Atticus' co-founder and Head of Industry, Dave Coffaro, was recently a guest on author Kathleen Burns Kingsbury's podcast, Breaking Money Silence. Breaking Money Silence tackles the financial conversations that most folks are reluctant to have, and in the 97th episode Coffaro breaks down an issue that's becoming more common everyday — A growing number of millennials are being named as executors of estates, and are mostly unaware of the responsibilities it entails.
I've been asked to be an executor of a will. Now what?
As millennials age, they will be asked to serve as executors of wills and help settle their parents’ and loved ones’ estates. But what does that really entail and what types of questions should ask before accepting this honor? In this podcast, I interview Dave Coffaro, an experienced banking executive and co-founder of Atticus, an app to aid in estate planning settlement. Listen in as I share my personal experience with estate planning conversations and learn why Dave is so passionate about helping people, especially millennials, break money silence around this taboo topic.
Intro
Dave Coffaro:
If you take all topics related to money, they're generally uncomfortable, and I would say this is probably one of the most uncomfortable situations because you're talking about death too.
Podcast MC:
Does talking about your money make you cringe? Are you tired of fighting about finances? Do you want to stop sabotaging your financial happiness? Then you are in the right place.
Welcome to 'Breaking Money Silence,' a podcast series aimed at helping all of us talk more openly about money.
Podcast MC:
Your host, Kathleen Burns Kingsbury is a wealth psychology expert who is doing what she does best speaking about taboo topics. International speaker, author and founder of KBK Wealth Connection.
Kathleen understands money and our relationship with it. Over the past decade, she has empowered thousands of people to break money silence at home and at work. Now, here is Kathleen.
Welcome
Kathleen Burns Kingsbury:
Today, I want to welcome Dave Coffaro to the Breaking Money Silence podcast ... Dave is a strategic advisor, executive coach, keynote speaker and author. His latest book is, “Leading From Where You Are: Seven Themes to Make a Meaningful Impact in Your Work.” He is the principal of Strategic Advising Consulting Group, where he helped serve or work with businesses to define design and deliver their vision.
And if that isn't enough, he does more than that; he is also the co-founder of Atticus, a fintech firm providing individuals and professional advisors with easy to use, do-it-yourself products for fiduciary based activities like trust and estate settlement. Wow! Welcome Dave - welcome to the 'Breaking the Silence' podcast.
Dave Coffaro:
I'm so glad to be here with you and to see you. I love talking to you every month, but it's great to get to see you.
Kathleen Burns Kingsbury:
Yeah, I know it's really nice with our little Zoom call today. And so today we decided to talk about something that actually is in a weird way, near and dear to my heart. And I know it's a passion of yours. We've decided to talk about millennials and estate planning. So I want to just set up the conversation with a recent thing that happened in my life about maybe a couple of months ago.
So one of the things that my husband and I decided to do was certainly write our will awhile back and to be able to set up a trust. And because we don't have any children, we decided to name one of our nephews as the executor and the nephew happens to be a millennial.
So it was really interesting to me when you and I started talking about maybe the differences or the fact that millennials will start being asked to be executors of wills. And what does that mean?
So just overall, why are you passionate about this topic of estate planning and educating people, but especially millennials about it?
Dave Coffaro:
Well, it really links to your overall theme of Breaking Money Silence. This is a dimension of money. We're talking about someone's financial life. When you do a will, if you do a trust, and then you ask somebody to be the executor, you're really talking about a chapter in their financial life. I would say this is probably one of the most uncomfortable situations because you're talking about death.
For millennials in particular, though, over the next 10 or 15 years, they will be the group that gets the most requests to serve as an executor. So it's important to start getting comfortable with that kind of conversation today. That's part of the reason I'm so interested in the topic. But I'll add one more thing to it:
For a long time, I ran a large investment and trust division of a bank. And as I watched what happened in the estate part, estate settlement part and I saw how incredible the need was, I did everything I could to expand that group, and I found that one of the most important parts of the work that they did was helping to facilitate the conversations. And so there's such demand for the conversations. So overall, I think it fits under the umbrella of 'Breaking Money Silence.'
Kathleen Burns Kingsbury:
Absolutely. And you're right, when we talk about this wealth transfer and people inheriting money, it also, unfortunately, usually means that there's a death.
