped right in with full force and took over. She’s a miracle woman.

Here’s the moral: Don’t depend on an Elsie to appear out of the blue and rescue your family business if the owner is suddenly gone. In the coming weeks, I’ll cover the steps to take in creating a business succession plan. And in the spirit of my confession, I’ll close with the adage: Do as I say, and not as I did.

Marvin E. Blum

The Blum family matriarch, Elsie Blum, surrounded by loving family. A business dynamo in her 80’s, Elsie single-handedly managed the family business transition.

The Most Neglected Area of Estate Planning

In a radio interview, I was once asked “What’s the most neglected area of estate planning?” Without hesitation, I replied: “business succession planning.”

Last week’s email on prenup planning referred to Jon Moore’s article in Family Business magazine entitled “In a Divorce, Who Gets What?” In it, Moore emphasized the importance of advance planning, so family businesses survive divorce and/or death. He stresses the concept of “integrated planning,” coordinating all the puzzle pieces: estate planning, disaster planning, asset protection planning, and business continuity planning. It takes more than hope and luck for a business to transition through major family changes and disruptions, especially the death of a founder. It takes careful planning.

Most business owners have a strong emotional connection with the business they created, almost as if it’s another child. They care what happens to the business after they’re gone. They have a keen interest in building a sustainable business that passes down as a meaningful legacy to future generations. Given the aging demographic of many baby boomer business founders, there is an urgent need to plan for what happens WHEN, not IF, the founder is no longer running the business. Family business owners are often so emotionally tied to the business that they have a hard time imagining the business without them. They believe they are indispensable. But as Charles de Gaulle, former president of France, famously said: “Cemeteries are full of indispensable people.”

When it comes to business succession planning (also known as business continuity planning or business transition planning), there are no easy solutions or fill-in-the-blank forms. The hardest part is to get started. Here’s a suggestion for the first step: call a meeting of those most familiar with you and your business and designate them as your planning team. Choose from among your CPA, attorney, banker, financial advisor, life insurance professional, family counselor, and other key stakeholders. Bring your planning team to the table to start the conversation. They will gradually help you develop a succession plan that makes sense for your business and your family. Then, they will guide you through the steps to implement the plan. Don’t try to go it alone.

When the time comes to develop the plan, it really boils down to three choices in the toolbox:

  • Transfer the business to family members
  • Sell the business to inside parties (people within the business)
  • Sell the business to an outside party

In coming emails, we’ll explore more about the business succession planning process, and dive into each of these options. The Blum Firm would be honored to partner with you to help you achieve a successful continuation of the business legacy you worked so hard to build.

Marvin E. Blum

Addressing the “What If’s” Before Saying the “I Do’s”

We continue this week with our Family Legacy Planning segment on “the year of the wedding.” As mentioned last week, much of the goal of protecting family assets can be achieved outside of a prenup agreement through a “prenup alternative.” A prenup alternative utilizes irrevocable trusts and/or entities to protect assets. By carefully using these common estate planning tools, you can convert what would’ve been “marital property” into “non-marital property,” an important distinction.

All assets benefitting a Texas married person fall into one of two categories: marital property and non-marital property. Within the category of marital property, there are two sub-categories: community property and separate property. Separate property consists of assets owned before marriage or acquired during marriage by inheritance or gift. All of a spouse’s other assets, including income received from separate property, are community property. There is a presumption that all assets are community property, barring clear and convincing evidence that an asset is separate property. When separate and community are commingled, the commingling generally results in the assets becoming community. When a family court divides community property, it doesn’t necessarily divide it 50/50. The court can make a “just and right” division and award more than one-half to a spouse, taking into consideration equitable factors. One of the factors that a court can weigh is whether one of the spouses has more separate property than the other. So even though separate property cannot be awarded to the other spouse, it is still on the table for consideration and can impact the way a court divides the community property. On the other hand, non-marital property is not on the table for consideration in a divorce settlement.

Assets owned by a carefully drafted irrevocable trust are non-marital property. Ideally, parents will direct that all gifts and assets passing at death go to such a trust for their child. Single adults who have already accumulated assets in their own name can transfer assets to certain “self-settled” non-Texas trusts or can sell assets to a 678 Trust. When assets are transferred to a self-settled non-Texas trust or sold before marriage to a 678 Trust, the assets in the trust will continue to be non-marital property, even as they grow. If the assets were sold for a promissory note, the note will be separate property. However, the note will be frozen in size and is the type of asset not susceptible to being commingled. Irrevocable trusts are far less likely than prenups to be subjected to legal challenge. Legal precedent tends to favor respecting the integrity of the trust. Furthermore, unlike a prenup where both future spouses are involved and have to sign the document, a trust is easier on the relationship since the future spouse plays no role with the trust and needn’t sign anything with respect to the trust.

Another prenup alternative is to transfer assets before marriage into an entity, such as a limited liability company or limited partnership. In Texas, although a spouse’s outside ownership interest in a partnership is marital property, assets owned inside a partnership, as well as income earned but undistributed, aren’t divisible upon divorce. Contrast this with income earned on separate property that was not placed inside an entity or trust. Income on a Texas spouse’s separate property is community, whereas income accumulated in the entity or trust is non-marital property. It’s easy to see the substantial benefits prenup alternatives can provide.

Can you achieve all the protection you need through prenup alternatives and avoid the need for a prenup? There are certain protections that still require a prenup, but perhaps it could be a scaled-back prenup. Those entering into second marriages may need to address obligations to former spouses. A child from a prior relationship requires special planning to diminish the risk of later friction between the child and a stepparent. If a spouse is in a high-liability-risk profession, a prenup can provide an added layer of protection for the other spouse’s property. The prenup can also specify how assets are divided when a marriage ends, whether by divorce or by a spouse’s death. In addition, if assets were transferred before marriage to an entity, once the entity makes distributions, the distributions are generally treated as community property. A prenup can override that treatment and characterize those distributions as separate property. Therefore, many do both a prenup and a prenup alternative (sort of a belt and suspenders approach). However, if the primary goal is to only protect certain family legacy assets, sufficient protection can often be achieved by only doing prenup alternatives.

