Read The Transcript Here:

Steven Jarvis, CPA (00:51)
Hello, everyone, and welcome to the next episode of the Retirement Tax Services Podcast Financial Professionals Edition. I’m your host, Steven Jarvis, CPA. And this week, we get to have a fun conversation about the intersection of those things that are inevitable, death and taxes. Joining me to share some expertise on the death side of things is Mike Bennett, co-founder of Encore Estates. Mike, welcome.

Mike Bennet (01:13)
Yeah, thank you for having me. Definitely looking forward to this.

Steven Jarvis, CPA (01:16)
Yeah, estate planning and tax planning definitely get lumped in together, and for some of our listeners, this might seem obvious, but so listen to it from the standpoint of how you should articulate this to your clients. Mike, with the estate tax exemptions being so ridiculously high, why should most people care about this conversation even if they don’t have $26 million?

Mike Bennet (01: 36)
Well, I like to think that there’s three things we need to know to do a perfect estate plan or tax plan. Number one, when are going to die? Number two, what are the tax laws going to be in the year that you die? And number three, what are your assets going to be when you die? I don’t care who you are. We’re batting 0 for 3 on those things. And so it’s good knowledge to have, think, just in general. And I really do feel like that it’s, yeah, it may not be an issue today, but who’s to say that it won’t be for any one of your clients?

Steven Jarvis, CPA (02:02)
Yeah, that’s a great way to look at it. Before I keep getting nerdy and go deeper on some of those questions, Mike, give us just a little bit of your background so listeners know where you’re coming from on this topic.

Mike Bennet (02:12)
Yeah, so I call myself a recovering estate planning attorney. I’m not a practicing attorney, but I was for quite a while. I graduated from law school in 2005, and I’ve done nothing but estate planning since then. It was… I didn’t realize how great it was to find something I loved at an early age and just go with it. And so it’s been really, really fun to go from impacting hundreds of families a year to now with Encore impacting thousands of families each year with estate planning.

Steven Jarvis, CPA (02:38)
Well, Mike, with your background, maybe talk about that difference a little bit a, why is this estate planning conversation so often intertwined with financial planning? Like, why aren’t you just off on your own as an estate planning attorney? Why doesn’t that world just live on its own versus trying to get intermingled with financial planning like it does so often?

Mike Bennet (02:54)
Well, yeah, so when I was in private practice, I mean, other than my existing clients, financial planners were my number one referral source. And then CPAs were after that. And so the best relationships that I had in practice were when the accountant, financial planner, and myself were working together. And so whether it was doing something at the financial advisor’s office, all for the benefit of the client. And so when you have all three of those, I guess, legs of the stool working together, it’s an incredible outcome for the client. so seeing that in action just locally, it was awesome. But being able to do something like that, where I’m working with financial advisors nationwide for the benefit of their clients, it’s incredible to see all that. So just having that intersection, I think, is truly important to come at it from two different angles.

Steven Jarvis, CPA (03:43)
Completely agreed. You know, being on the tax side of things, I love being able to focus just on the tax piece, but I know that the clients I work with have somebody who is looking at their broader financial picture. Because even though I’m the tax guy, I tell people all the time taxes aren’t the primary reason we do things. We want to be tax efficient, but we got to make good life decisions first. Mike, as you talk about that dynamic of these three professionals ideally working together, I know that a hesitation for financial advisors at times both in the tax lane and the estate planning lane is, I want to make sure I don’t go too far. Like, I don’t want to get in trouble. I don’t want to be giving legal advice. I don’t want to be giving tax advice. And so I’ve definitely seen situations where this doesn’t work well because the advisor doesn’t get deep enough. And they just say, hey, go talk to your CPA. Hey, go talk to your attorney. And that doesn’t facilitate really a great outcome. So what have you seen make a difference on really positive dynamics in that relationship versus just kind of sort of getting by?

Mike Bennett (04:34)
So I think a lot of it comes down to humility. I think that it shows a great deal of confidence to say, I don’t know. And when you’re working together, truly working together as a team, I think it’s okay to say, Hey, I don’t know, this is Steven’s lane. Like, let’s get his input on this. He’s gonna know more about this stuff than I do. But I think there’s a lot of attorneys out there, a lot of CPAs and a lot of financial planners, I think that they’re afraid to say, don’t know. They feel like they need to be the smartest person in the room. And, you know, yeah, everyone wants to be, I guess, but I think it’s okay to just know that when you’re the client and you see these three individuals potentially working together for you, that it’s, they’re all gonna have their varying levels of expertise on different things. Like, I’m not gonna sit there and tell them how to do their taxes. I’m not gonna sit there and tell them what to invest in. Like, that’s just not what I know.

