Anyone Can Inherit the House. The Lucky Few Inherit the Wisdom, Direction, and Values That Made the House Possible.

Healthy, Wealthy and Wise Podcast, August 5th, 2023

Patrick Johnson, CFP featuring Catherine Hammond

The Healthy Wealthy and Wise Podcast with Patrick Johnson featuring Catherine Hammond brings together forty-three years of experience in estate planning and financial planning. You’d be wise to listen to this podcast to understand how these two industry leaders are thinking about aging, estate planning, families, and living your best life in retirement.

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In this episode, Catherine tells a favorite story of George Washington’s legacy to his nephews. He left them each a sword used by soldiers in the Revolutionary War. But he didn’t just give them. He stated that they were only ever to be used in self-defense or in defense of the country and its rights.

With this potentially dangerous gift, George provides direction, principles and values. This is the “Why” behind the asset. Without the “Why”, an estate plan and all the financial preparation that go into it are nothing more than lines on an asset spreadsheet. Anyone can inherit a house. The lucky few inherit the wisdom, direction and values that made living in that house possible. That’s the real legacy.

Defining Estate Planning

Here are a few excerpts from the podcast:

Patrick: “How do you define Estate Planning?”

Catherine: “Most people think of estate planning as a will and a trust. Maybe if they’re savvy, they’re going to think about a power of attorney and medical directives. All of those are important. But that is not an estate plan. That’s a part of an estate plan. That’s a reflection of part of the estate plan. The estate plan is the holistic design of a plan that will take you where you want to go in those moments if you become incapacitated and when you die.

So, it incorporates legal documents as part of how it’s carried out. But it also incorporates a look at all of your assets. It incorporates a look at what succession looks like to you, especially if you’re a business owner. And most importantly, it incorporates your values and your relationships. Most people end up drafting and signing estate planning documents that simply make a transfer of assets to the next generation.

So yes, your bank accounts, your retirement accounts go to the next generation, that’s lovely. But it happens most of the time in a vacuum, without really thinking through how do I make this truly a gift? How do we create an opportunity for the next generation rather than just handing them a check for money so that they don’t have to work? And let’s say the average client has maybe a $2 million estate, somewhere between two and 5 million is probably our average client.

We have a lot of clients with more money than that. A lot of clients have less money than that. And in that spot, most people think, you know, if I die, and I leave $1 million to each of my two kids, it’s not going to ruin them. If that’s, you know, enough money to make a minor difference. And that’s all good without thinking it through. What do they want that money to actually do in the next generation’s lives? And how? Because it’s all related to legacy.”

Gifting More Than Just Money Through Values-Based Estate Planning

Patrick: “…Do you find that people are ready to go there? Or do you find that when they come in, they just want the thing that says trust at the top?”

Catherine: “My goal when anybody comes in to meet with me is to find out what’s really important to them. And so people come in thinking about all of the tactical things, and it seems like money is often the doorway into what’s really important to them.

And I just led a workshop for our clients last week on relationships and enhancing your relationships with your adult children, because when we open the money door at my conference room table talking about how to transfer wealth to the next generation, people tell me their stories.

And they tell me their stories of the estrangement with their children and grandchildren. They tell me the stories of what they’ve said to their children and grandchildren. And I get to see that what they really want has nothing to do with the money. It has to do with those relationships. It has to do with feeling loved, having the experience of being loved and mattering.”

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