In the Family Business magazine article “In a Divorce, Who Gets What?,” Jon Moore discusses the Amazon divorce of Jeff Bezos and MacKenzie Scott. Scott received a 4% stake in Amazon, valued at $38 billion, but agreed Bezos could retain voting control over her shares. Moore describes a three-step process to protect the shares of stock in a family corporation: (1) put title to the shares in a spouse’s name as separate property (a “belt”); (2) declare in a prenup that the family business is separate property, including any future income or growth in value of the business (“suspenders”); and (3) hold the business in a corporation with a Shareholders’ Agreement specifying that a divorced spouse cannot be a shareholder of the corporation (a “second belt”). Many family corporations have a buy-sell agreement providing that if a divorcing spouse acquires a right to stock, that spouse must sell the stock back to the family at a pre-agreed price. Moore adds that another tool is to transfer the stock to an irrevocable trust, as a prenup alternative, as we suggested above.

As is evident, there are multiple techniques and considerations in deciding how to best protect family assets. It’s not a “one size fits all.” However, with the grim statistic that about half of first marriages in the United States end in divorce, pre-marital planning to protect family assets is the responsible thing to do. The Blum Firm would be honored to help you weigh all the options and decide what is best for your family.

Marvin E. Blum

Prenups: How to Achieve the “Good” But Avoid the “Bad” and the “Ugly”

In this week’s Family Legacy Planning email, we continue with the theme that we’re in “the year of the wedding.” Over the last two weeks, we’ve focused on the impact of marriages on a family’s human capital. We identified “hot button” issues related to wedding planning and bringing a new member into the family. If not handled carefully, those hot buttons can create fires in family relationships and disturb the emotional well-being of family members, setting a family’s human capital ablaze. As estate planners, our mission is to help families steer clear of those fires and preserve healthy, harmonious relationships.

When a couple plans to marry, there is a tension between preserving harmony at all costs versus addressing necessary financial matters. That tension can make you feel like you’re walking a tightrope. Though it’s tempting to avoid the topic, protecting family assets is an important part of estate planning. Families work hard to create financial security. There is also an emotional attachment to certain family assets, such as a family business, heirlooms, or other legacy assets. It’s a valid goal to preserve those assets and protect them from division by a family court upon the unfortunate incident of divorce.

The purpose of a prenuptial agreement (a “prenup”) is to clarify certain items in order to prevent (or at least diminish) disputes down the road. What can a prenup do? Prenups can clearly identify the separate property assets each party brings into the marriage. Under Texas law, income earned on those assets will be community property. However, a prenup can override that law and provide that income earned on separate property assets will remain separate. Prenups can also address how to treat wages, retirement plans, debts, financial responsibilities, tax filings, homestead rights, and division of assets/spousal support upon death or divorce. These clarifications can be especially critical if either spouse comes into the marriage with children, in order to reduce the risk of later disputes between those children and a surviving stepparent. A prenup can even address non-financial issues such as child-rearing, religious upbringing, division of household responsibilities, etc.

As wedding hot topics go, it’s easy to see that a prenup may well be the hottest. So let’s explore some prenup tips to help keep it from becoming a potential tinderbox.

  • Start the prenup process early, long before the wedding day.
  • Complete the process well in advance of the wedding.
  • Each party is well-advised by his or her own attorney.
  • Let the lawyers do as much of the talking directly with each other as possible.
  • Provide a full disclosure of each party’s finances, or get an informed, voluntarily-signed waiver.
  • Note that a prenup is about more than property division upon divorce; it also can protect one spouse’s assets from claims that might arise against the other spouse, such as an auto accident or a medical malpractice claim.
  • Avoid sharp dealing, overreaching, harsh negotiation.
  • Establish a “family policy” that all marrying couples have a prenup, ideally long before anyone gets engaged.
  • Try to achieve as many property protection goals as possible through a “prenup alternative.”

A prenup alternative involves the use of irrevocable trusts and entities to protect assets. In next week’s email, we’ll dive into prenup alternatives and explore how estate planning can convert what would’ve been “marital property” into “non-marital property.”

We are not suggesting that a prenup can be completely painless. We are not naïve; prenups are not a romantic topic. However, by following these best practices, our mission is to help you keep the temperature cooler and keep as much focus as possible on the loving relationship.

Marvin E. Blum

Laurie and Marvin Blum at their wedding 43 years ago—white lace, promises, and so much to celebrate!

Tips to Onboard In-Laws into Your Family

As pointed out last week, we’re in the “year of the wedding.” Our focus last week was on the risks weddings pose on protecting a family’s human capital. Human capital is one of the five key components of a family’s wealth (along with intellectual, social, spiritual, and financial capital). Human capital consists of the individuals who make up a family, celebrating each one’s personal identity, self-worth, and well-being. Marriage adds a new member to the family, so it instantly impacts the make-up of a family’s human capital. If you engage in a thoughtful process to welcome in-laws, their impact on the family’s human capital can be positive. But if you’re not careful, bringing a new in-law into the family can be disruptive to the family’s human capital.

Put yourself in the shoes of the new son-in-law or daughter-in-law. Most of us have been there at some point. Remember how it feels. There’s no getting around the fact that in-laws grew up in a different home, with a different set of rules, and on some level, different values. It’s natural for the new in-law to feel like an outsider. When the family makes efforts to welcome the new member and make them feel like a valued member of the team, you improve the odds of successfully incorporating that in-law into the family. Taking steps to strengthen the bond with in-laws pays enormous dividends, especially when you consider that they will be parenting the next generation of your family. The continued success of your family’s human capital depends on it.

When I started out as an estate planning lawyer over 40 years ago, the trend was toward secrecy and a more closed relationship between the older generation (Generation 1 or G-1) and younger generations (G-2 and G-3). This was especially true when it came to money and a family’s business affairs. This was even MORE especially true between G-1 and SPOUSES of G-2. The world is a different place today. No matter how hard one may try, there is little to no privacy. We need to embrace the reality that G-2 and G-3 (and their spouses) have ways to find out much of G-1’s business. What’s also true is what they don’t know, they’ll make up. Such behavior fuels misinformation and a communication breakdown. Rather than hide from today’s expanded access to information, the smarter course is to accept it and adopt an open approach that carefully manages the communication flow.

