Estate Planning

Sunday, March 26, 2017 – Wealth Strategy with Bryan Rigg
Tune In Every Week: Saturday on WRR from 7:00-8:00 am / Sundays on 520 KLIF from 1:00-2:00

Bryan Rigg and Reid Heller

Today I will be talking about historical events and how we can use those lessons from historical events to understand what’s going on in the market today. How that might influence our investing. Also, different things that you want to be looking out in the world today, as far as helping you understand your portfolio.

I’m also joined here today with Reid Heller, a lawyer who’s been practicing for 30 years. He’ll be talking to us about estate planning and things people might want to be considering as they put their estates in order.

We thought that would be a good guest to have on the program during tax season, right now, as people are looking at what they’ve done this last year, how much taxes they’re going to have to pay, and looking at their estates. It might be a wise decision, while you’re involved with that, to also be looking at how you’re putting together your estates, your wills, your trusts, and so on.



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Show 12‑Segment 1

Bryan Rigg: Hello, ladies and gentleman. My name is Bryan Rigg, with Rigg Wealth Management. Thanks so much for tuning in today.

Today I will be talking about historical events and how we can use those lessons from historical events to understand what’s going on in the market today. How that might influence our investing. Also, different things that you want to be looking out in the world today, as far as helping you understand your portfolio.

I’m also joined here today with Reid Heller, a lawyer who’s been practicing for 30 years. He’ll be talking to us about estate planning and things people might want to be considering as they put their estates in order.

We thought that would be a good guest to have on the program during tax season, right now, as people are looking at what they’ve done this last year, how much taxes they’re going to have to pay, and looking at their estates. It might be a wise decision, while you’re involved with that, to also be looking at how you’re putting together your estates, your wills, your trusts, and so on.

First what I would like to do, as a former academic and professor, I am constantly shocked, if you will, by the lack of historical understanding of markets, and of history in general, and how that has played out in the economic realm, and the political realm, for that matter.

Quite frankly, a lot of people in college, and in life, don’t do an awful lot of study of history. That’s no fault of their own. We have so many pressures out there with family and jobs, and so on. I can understand that.

I hopefully will enlighten you today about certain things that you have taken for granted in the market, and how they came to be.

First of all, I’d like to go over a few items to be thinking about as you look at how you should invest. One thing you always want to take into consideration is world events.

When things happen on the international stage, they quite often can impact markets dramatically. You want to try to do your best to anticipate things that might be happening.

Right now, when you look at the nuclear Iran deal, you want to start asking, “How does that impact markets?” “How does that international trade?” “How does that impact the Sunni‑Shia divide?”

These are important questions to look at, especially when you’re looking at the energy market. World events are very important to look at. We need to focus on that, especially when you want to look into going into the international realm to possibly invest.

Also, you want to look at the economy and look at which economies are strong, which ones are weak, which ones you can have a better appetite for the trust for, and which ones you need to be very skeptical about.

As we’ve mentioned before, in previous programs, when you’re looking at different economies, you want to see where the economy is functioning where there is a strong rule of law.

When clients would come to me and ask for good markets to look at across the globe, if you’re looking at England, if you’re looking at Germany, if you’re looking at Japan, if you’re looking at America, Canada, you can rest assured that there is a strong foundation of law that has a history of quite often being transparent or trying to do the right thing.

Versus a lot of countries, like in South America, or in the Middle East, where there’s not a lot of transparency, where a law is not really strong. Africa, for that matter, as well. You want to be very careful about going into those markets, because you don’t have the rule of law, necessarily, on your side.

That’s another thing you need to be thinking about as you build out your portfolio, the money that you’re investing in the stocks, in the index funds, in the bonds, and so on, when that money goes out and is deployed, are those companies and those entities, are they operating within a framework of a good structure of law?

Quite often, when you look at English law, common law, which basically rules in England, Canada, and America ‑‑ and of course we helped build out the new democratic government of Germany ‑‑ that influence has created very strong markets historically.

You also want to look at scandals and see how they have played out in the world. America’s not immune to that. We’ve had the savings and loan debacle. We’ve had the mortgage debacle just recently.

We had the 1929 crash when people were leveraging up to buy more and more stocks and there wasn’t enough money to support it. That came down in a horrible crash. The good news here is when you see scandals, you want to see how quickly there’s transparency afterward, and looking at what actually happened. It’s not so much the scandals that you know about that should be worrisome, although they do impact portfolios, and they can be devastating in the short term, as we’ve seen. Although, quite often, the markets have recovered in a dramatic fashion, if you will. After 1929, after 1987, after 2008 and 2009.

