May 3, 2018
Is Your Business Ready to Sell? Part Five:
Sellers Need a Phased Approach to Wealth Planning
John Monahon: Hello, and welcome to In Process, conversations about business in the 21st century, presented by Trusted Counsel, a corporate and intellectual property law firm. I'm John Monahon.
Evelyn Ashley: And I'm Evelyn Ashley.
John Monahon: We're partners in Trusted Counsel. Evelyn, this is our fifth installment of prepping the princess, which is our podcast series. It consists of six podcasts about businesses and their chief executives and what they should be thinking about in order to get themselves to a point where they're ready to be sold.
Evelyn Ashley: Yes. And I think this'll be a really interesting one from both kind of the estate planning perspective, but also maybe some of the things that entrepreneurs and business owners should be thinking about prior to actually getting ready to sell their business.
John Monahon: Right. I mean, you and I, we deal with all sorts of business owners who are so involved in their business on a day to day basis that they don't really do a lot of financial planning, at least not high level, like what we're going to hear from Wilmington Trust today, and then all of the sudden, a big windfall of cash comes their way.
Evelyn Ashley: And then there's that tax bill that comes along with it.
John Monahon: Right. And there's implications. And as long as they talk to someone ahead, we can get ahead of it, right?
Evelyn Ashley: Yes, help manage it.
John Monahon: Yeah. So we have today joining us Jonathan Fitzgerald of Wilmington Trust. Jonathan is the vice president and director of wealth and fiduciary planning in the south east. Jonathan is responsible for developing customized wealth management and financial plans for high net worth individuals and families, business owners, entrepreneurs, and foundations and endowments throughout the south east United States. Jonathan holds a JD from the University of Florida Levin College of Law, and a bachelor's degree in accounting from the University of Notre Dame. Jonathan, welcome to the show.
Jonathan: Thanks very much for having me.
Evelyn Ashley: So, Jonathan, while the concept of Wilmington Trust I think has a familiar ring to a lot of people when they hear it, I don't know that they necessarily really know what Wilmington Trust business is all about. Maybe you can kind of walk us through the, from a broad perspective, of what Wilmington Trust does and a little bit about its history.
Jonathan: Sure, that'd be great. So Wilmington Trust was founded in 1903, originally as the family office for the Dupont family. So it was founded by Coleman Dupont at the time. And since that time, it has focused its business primarily on advising business owners and large families on the legacy planning aspects of their lives. And so over the past 100 plus years, Wilmington Trust has been engaged deeply with the Dupont family, and has expanded to many other families throughout the country and helping them and advising them in those areas.
It's a comprehensive wealth management firm. We do everything from investments to lending. Obviously there's a large planning component, which we're going to talk about today. And so those are the core businesses of Wilmington Trust. In addition to that, Wilmington Trust was purchased by M and T Bank in 2011, and since that time, they've added one of the leading commercial banks in the country, and so we have a large middle market lending practice in the commercial space. And we utilize those relationships to sort of continue to grow out our wealth management business in the business owner segment.
Evelyn Ashley: Interesting. So when do you think a business owner should be talking to a group like Wilmington Trust? Is it long before they even think about exiting their business? Or is there a time period that you see? And I suppose there's also, I guess, that situation where you have family businesses that really just think about family succession as part of running that business.
Jonathan: Sure. I mean, the short answer is they should get advice as soon as possible. It's never too early to engage advisors, and that would include attorneys, CPAs, a wealth management firm. With our business particularly, we sort of think about business owners in one of three phases. There's something that we call the business capital phase. So when someone's starting up their businesses, focusing on growing their business, and really they might be at a point where they're not able to pull a lot of cash out of the business because they need it for growth. There's the what we call the personal capital phase, which is when the business is running successfully, they can start to focus on pulling cash out of the business, and they can start to think about diversifying their overall asset picture, whether that be doing outside investing or other types of investment.
And there's the legacy capital phase where the business is so successful that they're really just focused on passing the wealth that they've generated onto the next generation. And so in our business, we really focus on business owners that are in the second two phases, either the personal capital phase or the legacy capital phase. And we really excel at helping them transition to the point where their business and the assets therefrom are not the sole focus of their wealth.