Along with the new reality of more “open” rather than “closed” relationships, there is also a new style of estate planning. The “new age” of estate planning is holistic. It goes way beyond just drafting Wills. The Blum Firm has expanded our offerings to help families establish a family governance structure. Such a structure contains policies to foster strong family bonds, particularly with new in-laws. In particular, your family governance system will oversee a family meeting process that includes these elements:

  • Adopting an orientation process for in-laws and for kids reaching adulthood (multi-step, not through a firehose, so as not to overwhelm)
  • Gradually educating family members on the family’s business, estate planning, and wealth (all five capitals, not just financial)
  • Regularly reaffirming the family mission statement, values, and vision, allowing for new input and periodic updating
  • Creating an avenue for continually updating the family on new developments and important decisions
  • Establishing open channels of communication, feedback, and idea sharing
  • Procedures for group decision making, voting, and resolving conflicts
  • Planning shared experiences (which includes having fun together!) to build relationships

Granting in-laws a backstage pass to the inner workings of the family will go a long way in making them an insider instead of an outsider. Rather than have them learn through haphazard methods, guesswork, and “pillow-talk” with a spouse, create a thoughtful structure. The Blum Firm would be honored to help you create a system to manage the communication flow. One final tip: This is family, not business, so we know you’ll deliver it with love.

Marvin E. Blum

Weddings are a time of great celebration, including welcoming a new member into the family. This was the night we celebrated Adam bringing Brooke into the Blum family.

It’s the Year of the Wedding

I was visiting with close friends recently about their daughter’s upcoming wedding, and they referred to an article they’d read describing 2022 as “the year of the wedding.” Due to so many postponed weddings during COVID, the 2022 calendar is jam-packed with weddings. Question: What do weddings have to do with estate planning and family legacy planning? Answer: A lot!

When I was studying tax law and estate planning at UT Law School over 40 years ago, I never imagined I’d one day be advising families on so many issues pertaining to marriage. I’ve written on the topic, I give speeches on the topic, and I regularly advise clients on the topic.

The ties between marriage and estate planning are numerous. The most obvious has to do with trust and pre-nuptial (“pre-nup”) planning to preserve and protect family assets. But as a follow-on to last week’s email about protecting all 5 “capitals” (not just financial capital), my focus today is on the impact of marriages on human capital. As I elaborated last week, author Jay Hughes distinguishes between quantitative estate planning (to protect financial capital) and qualitative estate planning (to protect human, intellectual, social, and spiritual capital). Family “wealth” is comprised of all five capitals.

Hughes defines human capital as the individuals who make up the family, including each one’s physical and emotional well-being. It’s easy to imagine how a stressful wedding scenario would disrupt family relationships and the emotional well-being of family members. Yet even in the most harmonious situations, wedding planning puts stress on family relationships. Healthy relationships are the glue in maintaining a family’s stability and sustaining a family’s wealth long-term. The estate planner can be an objective voice of reason when challenges emerge.

Consider the impact these hot-button issues could have on family ties:

  • Cost of the wedding—Establish a budget (and then if you’re realistic, you should secretly double it in your head). The movie Father of the Bride warns how tempting it is to bust the budget. Caution against the wedding becoming bigger than the marriage. When our daughter Lizzy married, we asked her to identify her top three priorities. She chose music, photography, and a fairy tale Manhattan venue. We kept all other costs under control.
  • Determine who pays for what—Bride’s family, groom’s family, or the marrying couple. A wedding is a major financial endeavor akin to two strangers entering into a business partnership. Some Orthodox Jews adhere to the FLOP rule: the groom’s side pays for Flowers, Liquor, Orchestra, and Photography. Clarify upfront what costs each will cover.
  • Who calls the shots? Though some are tempted to follow the other “Golden Rule,” a wedding isn’t necessarily a situation where “he who has the gold rules.” With the stability of a family hanging in the balance, the stakes are much higher.
  • Invitation list—Do the math. A 400-person wedding doesn’t mean the bride’s parents can invite 400 guests. That’s 200 couples, perhaps 100 for the bride and 100 for the groom. After inviting family members, the bride’s friends, and the groom’s friends, parents will likely be left with a small number of invitations for their friends.
  • Pre-nup planning—As hot topics go, this may be the hottest. The Blum Firm has substantial expertise in this area. Be on the lookout for information in upcoming emails about pre-nups as well as “pre-nup alternatives.”

Above all, remember that “post-wedding” matters more than “pre-wedding.” Set aside any hard feelings and support the new couple. They will be parenting the next generation of your family. Embrace your new in-law and welcome him or her to the family. In coming weeks, we’ll give tips on onboarding in-laws.

Stay tuned for more wedding wisdom in this “year of the wedding.”

Marvin E. Blum

Weddings are an important part of a family’s legacy. Marvin Blum’s daughter Lizzy observes as her husband Ira preserves the Jewish tradition of breaking a glass, reminding us of the fragility of life and the care it takes to protect relationships.

Family Wealth: How to Keep “It” in the Family

Over the last few weeks, I have drawn lessons from my brother’s death to urge everyone to do an estate plan check-up. As I emphasized last week, in reviewing your estate plan, I recommend you do so not only with an eye for how it performs financially, but to consider how it performs in all five of the capitals: Human, Intellectual, Social, Spiritual, and Financial.

To describe the five capitals, I will draw from the teachings of my hero Jay Hughes in his most recent book, Complete Family Wealth. Hughes explains that in the title of his earlier book, Family Wealth: Keeping It in the Family, the word “it” is not money. “It is the family’s qualitative wealth—its human, intellectual, social, and spiritual capital—in addition to its quantitative, financial capital.” Financial is only one-fifth of the wealth package. He quotes a grandmother who recognized the distinction when she said, “Our family has always been rich, and we’ve sometimes had money.”

To help you assess how your estate plan measures up on all five components of wealth, here’s how Jay Hughes defines them:

  • Human Capital: Each family member’s physical and emotional well-being, including each one’s ability to find meaningful work.
  • Intellectual Capital: The knowledge gained through life experiences, whether learned from academic, career, or artistic achievements, including an understanding of family finances.
  • Social Capital: The relationships family members have with each other and with their communities, including giving of your time, talent, and treasure to society.
  • Spiritual Capital: Understanding that as a family, we share an intention (or shared dream) that transcends our individual interests, whereby we embrace humility, gratitude, traditions, as well as whatever a family’s religious beliefs may be.
  • Financial Capital: A family’s money and property, different from the other capitals, yet important in helping a family cultivate those other four qualitative capitals.