Steven Jarvis, CPA (05:21)
Well, Mike, for my experience, I’d to hear your thoughts. I like how you tie that to humility that that really resonates. And for me, in practice, I think that that really often looks like the better you understand the client’s actual goals and the outcomes needed to create those goals, the easier it is not to get focused on, what do I do to make myself feel like the smartest person in the room? It’s what do I do to best help that client accomplish their goal? Because if I’m laser focused on here’s the outcome this client really needs, then I don’t care so much about whether I provided it, I just want to get them to the finish line they’re expecting. Does that resonate at all with you?

Mike Bennett (05:52)
Yeah, no, I love that. what I equate it to in my world is, you know, now that I’m doing software, okay, there’s certain level of people that will definitely benefit from using a software, and then there’s others should never use something like a software. They should be going down and sitting knee to knee with their local estate planning attorney. They just should. And some people are going to require that level of service and getting them to that right level of service. That’s what resonates with me. And that may be a solution like ours or there’s a chance that it’s not, and that’s okay.

Steven Jarvis, CPA (06:22)
Yeah, regardless of the service that a person’s providing that that last piece you said in there of hey, this might we might not be the right fit. Like we all have to really embrace that idea. We are, regardless of what we’re doing, whether it’s me on taxes or you on a state plan or financial advisor on all the things they do. Like if you can’t accept that you’re not the perfect solution for every person, you’ve got other issues you need to sort out. Like that’s just not how the world works. You can’t be the you can’t be the answer to everyone. Mike, let’s circle back here for just a second. I kind of went over it really quickly, but I want to talk for just a minute about how do we help advisors have the confidence to get involved in topics like taxes and estate planning without that fear of, okay, I went too far now I’m giving legal advice.

Mike Bennett (07:00)
Yeah, and so I like to describe it as being descriptive versus prescriptive. You can give as much information as you want. You can be descriptive. But as soon as you start saying, okay, wow, this is your situation. This is what you need. And you’re prescribing a path. That’s when you start crossing into advice. And so I think it’s very important to know those lines and ultimately, when in doubt, refer it out. If you’re not sure on how far you should go, don’t do it. Maybe that’s a little bit too vague, give as much information as you want, but just don’t tell them what they need to do.

Steven Jarvis, CPA (07:33)
Yeah, I like that distinction of being descriptive versus prescriptive, because that also gives us kind of a spectrum that we can operate on. Hey, if we’re new to tax or estate planning, that descriptive portion might be a lot less than maybe it will be in a couple of years as you get more reps in here. Having that line at some point where you say, to really be confident that this makes sense in your situation, we need to tag in that expert. I like that line there of win and doubt, refer it out. The other one that I always share is don’t don’t abdicate, collaborate because the other thing that we see in on the tax side of things is advisors that they’ll use the, go ask your CPA as a cop out. And if you’re saying, Hey, go ask your CPA and you’re not being involved, if you’re not collaborating in that conversation, you really haven’t helped. I mean, you’ve covered your own butt for compliance purposes, but you haven’t helped your client. If instead you say, like back to your descriptive versus prescriptive, if it’s, hey, to really get us to the finish line, we need to tag in a professional, and here’s how I’m gonna help facilitate that conversation. Now you’re adding value to a client, whether that’s directly with a live professional that’s using tools, whatever that is, you’ve still gotta take responsibility for how that gets across the finish line.

Mike Bennet (08:41)
Yeah, you’re pulling across and I love that. And you’re getting more information for yourself as well to just make you better for that next client.

Steven Jarvis, CPA (08:48)
Yeah. Mike, are some common things that you’re seeing as advisors work with clients as far as common mistakes that they help avoid or the most frequent value adds in that estate planning world? Because it is this huge broad spectrum of the variety of things that can fall under estate planning. So maybe give us a couple of things that most advisors should at least be aware of and be able to do a good job on that descriptive side of things.

Mike Bennett (09:12)
I mean, the easy one is just getting it done. Mean, no matter what survey you read or anything like that, it’s somewhere between, you know, one third to 40% of people have actually done this. And so there’s just getting it done is great. And I think one of the things that when someone does have it done is making sure everything lines up. And so making sure those beneficiary designations are correct, making sure on your retirement accounts and life insurance and making sure the assets are actually in the trust. So making sure that everything is actually working together. Those are quick wins for advisors. If you know that your client has a trust, but you have a brokerage account where their trust isn’t the owner or at least a beneficiary of that account, there’s a gap there. And that’s a quick win for advisors on that. And so I think that there’s a lot of…Yeah, just making sure that those things are actually working together. I think that’s a huge, huge one in addition to getting it done.

