Do you know where your next client is coming from? Do you need more ideas or more prospects? Would you like more time, more money, more fun? If the answer is “I want all of those! I want more time, I want more money, and I want more fun,” then you need to become experts in communication — the art of questioning, answering objectives and collaboration. First and foremost, I think communication in the art of questioning is the thing that you really need to get a handle on.
You have to learn how to turn compelling statements and/or observations into questions. Asking questions assists in building rapport, gaining confidence and collecting more and better data. Questions, for instance, about estate tax or asset protection: “Have you analyzed which asset to distribute at what time and in what order to increase the value to your children?” “Do you think that estate planning is all about taxes? Because I will suggest to you that it’s not. Estate planning is getting the right asset to the right person at the right time and the right amount.” It is philosophical conversations. It is charitable conversations. It is finding out that they have got one child who is on drugs, and they don’t want to leave that child a lot of money. It is finding out that a daughter might very well be getting ready to marry a tennis bum, and he thinks they are going to end up divorced. It is really important to get in between the lines, not just on the lines. “After you’re gone, will your children talk to each other?” We have all seen situations where families fall apart because Mom and Dad didn’t take into account what was important to the kids. “It took a lifetime to build your estate; doesn’t it make sense to take a few moments to preserve it?”
“Equal” and “fair” are not necessarily the same thing. For instance, how do you divide a car or a business into thirds? It’s not necessarily the same asset. It might be that I give a house over here and a portion of the business over here and a car over there and assets and money and securities, but not the same asset because all people don’t have the same ability to be able to handle their money, and all people are not financially responsible. So, the structure on which the assets are left to them is also extremely important.
Do you know how much liquid capital you are going to need to be able to retire and maintain your after-tax lifestyle indexed for inflation? We call it your “critical capital mass.” You can have your own words for it, but really it means having enough saved money so that when you draw down on principle and interest, there will be enough money to go long past your life expectancy, after taxes, indexed for inflation. Are you on track for that number, or do you have a deficit? If you have a deficit, what are you doing about it? Which mistake would you rather make: having too much money or having too little money? If we make a mistake as planners, I would prefer my client ends up with too much money, and I’m sure you would as well.
How are you going to pay off the mortgage on your retirement assets? They’ll say, “Mortgage? What mortgage? I have my retirement assets.” It’s called the Internal Revenue Service or the state taxing authority. There is a tax that is going to come out of those assets before you ever get a chance to spend it. Which is more important to you: the return on your money or the return of your money?
How much money would you take out of your business if you didn’t have to pay the tax on it and your CPA agreed? What’s your exit strategy for your retirement plan assets on your business? What is your strategy for exiting your business? How would you like to be in business with your partner’s widow, her attorneys, her children, their attorneys, her new husband, his children and their attorneys? That is what the lack of a buy-sell agreement leaves the family — the ability to be able to work with people whom they don’t even know. Did you know that if the business capital can’t be used just to absorb the tax that the tax may very well absorb the business?
Here are some general questions: “Isn’t it better to have it and not need it than to need it and not have it?” “Why do you think you’re here?” I start every single client meeting by asking them why they are here. I don’t know what they know. They might say, “I don’t know. My CPA told me we have to meet.” They might say, “Well, we’ve got a problem where we’re getting sued.” They might say, “We’re here for estate planning or income tax planning or tax reduction.” But I want to know what they are thinking about before I start my presentation. “What does the estate or income tax planning mean to you?”
It’s interesting. We read books, we attend seminars, we listen to CDs, but we don’t necessarily know what the client is listening to. So, it is important for us to understand and uncover what estate and income tax planning means to them. “What have you accomplished so far with regard to your income or estate tax planning?” “What do you like or dislike about what you’ve been doing?” “If we were sitting here one year from today, what would have had to have happened during those 12 months for you to look back and be happy that we met?” “If you don’t do this, what will you do?”
Simon Singer, CAP, CFP, is a 36-year MDRT member with 33 Top of the Table honors. Singer is the founder of The Advisor Consulting Group, a firm designed to provide financial and estate planning assistance to clients of high-end CPA and law firms. These firms specialize in executive/owner compensation and zero estate tax planning for wealthy individuals and closely-held businesses.
