Lindsay Pazdan: Essential Trust and Estate Planning Advice | Next Gen

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I think as you enter the wealth management industry, you feel the need to be a salesperson, and I'm not, and that's okay.

Welcome to Barron's Advisor: The Way Forward Next Generation, a special series spotlighting the emerging leaders shaping the future of financial advice. Twice a month, we'll be digging into the strategies, insights, and game-changing moves that will help you take your practice to the next level.

I'm your host, Allison Tucci, and today with me is Lindsey Paston, a Morgan Stanley Wealth Advisor, and we're going to be talking about trusts and estates and what you can do as a financial advisor to really hone your skills. Welcome to the podcast, Lindsey.

Thanks for having me.

Thanks for coming. So we're just going to jump right into it. Trusts and estates is something that has been, you know, more and more the forefront of the news. Can you help break down the difference between trusts and estate planning? Because a lot of folks commingle the two.

Yeah. So when you think of estate planning, that is your general overall plan for the future. Okay. But trusts, and that is part of your will, you could have healthcare proxies that would be part of that as well. And trusts are part of it, but that's part of your overall estate plan, which is really your direction of of where do your assets go upon death. And so within wealth management, we really focus on making sure our clients have the right vehicles in place and that we're working with their attorneys and getting really a good understanding of their overall wealth plan, including their estate plan and including the trust. A lot of time people have these established, but they're not executing them or funding trusts accordingly.

How do you think about estate planning in the wider financial orientation of your clients?

There's a lot of questions we can ask to start, either start the conversation for clients and, you know, how do you formulate your estate plan? What does it look like? There's a lot of questions sometimes that people don't know to ask. So I think during discovery, especially during the financial planning process, during discovery, you can really identify a lot, right, with clients they accumulate wealth, but there is a disconnect at times between the wealth that they've created and their understanding of what that purpose is. What does it all mean? And when you start to put that into motion and they start to grasp this understanding of why, why do they have all this? You know, what does it all mean? Then it starts to go into deeper conversations of, Okay, now how do you execute this with the estate planner? So for example, maybe there is a, you know, a special needs trust needed. There, maybe there's a kid that has special needs in the family or a niece or nephew. And so that's when you start going, okay, let's work with your estate planner and make sure we're properly funding something.

A lot of families now in the U.S. don't look like the quote unquote traditional family of the 1950s. So how do you approach, you know, blended families or families with, you know, multiple different dependents or special needs to your point? How do you go through that discovery process and then have that conversation with the team?

Yes, this is hands down, I think one of the best parts of our job is that you start this conversation. And when I think about financial planning, It is not, we are not just looking for data, right? We are looking for emotions, relationships. This is laying the foundation and this is how we start with prospects before they become clients is gaining an understanding of who they are, who matters to them, who's important. You know, when you get that outline, you can start asking questions of how are your assets titled? "Do you have children?" Or, "Who's important? Who's part of your family?" And you oftentimes will hear the answer of, "Well, from my first marriage, you know, we have, I have children from my first marriage." Well, that takes you down a whole new path when it comes to financial planning, right? Because there's a lot of questions associated with that of how are those children accounted for? What's the relationship like? And so once you start to color in this picture of what matters to a client and who they have relationships with, that's when you start to weave in, well, what does the estate plan look like? And then is what they're saying to me, is that actually being reflected in the plan or is that actually being reflected in those trust documents that they have? And I'm a huge fan of, Making sure, you know, especially as a younger advisor, that you ask those questions. And it can be really uncomfortable. I just think as the younger advisor, you want to show that you bring value, right? You want to show that you have a place in the room and that at times you're a little, you're nervous to ask the questions because you don't want to not have the answers. And it's okay because it's okay not to always have the answers, but to at least ask the question. And if they come back with another question that you're not really, you know, you're not really sure of, it's a great opportunity for you to then connect with their estate planner, connect with their attorney, have a conversation, start to get to know that attorney and understand why it is certain things are in place. And I think those relationships are so critical for us as advisors because everyone's lives are so complicated.

It sounds like you have to bring families in, blended families in. You have to bring sometimes, you know, making sure that folks are able to understand what they're being inherited. And there also could be concerns for children who may be spending more than the adults think that they should be expending for. How do you handle some of these more typical difficult conversations?