And so it struck me when I asked my nephew to serve, that he was honored, but I don't think he fully knew what he signed up for.
So if somebody is listening in and goes, oh, I was recently asked or maybe I know I'm going to be asked or I might be asked, you know, what do people have to know about serving as somebody's executor and helping them settle their estate?
Dave Coffaro:
There's a ton to that. It's really an important topic to delve into. And so, I think the starting point is to really understand what's involved with estate settlement.
And that starts with what is the estate? And the estate really is just the aggregation of all somebody has and all that they owe. So their assets and their liabilities all together.
And I look at estate settlement as sort of bringing a close to the last chapter of someone's financial life. And so the actual process involves three things. The first thing is inventorying someone's assets. So what do they have and what's the value of those assets?
The second part of it is paying off anything that's out. So any outstanding debts, any taxes that are due, anything like that, and then finally transferring whatever is left to the next generation of owners that can be family members. It can be someone else, it can be to charity, but it's that transition part of it.
So if you've been asked to serve, the good news is somebody trusted you enough to ask you to serve. But it's really important, like in your nephew's case or any of our cases, that if you're asked that, you understand there's sort of another part to it, too.
There's a lot of work involved. And the bigger the estate, the more complex it is, the more work. So it's not uncommon for a fairly simple estate to last a year, to take a year to settle. And there's a lot of work that goes around that.
But understand what you're signing up for then. Also, along with that, if somebody doesn't have a will. They're going to have to go through the probate process. Now, folks may be familiar with it, but it's a court ordered process. The court facilitates it. What the court does is they will appoint someone to be the executor and they will appoint a trust in the state attorney to work through the process and then they monitor the progress.
There are some challenges with that. First of all, you've got a court running the process. You're not doing it yourself. But second of all, it's public. Anything that's done in probate is for the whole world to see. So you can bypass that through proper planning. And this is important for people who are thinking about planning.
Now, if you put your assets in a trust, a trust will help you transition those assets without having to go through probate.
It also saves money. So the process of settling an estate does have expenses on average for a smaller estate. It can be like fifteen thousand dollars. It varies by city and parts of the country.
But if you have a trust, you can bypass some of that. So that's something good to think about. So I don't know if that scared you or would scare your nephew, but those are some of the things that sort of come to mind when somebody honors you with asking you to serve.
Kathleen Burns Kingsbury:
Right. So I'm channeling the people who may be listening that hear that and go, wow, that's a lot. I'm honored. But can I say 'no?' Can I be like, 'thank you, but no thank you.' What might that conversation look like?
Dave Coffaro:
You can say 'no,' as it's like any invitation — it's an invitation. It's important to be mindful, and then having the conversation, you can just say,
look, there's a lot to this. I don't feel comfortable. I feel like it's outside of my comfort zone. And I think it'd be better for you to ask someone who might be better prepared to navigate this.
What's most important is that you know what you're committing to before you commit to it.
Kathleen Burns Kingsbury:
I think that's a great way of thinking about it. One of the things that we've done with our executor, my nephew, is we frame the conversation as, 'we would like you to do this,' ask any questions and feel free to say 'no.'
And there are many other dialogues. We're in the midst of having these dialogues. But you know, I'm not planning on going anywhere anytime soon, but I'm trying to practice what I preach and have these conversations.
And so it is not only a nice way to teach him about money and about estate planning eventually for his own life.
It's also led to some really interesting conversations. So in your opinion, what are the conversations you should be having when you're named executor, and who should you be having them with? And I know that's a big question. So just tell us where to start.
Dave Coffaro:
Well, the first thing is having a conversation with the person who asked you to serve about some of the situational factors, such as understanding,
is this a larger estate ($1-$2 million)? That's an important factor. Are there a lot of different types of assets that are part of the estate? Is it simple like a few bank accounts and some personal possessions, or are there real estate assets and collectibles and art and things like that? The bigger it is, the more complex.
And you need to understand that. Another thing to ask is,
who are the beneficiaries and how do they get along with the person that created the will? Is there a good relationship between them?
Another important dynamic. And then, how did the beneficiaries get along with each other? If they don't get along well today, chances are that if they stand to inherit money, it's not going to get better. So it's really important to go through that.
