Birmingham, Alabama-based financial guru Jeff Roberts, who was recently named one of the top private wealth advisors in the nation by Barron’s®, came on Yellowhammer Radio to lay out the facts so people can decide for themselves.
The full conversation with Mr. Roberts can be heard on the Yellowhammer Radio podcast or in the video above, and a lightly edited transcript of his interview with Yellowhammer’s Scott Chambers and guest Chris Reid can be read below.
Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.
Scott Chambers:
Welcome back. It’s Yellow Hammer Radio, super station 101, WYDE. 866-551-9933. We will get to your calls coming up. Right now on the show with us today is our local financial guru, Jeff Roberts. He’s the founder of Jeff Roberts and Associates. He and his team of seven advisors can help simplify your complex wealth management needs. They are an exceptional financial advisor team, who have provided sophisticated financial planning and advice to high net worth clients for up to 131 combined years.
That’s a lot of years, Jeff. How are you today, man?
Jeff Roberts:
Excellent, my friend. It’s good to be back.
Scott Chambers:
Good to have you back. Glad you’re on with us here today. Andrea, of course, is getting some beach time in down to the Gulf Coast. You have me, who’s a little on pain medicine, so I don’t know how this interview’s going to go, Jeff. It may be crazy.
Jeff Roberts:
Hey, man. If you loop off into twilight land, that’s okay. I’ll bring you back.
Scott Chambers:
All right. Well, you know in the past couple of weeks, we’ve been talking about the three minute confident retirement check, which is found at JeffRobertsandAssociates.com. Now since then, we’ve been drilling down on your confident retirement approach and the four principles that go along with it. Again if we can review some of that, tell us all about the confident retirement approach, Jeff.
Jeff Roberts:
Well basically the company I franchise through, Ameriprise Financial, we’ve been doing and helping people plan their finances for over 120 years, since 1894. We know retirement planning, whether you’re there or trying to get there. This is why we’ve developed an exclusive confident retirement approach, which is what makes retirement planning more manageable by breaking it down into simple steps for having a certain amount of money that provides a guaranteed income for covering the essential expenses that you have in retirement. Having a bucket of money that is used to cover lifestyle expenses separate from our essentials. Then preparing for the unexpected and then leaving a legacy to pass on to your heirs. That’s the basics.
Scott Chambers:
Well, I know. Today, we’re talking about the fourth principle, which is leaving a legacy. Tell me, what’s the whole leaving a legacy thing all about, man?
Jeff Roberts:
Basically leaving a legacy is leaving a lasting impression on those you love or the causes you believe in, is really what it means to leave a legacy. Whether your legacy involves family, loved ones or a cause that you care a lot about or are passionate about, there are strategies that can assist you with giving now or tax efficiently distributing your estate later. That’s the basics. Taking your life’s work, if you will, financially and passing it to the places that you want it to go.
Scott Chambers:
Very interesting, Jeff. That’s pretty interesting right there. People planning to do that, are there some mistakes maybe that they possibly make while they’re trying to do that? That could be … To me on the outside, it sounds complicated, but that’s what you do for a living.
Jeff Roberts:
Today what I thought we would do is just keep it simple. Let’s just drill down on a bunch of those common mistakes that I see. These are in no order. I just made a list today of the things that when people come in and talk about estate planning, the stuff that we see people getting wrong most often, again we’ll go through several. Again, random order here. One easy, easy one that’s probably the simplest that we see people do is when people decide they want to gift money, whether it’s to their church or a family member or anything else, people all the time are gifting cash. We strongly encourage people not to do that as a first source.
In fact, what we look for oftentimes, particularly if you’re looking at charity, if you’re gifting money to a charity that is an actual charity where you can get a deduction for giving the money there, you’re actually better off by giving highly appreciated property, like a stock. Something that if you sold yourself, you would have to pay capital gains on. Passing it to the non-profit organization, they can sell it, not pay taxes and then the cash that would have given, use that cash to replace that asset in your investment portfolio. When you’re giving to a charitable organization, try not to gift cash. Gift highly appreciated property when existing.
Scott Chambers:
Oh, that’s pretty interesting. What are some of the other common mistakes that people make?
Jeff Roberts:
Titling or ownership of property is huge. We see clients that will go spend thousands and thousands of dollars to have wills and trusts set up, so that upon their death, their money goes in a particular direction. If you’re hearing this and you think, “Yeah, yeah, yeah. I’ve had this fancy will drawn up and did all this work with an attorney.” If you didn’t go in and take a close look at the ownership of your assets, your assets may be owned or set up as a beneficiary, in a way, that the money doesn’t ever get to the will or the trust that you created. It passes directly on to the joint owner or to a beneficiary and the hardworking estate planning that you did, didn’t work. You have to look at not just creating the legal documents, but also the way your assets are titled or owned. Those have to be aligned. We see people getting that incorrect all the time. Huge mistake.
