The WAY to WOW Shows
Building a Trust Company
May 4, 2026
Automatically generated from YouTube captions; names and wording may contain errors.

[0:01] [music]

[0:02] >> Who are you? And where are you going? What do you want? Hello and welcome to Trust and Estates Weekly. I'm your host Kevin Bemel. And I'm here every Monday at 10:00 a.m. Pacific time to talk about estate planning and trust and probate administration. Uh typically from the standpoint of professionals like myself and my guest Tim who I'll introduce in a minute. Uh

[0:38] but also for those of you who are what we might call laypeople. It's not your primary business being involved in this this kind of thing. Uh but maybe you got um appointed as a trustee or or the executor of I don't know your parents estate. And uh you know you're you're you're trying to navigate your way through what can sometimes be a somewhat um confusing process. And so hopefully this will give you some information so that you can do that better and communicate with your various advisors better. Uh so so today I'm very happy to welcome

[1:15] to Trust and Estates Weekly my friend Tim Borchers. Uh Tim hails from the great state of Massachusetts. Uh we've known each other for a a couple of years now. And uh if you've uh seen Josh Yager on my shows that I actually met Josh uh through through Tim. So uh uh you know I'm I'm I don't want to spend a lot of time me telling you about Tim. So So Tim, first of all, welcome to uh to the show. Thanks for coming on. Yeah, I'm so glad to be here as well. Yeah. So you know, start out if you would by uh telling us uh at least a little bit

[1:51] about your background so people can understand who you are. Yeah, so I've been a lawyer for 40 years and uh I've had my own practice for 30. Um I early on did a lot of general practice and and I loved that because it gave me a lot of experience both a little bit of courtroom, corporate, real estate, and then I I settled in after a few years on my passion for uh estates and trusts and we formed a law firm that concentrates entirely on that area. So, we like to say today that we uh we

[2:26] plan and we we we do everything in terms of trusts because we are we do wills, but they're really ancillary. So, we um uh we do trust planning, trust support over the years while people are living, trust administration at death, and then we offer uh trustee services, and that's where I'm spending about half of my time now. Um and I'm originally uh from New England. I I'm a from New northern New Hampshire um in the beginnings and uh enjoy the outdoors and a big family. Um and um the rest as I say is history.

[3:02] Yeah. So, I when we met, you were um you you had I think somewhat recently started a trust company, which you're actually the only lawyer I've ever met who's who's done that taken that step. I mean, there lawyers will oftentimes act as trustees or or or get involved in trust administration, although I think at least here in California less so than they used to because other areas of practice are more lucrative. So, um what what led you to start moving more

[3:39] into kind of the trust administration side and then, you know, and then eventually start a trust company? So, uh because of the long period in which I was doing estate planning, you know, it becomes inevitable a lot of uh estate lawyers end up being asked by their clients to serve as a trustee, as an executor, and other fiduciary positions. Um And what we found was that we were doing so much of it um 8 years ago that um our uh decision was that why

[4:14] don't we spin off a uh special a separate trust services outfit. And this would have the advantage of allowing lawyers to refer to us, where most of our referrals come from actually, uh without feeling like they're just referring to another lawyer. The second thing was that Massachusetts has a unique law that allows corporations to serve as fiduciaries without being a chartered trust company. So, we're a non-depository corporate trust company, and when people name us as a trustee, executor, etc., they're naming the company. They're naming Northeast Private Trustees.

[4:51] And uh our position there is just as officers in the corporation. So, we spun that off um and it has its own legal existence and insurance, and uh we can administer trusts from anywhere in the country uh as long as we can do that administration here locally in either Massachusetts or New Hampshire. So, we are licensed uh as a corporation in New Hampshire as well to provide the trustee services. So, it So, I think you and I I mean, we've talked about this, but for people out

[5:26] there who aren't particularly familiar, what is the benefit of of being a corporate trustee without having having to become something more elaborate? And And And like I know one thing you can contrast it to me. So, here in California, I have I have to be, you know, as an individual liable for my acts as as a trustee or as a professional fiduciary, right? Otherwise, I have to form an actual trust company. There is no third option, if you will, the way there appears to be in Massachusetts. Talk about that, if

[6:01] you would. Yes, so when you are a trustee, you know, whether you're personally a family trustee for a deceased family member or what have you, or you're a professional,

[6:15] >> [clears throat]

[6:15] >> uh as an individual, you're absolutely right, you're personally liable for your decisions, for your mistakes, um which hopefully are very few and far between. Um but if you have a corporate entity, then the corporation can be liable instead of you personally. Now, if you're if you're a lawyer uh by profession and you take up uh these uh fiduciary appointments, then your uh lawyer's liability insurance will cover you. I I wouldn't take that for granted. I would always check that. Mhm. Um but um

[6:51] the advantage of the corporation is that it has perpetual existence. So, in our case, I like to say three things about our our operation, uh our trust company. Number one is that it's it's small and it's intimate, so it's just like working with a small firm of any size, uh of any nature, rather, where you know the people and they know you, and the second thing is that we are lawyers uh in the estate planning field. So, as founders of the company, uh we know everything there is to know about the the trust documents and uh the tax laws

[7:26] and you know, we this is our life, um and we still run a a law firm uh as well. I spend about half my time on the serving as a trustee through the company. Uh but we have a bustling uh firm as well. And the the third thing about us is that we have this corporate existence. So, when people name us, they don't have to worry about whether I'm going to retire or die in office because the corporation will continue on. Got you. Okay, yeah. And and you know, that's interesting cuz one of

[8:01] the things that I I'm concerned about is, you know, look, I'm I I am, you know, 65. 40 years from now, it's unlikely I'm going to be here, right? And and so, what happens from a succession standpoint, you know, for you know, for my clients, right? So, that's that's always in the back of my mind and how am I going to handle that? So, so, talk about, if you would, the process of setting up your your company because I think that that's of interest as well.