John Monahon: And so what type of client, I guess, is right for Wilmington Trust?
Jonathan: Well, we really, the majority of our business owners ... Or actually, I'd say all of the business owners that we work with have a business with a total value in excess of 5 million, and so we really focus on that as a starting point. We advise families with businesses from 5 million, into the billions, and so there's a broad spectrum. But really, when the business is not at a value of at least 5 million, there's, in many cases, not a lot of value that we can add.
Evelyn Ashley: So talk us through kind of the first steps. Maybe you can actually walk it through from the professional advisor's perspective. Help us to understand when we should be thinking about pushing our company client over toward Wilmington Trust. Is it because they say, "Well, I don't even have a will?" Or is it, "Well, I've got some excess cash sitting here now and I'm wondering what to do with it?" Or, maybe even a situation where, "I regularly make charitable donations?" So kind of walk us through, Jonathan, what should we be thinking about when we're talking to clients?
Jonathan: Sure. So I think there's normally two phone calls, or two types of phone calls that we get where we are ready to engage. The first is the business owner that has historically had all of his value wrapped up in his business, and the business is now mature enough where he starts to think about diversifying his asset picture by pulling cash out and starting to invest it in maybe the public markets, or maybe in some other types of private markets that he could access. So that would be the first, and I can sort of give a little bit more color to that.
The second is generally that business owner that is looking to prepare his business for sale, but hasn't yet entered into a purchase and sale contract. So, in many cases, when someone actually has a purchase and sale contract, it's too late to do really significant tax planning. But two, three, five, ten years out, the sooner the better, if a business owner's starting to think about, "Okay, I can see on the horizon a sale, I don't know that I'm ready to do it yet, but let me get all of my planning in order so that when the sale happens, it happens in the absolute most tax efficient way for my family." That second scenario is really the sweet spot within which we operate.
Evelyn Ashley: So okay, so let's say that we do come to your office and sit down with you and we have a business that is a $20 million a year business. It's got good profits running through it, we think that in three years, we actually want to exit this business. What would that process be like during that meeting to kind of ascertain information from this client?
Jonathan: Sure. I think that the first thing that we always do with a business owner in that type of meeting is we get them very comfortable with how their ongoing lifestyle would look post-sale. And that is a very challenging thing to do. Most business owners are very comfortable with the idea of having all their assets in the business, and how the cash flows out of that business will look in terms of funding their lifestyle. Now, most people from the outside might look in and say, "Wow, that's a 100% private equity investment. That's super risky. How could you possibly sleep at night?"
For the business owner, that's what they've done. What's actually scarier for them is to think about putting their money in the hands of somebody else to invest it, and knowing that if they were to invest it, that they would be safe relying on a similar cash flow need out of the business as they have historically. So what we do is we do a lot of up front number crunching to show them how their financial planning will look on a going forward basis once the business is sold, and we get them comfortable with the types of investments that they may have that they may be comfortable with from a risk perspective.
Put another way, certain business owners, if they were to exit, have a much lower risk tolerance than others, and so they may actually need to hold onto the business longer, grow it into a bigger number, so they can retire and feel safe. So that's sort of the first, and I would consider the most critical step. The next phase-
John Monahon: Welcome back to In Process, here with Jonathan Fitzgerald of Wilmington Trust. Jonathan, when we left off, you were describing sort of your process with clients coming in. You had gotten done telling us about the first stage of planning them for I guess their after-business life. What's the second stage?
Jonathan: So normally, the second stage is to talk about their legacy planning objectives. And so that is often a much more challenging conversation for both us and them, because it's talking about how is it that they're going to divide the wealth among them, among their children, among charities, among whatever stakeholders they may think of when they think about their wealth. And so we do an in-depth analysis for them on a multitude of different fronts, whether it be trust planning to ensure the assets are outside of their estate and can pass tax efficiently to their children, to charitable planning, creation of different charitable trusts, private foundations. And so it's really that legacy planning bucket that allows them to understand that their estate plan is going to match nicely with their goals.