As you review your estate plan, ask if it reflects the family’s mission. Does it include elements to cultivate all five of the capitals? Consider ways to beef it up, if necessary, to foster mentoring of heirs, education experiences, philanthropy, preserving a family’s values and dreams (perhaps as expressed in an “Ethical Will” or Legacy Letter to your heirs).

My wife Laurie has a beautiful, innate understanding of the distinction between financial wealth and qualitative aspects of wealth, reminding me that “money’s not the right way to keep score in life.” I’m a lucky fellow to share life with someone who gets “it.” Dennis Lee Simon got “it” too. My friend John Hodge carries with him Dennis Lee Simon’s obituary, which I’m sharing here. When you read Simon’s obituary, you’ll see that in his short 34-years, he discovered that success in life isn’t about money, but about family, relationships, and faith. As he put it, “Nothing else makes much sense.”

I’ll close with one more story of a friend of mine who also got “it.” In paying a farewell visit to say goodbye to my dear friend Ray, he unwittingly shared the concept of wealth being both quantitative and qualitative. Ray’s final words to me: “Can you believe I amassed a $15,000 IRA? I never thought I’d have that kind of money. I’m also grateful that my entire family gathers here every Fourth of July. I hear some families don’t get along with each other and do things like that.” Such simple words, yet so much wisdom is packed into them.

The Blum Firm would be honored to help you create an estate plan that keeps “it” in the family.

Marvin E. Blum

Some Final Reflections From My Brother’s Death

When I began writing these weekly Family Legacy Planning posts over a year ago, I had no idea where this would lead. The feedback has been extremely rewarding. I have always loved to teach, and my plan was to give guidance based on my 44-year career as an attorney and CPA. What I discovered was that the posts where I shared personal stories elicited the most reaction. People encourage me to share my personal reflections. That shouldn’t surprise me. After all, estate planning is a deeply personal endeavor.

A few weeks ago, I opened the door into the topic of what I learned from my brother Irwin’s sudden death from pancreatic cancer. Surprisingly, I discovered I had suppressed a lot of my grief. Sharing this has been therapeutic for me. As my best friend Talmage Boston comforted me: “Some things in life are extremely hard to endure—but they deepen our character and our insights about life.” So true. At your urging, I will dive a little deeper into those insights.

Irwin’s death had a profound impact on me. As an estate planning lawyer, I was accustomed to dealing with death. However, the concept was always somewhat abstract for me. Irwin’s death made it real. In fact, I divide my law practice into two timeframes: (1) before Irwin died, and (2) after Irwin died.

More than anything I’d ever learned in school, seminars, or law practice, experiencing a loved one’s passing made me realize how much estate planning matters. I recently shared the observation that estate planning documents are not just paper. The structures and processes these documents create impact lives. By carefully crafting a plan, you can enrich lives. You can create responsible, empowered heirs and not trust babies. Such a plan fosters a powerful legacy that lives on long after you’re gone.

I’ve heard others sum up the value of estate planning in various ways:

  • My mentor Tom Rogerson of GenLegCo teaches: “Failing to plan is planning to fail.”
  • Planning advisor Kate Flume emphasizes: “Thoughtful estate planning trumps investment returns.”
  • My TIGER 21 chair Jack Mueller asserts: “The greatest investment return comes from doing proper estate planning.”
  • For investors fearing a bear market, the worst bear market occurs 9 months after death by unnecessarily paying a 40% estate tax that could’ve been avoided with proper planning.

As I’ve shared repeatedly in this email series, the returns from good estate planning are not only financial. In fact, financial rewards represent only one of the five capitals, summarized brilliantly by Jay Hughes in Chapter One of Complete Family Wealth: Human Capital, Intellectual Capital, Social Capital, Spiritual Capital, and Financial Capital. A thoughtful estate planning generates a legacy for your family in all five capitals.

I’ll close by once again thanking Irwin for teaching me the real value of my career, as I aim to guide clients in planning not only their estates but also their legacies. Irwin lives on in my heart. I cherish our childhood memories, like gathering discarded Christmas trees from all the neighbors’ yards to build a fort in our backyard, then dumping a mass of Christmas trees on our front curb (imagine the image as the only Jewish house in our neighborhood!) As the picture reflects, Irwin’s with me when I hike in the Rocky Mountains. He’s with me when I savor a slice of chocolate cream pie (his last enjoyable bite). He’s with us when we sit on the bench his wife Lea Ann dedicated in his memory at Airfield Falls in Fort Worth, looking out on a majestic waterfall that he and Lea Ann loved. Irwin lives on.

Here’s encouraging everyone to take a good honest look at your estate plan and imagine it in action after you’re gone. The Blum Firm would be honored to help you pass down success in all five capitals.

Marvin E. Blum

Marvin (left) and Irwin Blum hiking to Lake Haiyaha, only a few months before Irwin died. Irwin lives on in every Blum Rocky Mountain hike!

New 2022 Estate Planning Numbers—Time for a Tune-Up

Over the last two weeks, I shared lessons learned from my brother’s unexpected death, including the need to take your estate on a “test drive” to see how it runs if you pass away today. All too often, we discover surprises that can be fixed if we catch them before death. Expanding on that theme, New Year’s is the ideal time to do an estate planning check-up.

With the arrival of 2022 comes the opportunity to take advantage of an increase in some important numbers:

  • The lifetime estate/gift tax exemption is now $12,060,000 per person, an increase of $360,000 per person. A married couple who used their full exemptions prior to 2022 can now transfer an additional $720,000 out of their estates. Doing so saves the 40% estate tax on the amount transferred, plus saves the 40% tax on any growth in those assets between now and the date of death.
  • The annual exclusion for gifts rises from $15,000 to $16,000. You can now make annual gifts of $16,000 to anyone and remove those assets from your estate without having to eat into your lifetime exemption. A married couple can join together and make gifts of $32,000 to as many people as they wish.