[8:36] Well, I would say two things. The first one's quick. I mean, in our case, it it was establishing simply a business corporation, which is relatively easy to do. And there we were very specific about our corporate purposes. It's part of our charter, if you look us up on the website here or in New Hampshire. And the second thing is that when you set yourself up as a business of any kind and everybody who's ever done anything where you have to make a a living at it, you realize, my goodness,

[9:12] there's a lot more to this than first meets the eye. And it's one thing for Kevin or Tim or Joe or Jane to be a trustee one time, you know, you know the family members, you get some advice from lawyers and accountants and and you just you just start in at it and and you learn your way through it. But as soon as you start, I don't know, getting the second, the third, the fifth, and and certainly by the time you get to your sixth to 10th trust, all of a sudden you're managing all of the

[9:48] multiple you're multitasking on all of the aspects of the business. And so for us, setting up the business of being a corporate trustee really meant that we had to develop a process manual, we had to develop written disclosures. Um our of course we had to decide on fee schedules. Um naturally the website and and all the other communication. How do you um set down agreements for how you're going to get paid? Um if you're appointed as a trustee, you know, you're really making a handshake with yourself. Oh, I'm going to pay myself this amount of money. Right. When you

[10:24] really want to disclose it to people and you know, that's the best way to course to do it. No, you don't just Now, some states have fee schedules uh and I think you do in California. We don't in Massachusetts. There's no such thing. Has to be a reasonable fee. Right.

[10:39] >> And um so we we charge a percentage of assets. Uh sometimes we work hourly and sometimes we have a flat fee, but most of the time it's a percentage. Yeah. And so it yeah, it is true here in California there is there are statutory fees for acting as a personal representative in a probate. Uh but on the trust side, yeah, there is at least not that I know of. Yeah. But I I just in fact I just got appointed um as a trustee interim trustee on a trust yesterday. Um and part of the order, you know, included what my fee is going to

[11:15] be. In this case I'm doing it for, you know, a flat fee. And that was one of my concerns, right? Is I since this is a trust where the beneficiaries are in litigation against each other, the last thing I want to do is get sucked into that because, you know, all they don't this one doesn't like my fee or whatever. So, this is it's always a concern, right?

[11:35] >> Yeah. Yeah. So, I'm sorry, go ahead. I I'm And I would just add that um because we're an independent trustee, we don't have any financial institution affiliation. Um and of course that would be true if we were individuals as well, but as a corporation, we don't That's what makes us independent is we're independent of of the financial institution. Um but what I've I've discovered has happened is that we're now on file, so to speak, with a few dozen financial institutions. So, when we take

[12:11] on a new trust that's with Wells Fargo or Merrill Lynch or Bank of America, um we're already in their system. They already have our tax ID, they already know who our officers are to sign things. So, it's very convenient that way. Um and if I want to take a month off, which I'm told is legal to do, but I just never been able to do it.

[12:31] >> [laughter]

[12:32] >> Wait, wait, no, no, no. You're right, it's not legal cuz I have the same law. So.

[12:37] >> [laughter]

[12:38] >> Yeah, yeah, that that darn law. Yeah. Unwritten. Um but if I did, then yeah, yeah, there's there's three other people that can sign besides me. So, so I find that interesting that because banks, at least historically, um were one of the big sort of players in terms of acting as trustees, it sounds like banks are um in essence farming out trust administration to your firm. Or or did I understand that wrong? That's not really quite the way it'll work. Um

[13:13] when the banks are conflicted, uh so, uh a very fine institution around here um contacted me about five years ago and said uh we already manage the money for this beneficiary. Mhm. His trustee has decided to retire. And we need a a new trustee. And as you know, Tim, we could be the trustee cuz we're a trust company. We'd love to do it, but we feel conflicted because on the on the one hand, they're going to want to tell the

[13:48] beneficiary, "Yeah, you want some money? Here you go." But on the other hand, they're going to be the trustee and they're have they'll have to say no occasionally. Mhm. And so they didn't want that conflict conflict. Um, that's happened a few times where we we yeah, we do have banks that we it it it could go the other way, too. So we could say, "We want to be the trustee, but we don't want to keep records. We don't want to accountings. We don't want to do the accountings. We don't want to do the tax returns. So we could let um a bank trust company be our back office.

