How To Avoid Mistakes In The Greatest Wealth Transfer In History

Video Transcript

Ray Hrdlicka – Host – Attorneys.Media

Hi, this is Ray Hrdlicka, host of Attorneys.Media – “In The News” segment.

Today we’re talking with Andrew Dósa, an estate planning attorney in Tacoma, Washington and Alameda County, California.

And I want to bring up something that’s been in the news a heck of a lot lately, articles all over the place, and that is about the, as to use the phrase that everybody is using, the greatest wealth transfer in the history of America is about to take place.

And what they’re saying is that from the baby boomer generation down to their beneficiaries, it’s just beginning at this time.

So obviously it’s a great time to be an estate planning attorney.

So, let’s ask, and I wanted to ask this question with that knowledge in mind that, you know, there are so many different news organizations talking about this great wealth transfer, Andrew.

What are the cautionary statements, cautionary questions that you can provide to the listener here about this greatest wealth transfer and what they can do to make sure they don’t make mistakes in that greatest wealth transfer.

Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA

Well, thank you, Ray.

I appreciate that you’ve invited me to come and participate in a conversation with you.

I will begin by saying it is a little ironic that I, now a baby boomer, am experiencing the great wealth transfer from my parents.  And here’s how it played out.

So, my dad passed in 2010, meaning that everything he had went to my mom.  And so now my mom at the age of 93 is really not in a position where she’s best kept and safest when she’s lived alone.  Now she was doing really well.  She’d stomp up and down the stairs.  Her bedroom was upstairs.  She lived downstairs.

And she did pretty well, except that going back about a couple years ago, she just started having a couple falls.

Mostly she’d fall on the carpet or something like that, or she’d fall and lose her balance and she’d hold on and occasionally she’d get into trouble, or she had some vertigo.

So, my sister, in the soft and subtle way that she approached it, basically came to mom and said, so mom, would you like to fall down the stairs and really hurt yourself before we have a good conversation about where you ought to be?

So, with that bluntness, my mom really just said, yeah, I know, it’s time for me to make a change.  So, my sister has taken to my mom, and I’m grateful for that.  My sister chose to retire, and it worked out that it gives her a little bit of freedom.  And her home is big enough so that mom has her place and can live alone with her independence.  And so she knows where the food is.  Sometimes they’ll join them for dinner and all those things.

But she’s really in a place that’s really convenient for her and safe.  And she has her alone time, and she has her little sort of a, so to say.

What I’m going through is exactly what we’re going to talk about today, and that is for those who have baby boomer parents and the parents are passing away or moving, now they have all this property.  A lot of it’s real estate, but mostly it’s just a ton of personal property, a lot of personal property.  And boomers, you know, have raised children in a new generation.

And there’s a second and a third generation after that.  And there’s, in a sense, a less materialistic inclination for these generations after the boomers.

Not that the boomers are necessarily materialistic, but, you know, if they were raised in the Great Depression, the idea was, oh, don’t throw that away.  I can use that.  So, there was not a hoarding mentality, but a fear of letting go of something that could be useful.  It was a necessity.

So, what happens when you have all those things that baby boomers collected over the years, whether it was a little bit of art that was valuable but not spectacularly valuable, or it was furniture, it was a larger house, it was all the things that were there.

And so, what does the generation after the boomers do with all?

So, a lot of the reports are about something that says, well, these boomers are giving all this stuff to their kids and they’re giving their children a headache, which I think frames the issue in the wrong way.  It’s not boomers that are causing headaches to their children.

It’s their children that don’t see the value of all those things that the boomers have.

The next generation doesn’t care too much about china, doesn’t care too much about glassware, doesn’t care too much about stuff around the house that makes for a presentation.

The next generation is going to IKEA and buying something, and it may last for five years and then you throw it out and you start over again.

So, the idea of the durability of goods is not as prevalent or as significant to them as it is to boomers, which is not a commentary on them as seeing things lesser.