Yeah, as you say this, my mind lights up with vivid thoughts on specific client examples because everything you just said happens in real life. There are difficult family dynamics and often working together, and I'm gonna kind of break this one down. Next gen, super important. How do you get the next gen involved, especially when it comes to more of the dynasty trusts, right? These trusts that are going to go generation to generation. How do you get the next gen involved? How do they become really good stewards of this wealth, right? How do they also grasp what this all means? And working with the attorney Often you just have conversations of, okay, what is the next gen now? Is there a way to jump into this? Is the foundation established? Is philanthropy, charitable giving involved? And it's almost that put your heads together and think of, have the clients taken this on? And that collaboration it's helpful because it sets you up for the next meeting. We tend to meet with more complicated families. We've had meetings before with the attorneys as well, the estate attorneys.

So you bring them into the actual meeting? Yeah. I'm assuming you prep in advance so that you know each other's role in the meeting.

Yes, and that's where that collaboration comes in.

That's fantastic.

Right? An understanding of how do we help this family transition wealth. And is what they're asking for, is it all accounted for in the documents? And that's special because you actually feel like you are, you're making headway and you're also, again, you're setting up this next gen to be prepared because with money comes responsibility and there's a lot of responsibility. And sometimes that pressure is daunting. It sounds funny to think of that, but it is. And you see it in clients. And so, A, from an advisor perspective with the next gen, we try to get in there early, right after college, and have conversations about what they've created on their own, right? Their 401(k)s, purchasing a home. How do they use trusts that have been allocated for them? Also putting really a purpose and a passion and a reason behind the money. Money means nothing if there's no purpose to it, if there's no thoughts behind it. It's really important to do that. And once they do, you also start having a conversation on charitable intent, right? Is there a charitable intent? That seems to really engage the next gen and it starts to build them for the bigger conversation of, from a long-term estate planning, you know, also an inheritance someday. It starts to set that framework so they're more comfortable when you get to that collaborative conversation with the attorney on transitioning wealth or getting the next gen involved.

So let's talk about that then. Yeah. So you have the background of working with attorneys coming from an RIA. Any tips or tricks working with them? I think a lot of advisors, you know, they want to build that relationship. Are unsure of how to do so. And I know most attorneys have some characteristics that are more similar than other professions. I'd love for you to uncouple that.

Yeah, I think attorneys are fantastic. I am completely biased, but I really appreciate— they are looking for facts. They traditionally, the attorneys we work with, are— they want to know what's the circumstances. And how can we approach it? Estate planning attorneys often like to collaborate. They've put a lot of time and effort into the plan and also into getting to know the client. And if we can work together, if we can say, I had this conversation and did you incorporate this into the plan? Or they can do the same vice versa and say, have all these been titled correctly? You know, we can collaborate together and really do what's in the best interest for the client. Attorneys in general, we— they're— it's wonderful that they do like the facts, right? They want it straightforward. They don't— if you don't have an answer, that's okay. Get back to them. You just tell the truth always, which we should always do anyway, but you tell them, you know, I know this, or I don't know this, or This is what I think the answer is, but I need to confirm that and I'm going to get back to you. And that is how you build trust with an attorney.

You're listening to Barron's Advisor, The Way Forward: Next Generation. We're going to take a short break. Stay with us.

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Welcome back to Barron's Advisor: The Way Forward, Next Generation. Let's get back into the conversation.

What are your thoughts for how often you update the estate? Are there specific triggers that potentially say, okay, me as an advisor now have to ask these questions and relook at the documents? How do you think through that?

Financial plans, I think we look at annually because life changes. The trust and estate, it is, it's often these financial planning reviews where We ask questions such as, I'm thinking through a recent client situation where they really care about funding children's education or grandchildren's education. And it just came up in conversation of, well, how are you actually going to fund it? And a conversation that we brought the attorney into, how is this reflected in here? How are they going to fund the grandchildren's education?

Are they going to liquidate something?

Yeah.

Exactly.

Or if something was to happen to them tomorrow, Is this accounted for? Is there, is it, is it reflected in these docs? Does it make sense for them to either do a 529? Does it make sense to have this specific line in the trust? Is it already in the trust and I just don't know it's there? I might not even have the most updated trust doc, but just having that conversation all stemmed from an annual financial planning update. And these are clients that when you think through financial planning, I think the general public tends to think, oh, well, that's, you know, the $10 million and above clients. They don't need that. Or the ultra-high net worth clients, they don't need that. But it's just a good framework for everyone to just understand what clients' actual, what their strategy is, what their actual, all their assets look like, how they're going to flow through together. So it tends to be, you know, look at the estate plan. When the kids graduate college, yeah, you're honestly, you're likely going to have a change in estate plan. It's a good time to refresh. Every 5 to 10 years, it's a good time to look everything over or to connect with your attorney. Often these conversations with your financial advisor leads to those conversations of, is this reflected? Or has something changed?