[14:23] Mhm. Yeah, we could do that. And um I think I only have that in in that one case that I was just mentioning. So otherwise, we're fully responsible. We have to make sure taxes get done, the accountings get prepared for uh reports to the beneficiaries. And um we do it as a corporation instead of as an individual. Right. Right. So um one of the things you mentioned is that you you're able to give your clients much more um personal attention. Uh, and

[15:01] and you know, as someone who deals with uh you know, large institutions all the time as as I I suspect you do as well. Uh I I I can see that as being a huge competitive advantage. Um but I'm I'm curious to know, you know, how you how you frame that, but then also how it works on a practical level where, Mhm. you know, you do have a relatively small staff compared to, you know, a bank or something like that where they've got maybe not now more people than they can need cuz they're slimming down, but still a lot more, you know,

[15:36] bodies to throw, you know, work at, so to speak. Yeah, and I I think this then relates back to my point about um you know, be careful what you wish for. Look at carefully how how fast you're going to grow. And how big is the next trust that you're going to take on? And can you handle it uh with your current staffing, etc. Um and for us, it's very incremental. So, we've increased our staff as the business has grown. Uh but we also are appointed as a successor trustee probably 300 times.

[16:13] And any of those people could pass away at any moment. Um I would say by the law of averages, you know, we'll see probably seven of those this year and 12 next year and 15 the next year, and it'll just keep growing as more of those mature.

[16:31] >> [snorts]

[16:31] >> Um what I've um also been thinking a lot about is uh is the transition from practicing estate law and then becoming a trustee. I liken it to it's when you're an estate planner, it's much more like you're the academic in the classroom. You're saying, you know, these are the rules, and let me map this out for you, and you know, this is what will happen or could happen, and um but then all of a sudden, um you know, you be you have to be thrown from the classroom right into the field. And so, you're no longer that um

[17:07] abstract instructor, and now suddenly you're the engineer in the field. Um or maybe it's, you know, you were you were We're engineering in the classroom, and now you're out in the field having to actually build the bridge and build the highway. Um and uh which is lovely. I mean, I love that transition. I think of um Indiana Jones uh you know, famously uh Professor uh Jones in the classroom. Uh what was his first name? Not Harold, but anyway. Yeah.

[17:39] >> [laughter]

[17:39] >> Yeah. There there he was in the classroom uh with his coat and tie, and then he puts on the bandana, the whip, and the cat, and he's in the field. And that's kind of what it's like to be the trustee. We are suddenly out there having to make those flash decisions. It's kind of exciting, in a way. Um and I'm sure you would agree. There's a long history of lawyers serving in trustee capacities, but it's not for everybody. And I would [clears throat] say furthermore, in today's environment where everybody's a specialist, there are fewer and fewer

[18:14] of lawyers who are, let's say, age 50 and younger, who really want to take on a second job, if you will, of being a a trustee. Older lawyers, um you know, we make the mistake of thinking we can do a little bit of everything, but

[18:28] >> [laughter]

[18:30] >> Yeah. And and we're try trying to avoid that that temptation. But um yeah, you know, being the hero, being being there for our clients, um it's it's tempting. You know, we you know, I love love taking care of my clients. So, of course, why wouldn't I be a trustee for them? Mhm. Well, yeah, proceed with caution.

[18:51] >> [laughter]

[18:51] >> So, let's take a quick break, but I but I want to pick up on on a couple of those thoughts. So, we're going to take a break.

[19:01] >> [snorts]

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[19:38] or visit magnumprops.com. Yeah, so you were you were talking about um um the idea of um wanting to take care of of your clients and and I I I will say from my perspective, now I I'm not I'm not a lawyer, I never was, although I was a law clerk early in my professional life. Uh the the there is a lot of satisfaction in taking care of enacting as a trustee or or for that matter even a probate

[20:13] administrator because it it is a caretaking role, I think. And and it's one where often times the people of whom we're taking care really couldn't do it on their own and and and would be open to being you know, who knows, cheated, uh you know, squandering the money away, all that kind of all that kind of thing. So.

[20:38] >> Right. I know it and when we've successfully done a law practice or a CPA practice, um and I I think occasionally financial advisors who end up retiring and then they they were able to take up the uh job of trustee, I mean, it's a culmination really of or fulfillment of this track that you've been on to be able to say, I've planned it, now I get to execute on it. Um I I I think

[21:13] in terms of how you transition from being just the practitioner to a trustee, you know, you have to have an interest in the field. Uh your knowledge is going to come in invaluably. Um Uh you like you have to like people. You have to tolerate a lot of differences cuz beneficiaries are not the same as their parents. You know, we we we love our clients. Um mom and dad are wonderful. And maybe their kids are going to be wonderful or or maybe not, you know. And and you know, as as you know, uh you know, trustees think it hey, it's my

[21:48] money. I What Why are you doing telling me I can't I can't have more of it? Right. Um and in fact, the message really when you have a trust is not about it being your money any longer. It's money it's a resource for the for your for your flourishing. Mhm. Um it's not just uh you know, a cash uh cow that that you can tap into. Um the other things about the the trustee careers I think we can do it later and longer um um in our careers instead of uh thinking well, you know, maybe I don't want to be whatever. I