I want to share an article I wrote that was recently published, as it’ll be helpful in doing an estate planning review. The article is geared toward advisors, but it also speaks to each of us as we dust off our estate plans. The article is entitled “Estate Planning for 2022: Questions to Ask Your Clients,” and it addresses these ten questions:

  1. Do you own anything in your name (other than retirement accounts)?
  2. After you’re gone, will your retirement assets be protected?
  3. If you died right now, would your children’s inheritance become divisible upon a divorce?
  4. Have you taken advantage of the doubled estate tax exemption?
  5. Can you have your cake and eat it too?
  6. Do you have any low basis assets?
  7. Do you love your grandkids equally?
  8. Do you have a “red file?”
  9. Do you have a business succession plan in place?
  10. Are you worried an inheritance will ruin your children?

Here’s a link to the article. Please note that the explanation under question 4 refers to a $23,400,000 estate tax exemption for a couple, but as pointed out above, that number is now $24,120,000. Don’t forget that the doubled exemption sunsets in 4 years, so any exemption you haven’t used by December 31, 2025 declines by about $6,000,000 per person at the stroke of midnight. Cinderella’s coach will turn back into a pumpkin. Now is the time to “use it or lose it.”

The Blum Firm would be honored to help with your estate planning tune-up. May 2022 be a productive and fulfilling year!

Marvin E. Blum

The Blum family wishes you a joyful and fulfilling 2022!

Lessons from Irwin’s Death: Take Your Estate on a “Test Drive”

In last week’s Family Legacy Planning email, I revealed how my brother Irwin’s death was a wake-up call in so many ways. I shared how death often comes without notice. As I’ve shared before, not only do “you only live once” (YOLO), but also “you only die once” (YODO), so you have only one chance to get it right. The key message is to BE PREPARED and have your affairs in order. Death, especially when unexpected, is viciously hard on your family. Don’t make it even harder by leaving them unfinished business.

When a client dies, we immediately embark on the details of estate administration. We gather legal documents, learn how bank accounts are titled, find out the beneficiary of life insurance and retirement plans, and determine to whom everything passes. All too often, we discover surprises:

  • A bank account or brokerage account that pays on death outright to an unintended person, instead of passing through the Will to a trust with built-in protections
  • An outdated beneficiary designation that leaves life insurance or retirement assets to the wrong recipient
  • Documents naming an executor, trustee, or guardian for your minor kids you wish you’d changed
  • Bequests that should’ve been added or omitted
  • Lack of instructions on how to distribute personal effects, which could have helped avoid some painful fights among heirs.

We usually discover these surprises within days of a loved one’s death. Had we only known before their passing, we could’ve easily and quickly fixed them. That brings me to my core message: by taking your estate on a “test drive,” you look at how your plan runs as if you passed away today. Now you have a chance to make things right. It puts you in the driver’s seat of your estate plan.

If your estate planning documents have been sitting on the shelf for a while, now’s the time to do a “pre-death audit” or test run around the track. Red flags on the course include the following:

  • Documents drafted more than four years ago
  • Significant life events, such as marriage or divorce, for you or your family members
  • Serious health challenges
  • Newborn children or grandchildren
  • Bank accounts set up to “pay on death” or pass by “right of survivorship,” circumventing your Will.

The Blum Firm can help you perform the test run and then assist with any needed tune-up to your estate plan. This sounds like a good New Year’s Resolution to me.

Wishing you a New Year that’s happy and HEALTHY (and boy has that word taken on a new significance!),

Marvin E. Blum

Irwin (left) and Marvin (right) with mother Elsie Blum. Irwin’s untimely death teaches us lessons— be prepared, and do an estate “test drive” to make sure all’s in working order.

What I Learned From My Brother’s Death

At holiday time, our minds naturally turn to family, especially memories of times with loved ones no longer with us. While in this reflective mood, I want to share a story of my dear brother Irwin. Here are some lessons we can all learn from Irwin’s untimely death from pancreatic cancer:

  • On your deathbed, your priorities shift to what really matters, and we realize all of the day-to-day “stuff” we worry about is just “stuff.”
  • We don’t always have much (if any) warning of impending death.
  • Estate planning documents are not just paper. They have a real impact on lives.
  • After we’re gone, our legacy can live on in a very powerful way.
  • Now is the time to do a “test drive” of your estate plan to make sure you’ve dotted all the i’s and crossed all the t’s.

Please indulge me to tell the story of Irwin’s passing. Here’s a guy who lived a model life of good health (no smoking, no drinking or drugs, exercised regularly, ate a healthy diet, not overweight). Irwin was rarely sick. One Friday evening almost five years ago, he called to tell us he thought he’d broken his foot. He was heading to a neighborhood clinic for an x-ray, lamenting that he’d soon have to endure the inconvenience of a cast on his foot. We urged him to go instead to a local hospital emergency room to meet an orthopedic doctor friend of ours. X-rays revealed that his foot was not broken, but the pain was coming from blood clots in his calf. Within hours, we discovered that there were blood clots throughout his body, emanating from his pancreas. We knew what that meant, having lost my father to pancreatic cancer 14 years before.

Irwin faced this diagnosis with the most amazing strength and courage imaginable. Doctors recommended no treatment, as the cancer was already too advanced, and Irwin went home with his wife Lea Ann and into hospice care. Irwin declined rapidly, but his spirit stayed strong. He even maintained his sense of humor, kidding with his buddies who surrounded his bed daily. His concern was never about himself, but about taking care of his loved ones. He wasn’t worried about his own health, but his focus was now on my health, aware that I have two close relatives (a father and a brother) both succumbing to pancreatic cancer. Doctors wanted to perform genetic testing on Irwin to be useful in assessing my own risk. Irwin held onto life just long enough for the kit to arrive so he could give his blood for my well-being. Only hours after giving me that gift, Irwin died. The journey from diagnosis to death was a mere two weeks. He was gone at age 65.

Words can’t begin to express my love and gratitude to Irwin. He gave so much, throughout his whole life, and his selfless act on his deathbed was just another example of the “mensch” he was. I was blessed with good news from both Irwin’s genetic testing and my own genetic testing. I still take every precaution and am enrolled in a program at UT Southwestern Medical Center aimed at early detection, should a problem arise. I am beyond grateful.

