“You will have a family meeting. You’ll have the meeting either at the coffee table with your family, or it will be held without you at your coffin.” Russ Crosson, Exec VP and Chief Mission Officer, Blue Trust.
Is your will gathering dust on a shelf? Is it outdated? Maybe you haven’t even started the process of a will and / or an estate plan? As a Christ follower, we’re called to be stewards of all God’s blessings throughout our years on earth.
Your estate plan, your will, and your plan for the succession of your business can give you a platform to point to Him when you have intentional conversations that communicate your values, your faith, and give glory to God.
Join Russ Crosson and Greg Leith on the Convene podcast as they discuss family meetings, estate plans, succession, philanthropy, and think (in advance) about the question, “How did you do with what God gave you?”
To learn more about Russ Crosson and Blue Trust, head to:
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Watch the episode here
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Who Walks With You As You Manage Your Estate? With Russ Crosson
I am super excited to have you with us, Russ. You have been in this business for a long time. The Executive Vice President at Ron Blue Trust. Chief Mission Officer, hired in 1980, the second employee of Ron Blue himself. You’ve worked in financial planning, in estate planning, philanthropy, and generational wealth transfer, and I love that you’re currently advocating for the heart and soul and mission of the organization to make sure it’s passed down to the next generation. You’ve written four books. Your Life Well Spent, The Truth About Money Lies, What Makes a Leader Great, and Your Money Made Simple. I’m excited because I think some people that are reading are going to change course because of what they read. Welcome to the show.
Greg, thanks for having me. I really have enjoyed getting to know you over the last few years and appreciate what you’re doing at Convene and look forward to sharing with your constituency.
Estate Planning: Process, Not Product
We’re going to talk about three things, estate planning, succession planning, and philanthropy. Why don’t we start with estate planning? You and I have spoken with hundreds of business owners. Some are doing well with their estate planning, some are not. What are some of the pitfalls you’ve seen that cause people to stumble and as people are reading, what could they do to change course if they find themselves not in a good spot?
I’m going to give the readers two P words. The mistake we find is that people forget that estate planning is a process, not a product. Many people get their wills done, and many people reading this may have wills and think, “I’m done.” Unfortunately, what they’ve overlooked, and many times with their own detriment, is the fact that their business has changed, their family’s changed. Circumstances have changed. The biggest mistake I see that people make is they’ve probably hopefully have wills, but then they put them on the shelf and think, “I’m done.”
People forget that estate planning is a process, not a product. Share on XUnfortunately, to whom much has been given much is required. The more you have success in your business, and the more your family matures, the more you need to go back and re-look at it. I was just with a longtime client, 35-year business owner client, and we had his wills redone here, and we sat there at the table and he had them signed and he is using some trust now where he wasn’t before because of some marriage issues with these kids.
You and I had another guy come in and his wills were 30 years old, and some of the people in the will were already dead. They weren’t even able to fulfill their function. They only had 2 of his 4 kids. I think the biggest thing is realize that it’s a process and that if God chooses to bless you in your business, you’ve got to revisit this every now and then. As your kids move through their teen years and whatnot, that’d be the biggest thing. Don’t think that you’re done. That’s the mistake people make.
One guy told me one time, “I have wills, but they may even be lost.” That was his comment to me. He was worth multiple millions of dollars. Unfortunately, people sometimes think, “If I deal with this, I’m going to die. I don’t want to really talk about this.” As I said to him, he who much have been given, much is required. Unfortunately, you have to engage in it.”
I’ll say one other thing right there. There’s a phrase we like to say with our clients. To the degree there’s wealth, if there’s not intentional communication about the wealth, it’s tantamount to withholding affection. What that means is you’re going to have a family meeting at some point to discuss your estate. The question is whether or not you’re going to be there. You either have the meeting around the coffin or around the coffee table.
I had my third family meeting with my family and I explained my 40-year financial history, my 40-year spiritual history. One of the daughter-in-laws came up and said, “That was really good to learn that. We wish you had write that down.” I think that people reading should realize that it’s not just these documents, but you’re able to pass on values and communicate to your children and grandchildren and point them to God.
You didn’t just get where you got overnight. You took risks, you did things, you leveraged your house to start the business or whatever. Your kids and grandkids need to hear these stories. That’s part of the estate planning process. You’re getting your wills done, but then communicating that to your kids. I was at a family meeting in Florida one time. One of the grandkids went up to the granddad and said, “I’m really glad you shared that. We didn’t think you ever worked.”