The scandals you want to be careful about are the ones that there’s not transparency about, there are not reviews of afterward. Where you see those type of scandals in a certain market framework, you want to be careful about that. You want to be very sensitive to these scandals and how they occurred so you can try to prevent it later on. Quite often America has implemented laws and regulations after these scandals to try to prevent it.

As many of you know, I and my two partners, David Rigg and Gary Bilyeu, we’re all Marine Corps officers. We say that a lot of our regulations are written in blood, meaning that what we do in the Corps has been learned, unfortunately, by the misfortunes of others, of how not to do things.

We also see this with a lot of the scandals throughout our economic history. We’ve learned what not to do because we’ve had pain and financial loss.

The markets, in some respects, according to some economists, are getting more efficient because of the scandals we’ve had and how to prevent them in the future. That’s something you always want to look at.

Also, you want to look at carefully company news and how they’re reporting. Quite often, people don’t read about the companies they’re investing in.

That’s something that Rigg Wealth Management, we pride ourselves. We look into the index funds, we look into some of the private offerings that we’ve had, very carefully.

If you read “The Big Short,” by Michael Lewis, Dr. Burry, who saw the mortgage debacle on the horizon, did a simple thing of reading the financial statements of the companies, realizing that they could not sustain the borrowing that they were doing and the leveraging that was out there.

Bear Stearns and Lehman Brothers were 30 times leveraged. That means for every dollar they had in the bank, so to speak, they were lending out 30. That’s not sustainable, but that had to be reported.

That’s something that’s good about America, with the transparency. It was being reported, but nobody was reading it, except for a select few, like Burry.

Eventually his play, it was over 600 times his original investment. He walked away a multi‑multimillionaire because of it. He’s one of the few people to see that. Simply, he was just looking at company reports.

Also, you want to try to ascertain the difference between what is legit news and what’s hype. By reading those reports, you can see the difference.

We know about the hype with the dot-com bust in 1999 and 2000. If you looked at what they were offering, quite often now, in retrospect, we can see there wasn’t a lot of value to a lot of these companies.

They got a dot com domain name and they were promoting that they were going to do something for this particular industry, but they didn’t have hard assets. They didn’t have a track record. A lot of them didn’t have a lot of experience.

Had you been reading the reports and looking at the legitimacy of a lot of these business opportunities, you would have seen that there was a lot of hype, versus a lot of tangible realities there for investing. That’s something that’s very important to look at.

Obviously, another aspect is politics. Politics plays a huge role in investing, in how one looks at the economic environment. I’ll go into the stats here later.

What’s interesting, [laughs] a lot of people think Republicans are very job friendly and economy friendly. Of course, their whole take on things is indeed that, but when you look at historically, returns under Republicans, it’s around 6 percent, whereas under Democrats it’s around almost 10 percent.

This is something interesting to take into consideration when you’re investing, whether you’re in a Republican administration or a Democratic administration.

President Trump might be changing that because the way the stock market has responded to his election has been phenomenal. He’s definitely going to be well over 10 percent if he continues on at this rate.

These are the type of issues that I’ll be discussing today. I’ll be going over the different historical events that are important to learn about to understand your portfolio today and how you might want to respond to things that are going to be happening currently and in the future.

We are going to also be discussing estate planning with Reid Heller here. Please feel free to contact us at 972‑383‑1210. We love to hear from you. Again, that’s 972‑383‑1210.

Also, please feel free to visit our web page at That’s Rigg, with two Gs, We love to get your feedback and hear what you think about the show.

Please stay tuned. We’ll continue on exploring the different aspects of the economy and history that will help us with our portfolios and estate planning. Thank you for tuning in.

Show 12 ‑ Segment 2

Bryan Rigg:  Welcome back, ladies and gentlemen to Rigg Wealth Management. My name is Bryan Rigg. Today we’ll be continuing on exploring what you need to be thinking about in the economic landscape, the political landscape, the historical landscape that will help you with building out your portfolio.

We will be joined here shortly with Reid Heller, a lawyer who’s been practicing for 30 years. He’ll be discussing issues about estate planning. We thought that would be very good to do, especially during this time ‑‑ tax season ‑‑ when people are looking at their estates. If they haven’t put together estate plan, this would probably be a good time to do so.