[22:24] don't want to be in the courtroom or I don't want to be, you know, pounding the pavement pavement for new clients. Um uh we can make money at it. I mean, that that's obviously uh important. Probably at the same rate or so that we could as as lawyers, although I have met a lot of lawyers who don't know how to charge as a trustee. And you know, maybe they say, well, jeez, last year I put in, you know, 10 hours on that trust at my hourly rate, here's my fee. Well, that may be okay, but I think they're neglecting the fact that they also have a lot of risk. They may not

[22:59] have done a complete job through no fault of their own. I mean, they just were not really um I don't know, paying it full attention or they uh thought their client didn't care whether they did an accounting, for example. Um but if you really take this job very seriously to the nth degree, as you know, you've got you've got to put in the the hours. Um we can definitely make a an impact for good and uh it's an adventure uh cuz every every case, every uh trust and every year can bring something new and

[23:34] different as we work with these clients who are now beneficiaries. Right. Right. So, an another another thought that you raised is is um how you know, younger attorneys, you know, don't seem to be as interested in having, you know, a second job, to use your word. And and but but in reality, how long um lawyers have been acting as trustees. I mean, if you go back to I I'm a big fan of 19th century literature, right? If you go back to Dickens and such, you will see, you know, in the in these stories, lawyers who are acting as executors and trustees, right? Also,

[24:09] we're we're going back now, you know, 150 or more years. Um and I'm I'm I'm I'm curious to hear your thoughts as to why um and and and by the way, our our mutual friend Josh, uh he has the same perspective and and in fact, I I do as well. Um it's not just that younger people don't want to be trustees, it's that they seem to be not particularly interested in this area of law or, you know, in in in a case, you know, trust administration. They just don't seem to be interested in it. Mo- Seems like most of the people I deal

[24:45] with, even in my own profession, are closer to my age than they are to say, you know, someone who's maybe 5 10 years out of college. Yeah, I I think a lot of it has to do with with the uh if you if you if we're talking about the legal profession or the accounting profession, you know, it takes a lot of effort, a lot of um education, a lot of practice, a lot of uh being mentored, and then you become a mentor yourself. And to

[25:21] um to to to branch into uh what seems like a could be a tangent uh for people is is not what they're interested in. And I think it's also the case that there's far more specialization today just as a general matter. Um I mean, I like to say that I used to uh do minor repairs um including changing the oil in my car until I forgot to put the plug in after I put the oil in. Um so I had to buy more oil, needless to say, after I put the plug in. Um but um

[25:57] it uh you know, and you get um uh lawyers that uh who are very happy to be a trustee, but they're going to really specialize in it. Uh people that go for a specialized training, like the certified trust and financial fiduciary advisor, CTFA. Um and of course uh folks in the financial field who become part of the trust department of the bank or other company. But it's a growing field. I mean, I every time I turn around, there's another trust company in South Dakota. There's another one in New Hampshire.

[26:33] And um and you you read statistics on it, and it appears that there's just a growing need. Maybe it's because of the baby boomers. But the fact is that if we're going to do it, we got to take it very seriously and get and get good at it. Um and there's liability, you know, if we if we don't, you know, we we have to we stand a chance of being removed. Maybe we could be sued and surcharged. I mean, the court can charge us for what we've done. Or at least make us pay back our fees. Um

[27:08] and darn it, we have to know the trust terms and follow them. Now, AI is a great tool these days for uh being able to summarize trust documents quickly. I can we can take in a trust case much faster than we used to. Mhm. Um at the same fee because we're able to you know, feed [snorts] that trust through uh we happen to use Co-pilot. We have the a licensed version. Mhm. Um and it's marvelous. I mean, I put in 60 questions and it gives me 60 answers. It's it's it's marvelous.

[27:44] Um you know, we have to be uh ethical at all times. We have to be be fair to to the various beneficiaries and the duty of loyalty and good faith is is paramount. And you know, we we just can't be winging it. And so there's a lot of barriers to entry. Um but once you have decided to do it and you begin to take it seriously, you build some process around it. I think that's when the fun should begin. You start to say, I'm getting really comfortable with this and I I enjoy it and I want to build a team that does it

[28:20] and we want to build our identity. And that's what we're we're loving doing as Northeast Private Trustees is building our identity uh on those three differentiators that I've mentioned. You know, we have the background of lawyers. We're corporate but personal at the same time. And um what what fun what fun it's really becoming. And we're not competing with the vast majority of lawyers. Uh fortunately, like I said, that's where the most of our business comes from. Is lawyers saying, well, I've been a trustee, I need to retire. My clients don't have any reliable family members. We need an independent trustee. Or we've got a

[28:57] child who with a disability and none of the other family members are comfortable being the one to say no to them or whatever the case may be. Yeah. See, you you it was like you kind of you're reading my mind. You brought up the issue of of AIs or I think in particular large language models and and what a great productivity tool they've been for your business. I found the same thing. My concern, I have a but I have a I don't know what a counter concern for that. Okay. Not so much for myself, but but for our profession in general and