Steven Jarvis, CPA (10:03)
Yeah, a couple of thoughts come to mind as you describe that one. I recently did an in-person event with your co-founder, Matt Morris, and he brought these coasters that say, it on it. I’m sure he showed you these before. And it’s a round coaster that says, to it. And I like dad jokes that this one took me way too long to comprehend, because he said it probably six or seven times before. was like, it’s around to it, and you need to get around to it, talking about estate planning, getting everybody to get it done. So that one will forever stick in my brain, but I like how you’re talking about, hey, we gotta make sure that what we put on paper actually got executed, all these things line up. I’ve heard advisors talk about it before, and it made a lot of sense to me that we can’t just end up with a big stack of estate planning documents. We’ve gotta then make sure, like, was this what we wanted? When we sat down to do this estate plan and we had this idea of how our kids were gonna end up with the money or when they would get it or which charities would get it. There’s all of these details that go into it. We end up with this giant stack of documents, but did that actually accomplish what we want it to? So a great reminder there to make sure that all the hard work we’re putting in is accomplishing the goals we set out with.

Commercial (11:08)
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Mike Bennett (11:47)
Yeah, I like to equate it to a safe. You built this safe, now put something in it. And that’s the safest. There’s nothing in it, it’s not guarding anything. I mean, yeah, there was always backup documents to make sure that things get in there after death. But again, if I could boil a state plan down to one word, that word is control. We’re controlling who gets it, how they get it, who makes financial decisions, who makes health care decisions, and who’s the guardian of minor kids. And so revisiting those things and making sure that those are the actual decisions you want is just so, so significant. And again, a huge win for an advisor when you’re building that relationship.

Steven Jarvis, CPA (12:18)
Wait, so you’re telling me that estate planning comes down to control and not taxes? Taxes aren’t the main reason to do estate planning? Is that what you’re saying?

Mike Bennett (12:26)
Well, it’s control over taxes too. So there’s our tie-in.

Steven Jarvis, CPA (12:29)
No, I really appreciate that. That’s the way you summarize. I mean, you clearly do this all the time. It’s easy to get misaligned with what we’re really trying to accomplish here. And I don’t like paying taxes either. I like to help people pay only what they absolutely have to. But there’s so many topics. Estate planning is certainly one of them. Where taxes are not the primary reason we make decisions. As our estates get larger, there can be planning that we do to make sure that we don’t get hit with unnecessary taxes. But I like that, boiling it down to whether it’s control of taxes or any other elements you mentioned in there, that control is really the goal, not strictly tax avoidance.

Mike Bennett (13:02)
Yeah, but again, like control. You get to control your taxes too to some degree on this. So that’s, love it.

Steven Jarvis, CPA (13:08)
Yeah. So Mike, talk a little bit more about, you mentioned before that with what you’re doing at Encore States that essentially you’ve created a software solution for, to help advisors with a state plan. But talk about where that balance is of what can a software tool do versus we still need humans involved because we run into this on the tax planning, tax preparation side as well that I think it can be easy, especially with so much talk around AI these days, to think that software replaces people? And I don’t think that’s what you guys are advocating for either. Like, what’s that balance?

Mike Bennet (13:38)
So when we built what we built, we felt like that there was two distinct options. There was the completely go do it yourself. All these things have their place. And then on the end of the spectrum, have go, you’re sitting down with the traditional local attorney relationship. And so we’ve tried to take the efficiencies of software and build a human element. On the front end, the human element is the financial advisor, and we’re the human element on the backend, helping through these things. Trying to marry those two things up to say, okay, yeah, there’s a certain segment of state plans where people don’t know what they don’t know. So they don’t want to just go rely on a software, but they also don’t want the time expense, the angst of going and meeting with a local attorney. And so trying to bring those two things together and say, okay, yeah, let’s take these software efficiencies, have the attorney that’s there that drafted the documents or drafted the templates, but only bringing the attorney as needed. And so, and it goes back to one of the things we were talking about earlier with getting them to the right level of service. So this should just be one of the arrows in the quiver. You should always have your local attorney relationships. Anybody who’s advocating for, no, don’t ever use an attorney, I think that’s a mistake. And you’ve got to have that arrow too.