In the previous segment, I talked about different things that people need to be looking at when they’re building out their portfolio strategies. I talked about the importance of world events in looking at them. I talked about the importance of looking at economies out there, and which economies are strong, and which ones are weak.

I talked about looking at scandals, and how governments and nations deal with scandals, and how they respond to them. I talked about the importance of looking at company news and reports, and how important that is. We especially see that with the mortgage debacle in 2008 and 2009.

I also talked about the importance of looking at what is legit news and what is hype. Used the .com example, how that was just a lot of hype. Also, you can go back to the 16th century in the Netherlands about the tulip craze.

A lot of people don’t know that people were paying fortunes for tulips, thinking that was an incredible investment, and it was for several months. People would buy tulips, and then it would go from $1,000 to $30,000, and they would sell that tulip. It was a tulip craze. Looking back at it now from our current modern perspective, it seems an absolute mad time of investing history.

Nonetheless, it shows you the dangers of getting involved with enterprises that are just full of a lot of hype and there’s not a lot of value and productivity there. It’s very important when you’re looking at investing opportunities to see what is legit and what is just full of a lot of hype.

We left off discussing about politics and how that plays into the markets. We see now a new phenomenon with investing. Looking at President Trump and how he, with his Twitter account, can influence markets ‑‑ three, four, five percent different holdings in different companies.

Also one thing that I’ve brought out ‑‑ I use this from “US News & Report” on politics, and Republicans, and Democrats, also a big report that Credit Suisse gave me when I was training with them in 2006, 2007‑‑ that a lot of people don’t know that markets actually do better under Democratic regimes than Republican regimes.

It’s shocking, because Republicans always promote themselves as being business-friendly and focused on the economy. If you look at President Trump’s first 100 days, if you will, he’s doing remarkably well there. He may be changing that stat, but right now under republican regimes, you usually get around six percent average return in the stock market. Democratic regimes, you get around 10 percent.

Some people don’t know that some of our worst times with presidents was actually with George Bush and then with Nixon, and both of them were very business friendly. Looking at the political realm is very important when you’re looking at investing. Also, you want to just look at simple supply and demand.

This is one thing that Warren Buffet has done so well with. He looked at the landscape early on in the ’50s and ’60s. You saw, “Hey, people are drinking Coca‑Cola, and people like Dairy Queen,” and he started investing in those enterprises. That type of philosophy ‑‑ of really looking at supply and demand, where it is going, where the trends are ‑‑ is a very wise approach to looking at investing.

Also, you want to look at natural disasters and how they influence the market. When we had the Ebola crisis here, you had things that were kind of shaking up in the market. When you had the tsunami a few years ago, there was problems in the international market.

Natural disasters can create problems. When you had the tsunami that hit Japan a few years ago, of course that wreaked a lot of havoc with Japanese markets. You want to look at that, how you can anticipate that in a stock portfolio. Also, how you can respond to it is something that is important to look at as well. Also, you want to look at expectations versus speculation.

That is something very important to look at ‑‑ what are your expectations for these holdings that you might put in your portfolio? What’s the expectations for the certain market sector? What are the pundits saying? What are the experts saying? What are the academics saying‑‑ and see what is speculation.

What is not really based on a historical or academic research? Then what is truly substantiated? That is very important. The last thing I think we need to really look at, because it is part of the human DNA, unfortunately, is war.

Then now the growing problem of terrorism, how this plays out, and how markets respond to it. The most famous case really in America is 9/11, and markets were shaken by that. People were really shaken. A lot of people started buying gold and silver.

When you see an increase of gold and silver buying, a lot of times that’s people starting to panic, starting to feel that the markets are going to go away. Taking that into consideration with war and terrorism, that’s something that also that’s very important to look at whether you go into defense industries, whether you go into certain type of aspects of healthcare that can respond to this.

It’s important to look at this, because historically when you look at how our market has responded, whether it be to the Civil War, whether it be World War I, World War II, Korea, quite often at the beginning of these conflicts, you have mass turmoil in the market.

I see opportunity there, because by the end of these conflicts, especially the Civil War and World War II, and World War I, we became powerhouses economically. It’s almost the economic spending that we put into the war ‑‑ developing technology, mobilizing the nation ‑‑ creates a whole new environment from an investing opportunity.