And how do you, you know, broach the topic of a check-in? Let's say you have a client who's like, Lindsay, I don't need to talk to you, I'm actually good, set it and forget it, call me in a year. What would you say to that client in terms of— especially if they're in their mid-30s, right, or in their 40s, and you know there's a lot of changes happening— how would you convince them just to answer your phone call?

Yeah, it's a great question because it is a constant struggle on that one at times to get a response, but I've found it's really about documenting it. Often, I mean, I know myself, I am busy at home. The second I leave work, I have kids, I have a life, I, you know, try to make it to tennis every once in a while if I can, but we all have other activities and are pulled in 100 different directions. And our clients are too. And so sometimes if you just put it in writing, right? You put it in writing and you said, that's, I completely understand. I know you're busy. Here's just a few things I was thinking of that I just wanted to put the idea out there and I'll check in with you in a few months, but if there's a time that you want to talk about these things, please let me know. And again, bullet points. Actually, I probably haven't mentioned this yet. Bullet points. Everyone loves a good bullet point. We don't need to write these huge, long paragraphs. I love that. Make it simple. Make it— I always flip myself. Digestible. Yeah. Put yourself always on the other side of the table. If somebody was sending this to you, how would you want to read it? I would want the highlighted words bold, right? Give me 5 bolded words. And I'm like, oh, action items. I can do those. Write me a page and a half. I'm not interested.

You're just going to go to the next email.

Yeah, next email. And so with clients that are busy, it is so important to meet them at where they're at, right? Don't overwhelm. Don't inundate. Set a few simple topics that are important, and your clients read them.

In terms of, you know, looking back at where you are today and things that you wish you would have known. So we get a time machine. What would you wish you would have known a couple of years ago?

I think I've seemed to have done it all on a great track with the most amazing business partner I could ever imagine, right? And I have always been a relationship different person. I am not a salesperson. It just isn't in my nature. And it is something I have learned over the years is I think as you enter the wealth management industry, you feel the need to be a salesperson. And I'm not. And that's okay. And it's something, it's taken years and it's probably age too, but it's taken some time to adjust to the fact that it's okay that I'm not a salesperson. I'm me. And I can incorporate things into a conversation in my own way that feels natural. And it's so important to be natural because when we are ourselves, we do what is best for the client, right? We are working in the client's best interest and we don't have to be or don't need to feel that pressure to be the salesperson. It's like the world in general, right? You always are trying to be the best at anything you're doing. Or I guess that's a Type A personality. But, you know, it's— we're always trying there's always somebody who's better or greater or bigger or doing more. Yeah. But it doesn't matter. What matters is, are you doing the right thing? Are you being you? Are you comfortable in your own skin? Are you comfortable every day at work? Are you happy?

Mm-hmm.

Like, that is what I would probably look back and tell myself is everything is gonna work out. Change happens around us all the time. And it's okay. You just have to persevere and, you know, just really stay focused on the clients and be comfortable and be your authentic self.

In wrapping up this podcast, I'd love to kind of pick your brain if there are any sort of best practices or tips and tricks you'd want to leave our listeners with, with either trust and estates or working with the next gen? We covered a lot of topics here today.

There are two. One is with the next gen, it's important to consider what the parents' feelings are, what their investment preferences are. But don't take the parents' investment preferences and throw a blanket on the kids and think that that's what they're interested in as well, because it's not often the same.

Right?

They're going to have their own. You have to treat them like their own separate client and know that those are clients that are going to grow. And over time, they will be your biggest clients. So use that opportunity to really cultivate a great relationship with the next-gen now. And the second part of this is really nothing we've covered so far, actually. But, you know, as we were talking about a great business partner, I think it's so important for any upcoming advisor to sit down and listen to other advisors who are more senior to you and to ask them questions. And you might have completely different investment philosophies or completely different types of clients, but you are always going to learn something that's really meaningful and something that they've learned over time that, you know, you haven't just experienced yet. And it will all, you know, It comes back to you. Everything you hear, you know, if in every conversation you take one thing out of it, it was successful.

Well, thank you, Lindsay. This has been a fantastic conversation, and I really appreciate your time today.

Thank you.

The production team for Barron's Advisor: The Way Forward: Next Generation is Ellie Ismailidou, Rebecca Bisdale, Paul LeBlanc, Kinga Rojek, Joseph Lesby, and Alexis Moore. Melissa Haggerty is the executive producer. Jenna Mathis is the Director of Programming for Barron's Advisor Programs. Greg Bartolus is the Editor-in-Chief of Barron's Wealth and Asset Management Group. We'll be back soon with another episode. Thanks for listening.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.