Steven Jarvis, CPA (14:45)
Yeah, that makes so much sense to me. I mean, like, again, like we said before, if you think you’re the answer for everyone, like you’re missing something, like nothing’s going to be a perfect solution in every situation. And it’s the same with I’m a huge fan of software. I can’t, thankfully, I’m not quite old enough to have ever needed to do a tax return with pen and paper. But I mean, the software has come a long way and I hope the software goes a lot further. I mean, I want. I want to use tools in a way, you mentioned efficiency, I love software especially for that. How do we leverage tools to allow us as professionals to focus on the part that really is our highest and best use, the part that we truly have to do ourselves as opposed to outsourcing? And tools can help us do so much more for clients. If wee, going back to the descriptive versus prescriptive, like, we still have to understand, we have to have the knowledge base to use these tools effectively.

Mike Bennett (15:35)
Yeah, no, absolutely. And again, I think that there is a little bit of a learning curve with some of these things. mean, particularly something like estate planning. I mean, it’s a big area. And so we try to do what we can to help support advisors on that to really just know that they’re not flying on their own on this stuff, that they’ve got us there to catch them if they need it.

Steven Jarvis, CPA (15:56)
Mike, let’s talk a little bit about how advisors can improve that knowledge base in a particular area like estate planning. On the tax side, when I meet advisors who haven’t done any tax planning before, I literally just tell them, hey, you need to start by picking up tax returns. And then I kind of build with them from there of, let’s see where your experience is and how we keep moving this forward. Because I’m convinced that no matter where you’re at on your tax knowledge, there’s always more that we could be doing. There’s ways we can keep learning. The tax laws change, all that sort of thing. And so how does that work on the estate planning side? I mean, how do you help advisors identify? Here’s how I keep improving my knowledge?

Mike Bennett (16:29)
Yeah, and I mean, you’re going to start with some of the basic stuff, obviously. just the, I guess, the state planning 101, if you will. And we’ve tried to create a knowledge base, a whole separate academy. We have required trainings that our advisors have to go to before they can even submit a plan to us, because we feel that strongly in the training aspects of it. But then as you get more more reps, you’re going to get more and more complex with those things. So mean, I’m a big fan of continuing education. I mean, we have a continuing education class that we offer to advisors just on beneficiary designations and retitling and how to do it on qualified accounts and those types of things where it’s, mean, there’s just these landmines there that you have to navigate to make sure that you’re doing the best job for your client.Never stop learning, I guess. That’s so generic to say that, but that’s true. I mean, If you truly want to help the client that much, then grab a book. Or maybe that’s a little dated, that’s, yeah.

Steven Jarvis, CPA (17:22)
Download the audio book. I like that you mentioned in there getting the reps in. I’m such a huge fan of hands-on learning. There’s a ton of valuable information that can come from these different educational resources that you guys put out that we put out on tax planning. But at end of the day, no matter how smart of a person you’re learning from, until you get your hands on the thing and get the reps in, your learning can only go so fast and can only be so practical, would love to hear from you, Mike. I know that my my biggest learning moments have always been from like actual client work, like the being in this situation, having to identify how this particular situation is different and nuanced and complex and and navigating through it like those those reps are so critical.

Mike Bennett (17:58)
Yeah, mean in undergrad I was at UC Santa Barbara and I got a business econ degree with an emphasis in accounting. And so, okay, there was a lot of theory involved. And you’re like, well, okay, did that really help me? Like, okay, I guess. And then law school, taught me a lot about the law, but nothing about dealing with a client. And you know what, I learned more in my first six months out of law school about dealing with people than I did in seven years of schooling. It’s super, super important to get those reps where you’re boots on the ground doing those things. I mean, that’s truly the only way to learn. And I was fortunate enough to get good training where the first two years, I never did an estate plan as an estate planning attorney. I was only working on the trust administration side after people died and the trust and probate administration. So I saw all the things that go wrong for the first two years out of law school. And then I shifted over, you know, they’re like, no, this is intentional as part of your training. Now let’s shift over to the planning portion. You’ve seen what can go wrong. Now what do we do about it in advance? How do we take this proactive, proactive way of doing things? And it’s it was some of the best training. Like I was so yeah, just grateful to have that level of training.

Steven Jarvis, CPA (19:08)
It’s interesting. Nobody really wants to be part of having to correct mistakes, but you learn a ton from it when you’re in those situations. So yeah, there’s definitely a lot of value in seeing what goes wrong. And then I appreciate your emphasis on or, you know, kind of focus on, well, I’d rather be involved in the proactive side. Given the choice, like I learned a lot from the mistakes that I got to see, I would rather proactively help avoid these. Then, you also mentioned in there, and I think it’s a really great reminder as we talk about these things, both tax and estate planning. At the end of the day, the client interaction piece, the client communication piece, that’s where we can add so much value, whether a financial advisor, CPA, a state planning attorney, that’s the piece that AI is not coming for anytime soon. Creating that client experience, that communication, those are things that, again, also come from getting the reps in. You don’t learn that strictly from a book, but that’s where so much value can come from. Mike, share a little bit with the audience here about how they can learn more about Encore Estates. For anybody who’s looking for resources on helping with an estate planning piece that aren’t just estate planning attorneys themselves, where should they go, what should they do?