[29:32] that is I know when I sort of started on my professional path, as I mentioned a little while ago, I started out as clerking in a law office, right? I was not a paralegal so that they gave me the, you know, name law clerk and I kind of learned, you know, working. Um but these days when I need to have a simple agreement drawn, I can go to an LLM, I can say I want an agreement to do the following and, you know, a minute later, that that document is there. And then I can send that to my lawyer, you know, who's who's been a lawyer for 35, 40 years to

[30:09] review, make a few changes and done. So, for young people it seems like the opportunity to get into the field, get the experience that they need is reduced, you know, by by AI. So, I'm again, I'm curious to hear your thoughts about that. Yeah. Well, I'm going to use an analogy that um I I've been I've been thinking about all my life cuz it I for all my life I've been a a canoeist. I I

[30:44] I canoe and I taught canoeing and and you know, you can jump in a canoe and make it go. And you might even get there just as fast as an experienced canoeer canoeist. And and but if you've seen anybody who paddles a canoe by themselves who doesn't know how to use strokes properly. What they'll do is they'll paddle on the left side then they have to switch hands paddle on the right side go back paddle on the left side and paddle on the right side.

[31:19] You know, and just a little bit you know, and if and if you asked AI you know, how do you paddle a canoe? I don't know maybe I AI would say you know, you get a paddle stick it in the water and you pull.

[31:29] >> [laughter]

[31:30] >> You know, if you but if you really want to understand the science of anything whether it's being a trustee or paddling a canoe you you realize that there's some something deeper that you can be doing and and really should be doing. You're going to be a lot more efficient when you learn some canoe strokes so you don't have to keep switching sides. And that's the way it is with with AI it's going to give us somewhere between 20 and 80% of the

[32:06] information we need but it's that that final finesse that you know, Kevin is going to get by being a trustee day in and day out knowing what to look for knowing how to talk to beneficiaries how to read the trust how to find out more about the grantors intentions maybe the grantors living and you can ask him. Talking to the lawyers and so forth. And I know you're not suggesting that somebody could become a trustee just by

[32:43] you know, asking AI chat to

[32:47] >> No, actually the opposite. Seems to me that the existence of these models make it more difficult for someone to get the experience, right? Yeah. Yeah. I I feel like um there's other ways to distinguish yourself as a trustee, too. I mean, you can I often have to turn away special needs trust situations because um you know, we don't really know much about certain mental illnesses. Um we've had some I would say negative experiences. Um

[33:22] >> [clears throat]

[33:22] >> and some other very positive experiences. Uh fortunately, um right now all of our cases are very positive. Um but um Yeah, I mean and and you you can't be naive, either. You know, you you really have to say uh what's it going to take for me to uh to be sufficiently cautious, um circumspect, um ask the right questions, appear to be somewhat hard-nosed about distributions.

[33:58] I've had beneficiaries take advantage of me because I I let them um I I I let them feel like they were in charge. And it really needs to be a collaboration. It can't be I can't just make decisions in a vacuum, and neither can they uh simply demand. If we have these lifetime long-term trusts. Obviously, if you're I suppose you do some administrations as well, where you you're just a in the position for 18 months, and then hopefully, you know, you're done.

[34:33] You know, that's that's a very different enterprise. Uh it's very important and and we need people to just be administrative trustees. But um it it's quite different. Um but I you know, there's this principle that you have to do something for at least 10,000 hours before you've mastered it. Mhm. And you know, that's going to be true here, too. You know, so I didn't start uh in earnest being a trustee until I was 60 years old. And at that point, I said, "Well, I've got the book knowledge. What does it

[35:09] take to actually do this?" And if you've been in the field, you have an advantage. Yeah. You know, maybe you can cut down the 10,000 to 5,000, but it's still a lot of hours to put in. The importance of consistency, developing the habits around this. Um and developing uh in my case, uh some good staff. Two former bankers that are with me now. One that came out of a trust department. And one that was uh on the retail side, had a lot of um client-facing experience. Uh good at

[35:44] business development. Um man, it's aw- it's awesome to have them just become part of the team and and just like lap up the Kool-Aid. They're loving that what they're what they're put now part of. Yeah. So, yeah, we I was um I think I have to think about this now. Yeah, 58, 59 when I started doing this myself, although I had like you, I had a a long, you know, business career prior to that. Um and a lot of it was management and administration oriented, primarily focused on real estate. Um but but one of the experiences I had and

[36:20] this this echoes something you mentioned a a little while ago. And and I was a chaplain in the Navy, which I think you know, but I started my Navy career later in life than than most people. And I was as old as most of the admirals. You know, which [laughter] is the senior, you know, officer. So, you know, my I was older I think than all of my commanding officers. And I had a very different relationship with them because [clears throat] I was older than they were. As opposed

[36:56] to being a young kid, maybe, you know, a few years out of seminary, and, you know, their their commanding officer might be 20 years older than them, right? So, the the amount of respect accorded to me because of my age and experience was very very different. And I could, if I needed to, go toe-to-toe with an admiral um because, you know, again, he wasn't going to, you know, pull age on me. He could pull rank on me, but not age, right? Right. I think that's an you know, that you highlight that a little bit, but I think that's an an interesting, if somewhat unexplored,

[37:33] aspect of what we do. I'm Do you have any other thoughts on that?