A lot of times when people are worried war and us going ‑‑ right now, President Trump is talking about taking out all of ISIS ‑‑ that’s 40,000 fighters that’s estimated to be in ISIS‑held territory that we would have to take out.

We’re most likely to put boots on the ground, and that’s going to be a massive war. How does that play out in the economic world for us? This is important to look at. These are things that at Rigg Wealth Management, we explore with our clients and look at portfolios with those questions in mind when designing a diversified portfolio.

Those are the lists that I like to go through in the world today to help give an understanding of what we’re dealing with when it comes to certain investment opportunities. Now I’d like to just break off and go over just certain things that are out there that people just don’t know about that tell us a little bit about our investing habits and tells a little bit about our psychology.

Most people don’t know what the largest employer in the world is, and that is Disney World. It employs 50,000 employees. It hit the landscape of America in 1955. Ronald Reagan hosted the live ABC special on it in Anaheim, California. Right now it generates around five billion annual in business per year.

What does this tell us about our spending habits, our behavior? It seems like a lot people like escapism. They like to get away from the normal of life. We see this with video games. We see this with theme parks here in Dallas/Fort Worth. We see Six Flags, and Wet’n’Wild, and so on. We’re seeing virtual reality games sprouting up all over the place.

This is one thing to look at as far as investment opportunities. People like that escapism, like that alternative reality. How you get access to it, a lot of times can bring good profits to a portfolio. That is something important to look at when you’re looking at the investment landscape.

I’ll be exploring more historical events and historical realities that have influenced the way we invest and give us insights about human psychology with investing later in the show. In our next segment, we’ll be joined by Reid Heller, who will be talking about estate planning ideas. Right now during tax season, that will be very important to look at.

We’d love to hear from you. Our number is 972‑383‑1210. Again, that’s 972‑383‑1210. Also, please feel free to visit our website at We enjoy getting feedback. Please get in touch with us.

Feel free to call us and set up a no‑charge consultation meeting, where you can come in, bring your documents, see what you’ve been doing, see how we can help you with your portfolio, and exploring these ideas that I’ve been exploring the last few minutes with you.

Thank you so much for listening, and stay tuned. We’ll be right back to you.

Show 12 ‑ Segment 3

Bryan Rigg:   Welcome back to the show, ladies, and gentlemen. This is Bryan Rigg with Rigg Wealth Management. Thank you so much for tuning in today, listening about the economic landscape, and how historical events, economic realities, and political realities help us understand portfolios that we have.

That’s what we do at Rigg Wealth Management. We try to bring a lot of insight from the past to help us understand what’s going on in the future and to respond to that. Now, I want to shift gears and hand it over to a dear friend, Reid Heller.

He’s done a lot of estate planning for my clients. He’s done my estate planning. I think, at this time in the year, when people are focusing on their taxes, focusing on their estates, if you haven’t done your estate planning, I think it is very important to look at that.

While at Rigg Wealth Management, we’re not allowed to give legal advice, we know a lot about the legal landscape, and we can help you find a lawyer of your choice to put your estates in order. We find quite often when we deal with clients that people have not sat down and put their estates in order.

Dealing with your estates, sometimes it can be uncomfortable because you’re quite often dealing with your mortality. You’re dealing with issues that are going to take place once you are no longer here, and you step over that great divide into the great unknown.

It is important to do this. We see the debacle that happens with estates like Rockefeller, Jr., Rockefeller, Sr., Prince, who just died when they die intestate. My great-grandfather, who was a multimillionaire rancher in Oklahoma, he died intestate. He had nine children, and it caused a lot of confusion.

I encourage you, for those of you out there who have not done your estate planning, it is very important to do so. Without further ado, to explore these issues, I’ll turn it over to my guest and friend, Reid Heller, who has put together a nice list of things to be thinking about while you do your estate planning. Reid, thanks so much for being on the show.

Reid Heller:  You’re welcome. Thanks for inviting me. Good morning. First of all, I’d like to let people know that I’m a general business practitioner who has an interest in estate planning. I’m not certified in any area of specialty with the state bar.

I do do a lot of this. It is a special interest of mine. I’d like for all of you to think for a few minutes about what the world looks like when you don’t have a will. People without wills actually do have a will. It’s drafted by the state.

It’s called the Texas Probate Code, or the Estates Code. They make provisions, whether you like them or not, for the way that your money and property will be distributed to your heirs.

For example, if your goal is to have your wife receive all of the estate after your death, or your husband, the statute, or the Estates Code, is not friendly to that idea. It wants children to receive a certain portion of it.