If you think about it, you grew up in this family and you maybe have some wealth and you don’t realize the hard times that mom and dad and grandma and grandpa might have gone through to get there. I think it’s a process, not a product. It’s a platform to have intentional communication to your heirs about your values and to point them to God. I want to say again, family meetings are not optional. The only thing optional about them is whether you’re going to be a participant or if it’s going to be after your funeral. I would think that that’s an important thing to remember.
Family meetings are not optional. The only choice is whether you participate, or if it's after your funeral. Share on XI like the coffee table or coffin. It does sound really much better to have it around the coffee table than with you not present lying flat out in the coffin.
Let me make one other comment. I’ve had three family meetings with my family. I have 3 boys and 3 daughter-in-laws. After the last meeting, Greg, I said, “I’m going to hire somebody to facilitate the next meeting,” because even though I could do it they started cutting up and doing stuff. It’s important many times to have a third party help you as a patriarch, facilitate this meeting. Even though I’ve done this for 40 years and I could run the meeting, after the last time, I said, “I’m hiring somebody in our family office division to run the next meeting because it’ll just be that much more effective.”
The Power Of Family Meetings: Beyond The Will
There are some people reading who’ve never even heard of this notion of having a family meeting. They really do, all kidding aside, think that the family meeting is going to happen after they die because that’s when, just like in the movies, some lawyer opens the envelope and reads everybody the will and some laugh and some cry and whatever the case may be. The arguments start and it’s not good. What happens at a family meeting? Just maybe a couple of bullet points. Obviously, you share your values, do you share what is going to be the dissemination of the funds?
It depends on the age of your kids. Early on, if your kids are 0 to 20, you communicate principles and values and help them understand things like foundations and just get them educated. When your kids are 20 to 40, you can begin to start laying in the numbers. Greg, this is why it’s an art, not a science, but at some point, you need to tell them the numbers because they’re going to know the numbers. It depends on the family, depends on all that. Usually, 20 to 40, you start being more specific. After 40, we found it really doesn’t matter. They should know everything.
Here’s the thing. Your kids should not be surprised in that attorney’s office. There should be nothing on the table in that attorney’s office that you have not already debriefed them on. They should not go in there and not have any idea. Last meeting I had, I gave my boys a notebook and in there were the wills, my net worth, my home going process, my healthcare directive was all there. I said, “Here’s the decisions you all are going to have to make.” I think you can’t over-communicate. Here’s the mistake people make. They think, “I can’t tell them the numbers.” If you drop dead tomorrow, the attorney’s going to tell them the number.
What’s the difference?
Why don’t you get ahead of it? You don’t tell your sixteen-year-old that they’re going to be worth you get $3 million. You help them understand, there’s responsibility. Mom and dad have to be good stewards. That’s why we’re beginning to communicate to you these principles.
I’m pretty sure nobody that you’ve consulted with has had a contract out on their life the day after a family meeting because a kid thought he was going to get a lot of money, so it’s probably fine.
No, but you know what you do uncover. We had one family say the kids didn’t want the business. We planned to give the business away to charity. By having the family meeting, we found out two of them really did want the business because they were mad at us, but they thought we told the parents to give it away. The point is, there’s a principle in estate planning that the form of the assets should fit the skills of your kids.
In this case, the kids wanted the business in the form of the business. They’ve made a huge mistake by giving it away. Family meetings should end up being a dialogue. This is why the third party is so important. They can go interview the kids, “What do you think about that? How are you feeling about that?” They can blend Gen 1 and Gen 2 together,
Talk to the perilous, terrible thought of some people who say, “I don’t want to divide the money equally between all my kids because some of my kids,” whatever.
It sounds easy to say love them equally and treat them uniquely. My experience in 40 years has been that you’ve got to be very careful if it’s unequal and you sure should have the meaning and communicate why while you’re here because they equate that to love. I like to say that God loved us when we weren’t lovely. This idea that I’m one kid’s wayward and one kid’s tracking, so I’m going to treat them unequally. I’ve seen too many situations where the parents did that and then the one that was tracking went off the deep end and the one that wasn’t. I think it’s very rare you don’t leave it equally.
God loved us when we weren't lovely. Share on XApparently, the prodigal came back.
That’s just a tough thing. My experience has been you need to err typically on equal. Maybe it may need to go into trust, potentially like this family I just talked about. They’re concerned about one child so we just put it all in trust. We didn’t spotlight that one. It’s in the trust for all of them. There are some things you can do that way, but I just think, here’s what we do. I’ve got to be a good steward. I can’t give it to that child who may be wayward. You don’t know the endgame. What I like to say is what’s the last thing you want them to hear from you? “I knew dad didn’t love me. He left me out of the will.” I’ve seen unequal distributions and I’m not saying you can’t do that, but just be very careful. Make sure you communicate it and usually, you err on equality.