Chris Reid:
Yeah, I see that all the time, too, Jeff. I tell my clients that. You’re 100% right. Sometimes they’ll draw up a will and then they won’t fully know what’s this going to cover and what’s this not going to cover. If you don’t have somebody like you that understands the financial situation of those meetings, they can think they’re protected and they’re actually not protected. Then they’re in a bad situation.
Jeff Roberts:
There’s no doubt. That’s why with our planning clients, we do a net worth statement, literally in every meeting. If they’re coming in every six months, we review the entire net worth, every asset in every location, from cars, personal property. You name it. We have the ownership of those assets tied on there, as well, so that when they’re working with their financial planning team, like a lawyer, estate planning attorney, they can see the document and the way everything’s listed out to know does the will and trust align with the ownership and get the advice that they need. It’s big.
Scott Chambers:
Our guest is Jeff Roberts, of Jeff Roberts and Associates. We’re talking about leaving a legacy and some of the mistakes people do when they’re trying to leave that financial legacy. Jeff, what are some of the other mistakes that clients and people make?
Jeff Roberts:
A couple other ones. This one’s big and it can be very personal to people. That is, we encourage clients to take an honest inventory of their heirs, and the heirs readiness to received an inheritance. The question I like to ask is, are your heirs equipped and prepared to receive money from you? I have two extreme examples. Just last night I was talking to the son of one of my clients, who is basically 27 years of age, just married. Both in the military. He has over $120,000 saved up. Literally rents an apartment. This is going to be somebody who will pay cash for the new car that they need and get a new used car. Then they’ll put 20% down on a house. They’ll be packing 15% away for their retirement plan in their early 20s. They’ll do that for the rest of their lives. You’re talking about getting an incredible financial foundation of somebody young with the right habits.
I have another client whose son that we had talked to, about a month ago. This is somebody who has been tapping into their parents’ money year after year. As a young adult, out on their own with their own family and kids, coming back to the parents over and over again. Going back to the well and trying to get money from them out of their retirement assets to float the mistakes that they’re making financially. The reason I share this is people don’t often take the time to think about the impact of leaving large amounts of money to children that are or are not equipped to handle it. If you spend your whole life sacrificing and planning your estate, and you’re building up your retirement nest egg that affords your retirement, and then we see that they’re likely going to pass that nest egg onto a child that’s going to go through it very quickly, there’s simple estate planning tools you can put in place to protect those heirs from themselves.
It’s a tough conversation, but it’s a big piece that we see people mess up all the time. The last piece on that one is, is because they feel that, “Well I’ve got to split my money equally with my children.” I look at people and I think, “That doesn’t even make sense.” Love your children equally by treating them uniquely. If someone is not ready or equipped to receive and inheritance that you’ve prepared your whole life for, don’t leave them something that they’re going to blow. You’d be better off giving it to charity or the child that does manage it correctly. Just an interesting perspective.
Scott Chambers:
Exactly. That’s interesting, Jeff. Very interesting. Are there any other common mistakes that people make, as we get ready to wrap up here in the next few moments?
Jeff Roberts:
The one that’s sad to me is when people can afford to gift in their lifetime and they don’t. They haven’t done the planning, the forecasting, the projections of their estate to see that they’re going to have enough money and they’ve protected themselves along the way. They could gift while they’re alive and let their family benefit or charities benefit and see the impact of that, but they haven’t done that work to feel confident enough to give money away. Proper planning helps us to be able to show that to folks. It’s huge.
Scott Chambers:
Wow. Well, Jeff, as we begin to wrap up here, if anyone has any interest in getting help or want to be more confident towards their own retirement, what do they need to do, man?
Jeff Roberts:
Give us a buzz at 205-313-9150 or you can go to JeffRobertsandAssociates.com. Take the three minute retirement competent check. It’s a great way to begin to figure out where you are.
Scott Chambers:
All right. Jeff Roberts, Jeff Roberts and Associates. Appreciate you being on Yellow Hammer Radio. We’ll chit chat with you again next Wednesday, Jeff.
Jeff Roberts:
Thank you. Sure.
Scott Chambers:
All right. Have a blessed day. Jeff Roberts of Jeff Roberts and Associates.