For example, your community property, while it would all go to the spouse, only one-third of your separate property would go to the spouse. This means that special inheritances, things that were earned either before marriage, or received by special bequests, such as money from a deceased family member, that money would primarily go to the children.

If your goal is to ensure that your spouse has the maximum amount from your estate at the time of your death, then the Estate Code is probably not the best way for you to handle your affairs. You’re going to want something else.

Bryan:  Excuse me for interrupting here, Reid, but how I’ve seen that as a financial adviser play out sometimes is, if they somebody dies, and they leave it up to probate like you’re describing, quite often, I always tell my clients, death never brings out the best in people. It brings out the worst.

If there is not a clear indication of what you would like to see done in case of your untimely death, and you go to probate ‑‑ correct me if I’m wrong here, Reid ‑‑ it can be very costly. It can be very contentious if there’s not a clear direction.

Probate is a platform in order to do this, but it may be very different than what people understand or feel like will happen if they die without a will.

Reid:  Without a will, let’s now talk about an attorney‑drafted will. Don, there are other kinds of wills that are available, and all create special complications in probate. One kind of will that you hear about from, especially in older Texas cases, is the holographic will.

In the 19th century, that was a common way for people to leave their property behind. It’s a document entirely in your own hand, usually states your name, the person you’d like to serve as executor of the will, names the property you want to pass on, and then the heir that you want to receive it.

It’s a complicated matter enforcing it. It requires two people to ensure that your handwriting is actually yours. The possibilities of contentiousness in probate, especially if there’s any kind of significant estate is very, very high.

The other kind of non‑attorney drafted will that you see from time to time is the computer‑generated will or the Internet type will. Those sorts of documents are usually tailored to a state other than the one in which they’re enforced. Consequently, there can be problems with the probate process with them.

The big issue in all wills, or all processes involving probate, is that they create a form in which conflict, and sometimes litigation, becomes more common.

There is always the option when people see a probate process, to come in, and begin making objections, lobbing grenades at the executor, contesting the people who are entitled to distribute the money, or establish the trust created under the will, etc.

For that reason, people from time to time are leaning towards the use of things called revocable trusts. Revocable trusts avoid the probate process to the extent that they’re properly funded. That means that the title of the property is correctly placed in the name of the revocable trust.

For example, your house’s title would have to be placed in the name of the revocable trust. You can do it with cars. You can do it also with non‑titled goods. Gold bullion, for example, or anything else of value.

We have to make sure that there’s an assignment that it’s in the trust. If so, then at the time of death, that property passes without any recourse to probate.

Bryan:  Explain that for our clients. The way that I understand it is, if you have it in a trust, it’s one way of bypassing probate. People cannot contest it. It is done by a matter of law, and it basically sets up the estate the way you want it without any real conflict in the courts.

Reid:  I think that latter point, without the possibility of conflict in the courts, because there is no court. There is always the possibility of challenging any document, and hauling it into a courthouse and asking a judge to review it.

Neither a trust, not or any other instrument known to man, is litigation‑proof, but the chances of litigation increase when you appear in court in order to prove up a document and have court-supervised administration.

Bryan:  Am I correct in my knowledge legally that if you have a will, or if you don’t have a will, you go through probate, everything is disclosed that’s in the estate? Versus a trust, you don’t have to disclose that. That’s not public information, correct?

Reid:  Correct. If you’re not in the probate type process, meaning you are settling your estate through a revocable trust approach, not going into probate means that nothing is publicized. However, I do want to make clear we have an excellent streamlined probate procedure in Texas.

It is less expensive to probate in Texas with a properly drafted will than in almost any other state in the union. Probate is not something to fear based on disclosure alone because there are also provisions in the Estates Code that allow you to keep your inventory secret.

Bryan:  On that note, for the listeners there, I think the takeaway to this point is that, if you don’t have a will, get a will done by a lawyer, and get it officially done. Don’t do a holographic will of writing it out, or don’t just expect…Doing nothing is not a good decision because that will be left up to the probate court.

A lot of things that will happen there will most likely not be in what would be your interest now, and what your will, your desire to see played out with your heirs. It’s important to sit down with an estate lawyer and go over these things.

Furthermore, if you want to prevent going through the probate process, a good way of doing that is a revocable trust. That’s one way of actually keeping all your assets and your desires, I guess, for your state away from the public eye, versus if you do a will, or if you don’t do a will, everything’s going to be public information, correct?