[37:37] >> Well, you know, that just reminds me of the fact that um you know what's the expression? Um you don't know what you don't know. Um or the more you learn, the more you realize how little you know. And so, the longer we do our jobs, the longer we have life experience, the more open we should be, hopefully we are, to saying, you know, I don't I don't know the answer to that. Um I want to find out more about that. Or based on my experience, I would say that

[38:13] you know, selling the real estate out of this trust in a down market is probably not the best idea. Why don't we rent it out, and then we'll sell it 3 years from now when the market comes back. You know, that kind of thing that you don't need book learning for. You know, there's a lot of common sense. So, I imagine as a chaplain you had so much life experience um that you're able to cut through all you know, you weren't saying to yourself, let's see, what am I supposed to do as a chaplain? I'm supposed to Oh, like this person's grieving. I I have to go through the four stages of grief with them or No, you're just like, "Hey, I just want to

[38:48] relate to you, man." Mhm. Um uh or woman. Um so, uh you know, to me uh having said that, you know, we then want to develop certain great habits and and so, to me um I have like eight things that I think you know, trustees need to to figure out fairly early on whether it's on each case or um you know, they need to figure out uh how they're going to approach their business. I'm going to have you hold right there cuz I want to hear those eight things, but let's take another quick break and then we'll pick up right where where

[39:24] where you are. Okay. Probate and Trust TV, your curated source for the most useful and insightful content on estate planning and trust and probate administration featuring standout professionals like Bill Gross, Paul Rabalais, James Cunningham, and yours truly. Whether you're a lawyer, accountant, real estate professional, or working on your own succession plan, this channel helps you quickly find the clearest, most practical content YouTube has to offer.

[40:00] Subscribe now to Probate and Trust TV. Spend more time learning, less time searching. Okay, so you were just before the break you were saying you there's eight things that that you kind of focus on as a trustee and I'm I'm you know really want to hear what those are. Sure. Well, I'll more or less list them and then depending on how much time we have I can delve into them, but you know, the first one is um the intake. Um so, um you know, you have a pending engagement you you need to analyze the trust and

[40:36] the relationships of the parties. You need to learn a lot. Um the second one is defining the role as trustee. You know, are you going to be co-trustee? Are you directed? Which if we have time we can talk about what does that mean, but are you being directed in your role or do you have a lot of discretion? Um knowing the terms um of the trust. Uh I've I've had people say, "Hey, we're going to appoint you as a trustee. Okay, all right. We'll see you later." We got to know what we're getting into here. So, you terms of of the trust and the distributions. Um how are we going to handle the assets that are in the trust? Are we going to

[41:12] be actively investing? Um are there business assets? Are there real estate assets that maybe we don't even want? Uh what will be the investment approach? What will be our mode and frequency of communication with beneficiaries? How will we report and account for our activity? And uh what fee are we going to charge? And uh what can we charge fairly uh to do it an honest day's work? So, um you know, I have a reminder to myself that in every case you you have

[41:49] to also look at com- potential conflicts of interest and ethical considerations in the beginning. Um you know, if I am a lawyer for a beneficiary and I'm now being asked to be their trustee, you might think, "Well, that's a perfect match, isn't it? I'm all I already know them. I have a duty of loyalty to them." But, you know, all of a sudden the duty of loyalty is different. Um my client I want to say yes to. Mhm. My beneficiary I frequently have to say, "Well, let's talk about that first."

[42:23] >> Mhm. And maybe the answer is yes, maybe the answer is no. Here are some things that you need to do for me to say yes.

[42:32] >> [snorts]

[42:32] >> And that's a very different relationship. So, uh we have to look at uh those conflicts up front. But, on that uh intake side, um we got to gather a lot of data. Uh like I said earlier, you know, somebody might uh lawyers do this to me all the time. "Tim, we want to name you as a trustee." Okay, how do we spell your name and get that Okay, all right, good, we're done. Uh see you in 30 years.

[42:58] >> [laughter]

[43:00] >> You enjoy You enjoy your canoe trip in the meantime. Yeah, right. I wish. Yeah. Yeah, so there's looking at the instruments. It's the Who are the parties? The conflicts check, the uh terms of the trust. Uh you know, I It's about a 50-point checklist that I use now, and AI does help me with that. Um you know, the spreadsheet of tracking of of what this data is all about. We got to put it down somewhere. Maybe we have a a software. We um we're probably going to be hiring um one of the leading software trust

[43:35] software providers this year. We've been slow to adopt, um but I think we are finally ready to to pull the trigger on that. Um and then um you know, calendaring uh of milestones. One thing we we have uh just decided on in our weekly um management meetings is to adopt a program of what we're going to call our working title is called um grantor support. Uh when we do estate planning, we call

[44:11] it trust support. We're thinking of calling this grantor support. And what it what I mean is that you've got a somebody who couple, no kids, they want to name you as a trustee, we've clicked, they like what we have to say, we think we can manage it. But there's no relationship until we're needed. Mhm. We ought to probably offer something. And I'm not the first one to think of this. Mhm. Uh you can talk to Dan Felix, for example, uh who's into preparedness uh for the ultimate event.