Mike Bennett (20:10)
Yeah, so on encorestateplans.com, one of the big differences, I love it right now that it has never been easier to get a high-quality estate plan done. You know, with the boom of estate planning software that’s out there, you know, we’re definitely a player in that market. One thing that we try to do is to be very accessible. We don’t charge to have an account. There’s no mandatory subscription. So advisors that are tired of being subscribed to death, you don’t need to worry about that. You know, we get paid when you do plans. And because of that, truly, we try to be more of a partner than a vendor in that regard, where we don’t get paid unless you do plans. So we’re doing everything we can to help you get that confidence to do plans.

Steven Jarvis, CPA (20:44)
So encorestateplans.com. Mike, we talked about it earlier, so I’m gonna put you on the spot too. Who are you not a good fit for? Because we just talked about how we shouldn’t trust anybody who thinks they’re a fit for everyone. So I’m just gonna put you on the spot. Who are you not a good fit for, Mike?

Mike Bennett (20:57)
So number one, we’re not doing any irrevocable trusts. You can do a revocable trust where you leave things to your kids, you know, at various stages and those types of things, but we’re not doing standalone irrevocable trust today. We might do some basic ones here in the future. We’re also not a fit for someone who’s disinheriting kids. It’s not that we can’t do those types of plans. It’s that the likelihood of litigation on something like that just skyrockets. And so we have a series of disqualification questions at the front, and that’s one of them right there, as disinherited kids. And again, it’s not that we can’t do them, but ultimately, if someone gets sued when these documents are coming into play, anyone who touched it is going to get sued. Now that’s not very comforting to hear as a financial advisor if you’re going to be diving into this world, but so will we. And it’s not that we’re not going to, we know we’re going to win, and we’ve never had it happen, but why even have the time to do that stuff? So, and I said it once before, but when in doubt, refer it out. And so if you’re not sure, but that’s also where our support team comes in, we can help you through those and we’re not afraid to tell someone, get rid of it. Send it to your local attorney.

Steven Jarvis, CPA (22:02)
I love that you have focused on what you’re best at. We do the same thing, but I have found it interesting. I’ll meet financial advisors who have a super-narrow niche of who they serve. Like they’ve identified, here’s who I work best with: employees from this particular company, people in this particular region, whatever it might be. But they’ve identified a really narrow niche, and then they come to me and are disappointed that I don’t do all the taxes for all the people in all the world. Like they can niche, but for some reason I can’t. And it’s just, sometimes I’ll point it out to them, they’ll realize that disconnect. But I appreciate that you’ve focused so narrowly on here’s what we do best, because that’s really who I want to work with somebody who’s an expert in the problem I need to solve.

Mike Bennett (22:36)
No, I love it. And with the number of reps that we’ve gotten on this stuff, there’s still stuff that we haven’t seen ever before that happens to us every day. But it’s amazing how often we can see the same patterns repeating themselves. It’s very intriguing, the information, the data that we collect, that we keep internal. But it’s incredible to see, like with charitable giving, with how people leave things to their minor kids. It’s really cool to see, some of the same themes repeating themselves and it becomes very predictable at times.

Steven Jarvis, CPA (23:05)
Well, Mike, I definitely really appreciate your time to come on and talk about a topic like this. mean, death and taxes go together, I mean, so easily because they’re both inevitable. know, everybody who makes money is gonna pay taxes. I can’t remember who said it first, but I love the kind of the mental framework of everyone has an estate plan. It’s just that most of us haven’t documented it. it’s back to whether it was it on purpose or not. Like something will happen, to the things we own and the things that are important to us when we die, it’s did we intentionally prepare for it. So love being able to have these conversations. So Mike, thanks for coming on show. I really appreciate your time.

Mike Bennett (23:36)
Of course, no, I love talking about this stuff. It’s dedicated my career to it. So it’s something where I truly do enjoy it. So thank you for having me.

Steven Jarvis, CPA (23:34)
And for everyone listening, mean, just like we talk about so often, I mean, really what counts here is taking action. So make sure you’re getting those reps in, whether it’s on tax planning, estate planning, taking the time to make sure you have good resources and good partners, and then making sure you’re getting your hands on real documents to get real reps. So until next time, good luck out there, and remember to tip your server, not the IRS.