Reid:  Correct. Historically, that is one of the strongest qualities to recommend a revocable trust.

Bryan:  Reid, in your practice, why do a lot of people, why have they not done their wills? Why have they not explored doing trusts to take care of their estates?

Reid:  It has to do with the thing that causes a will to be implemented and go into probate. It’s the D word. Death, and everything surrounding death is such a turnoff. We’ll do anything to avoid the subject.

We have a great difficulty looking into our own mortality. Sometimes, thinking about wills, you get distracted by those rather negative thoughts. However, a will is like a bond of love between you and generations, and a way for you to express yourself, and your sincere intentions well after you’re gone.

Properly drafted wills should actually have the word love stamped all over them because done correctly, they take away the difficulties of the moment, and create structure, order, and a sense of being cared for the survivors.

Bryan:  Thank you, Reid. We’ll be continuing our discussion of estate matters in our next segment. Reid Heller will still be with us. Thank you so much for listening. You have been listening to the program on Rigg Wealth Management. My name is Bryan Rigg.

We’d love to hear your feedback on the issues that we’ve been discussing today. My telephone number is 972‑383‑1210 for the firm. Again, that’s 972‑383‑1210. We’d love to hear from you. Also, please feel to visit our website at

That’s Rigg with two Gs, Please stay tuned. We’ll be exploring wills, trusts, and estate planning in our next segment. We appreciate you listening today.

Show 12 – Segment 4

Bryan Rigg:  Welcome back to the show, ladies, and gentlemen. You’re with Bryan Rigg with Rigg Wealth Management.

We’ve been discussing in the last segment about estate issues and how important they are. How they look when you don’t have a will, when you have a holographic will, a will that you just write out in your own handwriting versus a will you actually do with a lawyer, versus trust.

We were talking about at the end of our last segment how difficult it is for people to look at their estate planning. Quite often, the reason why is they’re dealing with their mortality. They’re dealing with death.

Reid, you talked about how you help people get comfortable with that. I don’t know if you were finished with your thoughts there because you also mentioned something that’s important to estate planning, is also looking at tax issues. If you don’t have anything more to talk about as far as how you get people comfortable with looking at their wills, please go into the tax issue.

Reid:  Let me say one more thing about getting comfortable. Mortality is an adult subject. It’s part of mature people’s understanding of themselves in relationship to the world and to the generations to come, and obviously, to their spouses and immediate relatives.

The goal of estate planning is to create a bond between yourself and those loved ones who survive. If you think this way about insurance and the need to provide for people after you’re gone, estate planning is the vehicle for ensuring that your desires are met.

Bryan:  I always find, just with retirement, a quote that I give from stats that 50 percent of all people who retire today have 50 percent less than what they need. From your legal expertise, do you think the majority of people have done estate planning, or have the majority of people out there not done their estate planning?

Reid:  I’m sure it’s a growth industry, meaning that only a smaller percentage of the country has actually submitted to this discipline and tried to go to a lawyer. I think there’s general interest, but I think many people have attempted to use Internet‑type solutions. I’ve tried to probate some of them, so I know the strengths and weaknesses.

Or they’ve tried to do things through holographic wills, which are botched, because of the peculiar rules surrounding holographic wills. There’s really nothing like finding an attorney. Shop around, get good prices. There’s a lot of variation.

Some firms are very expensive. Maybe you’re getting good value with high dollars, but it’s not necessary. Estate planning can be as low as under $1,000 for an individual, under $2,000 for a married couple, with some real tax planning.

Let me lead on now into the tax planning segment. Again, I’m not a CPA. I’m not a specialist. But this is something that those of us who are in this profession know from experience, the problem of taxes is what’s commonly known as the death tax. This is different from income tax.

The death tax is that tax that is assessed by the IRS upon the death of any individual. Although it may be assessed of the first to die for a married couple, the tax isn’t collected until the death of the second to die, at least if they’re US citizens.

The current tax structure in this country for estates is actually quite favorable. The range is 18 percent for sums $10,000 to $20,000. For a million dollars and up, 40 percent, so from 18‑40 percent is what we call the death tax.

If that sounds high, I’ve got some good news for you. There is an exempt amount in every estate, and currently, the exempt amount is just under $5 million per person. Excuse me. Did I say five? I think it’s just under $5.5 million per person.