[44:44] >> [snorts]

[44:44] >> Um i.e. death. Mhm. Um but um it and and so for a a modest annual fee and a programmed-in meeting like every 3 years or 5 years, whatever the uh folks are comfortable with. Um we can stay in contact, um get updated, uh just through a checklist of of uh uh details that we want to check in on. Uh names, dates, and birth dates, and beneficiaries, are they alive, have they moved? Um any new any news about them?

[45:21] Somebody has now got a disability. Somebody is working through a major financial problem. Um but that intake is is becoming um a a a post-take of you know, what are we going to do to help these people uh over the years? Yeah. Yeah, interesting. Interesting. Yeah. So, um what one of the um I would say pillars of my my business is What you say? uh the

[45:57] the relationship that I have with my the That is the most important thing. Okay. I find. Um And who do you think I've asked the client as you speak of it there? Right. So, you know, it it it it depends on the situation. So, if I'm if I'm um if I'm acting as a trustee on a on a on a long-term basis. So, while technically the beneficiaries are not my clients, I think it's it's useful for me to think of them that way. Sure.

[46:32] Because I seek to have relationships with people. Yeah. In another situation, it actually if it's a shorter term, the the client in fact may be the lawyer involved who's trying to get something worked out or the lawyers involved who are look looking to get something settled between their clients. Mhm. Or maybe there's a dispute going on. I've been called in because I'm the neutral guy. Um and what I want to do is make sure I don't cause more conflict. Right. So, again, the the

[47:07] the relationship with the lawyers in this case again, they're not they're really not my clients, certainly not legally. I I'm a trustee of a trust. But on the other hand, we have a relationship that or there is there is a an incentive to build a relationship there. Mhm. And and when you were talking about dealing with beneficiaries, you know, there's a there's kind of a push and pull there and a and a a need to work things through. Right. So, I'm I'm I'd love to know Mhm. what do you do Yeah. to create the ability to have that

[47:44] push and pull, right, without people getting angry or you know, worse because let's face it, people in society today they're not used to hearing or for that matter, I think saying no very much. Um, and so when no has to be I I always look for creative ways to say no, as opposed to just saying no.

[48:11] >> [laughter]

[48:11] >> Yeah, yeah. I mean, I guess it's best illustrated by some examples. Um, you know, one beneficiary um he recently uh came to us and said uh you know, I've got this partner who's living with me at the house and uh you know, we've been together a while and um he's got this business and I've been involved with it a little bit as well. And uh you know, jeez, if we just had another 50 grand we could, you know, launch this.

[48:46] And I'm thinking no, no, no, no, no on [laughter] this. Okay. You know, and or maybe, maybe, maybe, maybe, maybe. Um it's just so many questions. All right, well, who owns the business? Um, do you have a partnership agreement? Are you incorporated? Do you have liability? Tell me more about the business. What's your business plan? You know, you say if you had 50 grand, it would turn What are you going to to do? Oh, it's going to be you know, it's going to be marvelous because, you know, we've got

[49:21] all of this inventory of, you know, I want to I won't say what it is exactly. Um, and we just need to get get it out there and then, you know, I'm sure I'm going to turn the 50 into 150 pretty quickly. And I'm thinking, oh my goodness, and you know, and and if and a couple of months ago it was, I want money to be able to buy a car for my son. Okay, now why are you buying a car for your son? You know, he's 50 years old. Um, okay. And you know, we actually let that one go through because

[49:58] it was more of a hobby and a business enterprise than it was just merely trying to support him. Mhm. Um, and it was a, you know, an exquisite antique um, that and he had talent to be able to work on it and she was going to get, yeah, rather our client was going to get satisfaction out of this as well. Um, so, but I like, I have to remind you that we need to make this money last your lifetime because you do not have anything else saved. Fortunately, you have a home which you also inherited. Mhm. Um, but you happen

[50:34] to own that. So, um, I think there's an other things that we have to rely on. We have to rely on uh, budgets. We ask clients to tell us all of their expenses, all of their income. Um, and uh, I fall into the same thing. Clients, beneficiaries, I I do I do that, too. Um, beneficiary sounds very sterile.

[50:58] >> [laughter]

[50:59] >> Yeah. Yeah. You know, it and you know, aloof and us and them. You know, where's the collaboration in that? With a client, you feel like you're collaborating, you're coaching.

[51:09] >> You know. Um, so, and then I think um, after we learn about what their, you know, their basic situation is, their needs may be, then it's working out what's an appropriate distribution rate. Mhm. And uh, you know, maybe this trust isn't going to last a long time. You know, may maybe it is only going to go for 5 or 10 or 15 years because that's the clip at which this beneficiary really, really needs the support. Mhm. Um, mhm, you know, and sometimes we're looking at, well, you know, they're going to get social security at age 65 or 67 and and so we

[51:47] can give them more now and then we'll be able to back off later. We don't have any uh requirement to try to save money for the next generation. That's going to be really helpful. Because we know we can spend it on on this individual. Um and if it but boy, it's complicated. And you know, what if we do run out of money in 15 years and the beneficiary is like what? You you you you you spent it all on me?