Succession Planning: Caring For Your Business And Legacy
I remember a story from Saddleback Church, where I attend, where Rick Warren hired somebody to lead the prison ministry who had been in prison for many decades for murder, and he’s now running the prison ministry for Saddleback Church. Anything can happen. Let’s switch gears for a moment to succession planning. You and I, unfortunately, have stories of this not going well, where the spouse didn’t understand how the business worked and he or she finds themselves a widow. Talk about that because I think just like a lot of people don’t have a will, a lot of people don’t have a succession plan for their sole proprietorship.
They need to realize it probably in most of their cases, that’s their biggest asset on their net worth. They need to plan ahead and have buy-sells and who’s going to take over the business and do I really want my spouse in that position? This is all things have to be talked about. Do you have a key employee that’s going to take it over? What’s going to happen if I get hit by a Turnup truck on the way home tonight?
Here’s what I would say to business owners. You are a caretaker of that business that God’s allowed you to have. As a caretaker, part of your caretaking is to be thinking ahead about, “I’m only successful if I have a successor. Who’s that going to be and how do I do that? How do I take care of my family in the process?”
Business owners are caretakers of the business God has allowed them to have. Share on XI think here, again, most people don’t want to think about it because they think they’re going to live forever. The graveyards are full of lots of indispensable men and women, Greg. I think we got to realize that we lead for a limited amount of time. We need to be a caretaker of whatever we’re leading and we need to plan to replace ourselves.
The sooner you can find people that are better than you, that can carry on the mission of your company and invest in them, very rarely does the wife take it over or the husband if it’s a wife’s business, but you just need to plan ahead and think what’s going to happen here, because that’s usually your biggest asset. If you don’t do that, that value could be dissipated in your net worth.
You have a financial reason to do it, but you also don’t want to frustrate your spouse. You don’t want to let this thing that you’ve invested in just disappear because you didn’t put in place buy-sell agreements. Intentional thinking about who’s going to take the baton when I’m not here? What I’ve found that helps people is this idea that you’re a caretaker and guess what? You’re not going to lead forever. You’ve got to be prepared if you’re a steward before the Lord to hand that off.
I remember the guy that’s now the president of our trust company. He was in a bible study I did years ago and I said, “Don’t go anywhere. I want you on my team,” because I saw his talent and skill. Now you fast-forward, he’s been president for the last few years. It’s just great. You want to find those people that that can carry it on and not be afraid of them. That’s a key leadership principle. Don’t be afraid of strengthening others. You want to find people better than you. If you don’t do that, then you think it’s about you and not the business. If you really care about the business, you’re going to find people better than you.
I sat on a plane one day next to a guy that was stressed out. I will not share too many details so we don’t identify this fine person somewhere in the United States. He was pretty stressed out going to his flooded home in another city that he owned this home as a vacation property. We talked about Convene and people getting together as a group to work on problems and learn what God has to say about leadership. I said, “What’s your business?” He shared what the business was. He said, “The problem is I work 60, 70 hours a week.” I said, “How old are you?” He said, “I’m like 71 years old.” I said, “Why do you do that?” He said, “I have two boys.” I said, “Are they interested in the business?”
He said, “They work in the business, but one of them doesn’t like the business.” I said, “Why does he stay?” He says, “It’s because I pay him about three times more than the position is worth.” I said, “What about the other guy?” He said, “He couldn’t run the business if his life depended on it.” I said, “Why does he stay?” “Same reason. I pay him too much money.” Here’s a guy working 70 hours a week with 2 kids who he overpays and neither one of them are going to run the business if he drops dead tomorrow while he’s sucking water out of his flooded home. It’s like, “Are you kidding me right now?”
The sad thing is, Greg, that it doesn’t help the boys either. Here’s what we got to remember. Here’s what can help business owners is realize it’s still just financial capital. You need to treat your business just like if it were Coke stock or whatever, because it is just financial capital. The problem is you have your name on it and you’ve put all this sweat equity in it.
Somehow, you’ve elevated it to being something instead of thinking, “I’m going to handle this in a way that pleases God. Even though I got my name on it, if I need to sell it or I need to convert it to a form,” because in that situation, maybe he should convert that business to a form that helps his boys do what God’s called them to do. Maybe they’ve shown signs.