What that means is that a married couple can shelter up to $11 million, or just under that, with appropriate type planning, and it’s not complicated planning. This is something known as an AB trust type solution.

It’s something most general practitioners with some competence in special interests in wills and trusts can draft for you. It is worth exploring, because even if you’re below that amount ‑‑ because who knows? Who knows what the future holds?

Bryan:  Yeah. Just a few years ago, ladies and gentlemen, it was just $1 million, and it changed just in the last decade. The courts, the government, can change things in a heartbeat. That’s right now what you can plan for, but I want to reiterate here.

A lot of our listeners probably don’t have estates that are above $5.5 million, or collectively above $11 million. If you do, and you haven’t planned accordingly, then I strongly encourage you to get to a lawyer.

The one thing you always want to remember, whether your estate’s $100 million or $2 million, if you don’t have estate planning, you can lose hundreds of thousands of dollars in legal fees if you die intestate, so it’s very important to plan accordingly.

Continue on with the taxes, Reed. I think this is fascinating.

Reid:  The general mechanism through which we do this kind of planning is to take…Let’s imagine now a will, one will for each member of a couple. Each individual has a separate will, and in that will is a family trust.

Upon the death of the first to die, in this state, it’s community estate, so we take the community, add to it their separate property, and we segregate that into something known as a family trust.

That family trust is for the benefit of the surviving spouse. It’s very easy for the surviving spouse to access it, to manage it. It’s a tremendous method of getting the money to your spouse without actually subjecting it to estate taxes upon the death of the second to die, meaning that spouse.

Bryan:  These issues are very important to explore. Estate planning is, once you get into it, it takes several days to maybe come up with a plan, and then you can implement this over several weeks.

A durable power of attorney, living will, health care surrogate, wills, trusts like Reed is talking about, and the efficiency of trusts that can play out with your estate ‑‑ these are important things to look at.

Reid:  Don’t forget, disposition of remains, appointment of guardians for minors or impaired dependents. There are many things.

Bryan:  Yeah, so this is very important to look at. I find that most of my clients have not done proper estate planning, and I encourage you to do so.

Please feel free to visit us at our Web page at That’s Rigg with two Gs, Also feel free to call us at 972‑383‑1210. Again, that’s 972‑383‑1210. We love to hear from you, and we appreciate you listening today.

Show 12 – Segment 5

Bryan Rigg:  Welcome back to the show, ladies, and gentlemen. You’re with Bryan Rigg with Rigg Wealth Management. We’ve been talking about estate issues with a lawyer, Reid Heller.

We’ve been talking about taxes, talking about trusts, talking about wills, holographic wills, talking about what it looks like if you don’t have a will when you pass on, and how that can be very problematic for your heirs.

Right now I’d like to have Reid explore a little bit about gift tax, and how that looks, and how you can do that throughout your life. Then we’ll come back to historical events and how that’s shaped our economic reality, and how that might influence our investing habits. Without further ado, I hand it back over to Reid to explore gift taxes.

Reid Heller:  Thanks, Bryan. I think the word gift taxes is a little bit misleading. What we’re talking about when we make gifts during our lifetime is either an exemption from the reduction of something called the lifetime credit amount. The lifetime credit amount is almost $5.5 million per individual.

When you give gifts during life, those gifts ‑‑ if they’re of a certain size ‑‑ can be deducted from your lifetime credit. There is a provision that exempts a certain amount of money from reducing that credit.

You may want to think about that as a strategy for preserving your lifetime credit if you have a fairly large estate ‑‑ over $5.5 million for each individual. What that means is approximate $15,000 is available without any need for reducing your unified credit.

So that if you want to make gifts to each of your children, it’s possible to do so with that amount for each of them, which gives you a considerable amount of flexibility in trying to reduce your overall estate, pushing money over to the next generation, and not allowing that gift to interfere in any way with your existing tax planning.

Bryan:  Even if you don’t have an estate of five million, you can give almost $15,000 each year and get a tax benefit for it. A lot of people do this with 521s, the college saving plans, for their grandchildren, their nieces, and nephews, and so on.

We’ll be having Reid come on in later shows to discuss more issues about estate planning, the tax benefits, and the benefits sociologically for your families. I love the way that Reid described how doing your will, which is quite often very uncomfortable for people.

If you look at as almost a love letter, if you will, or a testament of love of how you want your kids to remember you by and how you want to take care of them, that might be one way of kind of helping you step over that line of dealing with your mortality in putting your estate in in order and finding a good strategy for your family.

