Pregame Warm-Up
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Read This Before You Read This Book

If this book is in your hands, you are probably thinking about putting together a Living Trust, which is the primary tool in the United States for the transfer of your assets after the deaths of both you and your spouse to your children, grandchildren, or other heirs. Or perhaps you already have your Living Trust, which has collected dust on your bookshelf or in your safe-deposit box, and you somehow have been prompted into revisiting it.

For a combined 70 years, my late father, teacher, and mentor, Gerald Condon, and I set up thousands of Living Trusts for our clients. After all those years of advising clients on their inheritance instructions, I am left with this one conclusion: You really don't know much about the Living Trust . . . or how it works . . . or what it should say or do . . . even if you have one!

Actually, perhaps that assessment is too broad to be of practical use. I do tend to speak in sweeping generalizations. Let me be more specific by lumping you into one of four categories of Living Trust clients:

1. You do not have a Living Trust, and you don't really know much about the Living Trust other than it is some kind of inheritance document.
2. You already have a Living Trust, but you have no real or meaningful understanding of what it is or how it works beyond the basic function of transferring your assets to your children after your death without probate. In other words, you just signed it where your attorney told you to sign, threw it into your car, and have not thought about it since.
3. You have a Living Trust and you initially made a real and earnest effort to decipher its form and function. But many years have passed since you established it, and all you really recall is (a) you have a Living Trust and (b) it contains your inheritance instructions.
4. You have a Living Trust, and you refused to sign it until your lawyer explained every single paragraph and provision to your satisfaction. If you are such a person, I say to you: Your kind is so rare that you qualify as an urban legend.

Whether you are a Living Trust rookie or veteran, welcome to this revised edition of The Living Trust Advisor, and congratulations on dealing with the often unpleasant task of facing your mortality!

Now, for you readers who are in the financial planning and advising profession, I also extend my heartiest welcome. At first blush, you may say to yourself, "Self, why do you need an education in the nuts and bolts of the Living Trust? You're not a lawyer. Your job description is to make as much money for your clients as safely possible. If your clients have any estate planning needs, you'll simply advise them to see an estate planning attorney. Have a nice day, Self!"

That's what I used to think as well. You financial people come up with a plan to make your clients money, and I'll come up with a plan to leave your clients' money to their children, grandchildren, and other heirs. And never the twain shall meet.

Let me tell you how I learned otherwise with the tale of the comeuppance that I received from a 300-plus group of your colleagues. It wasn't pretty. But if it wasn't for that experience, I would never have come to know about the importance of the financial advisor in my professional life.

About 10 years ago, I was invited to speak on "The Right Way and the Wrong Way of Leaving Money to Your Children (& Others)" before a national conference of the Financial Planning Association (FPA) in Colorado Springs. I gave this talk at a few previous regional FPA conferences (including Providence, Rhode Island, where I met an FPA member named . . . Jeff Condon. What are the odds?). I assume I was a big enough hit at those prior gigs to justify the FPA paying my speaking fee and travel expenses for the national gathering. Using baseball parlance, it was like going from the minor leagues to the Show.

When I am introduced at my talks, my "credits" never fail to strike a chord with the attendees. Although there are numerous estate planning attorneys with more impressive professional credentials than mine, none can claim that they wrote the best-selling inheritance-related book in American publishing history that the Wall Street Journal called the "best estate planning book in America" . . . or can say they have appeared on dozens of well-known television, radio, and Internet shows and outlets. As the conference's program coordinator ran through my accomplishments, I heard the usual mutters of "Wow!" "Really?" "Impressive." "Gee." "This should be good." Before I uttered word one, I had won over the 300 or so attendees-and I knew for certain that my presentation would leave them entertained and edified.

Yes, I was all full of myself. But that feeling was relatively short-lived.

After the (yet another successful) presentation, a standing microphone was placed on the floor near the dais for those who wanted to ask questions. The line quickly formed and snaked to the ballroom entrance. I believe it was the fourth person in line who asked me this: "Mr. Condon. I just want to say that was a terrific talk, and I learned a lot. Can you tell me how you use the financial planner in your practice?"

And this was my exact word-for-word response: "Ummm . . . I . . . uhhh . . . I don't really use the financial planner at all. Why would I?"

Have you ever had the experience of being ostracized by a large gathering of people? You don't want it. It's the initial silence of incredulousness. Then the sounds of notebooks shutting, chairs backing away, barely disguised mutterings, and feet walking in a direction other than yours. The sight of faces who were moments before enraptured, now revealing disdain and disgust. The sudden feeling of warm sweat permeating throughout the body. I take great pride in making a great impression on my audience. Not just good, but great. But now I was doing the polar opposite.

This was one of those times when the truth-that bringing the financial planner into the estate planning process had never before crossed my mind-was not the best response. The financial planner helps the client make money; the estate planning lawyer helps the client transfer that money to their children, grandchildren, and other heirs. Two separate worlds. And I assumed that financial planners believed likewise. But at that nightmarish moment-where I undid in 3 seconds the goodwill I had established in the previous 90 minutes with my inadvertent diminishment of the entire financial planning industry-I discovered that such an assumption was erroneous.

There was no pulling up from this nosedive. The program ended with the en masse walkout. As I was about to trudge from the dais, the program coordinator stood in front of me, put his hands on my shoulders, and said, "Jeff, I can see you are about to go into a deep funk. But try to hear me. Instead of castigating you, I think they should be thanking you. You woke us up to the fact that your industry is totally in the dark about what we do and how we can be of service. What you said about not needing us-that should be our rallying cry to find ways to explain to you why and how you need us. Not as a reason to get out the tar and feathers."

Those words talked me off the ledge. But more important, they were the impetus for my awakening to the fact that the financial planner is integral to the estate-planning process. While the estate-planning lawyer rarely sees or communicates with his Living Trust clients, you, the financial planner, are on the front line of your clients' lives. You are in touch with them at least every few months with calls, statements, emails, and invitations to seminars. You make, at least, annual inquires about their financial health and status, which, typically, beget a discussion of their latest family goings-on. Births of grandchildren. Graduations. Deaths. Children's employment status. What's going on with the "problem" child. As part of that discussion, you invariably bring up their estate planning-because you recognize that a sound plan to leave their wealth after death is just as important as the investment strategy that creates that wealth.

So you ask the usual questions about your clients' estate plan. Do they have one? If so, is it a Living Trust or a will? Was it prepared by an attorney? How old is it? When did they last have it reviewed? Does it speak to any of their current family dynamics and circumstances? And after this brief discussion, you advise them to see an attorney, which, most likely, will not be an easy sell. Why? Because your clients, like most people, are not accustomed to seeing lawyers. Most people go through almost their entire lives without anything "legal" happening to them. No divorces, arrests, lawsuits, or entity formations. Or, if your clients have had previous brushes with lawyers, those experiences may have been less than pleasant. Well, whether your clients go willingly or reluctantly, you, the financial planner, must strongly advise them to see an estate planning attorney about establishing or amending their Living Trust.

Is that it? Do I think you are just the shill for the estate planning attorney? Absolutely not. You are part of the estate...