I had a guy one time, he was 40 years old. He is in his dad’s restaurant business and he finally went and did what God called him to do. He was in the dad’s business for the same reason, getting paid a lot of money, but he wasn’t happy. Finally, when he was in his 40s, he went and did what God called him to do. Patriarchs and business owners need to have the courage to be willing to convert their assets to a form that fits the skills of their recipients. I’ve got three boys. One builds houses, one sells coffee, and one’s in the business. I need to leave my assets in a way that helps the one who builds houses and helps the one who sells coffee and not just say, “Here.” I need to be thinking about how do I do that so I can help fan what God’s called them to do.
Business owners need to have the courage to be willing to convert their assets to a form that fits the skills of their recipients. Share on XMy kids are all artisan pastors. Shelly and I just support them.
Letting them do what God’s called them to do. Business owners, that’s hard. Sometimes, business owners feel like, “If my kid’s not interested in a business, I’m a failure.” No, you’re not. It’s just God’s wired them different and you need to be willing to help support them on their stage of action. You’ve seen it, Greg. Kids are forced into the business. They’re not even good at it and they don’t like it and yet they probably have other things they could do if the dad would just give them the freedom to, “You do what God’s called you to do. I want to fan that flame.”
Finding Your Guide: The Value Of A Financial Coach
Talk to the person who’s reading who says, “This all sounds like a lot of work for me to do and I don’t even know where to start.” Obviously, Ron Blue Trust helps people with those kinds of things. Can you just share about that for a minute?
As I said, to whom as much is given, much is required. Most business owners are busy running their business. They don’t have time to think about these things. They need somebody to come alongside and just delegate to them this thinking to apply their principles to make sure you got your wills done and they’re up to date, and make sure that you’ve got the buy sales and make sure you’ve thought through the family thing.
What we simply do, Greg, is come alongside folks and just be their coach so they can go run the business. I have to think about this. We’re thinking about it for them. That client I met with the wills, he wasn’t sitting around, but we brought the wills to the dining room table. We brought the notary over and we got them signed. People need coaches. I’ve concluded that you’re a good steward if you apply biblical principles and you allow yourself to be held accountable.
You're a good steward if you apply biblical principles and allow yourself to be held accountable. Share on XPeople need accountability because this stuff, it’s not urgent, but it’s important. We just perform a consulting coaching role that just keeps reminding people, “I’ve got to get the wills done. We’ve got to really talk about that son and see if he wants to come into the business. We need to go interview him and your daughter-in-law.”
This is the kind of things we do. When I started working with the Cathy family of Chick-fil-A years ago, I went and interviewed the three kids, start off just talking to them and then informed a way forward. Now you fast forward, we’re still doing stuff many years on because it’s just a process. You need somebody to guide the process and hold you accountable.
I think this is still a sobering statistic, but I don’t know the latest number. What is the percentage of people who run businesses or are Christians living life who do not have a will?
I don’t know what statistic you’ve heard, but it’s probably 70%, I’m guessing. I can’t remember the number.
I’ve heard 80%. The chances are even though we’re talking to Christian business owners who are reading, that for sure at least half the people who are reading don’t have a will. That’s not a good day.
The state has a will form. You need to know there’s a will that state has and they don’t want them to go the way their state’s going to tell them what to go. Someone will go to the wife, some will go to the kids. Here’s the thing, we can help them figure out what to do. This guy that came in, I said, “We’re going to take these first steps. You don’t have to figure everything out. We’re going to redo your wills and we’re going to give everything we can to your kids tax-free. Everything else goes to charity. Let’s just make that step. Let’s get that done.” They’re like, “We don’t know how much to leave to our kids. We’re really struggling.” If I wait for them to answer to that, we’ll be another year.
Let’s get something done that’s better than the 30-year-old wills you’ve got. We’re going to get those done by the middle of January, and then we’ll start parsing it and being a little more specific about, was this the right number? I think, Greg, people just need somebody. They think it’s real complicated. They got to sit down and talk to their wife and come up with all kinds of decisions. Not really. There are some decisions you can make pretty quickly and just get it done. What we’re going to do is we’re going to send a letter to the attorney saying, “Do this.”
Philanthropy: Giving Beyond Your Cash Flow
This has been fun so far, but we’re going to have even some more fun philanthropy. There are some people reading who are saying, “I give money to my church and I’m friends with the donor development person from ministry, A, B, or C. We go fishing or hunting together with the president of ministry, A, B, or C. It’s really fun. I get to give them 10% of my money in aggregation.” Really, giving out of your cashflow is the least you can do. You can do more, talk about more.