My message to everyone is to be prepared. It’s human nature to procrastinate when it comes to dealing with unpleasant things. At this holiday season, please accept a gift from Irwin. Let’s fight the temptation to postpone the things we need to do: express love, do things that bring you joy, and engage in planning to create a lasting legacy for those we will one day leave behind. Please allow me to suggest that your new year’s resolution list include an estate planning checkup. In the coming weeks, I’ll expand on the lessons learned from Irwin and provide more tips for that checkup.

Wishing all a joyful and meaningful holiday season,

Marvin E. Blum

Brotherly love—The Blum brothers: Marvin (left) and Irwin (right).

Checklist to Help Kids Stay Off Drugs

Last week’s Family Legacy Planning email contained a quote that stirred up attention. Statistics show that having regular family dinners actually reduces the risk of kids turning to drugs. This finding is based on research at Columbia University’s “Partnership to End Addiction,” founded by Joe Califano.

The 18-year research project studied the link between the frequency of family dinners and teens’ substance abuse. Kids who have dinner with their parents at least 5 times a week are far less likely to smoke, drink, or use drugs. The risk of addiction increases dramatically for teens who have fewer than 3 family dinners per week. Califano explains that “the magic that happens at family dinners isn’t the food on the table, but the conversations and family engagement around the table… Family dinners are the perfect opportunity when teens can talk to their parents and parents can listen and learn.” Columbia’s research is summarized in the White Paper “The Importance of Family Dinners VIII” available here.

It’s important to start family dinners while the kids are young. The research revealed that “a child who gets through age 21 without using illegal drugs, abusing alcohol or smoking is virtually certain never to do so.”

Of course, there are no guarantees. However, it’s hard to ignore these powerful research findings. In her book How to Make Your Family Business Last, Mitzi Perdue provides this checklist for helping kids avoid substance abuse:

  • Be a good example.
  • Keep dangerous prescription drugs out of their reach (almost half of addictions start from the family medicine cabinet).
  • Teach kids early on that you consider substance abuse to be morally wrong and stupid.
  • Choose a middle school and a high school that enforces a drug-free policy.
  • Attend religious services (kids who do are 3 times less likely to smoke and drink).
  • HAVE DINNER TOGETHER at least 5 times a week.

I once attended an international conference for large Family Offices. They covered investing, tax planning, estate planning, educating heirs, but the one topic that received the most attention shocked me. It was substance abuse. Almost every family deals with addiction at some level. Consider adhering to these tips, especially the idea of regular family dinners. It’s certainly good food for thought, and perhaps the makings of a good New Year’s resolution!

Marvin E. Blum

The Blum family enjoying a Sunday brunch. Research shows that bonding at frequent family meals has lasting benefits, even helping keep kids off drugs.

What Are Your Rose and Thorn This Week?

Two weeks ago, our Family Legacy Planning series focused on 20 questions for your Thanksgiving table talk, prompting last week’s email to continue family story telling during holiday meals. The volume of feedback from those two emails tells me there’s a great level of interest in telling family stories. At your urging, I’m diving deeper into the topic of family table talk.

Robyn Fivush explores what’s so special about storytelling at the dinner table in her study The Importance of Family Dinnertime. “The dinner table is the perfect time for a busy family to come back together at the end of the day, to tell each other stories of their daily experiences and to re-connect as an emotionally bonded family.” Fivush breaks the stories into two categories: (1) “Today I…” stories where each tells something that happened during the day, and (2) Shared Family stories recalling favorite memories of a shared family experience, such as a trip or outing. Both are important, as every family member at the table can participate, regardless of age.

Fivush researched these conversations at the Family Narratives Lab and came to this surprising conclusion: “Adolescents from families that told more stories, both ‘today I…’ stories and shared family stories,… showed higher self-esteem, higher sense of social competence, higher academic competence, and showed few internalizing (anxiety, withdrawal, depression) and externalizing (aggression, substance abuse) behavior problems.” Why is that? Children from story-telling families build tighter family bonds, feel emotionally closer to family, and develop a sense of security and belonging.

Most of the stories are positive, but even talking about negative or challenging experiences is valuable. Fivush continues: “Use this as an opportunity to understand your children’s feelings, and to help them gain some perspective on these difficult events. Sharing sad events helps your children understand they are not alone.”

In the Blum family, we have discovered a way to expand on the “today I…” theme that works for family members of all ages. At the weekly Shabbat dinner table, each person gives their “rose” and “thorn” highlight of the week. We start with the youngest (even including the babies, whose older sisters answer for them), and keep going till we get to the old man Marvin. Everyone gets a voice at the table. My son-in-law Ira modified the rules recently to prevent the negative experiences from overpowering the positive ones. In order to announce your thorn, you have to first give THREE roses. You’d be amazed at the wisdom we all learn from these weekly highlights. Perhaps it would enrich your family experience too, while also giving everyone at the table an uninterrupted chance to talk. Why not give it a try!

Marvin E. Blum

Preparing Chanukah mealtime at the Savetsky home where each member of Marvin Blum’s daughter’s family can share three “roses” and a “thorn.”

Holiday Season—The Perfect Time for Storytelling

Thanks for the super feedback from last week’s email about the 20 question “Do You Know?” scale. That email generated the all-time best response in my Family Legacy Planning series. I used these questions at my own Thanksgiving table, and it prompted a terrific round of storytelling. The best way to teach younger generations about their family heritage is by telling stories. People forget statistics, but they remember stories for a lifetime. Dinnertime during the holidays is a perfect time to tell these family stories.

The New York Times columnist Bruce Feiler asserts: “The single most important thing you can do for your family may be the simplest of all: develop a strong family narrative.” Author Mitzi Perdue concurs: “Stories tell us who we are and where we fit in… Families that spend time together and share their family stories are likely to be high-functioning families.”

Psychologist Marshall Duke explains: “There are heroes in these stories, there are people who faced the worst and made it through. And this sense of continuity and relatedness to heroes seems to serve the purpose in kids of making them more resilient. Ordinary families can be special because they each have a history no other family has.” Sharing stories of ancestors who conquered adversity gives a kid confidence that he too can overcome obstacles when (not if) they arise.