Then also asking, are there other variables that could add complexity to this? For example, common that you might have somebody who's been through multiple marriages ,and having children through these multiple marriages, that adds a layer of complexity.
Maybe there are outstanding legal issues that you'd want to know about, or outstanding tax issues or just unusual family dynamics. I heard a friend of mine settled an estate in the Phoenix area, and the fellow who created this will had four kids from two marriages. Well, they didn't get along very well, but one of his desires during his lifetime and beyond was to find a way to bring the kids together.
So one of the assets that he left to them was a Ferrari, and it was a valuable collectible Ferrari. And so each of these kids got one fourth of the value of the Ferrari. And he gave each of them a document that told them where the car was located. But the funny thing was each of them had a different location. So what they found was he had disassembled the car.
When he was alive he stored pieces in these storage units — a wheel, a fender, engine. Somebody else got a front wheel and got headlights or whatever. So his purpose was, after I'm gone, this is the way you're going to come together, whether you like it or not. Because the only value you're going to have in this thing is if you put it together and then you can sell it if you want.
But understanding the concept is the real headline here — that there's kind of two parts to an estate settlement. There's the operational work — all the duties you have to do — and then there's the all the other stuff, and it's all the other stuff that can pull you down a rabbit hole. So just sort of have a good understanding of what you would be committing to, and have that conversation with the person who's creating the will.
Kathleen Burns Kingsbury:
I love that story about the Ferrari. I mean, I could see that both working and really blowing up. But as we know, I really deal with more of the emotional side of it, not the technical side. What I think is interesting, and also there's an opportunity here, is that it's usually not the technical side that's the problem. IF a family fails to pass on their wealth, it's usually the family dynamics, lack of conversation or understanding.
And, you know, one of the things that I think is tricky when you give us that list of things that we need to be talking about is I want people to know they don't need to have that conversation all at once — this can be over a period of time.
And also, I don't think that they're alone. So if somebody is listening in and says, OK, whether I'm a millennial or not, I've been asked to do this, and I now realize how complex it could potentially get or the work that's involved. So they're probably thinking, is there someone out there who can help me with this? So what do you say? Are there places where people can get help so they don't have to go through this alone?
Dave Coffaro:
Yes, there are certainly places.
You hit on something that's the most important thing, though, Kathleen, and that is the emotional side of it. And it's because you're combining somebody who is either passed away or is talking about passing away with financial reality, and that combination together is like turbo charged.
So you've got to be really, really mindful as you think about it. Getting comfortable with those conversations is important. You can certainly talk to an attorney. Other family advisers are valuable, but there are other resources, too. There's some really good books on the topic.
One of the books that I think is helpful is, “Estate and Trust Administration for Dummies.” Very simple, but it kind of walks through the fundamentals. What you need to know. There's another one that I like that's called, “How to Settle an Estate.” And a very good kind of guide on the principles that you need to keep in mind.
Kathleen Burns Kingsbury: Great!
One of the things that I'm excited about, though, Dave, is that you, along with your co-founder, have developed the Atticus app, which really helps somebody who either doesn't want to hire a bunch of professionals, and maybe doesn't need to.
And so it really kind of walks them through this process. And so tell us a little bit about Atticus, which is what the app is called and how it can be useful. And then I'll share kind of what my experience has been playing around with it a little bit.
Dave Coffaro:
Ok, good. So there is a space where for larger estates there are some great options. If the estate is above $2 million, for instance, there are a lot of banks that will settle the estate for you, and for the family member. Trust companies tend to do that for the rest of estates, which is like 98% of the estates in our country.
There really aren't a lot of good step-by-step approaches. So we created Atticus, and we designed this app for folks who are more comfortable in a digital environment who like an app based approach. It's a step-by-step app that walks you through everything you need to know and everything you need to do in order to work through a state settlement.
So it helps you, whether it's at the very beginning, saying what are the things you have to be aware of, and plan for as you work through this? Or, for instance, one of the most important steps, and I mentioned this at the beginning, is inventorying assets.
We've got a tool in the app that helps you pull in financial assets. So bank accounts, investments, things like that. But you can also go through and use your phone to inventory assets in the house. So you snap a picture of the piano, you snap a picture of the silverware, you snap a picture of any of those, upload into your file, and then you've got all of that together so that as you walk through the process, once you're done, it's all together.