It’s just that their worlds, their lives, didn’t really require the embracing of, we’ll buy really great furniture, we’ll never have to replace it.  It just was a different world.

I’ll just offer this and say, it’s really unfortunate when the next generation is not grateful that their parents are giving all those things to them.  All they have to say is, I don’t need this.  I’ll give it away.  You know, you can always give to the Salvation Army, which is one of my favorite charities.

Or you can give to Goodwill or other organizations like that, and they will sell them to people and then raise the money or use the money for the public benefits that they’re doing with the services they provide.  It seems to me that it’s not a terrible imposition on you if you have to give that away, if you choose not to use it.

But it’s like your parents going, I have a lot of things I’d love for you to be blessed by them, and you go, I just don’t need that.  Your parents are probably not going to be really insulted in a sense, because they really want you just to have what is helpful to you.

So it seems to me a small problem to have, to have all this personal property that you’re trying to deal with.  And the reason why I get that is I started the story talking about mom moving.

We had a house that was filled with beautiful things that they collected while we lived in Germany many, many years when dad was in the military.

Both of them immigrants into America, and they valued a lot of the beautiful things that they saw.  So my house was like a museum.  Beautiful, beautiful things.  And the sad thing is, Ray, I have no space for so much of those beautiful things.  And look, mom had three sets of china.  All of them really pretty nice, not highest end, but just really good quality and valuable enough for the use for them.  Now they’re not valuable at all.  No one wants to spend hundreds of dollars for a china set.

Because heck, you just go down to Goodwill, you get five side dishes, and if they match, you don’t care.  They kind of fit.

So my sister and I and my kids and her kids have way more stuff than we can use.  And I have possession overload.  And I’m willing to say, I’m willing to say no to stuff and not have them.  But my apartment’s just a bit more cluttered by some of those things.

So that was before my mom was sharing with me.

Ray Hrdlicka – Host – Attorneys.Media

So, are you finding that your clients are experiencing the same issue that you are with this, you know, just passing along stuff, for lack of a better phrase, you know, rather than, let’s say, assets, tangible assets, personal property?  Is that a common problem?

Andrew Dósa – Estate Planning Attorney – Tacoma WA and Oakland, CA

Here’s how it works out.  None of them have expressed, well, that’s not true.

I’ve had three or four of them, the husband or wife, or the husband or the wife, or, you know, the single parent now, saying, I’m pretty sure my kids aren’t going to want all this stuff.  But I’d rather just give it to them so that if they can use it, they can.  If they want to give it away to their friends, they can.  If they want to try and sell it and get a little bit of money, they can.  If they want to just give it away, they can.

But I have something that can be a blessing for them.  If it gains, gives them a gain, I’m happy about it.  None of them are apologetic that they collected all those things because they collected them because they needed them and used them.

Right.

So, it seems that people are aware of it, but none of them are really losing sleep over it, which I think is entirely appropriate.

The next generation should be just grateful they had parents that did well enough.  And if it’s a little inconvenient to give away things, well, give it away to people that are benefiting from it.  That just seems the easiest answer rather than thinking it’s a big problem deal.

Look, there’s a solution to having too much property.  Sell it or give it away.  It doesn’t seem like a terrible burden to have more than you need.  It’s a blessing.  And I think being grateful for that kind of blessing is, it seems to be thankful.

It seems to me being thankful for all that would be better than just thinking it’s a terrible imposition that you have to give away something that you don’t need.  Right.

Right.  Does that make sense?

Ray Hrdlicka – Host – Attorneys.Media

It does, it does.  Well, we’re at the beginning of this, the boomer generation.  You and I are at the tail end of the boomer generation, which is what, 20 years?

Is there a 20 year time period?  I can’t remember.

It’s going to go on for quite some time. As an estate planning attorney, obviously you’re going to be involved with this for a long time.

So, thank you for showing up today, and I appreciate our conversation.  We’ll have you out again.