I’d like to come back to some historical events out there that have shaped our landscape for investing and how we do things. A lot of times people don’t understand that the reality we have, how it came into being.

We talked about earlier, Disneyland ‑‑ a lot of people are shocked to know that is the largest employer in the world, with 50,000 employees ‑‑ and how that tells us an awful lot about the human psychology of wanting to escape, wanting to get out of the doldrums of reality, of their daily lives, and get into the world that makes them forget about their daily cares.

That’s something interesting to look at when you look at investing. You can actually invest in Disney and reap the rewards of what they do with movies, and what they do with their theme parks. Another thing people don’t realize that’s so much part of our world is the movie industry, and how things have influenced the movie industry.

Most listeners will know the famous move “Jaws,” blockbuster of Hollywood that came out in 1975, Spielberg’s small movie dealing with the famous actor, Roy Scheider. This was the first time that you had a movie that had a heavy pre‑opening marketing and wide releases.

Quite often before “Jaws,” you had a movie that came out, and then through PR and interviewing, they tried to build a following. With “Jaws,” you had a huge industry pushing it before it ever came out, promoting it.

Then you also had a lot of things coming afterward about it ‑‑ T‑shirts, mugs, a lot of buzz about how they did all the electronics, how they did the props. We see that same decade with “Star Wars,” that huge explosion of all the toys that came out of it.

This has inundated our way of looking at the world, consumer goods. Of course, the movie industry is huge, and you can invest in that now, and look at how that influences consumer behavior, how that influences how people look at reality. Quite often if you look at “Joseph Campbell & the Power of Myth.”

He’s saying quite often, our modern gods, if you will, our modern way of looking at life, our movie stars, and movies, that’s also part of the escapism. People gravitate to this, whether it’s going to Disneyland, or whether it’s watching movies. How does that influence investor behavior? I think that’s important to look at when you’re building out a portfolio.

Also quite often when people get interested in something, it helps them with investing. When I sit down with people, I ask them what they like to do and what they enjoy doing. That helps generate a productive discussion about how to build out a portfolio. Here again, I like to go back to Warren Buffet.

He was just looking at Coca‑Cola and Dairy Queen and seeing how people liked these companies. They liked consuming Coca‑Cola. They liked having Dairy Queen milkshakes. As a result of just observing that consumer behavior, he started investing in it.

He’s used that simple principle of looking what people need and want to build out a huge empire that everybody knows about. Another thing that people take for granted is the cable industry. When did that start?

A lot of people peg it in 1975 when HBO streamed the Thrilla in Manila, the famous boxing match between Muhammad Ali and Joe Frazier. This really put the cable industry on the map. Before, it was just all TV. Cable became a competitor, and now it basically dwarfs what the TV industry is doing. It’s a $40 billion segment of our economy.

Looking at how to invest in how people get information, how they get entertained in the privacy of their homes, is very important to look at. How those cable networks, how they do advertising, how they have consumer goods on their programs is important to look at as well when investing is considered.

Also, something that’s interesting is how investing can shift with new information. After World War II, you had an explosion of people smoking. A lot of people were smoking beforehand, but you had an explosion because quite often in all the GIs C‑rations, there was a pack of cigarettes.

Companies like Phillip Morris was able to get into government contracts, and smoking was done everywhere. 1964, the Surgeon General report came out of how dangerous smoking was, and you had a dramatic decrease of people buying cigarettes.

You also had lawsuits going out there that the companies like Phillip Morris had misrepresented their information. These are important things to look at, the health ramifications of consumer goods, what that can do to consumers, the people, American citizens.

That’s something also important to look at as you’re getting involved with investing. Quite often I have a lot of clients who say they want to get away from sin stocks. They don’t want anything to do with gambling. They don’t want anything with alcohol. They don’t want anything with smoking and cigarettes. We can do that, and that’s something else to look at.

These issues, I think, are important to look at historically and psychologically, and these are things we take into consideration when we build out portfolios at Rigg Wealth Management. We appreciate you listening today. We’ll be exploring these issues more in coming weeks.

We appreciate you listening to our program. Please feel free to call us at 972‑383‑1210. Again, that’s 972‑383‑1210. Also, please feel free to visit us at our Web page at We’d love to hear from you. Please call us, and have a no‑charge consultation with us at our office. We appreciate you listening today.