You can share information with the beneficiaries. When it comes time to wrap things up, you can produce reports that you can just hand to an attorney. You do need an attorney to help you close out the estate, but you hand them the reports. The attorneys are really happy about that because they got everything they need. They don't have to go get these fifty-seven things. You've got them and you hand them to them.
We’ll walk you through how to capture everything and then give you the reports that you need. But there's some other things too that are helpful. For instance,
there's compensation for being an executor.
It can be set either with an agreement with whoever created the will and you as the executor. It can be set by the court or each state in the country has a maximum fee that you can charge.
So, for instance, in California, where I live, on the first $100 thousand in value, you can charge 4%. The next hundred, I think it's three. So for $800 thousand, it goes down to 2%, and then the next $9 million is like 1%. So you can go by the state rule because we have all of that in Atticus, you don't have to look it up.
The app will guide you and say, OK, you're settling this estate, it's the state of Massachusetts. Here's what the maximum allowable rate is so that you know that. And there's a bunch of other things that will guide you with key knowledge, and key information to help you work through the process.
Kathleen Burns Kingsbury:
I thought it was really neat, so I did a quick demo. I actually have been named as an executor of an estate. I also certainly sat by my dad's side as he settled my mom's estate, and I have a little bit of familiarity with it without this app.
So when I did the demo on the app, it was really interesting. And what I loved about it is that it felt like somebody was talking to me that was almost like a friendly adviser and asked some questions. So I downloaded it, and it organized everything.
It asked who died, what my relationship was like with that person and it even asked if the beneficiaries got along. And so it was really interesting to kind of go through the initial process and look at how easy it would be to kind of take one screen, one question at a time, especially when you're grieving, and when you're overwhelmed.
And I did notice the pictures and the inventory piece as well. So my question is, if you click on the app that the beneficiaries don't get along, what does the app do for you? I would love for it to magically just adjust and it make it OK. Everybody's talking about money and getting along, but we all know it doesn't work that way. So that's version 2.0.
Dave Coffaro:
Exactly.
Kathleen Burns Kingsbury:
I'll invest in that. Yeah.
Dave Coffaro:
So what we provide are if you have challenges here, here are some ideas for you. And in fact, we've got a lot of content that helps support the questions that you saw, with everything from how do I do whatever the task is, to ultimate guides.
In fact, one of the things that's available, and all of your listeners can access that our team put a lot of time in putting together, is what I think is a fantastic guide. It's called, “What to do when a loved one passes,” the definitive checklist.
If you go to our website, which is www.weareatticus.com, you can get this checklist for free and it walks you through many things you need to think about, and it gets into the people side of it, you know, we're classified as a fin-tech company. But I like to say we're a FAM-tech company, because our job is to help connect families across generations and make it easier for them to engage. This isn't something that's a distraction for them.
Kathleen Burns Kingsbury: Yeah, I really thought that part was neat, and I look forward to exploring it more. And thank you for giving people that address so they can check out that resource.
You know, time goes so fast on this podcast, and I feel like I may have more questions for you on this topic as well. As I know, we always have really interesting conversations. So if someone listening in wants to find out more about you, Dave, in your work, in addition to Atticus, where can they find you?
Dave Coffaro:
My website is DaveCoffaro.com. It's got all of my background and articles and videos and things like that, and glad to share any of it.
Kathleen Burns Kingsbury:
And I also feel kind of touched because my father's been talking about estate planning ever since I was very young, and it ultimately has been helpful in my career and Breaking Money Silence, and then to have a code on an app that's about estate planning with my initials. I know it sounds kind of corny, but I'm very touched by that. And, you know, as always, Dave, it's been so great to break money silence with you. And I know that the conversation will continue.
Dave Coffaro:
Beautiful. Kathleen, thank you so much. Great to see you. Have a great day.
Podcast MC:
Thank you for listening to Breaking Money Silence hosted by Kathleen Burns Kingsbury, a wealth psychology expert, author and founder of CWB Wealth Connection.
Podcast MC:
If you like what you heard today, be sure to subscribe on iTunes or your favorite podcast app and leave a review. Also show this episode with your friends and family.
Podcast MC:
It is a great way to get the conversation started for more money, talk tips and information, or to hire Kathleen to speak at your next event, go to: www.BreakingmoneySilence.com.
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