The 90+-year-old widow called with what she thought were investment questions. One of her heirs wanted to broker her multi-million-dollar apartment property, even though the heir had no training or experience in that specialty. Another heir was willing to pay about 80% of what the property was worth.
WHOA! Those could be family-destroying choices. Within less than an hour, she understood several options which were safer for the family and better for her during her lifetime. None of those options involved payment to me. When we hung up, the widow had new ideas and insight, but she didn’t know me. She would decide whether to trust me.
She invited me to visit her and some of her relatives. They each did their due diligence. They wanted to find out if I knew my stuff and if I was the kind of person they might want to deal with. Two had read my book, one read several of my articles, and one saw interviews I gave to three out-of-state real estate gurus.
After a few hours of face-to-face time, they concluded that my observations and my questions about character, legacy, motivation, options, and people were more useful than simply my answers to their valuation questions.
How Wise Questions Gave Greater Awareness
My role as a professional advisor was to ask questions that would help them discover what solutions might work for them. My recent training in coaching was very helpful. I’ve learned that asking questions can help people discover how to make better decisions. Here are some of the questions I asked them.
Does the matriarch want to manage the assets in ten years?
What, if any, problems do you have with the asset or residents?”
Who will be affected by your decisions?
What is best for the family?
What have you learned from observing other families in a similar situation?
What legacy (your character and values) do you want to leave with your heirs?
Two ladies asked questions related to their goals and separate properties. They also shared some important family dynamics and history. They each concluded that their initial inclination was not their best option.
These wise ladies were aware of some mistakes that friends and other families made. They needed more time and information to make better choices.
Sharing the Wisdom of 35 Years in the Business
They had not yet obtained expert counsel on their options, nor had they yet thought through the implications of some quick and easy choices. My 35 years of study, practice, and teaching provided insights that are not obvious to lay people, even millionaires, like them. Here are three observations we discussed.
Investors value property according to income. Cash flow is the nickels or dimes. The market pays 10-20 times as much for the income when the property sells. In other words, the wealth created is the dollars.
Ladies tend to give better and more care. Caregiving in the U.S. 2020 reports that women assume primary caregiver responsibility for their parents 67% of the time. Men are not famous for home health care for aging relatives.
Trust attorneys understand that “Fair is not equal, and equal is not fair.” Collectively they have worked with thousands of families for decades. Here’s a common situation. One adult, the child of the deceased, (usually a daughter) has shouldered caregiving responsibilities for her parent. Should the inheritance be divided equally among all the heirs, or should the caregiver receive a larger share? You will answer that question based on your values.
If the matriarch chooses to give some relatives a higher percentage inheritance, it would be prudent for her to make a video explaining that while she was of sound mind, she made the choice independently, carefully, and with the full understanding that equal is not always fair and fair is not always equal. Because she valued the family’s ongoing success and harmony, the video should outline her logic and explain some of the reasons. Such a video would stop or dissipate suspicion that someone had used undue influence when she was medically or mentally impaired.
Professional comes from the Roman idea of “professo” to promise. Before an apprentice could learn powerful information like pharmacy, medicine, or law, the learner had to promise, to professo, that the secret knowledge would only be used for the client’s or patient’s good, and not primarily for the learned person’s disproportionate benefit. Modern fiduciary responsibility is the obligation of putting the client or patient’s interest ahead of the learned servant’s interest.
We hate unscrupulous experts. They violate an almost sacred trust. We expect professionals to guide others to make better choices. Society despises people who claim to be professional but see clients as walking wallets.
The sage ladies interviewed me to determine if I passed the sniff test. Our time was for them to determine whether any or all of them could trust me. They gauged whether I had the special knowledge and experience to help them. More importantly, they appreciated that my questions focused on their best interest, what mattered to them and the people they cared about.
What’s your experience? How do you decide whether a professional advisor is right for you?
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.“