One Thing & Another

Notes From My Journal: 2 Unexpected Estate-Planning Issues

In my ongoing effort to find a path through the dense and dangerous jungle of estate planning, I’ve been meeting with experts, talking with friends, and reading everything that looks the least bit relevant.

Most books are not worth the paper they are printed on because their intent is to sell ideas (and/or services) rather than discover problems and solve them. One book that is different is Beyond the Grave. I’m mentioned it before. https://www.markford.net/one-thing-another

Last night, I read another chapter. It helped me identify two potential estate-planning problems I was not aware of. According to the author:

 

  1. If any medical bills for the parent are covered and paid for by Medicaid, the state will seek to recover those payments after death.

 

  1. You can’t avoid the death tax by giving your house to your children before you die. Upon your death, it will be taxed as a gift. The gift tax will be based on the value of the house when given. Your children will also pay capital gains tax on the appreciation of the house since then.

 

It may, however, be possible to avoid the lion’s share of these taxes by setting up a QPRT (Qualified Personal Residence Trust). When funded, it takes the property out of the estate.

More on this anon.

 

Today’s Word: mammothrept (noun)

A mammothrept (MAM-uh-thrept) is a spoiled child. Example, from the historical novel Master and Commanderby Patrick O’Brian: “And having seen the parents I am impatient to see this youth, the fruit of their strangely unattractive loins: will he be a wretched mammothrept? A little corporal?”

 

Fun Fact

The Harry Potter Economy –I knew it was big, but it’s bigger than I imagined. Two parts of it: 500 million books worldwide and $7.7 billion in worldwide film sales.

 

From My “Work-in-Progress” Basket

The Power of Being Mysterious (and Why You Shouldn’t Do Too Much of It)

In his Oracles, the 17th Century Spanish writer and Jesuit priest Baltasar Gracian advises those who want power to “keep matters in suspense” because “mystery causes veneration.”

There’s a good deal of truth in that. People that speak quickly are frequently seen as rash or impulsive. People that tend to hold back a bit before making comments are sometimes seen as thoughtful and wise.

When BB, MN, and I talk about business (which is often), I’m the first to voice an opinion. BB rarely beats me to the gate, but he will respond to my statements right away. MN waits until we’ve both exhausted ourselves.

This gives him a distinct advantage. His comments are always inclusive of the thinking that has been already advanced.

Each of our habits derives from our individual mentalities: I’m a fast but sometimes incautious thinker. I’m always trying to solve the problem immediately. BB doesn’t like to waste time talking more than is necessary. But he also knows that since I’m going to be shooting first, he’ll have a chance to bounce his ideas off of mine. MN attaches less value to speed. He prefers being right.

As a threesome, our different approaches works very well. But I’m quite sure that if I didn’t have BB and MN to consider and then refine or even reject my ideas, I’d be much less inclined to try to solve problems so quickly.

In Thinking Fast and Slow, Nobel laureate Daniel Kahneman argues that both types of thinking are necessary to make good decisions. Thinking fast is rapid, intuitive, and emotional. Thinking slow is more deliberate and logical but consumes lots of time.

It’s really a good book, the product of a distinguished career of work and study in what’s nowadays called behavioral science. I’ll review it for you sometime.

But for today, I want to discuss just one aspect of it. Not the advantages and/or disadvantages of either “system” of thinking, but the emotional impact of voicing thoughts quickly or holding them back.

As I said above, slow speakers enjoy the advantage of making statements that are less likely to be dead wrong or illogical. And so their comments are usually given some degree of consideration based simply on the fact that they appear to be the product of careful ratiocination.

But when their comments do not prove out to be more insightful or more logical than those of the fast speakers, they are judged more harshly. As in: “It took you all that time to come up with that?”

If this happens routinely, the impression will no longer be, “This guy is a careful thinker.” Rather it will be, “This guy wants me to believe he’s a careful thinker, but he’s not. He’s simply afraid to voice his thoughts quickly because he doesn’t have any.”

I’m sure you know people like that. They listen to you with a certain sense of skeptical reserve. If you make a joke, they refrain from laughing. They love long pauses, as if they are restraining themselves from telling you what a dolt you are. They seem like intellectual snobs. What’s worse, they seem less interested in solving the problem than in positioning themselves in terms of the dynamics of interpersonal power.

So, yes, as the venerable Jesuit said, “Keeping matters in suspense” can give you some temporary power in a given conversation. But if you don’t use that extra time to advance the conversation, you aren’t fooling anyone. And eventually, they will start wondering if you can think at all.

I’ve managed to have a good business career by barking out my ideas as soon as they come into my head. But I recognize that many of my early statements will be rough at best and, at times, dumb. So I’m ready to change my opinion on any matter in a moment if I hear another one that makes more sense.

If I had a political mind, I’d make an effort to be more withholding in conversations. But to succeed at that, I’d be taking a risk. I’d have to ask myself: Is the power I might get from acting mysterious, superior, etc. worth the trust I might lose by seeming to be manipulative?

And the answer would be a definite “no.”

As for you… you have to find a speed of speaking that works for you. You should recognize the advantages and disadvantages of each approach. But most of all, I think the speed of your speaking should match the speed of your thinking.

If “solutions” to problems pop into your head before the problem is even fully stated, you should recognize that as a gift and be comfortable speaking early. But keep in mind that many of your thoughts will be premature. Don’t feel you have to defend them if a slow speaker comes up with a better idea. Jump on it. Because the conversation isn’t about power, it’s about solving the problem.

If you tend to be a slow thinker, feel comfortable waiting to speak until you’ve had a chance to think about what the fast talkers have said. But if, after thinking slowly about their ideas, they still seem smart, say so. Then move on to the next problem.

Most importantly, when it comes to important decisions, don’t make them alone. If you are a fast thinker, run them by a slow thinker. If you’re a slow thinker, invite a fast thinker to the party.

Then talk and think only about solving the problem. Everything else would be a silly, political power play. And playing for power is a sure way to help any business fail.

One More Thing…

All of the fees and royalties I get from my writing go towards charitable endeavors. I’m on the board of and personally involved in most of them, such as FunLimon, a community development center in Nicaragua. That’s because I believe that “helping” people is risky business that often comes with unintended consequences, such as feelings of entitlement and the weakening of character and ambition by creating dependency.

But there are some large non-profits I contribute to simply because the work they do seems both noble and impervious to negative side effects. One such organization is the Innocence Project.

Here’s a sample of the work they do…

https://www.innocenceproject.org