I’ll share a story from my own lineage that gives me strength. When my mother’s family was escaping Russia to come to America just prior to the Holocaust, her Aunt Rachel gave birth to a baby boy Morris during a stopover in Poland. Baby Morris was a Polish citizen; the rest were Russian citizens. When they arrived at Ellis Island, the quota for Polish citizens was full. Aunt Rachel, her husband Uncle Avrom, and baby Morris had to stay on the ship and go to Cuba. The rest of the family was admitted to the US. Aunt Rachel and her family made a good life in Havana until Castro came. Once again, they lost everything and even were forced to live in a small section of their home so strangers could occupy the rest of it. Years later after Uncle Avrom died, Aunt Rachel managed to escape to Miami, leaving everything she had behind for the second time in her life. But, Aunt Rachel made the best of it. Though elderly, she added English to the list of languages she spoke (Yiddish, Spanish, Russian) and made another good life for herself.

Knowing that I descend from survivors like Aunt Rachel helps me get through hard times. Every family has stories. The Emory University Family Narratives Project confirms that “family stories seem to be transferred by mothers and grandmothers more often than not and that the information was typically passed during family dinners, family vacations, family holidays, and the like.” These stories lead to “high levels of cohesiveness” and a strong sense of “intergenerational self,” which in turn leads to personal strength, moral guidance, increased resilience, and better adjustment.

During this holiday season, discover your own family narrative and share it with your loved ones.

Marvin E. Blum

A young Marvin Blum (center, standing) with family. Aunt Rachel (lower right corner) survived Hitler and Castro to make a better life in America after escaping both Russia and Cuba. Resilience!

20 Questions for Your Thanksgiving Table Talk

Here’s a suggestion for the conversation at your Thanksgiving table: use the time to discuss the “Do You Know?” scale. Arming your family with answers to these 20 questions reinforces family bonds and helps heirs become more resilient. This assertion is based on research by Dr. Marshall Duke and Dr. Robyn Fivush, psychologists on the faculty at Emory University, developers of the 20 question “Do You Know?” list.

This thesis was further tested and confirmed by Bruce Feiler, author of The Secrets of Happy Families. After years of research and interviews, Feiler arrived at this startling conclusion: “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem and the more successfully they believed their families functioned. The ‘Do You Know?’ scale turned out to be the best single predictor of children’s emotional health and happiness.”

Enjoy a lively and thought-provoking table conversation with the help of these 20 questions:

  1. Do you know how your parents met?
  2. Do you know where your mother grew up?
  3. Do you know where your father grew up?
  4. Do you know where some of your grandparents grew up?
  5. Do you know where some of your grandparents met?
  6. Do you know where your parents were married?
  7. Do you know what went on when you were being born?
  8. Do you know the source of your name?
  9. Do you know some things about what happened when your brothers or sisters were being born?
  10. Do you know which person in the family you look most like?
  11. Do you know which person in the family you act most like?
  12. Do you know some of the illnesses and injuries that your parents experienced when they were younger?
  13. Do you know some of the lessons that your parents learned from good or bad experiences?
  14. Do you know some things that happened to your mom or dad when they were in school?
  15. Do you know the national background of your family (such as English, German, Russian, Chinese, and so on)?
  16. Do you know some of the jobs that your parents had when they were young?
  17. Do you know some awards that your parents received when they were young?
  18. Do you know the names of the schools that your mom went to?
  19. Do you know the names of the schools that your dad went to?
  20. Do you know about a relative whose face “froze” in a grumpy position because he or she did not smile enough?

The Blum Firm wishes you a meaningful Thanksgiving celebration with your loved ones.

Marvin E. Blum

From their home to yours, Marvin and Laurie Blum wish you a meaningful Thanksgiving.

How Do You Choose What Causes to Support?

In last week’s email, I shared my views on the importance of philanthropy in estate planning. I described the estate planning process as a menu with a main course, appetizers, and a dessert. Not surprisingly, philanthropy is the “dessert” on the estate planning menu, after ordering a main course (for you and your spouse’s needs) and appetizers (to provide for your kids and other loved ones). There is a “two-fer” benefit to philanthropy, as it not only helps others, it also provides powerful “glue” in keeping a family unified as they come together to create a giving legacy.

I received feedback asking me to share tips on how to choose what causes to supportLady Bird Johnson famously said she selected causes that “make my heart sing.” For her, that included beautification and wildflowers, especially along America’s highways. For Omaha businessman Walter Scott, Jr., good friend of Warren Buffett, his focus was on youth. “I have nothing against old people. I am one! But I believe society will get the most bang-for-the-buck if I invest in things that help us produce educated and productive citizens.” Hence, Scott was a major donor to the University of Nebraska.

I was asked to reveal my own causes. I share similar philosophies with Lady Bird Johnson and Walter Scott, Jr. I look for causes where my charitable dollars and volunteer hours not only make my heart sing, but they also “move the needle” and have a meaningful impact. As the photo reveals, I also have a personal passion for the arts, driven by my lifelong love of painting, as well as a passion for children and education. These priorities attract me to causes like the Fort Worth Symphony (where I was treasurer for 42 years), the Multicultural Alliance and its Camp CommUNITY, Texas Cultural Trust, Trinity Valley School, and Jewish Family Services.

I encourage you to find what “makes your heart sing.” I guarantee that you and your family will get back more than you give.

Tax Tip: 2021 is an ideal year for people considering a large cash gift to a public charity. Normally, the tax deduction for such gifts is limited to 60% of your Adjusted Gross Income (“AGI”), but for 2021 you can deduct an amount equal to 100% of your AGI. Furthermore, there used to be a “cutback” on itemized deductions for high income taxpayers, but in 2021 there is no cutback. No matter how high your income, you can deduct the full amount of your itemized deductions. Therefore, through large cash gifts to public charities in 2021, it’s possible to completely eliminate your income tax liability this year.

Marvin E. Blum

Marvin Blum at the easel, fostering his passion for arts, education, and children.

What Are You Having for Dessert?

Today, I am honored and humbled to receive the “Outstanding Advisor” award at the National Philanthropy Day celebration by the Fort Worth Metro Chapter of the Association of Fundraising Professionals.

November 15th is National Philanthropy Day. The day recognizes the great contributions of philanthropy—and those people active in the philanthropic community—to the enrichment of our world.