[52:16] >> [laughter]

[52:18] >> Yeah. Yeah, we were taking care of you, remember? Um you know, and you signed off on the accounting every year and um you know, in another case, we had to tell a client, "Look at the at the rate we're going when your sister was the trustee, she was giving you anything you wanted. Now that we're the trustee, if we keep keep up at the rate that your sister was going, you're not going to have anything beyond age 70. What do you think of that?" Oh my goodness. Yeah. Yeah. So, yeah, you know, how do you how do you get into the the the groove with that beneficiary?

[52:53] And and that's where as I say, you know, you've got this process here. We have 75 trusts. Well, how do you remember what, Jill's need is compared to Jack's need? Um it's going to be the discipline of of careful notes, these things like budgets and and annual meetings or more frequently, certainly more more frequently. Or with the advisors. The advisors need to know what the cash flow needs are going to be. So. Well, and so that and that's perfect transition. This is probably going to have to be our our last uh question here because we are we're coming up on on our

[53:28] our uh time. Uh so, I know for my business, um I'm basically the team captain and part of my job is to put together the right team depending on the assets that are in the trust or for that matter in a probate, etc. So, I'm I'm curious you you know, my I I I may be wrong about this. You're not a full-service company in the sense that you do, you know, wealth advising and take care of real estate and all of that. So, maybe we'll wrap things up here by

[54:03] talking at least just a little bit about um how you look at the creating a team for each of your uh each of the trusts you administer or each of the clients with whom you deal. Right. When we think we're doing the complete job as a trustee, in our case, it's care for the beneficiaries, it's custody of the assets, it's uh the compliance with tax law and reporting, and then collaboration. So, we got to have build that team. We have So, um although we can uh do tax returns, we

[54:38] actually don't really like doing them, and so we have a relatively high fee to discourage people in some ways from hiring us cuz

[54:46] >> [laughter]

[54:46] >> you know, all right, you want us to do it? Okay, it's a minimum of $2,500 a year. Um but um clearly tax preparation, you know, we just had an accountant that made some wrong assumptions on on some trust and estate accounting uh tax work, and he's going to have to go back uh to 2022 and and and amend returns from then there forward. Um the financial advisors, yeah, you have to work with people who have a fiduciary standard. So, they got to be registered investment advisory firms, no question about that. They can't just be

[55:22] stockbrokers or insurance people. And and then specialists. So, that you know, property managers, business managers. Our role is that we want somebody else to be the the real estate manager, although I love troubleshooting around real estate problems. Mhm. Businesses need to be sold. We can't We can't run a business. You know, so we we have to have some ground rules there. Um but uh yeah, I we're having fun at it, uh learning something every day, and and I I'm just enjoying building this uh

[55:58] this project. And um a little bit of building the airplane while you fly it. I guess that's true in any business. Yeah, for sure. For sure. Certainly true of mine. Well, well, Tim, this this was really great. Uh I there are there are, you know, a dozen at least more questions I could ask you, so I'm going to have to have you come back. Um and we'll we'll visit again um and and also learn about, you know, the progress that you've been making, but uh I really appreciate you coming on the show today.

[56:30] >> I'm honored to have been here, and uh you know, to have a great dialogue like you've been able to to accomplish here. So, thank you for having me, and I hope you have a very good rest of the day, and be good, be well. Okay, I'm going to have you hang tight for just 1 second while I wrap up, and we'll talk for a minute offline. So, folks, uh listen, I you can see the amount of knowledge, experience, and you know, there there isn't a non-Yiddish word for this. There's something called seichel, uh which is just a it's a sense of of um uh

[57:05] understanding that that Tim brings to uh this this whole business of trusts and estates and all of that. And if you want to be in contact with Tim, uh his his his information will be in the show notes after this episode uh posts on on YouTube, and I'm I'm sure Tim I and/or a member of his team will be happy to talk with you, and um you know, I don't think Tim even needs my endorsement, but but but I give it because uh they're they're you know, they're he is just so so knowledgeable.

[57:42] Um Tim is one of the people that um that they you know, a couple of times in the past I've called up and said, "Hey, what do you think about this?" You know, and it was like one time he said, you know, "Call my friend Josh. He's he's he's the expert on that." So, you know, e- even those of us who've been around a long time, we need to be able to collaborate with uh with with our peers and and work things out cuz sometimes there are um you know, instances of first impression and um so, Tim's been a big help with that. Uh just real quickly then wrapping up, tomorrow at 10:00 a.m. Pacific time is

[58:17] my show business lessons from the military. Uh and then Wednesday at 10:00 a.m. Pacific time is my show people making money. And then remember, every other Thursday at 5:00 p.m. Pacific time, meet me at Jiggers' Place for a cocktail and a smooze. We'll talk about all the non-financial related topics. So, uh thank you very much for joining us. Appreciate you tuning in. Uh if if you think you if you know someone you think may be interested, pass this along to them. Both Tim and I would love to have the opportunity to help more people. And so, uh do do pass

[58:53] this along. And that just leaves it for me to say, Tim, one more time, thank you very much for coming on the show. Yeah. And signing off as I always do, Marie Darling, you're my bell. Courage at all times, my friends.