Greg, one of my great fears is for business owners, they’re going to stand before God. Just say, “How’d you do with what I gave you?” They’re going to say just what you said. “I tithe on my salary. I even gave 20% of my salary.” In the meantime, their retirement plan was going up, their business was going up and their real estate that then their business is going up. Their net worth was increasing hundreds of thousands of dollars a year.
Maybe they make $500,000, they’re giving $50,000. The New Testament says, “Give according to your ability.” For a business owner and folks who have wealth, it’s usually not in cash. It’s usually not just in their cashflow. For them to give, according to the New Testament principle, according to their ability, they need to look at their asset side too.
Let’s say I make $500,000, I tithe $50,000, but let’s say my business went up $1 million. “God, what am I supposed to do about that?” What happens to most business owners, Greg, is they don’t want to think about it. They just keep making money and then they die and it all goes into a foundation, or their kids have to give it away or whatever. This is where it gets fun. Get in there and look at it.
This guy I’m talking to, we gave away 10% of his business years ago. It was going up. We gave 10% to a donor-advised fund. His son who came into the business bought it back. There are ways you can integrate estate planning and succession planning and philanthropy planning and give according to your ability. You’re going to have to not just look at your paycheck, you have to look at that retirement plan going up those, the real estate. I can’t tell how many people I meet with and they start talking about their assets, “I got that real estate and that building’s worth $6 million, that building’s worth $1 million,” whatever.
What am I going to do about that? When God says, “How’d you do with what I gave you?” it’s not just your cashflow, but it takes planning, Greg, because you have to figure out, “How do I give away a percentage of my company? How do I give away a percentage of that real estate or a piece of that LLC?” I would say to people reading, “You can do that.” Most people don’t think that they can give away stuff like that, but they can. There are ways to give away assets. It just takes a little more planning,
Talk to the person who doesn’t understand some of the basics. Maybe they’re with a secular financial planner and the secular financial planner is really happy to have their $4 million in a broker fund and they don’t need the money. They are not sure what you’re talking about, but they’d sure love to do something about it.
You got $4 million in your brokerage account. Of course, this past year, mine went down some, but the years before that, it was going up 10% or 15%. Let’s say that $4 million becomes $4.4 million and you can give away that growth, avoid the capital gain tax. Let’s say it went from $4 million to $4.4 million. You could give away $400,000, you’d avoid probably $80,000 in capital gain tax. You get a deduction forward, which saves you another 30%.
You may be able to make a $400,000 gift at a cost of maybe $200,000 if you don’t need it anyway. I think, Greg, that’s the fun thing about this, to look at your assets. I would say the reader, if you’ve got something that’s appreciated, that piece of land you’ve had for 30 years and you paid $10,000 for it, now it’s worth $500,000, you’re thinking, “I can’t sell it. I’m going to pay capital gain tax.” Yeah, you could give it away and no capital gain tax and have a whole $500,000 to give away to somebody.
Here’s what I would say. Secular advisors will not bring in the philanthropic piece because they want to get paid on the pile. Why would I want the pile to ever go down? I would say that as a steward, if I want to manage my business and my assets well, I’ve got to think about giving according to how I’ve been prospered.
We’ve done this for 40 years, Greg. We’ve helped people maximize their generosity and give away hundreds of millions of dollars and they all come back with the same thing, “I didn’t know I could do it.” They never go broke. It’s an interesting thing. It’s like you can’t out-give God. They get more generous and then their business does well. It’s not a health, wealth, prosperity thing, but it’s just interesting to watch when people add philanthropic tools to their toolbox.
You can't out-give God. Share on XMaximizing Generosity: How Blue Trust Can Help
Somebody’s reading who probably says, “You’ve said enough that interests me. What can I do?” What can they do? Who can they call at Ron Blue?
They can email Info@RonBlue.com or they can call (800) 987-2987.
RonBlue.com is the website. Russ, I’m pretty sure that there are hundreds of millions of dollars that have already flowed into Kingdom causes because of the work that you do and the work that your team does at Ron Blue Trust. Now I hope there’ll be a little bit more as a result of our time here. If you’re reading and somehow you haven’t heard about Convene, we’re a place where Christian business owners help each other to build incredible businesses on a biblical platform. You can find out more about Convene at ConveneNow.com. For now, we’ll sign off and say thanks, Russ Crosson at Ron Blue Trust, for the work that you do and for being with us.
Thanks for having me. It’s been great and I just appreciate the work you all do and administering to business owners.
Thank you.