When asked for my views on philanthropy as an estate planning advisor, here are my thoughts:

The most gratifying part of my estate planning law practice is to help families with their charitable planning. Not only does the community benefit, but the family who is giving gets back even more than it gives. Philanthropy helps build and pass down a family legacy, providing glue to keep future generations connected. Not everyone can play a role in a family’s business or investments, but everyone in a family can be part of philanthropy.

In accepting the award, I described the estate planning process as a menu with a main course, appetizers, and dessert. The main course is planning that provides for you and your spouse. Appetizers are trusts that you create now to provide for your children and other loved ones. Then, after taking care of yourself and your family, you get to the fun part—dessert. For dessert, create a charitable vehicle such as a Private Foundation or Donor Advised Fund to benefit causes important to you and your family.

Such an estate plan provides for you, your family, and the community. Moreover, it leaves your heirs two important forms of inheritance: a traditional inheritance to provide for their needs, and a second inheritance allowing your heirs to provide for others. Through such as plan, you’ll make great headway in building a family legacy.

Marvin E. Blum

Marvin Blum celebrating his “Outstanding Advisor” award with mother Elsie and wife Laurie.

Do You Love Your Grandchildren Equally?

The last several Family Legacy Planning emails have been on the topic of giving assets to your family. While we’re on the subject of family gifts, here’s a provocative question: “Do you love your grandchildren equally?”

Suppose you have a son with two kids and a daughter with four kids. If you leave $12 million to the next generation (Generation 2 or “G-2”), that’s $6 million to your son and $6 million to your daughter. When G-2 dies, and the assets flow to the grandchildren (“G-3”), each son’s child gets $3 million, but each daughter’s child gets just $1.5 million. That’s a recipe for cousin jealousy.

To send a powerful message that you love all six grandchildren equally, here’s a simple proposal. Leave your estate plan intact, but take out a life insurance policy on your life and designate the benefit to go equally to your 6 grandchildren, per capita. For example, a $1.2 million life insurance policy would give each grandchild $200,000 at your death.

Although it doesn’t erase the possibility of jealousy, it does send the 6 cousins a clear indication that you loved all of them the same.

(Credit for this idea goes to my friend Bruce Udell of Sarasota, Florida.)

Marvin E. Blum

Marvin and Laurie Blum with their five grandchildren, whom they love equally.

Tips for “Use It or Lose It” Planning and Other Gifts

Last week’s Family Legacy Planning email created quite a stir by promoting a “Now & Later” approach to inheritance—give some now while you’re alive and the rest later at your death. Many are seeking tips on how to make lifetime gifts in the most tax efficient way. Consider these ideas:

  • Make $15,000 annual gifts to as many people as you wish.
  • In addition, pay tuition and medical payments (including health insurance premiums) for loved ones. Payments must be paid directly to the provider.
  • For larger gifts, make a gift of your $11.7 million lifetime exemption. Under pending legislation, this exemption cuts in half on January 1, 2022—“use it or lose it.” Even if the new law doesn’t pass, the exemption automatically sunsets in half on January 1, 2026, just 4 years from now.
  • If you gave away your full exemption in 2020, be sure to make a 2021 gift of the additional $120,000 inflation adjustment we received in 2021 ($240,000 for a married couple).
  • In order to capture the full extra exemption before it cuts in half, you have to make a gift of the full $11.7 million. The $11.7 million consists of an old half and a new half. A gift of only half first eats up the old half of the exemption, so when the new half sunsets, you’ll be left with zero exemption.
  • Married couples often make these $11.7 million gifts to SLATs (Spousal Lifetime Access Trusts) in order to retain access to the funds.
  • If a couple only wants to give $11.7 million and not $23.4 million, make the gift entirely from one spouse to a DGT (Defective Grantor Trust) for the kids. If the $11.7 million gift comes 50/50 from the spouses, you’ll have no exemption left after sunset. Giving the gift entirely from one spouse saves $5.85 million of the other spouse’s exemption.
  • To best protect your loved ones, we recommend you create trusts to receive the gifts, protecting the gifts from creditors, divorce, and taxes at death.

If the new law passes, the deadline for “use it or lose it” planning is December 31, 2021. But, if you supercharge the gift using a “squeeze & freeze” technique, or if you add the gift to an existing DGT or SLAT, the deadline is earlier—it’s the “date of enactment” of new legislation, which could be very soon. Time is of the essence.

Marvin E. Blum

Marvin Blum lecturing on “last chance” tax planning.

Inheritance: Give Some Now and Some Later, or Do It All at Death?

As discussed in the last two Family Legacy Planning emails, families struggle with balancing the amount to leave their kids versus the amount to leave to charity. As you settle on the amount to give your kids, the question becomes “When should I give it?” In giving assets to your kids, think about the benefits of providing some of the money to them now versus waiting until your death to leave it all to them. Consider the “Now & Later” candy approach to inheritance:

  • They very likely will need it more now, in their earlier years of raising a family, than they will down the road.
  • You will be here now to help guide and mentor them.
  • You will have the satisfaction of seeing them benefit from your generosity.
  • By spreading out the inheritance and starting now with smaller sums, your kids can learn from smaller mistakes and fare better later with larger sums.
  • A gift now sends a message that you trust them, building confidence and pride that they are part of your family’s success story.

The timing of this topic ties in perfectly with current developments in tax law. If it passes, the Biden “Build Back Better” legislation greatly limits the tools available for making lifetime gifts:

  • The lifetime exemption cuts in half on January 1, 2022 (just over 2 months from now), cutting back lifetime tax-free gifts from $11.7 million to $5.85 million.
  • After the “Date of Enactment,” you can no longer use IDGTs (Intentionally Defective Grantor Trusts), traditional SLATs (Spousal Lifetime Access Trusts), or GRATs (Grantor Retained Annuity Trusts) to get assets out of your estate.
  • After the “Date of Enactment,” you can’t make gifts to old IDGTs, SLATs, or any other Grantor Trusts (including most ILITs—Irrevocable Life Insurance Trusts) and get those assets out of your estate.
  • The opportunity to do “squeeze” planning with valuation discounts goes away on the Date of Enactment.

Now is the ideal time to think about gift planning for your family, for both tax reasons and non-tax reasons. At The Blum Firm, we are honored to help you evaluate your gifting opti