Evelyn Ashley: So what is the next phase? Let's say I am a business owner, three years before I want to sell. I want to make sure that I'm taken care of, that my future's taken care of, assuming I've got another 20 or 30 years to go outside of this business, and I make sure that my family is being taken care of. We've had that initial conversation with you, and are feeling good about, competent about the services that Wilmington can offer. What's the next step from the client perspective? What do you need to kind of move forward?
Jonathan: So generally, the first part, if the client is comfortable with their cash flow and the fact that it will be taken care of post-sale, we normally start in earnest immediately with the implementation of the estate planning side, because the cash doesn't come in till the business is sold. But the estate planning starts today. So normally, what we do is we organize a global meeting with the advisory team, with their CPA, their attorney, and with us, and we start to walk the entire team through the conversations that we've had with the client, and we come up with an implementation game plan.
So at Wilmington Trust, we are not practicing attorneys. We don't draft documents. We do the consulting work on the front end to ensure that the client is comfortable with the planning, and then we work in concert with the overall advisory team to make sure that all the legal documents are in place to effectuate the plan, and that the legacy planning objectives will be carried out when the business is sold.
Evelyn Ashley: So how long is that process about, typically?
Jonathan: So generally, when the client comes in the door on day one and has sort of only a general concept of when his business is going to be sold, the financial planning, estate planning conversations normally take about three to six months. At the end of that period, implementation with the attorneys can take three months, can take six months, can take a year, depending on complexity, could take multiple years if it's very complex. So we always say that a minimum timeframe before a business owner should engage prior to sale of the business should be at least two years. There's other issues with valuations that I know we're going to discuss, but from a planning perspective, it really can take up to two years to make sure that everything is in great order.
John Monahon: So if someone's a business owner, and they come in, and they know they need to work on some stuff, they're not quite sure yet, you guys help them, I know every situation is different and unique that person's goals, but what's some basic blocking and tackling that a business owner should be doing for some simple estate planning, or preparing for, I don't know, an exit of their business, or a potential failure of their business interests?
Jonathan: Sure. Yeah, I mean, I think that I can give you a basic rundown of the gaps that we generally see. So one of the big issues I think business owners fail to do on a regular basis is they don't have updated wills and trusts as their base estate planning documents. And in addition, and possibly the most important part of that is they don't have a buy sell agreement in place that matches, or that coordinates well with their base estate planning documents. So normally, one of the first things I would ask a business owner for is, "Where's your buy sell agreement? What does your will and trust say?" And to make sure that's well coordinated.
But a business owner could also go through that exercise with their business attorney in concert with their estate planning attorney. The next big area that I see in terms of major gaps is most business owners don't have up to date valuations on their business. Valuation is probably the most critical aspect of getting a business ready for sale. And the reality is that when you're trying to do the type of legacy planning work that we do, the valuation purpose is very different than say an investment banker, who's just trying to maximize the value. So one valuation that we would want might be a slightly depressed value in order to do this type of planning we would like to do and to make it tax efficient. And by the time you go through the sale process, the investment banker or the business broker is already in a process of maximizing that value, and so many of the techniques that could have been used to save tax are generally too late.
Evelyn Ashley: It's lost to you.
Jonathan: It's generally too late to implement those.
Evelyn Ashley: Yes. Lost to you.
Evelyn Ashley: So this is kind of interesting because valuations, we have many clients who have not been through kind of the valuation process before, and when they hear, "We're going to do a valuation that is not tied to the sale of the business," they become quite, shall I say freaked out by the idea that we could be-
Jonathan: A technical term.
Evelyn Ashley: Yes. That we could be putting a valuation out there that actually is not a market value, and how they can actually come over that. Talk a little bit about that valuation, what it is specifically used for, why it's good that it actually be less than a market value.
Jonathan: Sure. So a lot of the business owners that we work with, let's say $20, $50, $100 million business, they're going to prepare that business for sale and they're going to want to get full value for that business, there's no doubt about that. In fact, they want to get more than what ... They want to get their best day. So what we are focused on prior to them getting their best day is to ensure that for estate and gift tax purposes, which is the realm we operate in, which will drive all the planning for their heirs, that we can ensure that we have a valuation on their business that is actually, as you referenced, as low as possible.
Valuation is not an exact science. It's really part science, part art, and there's a lot of ranges of value that one can come to. But as anybody would understand, if you're trying to come up with a value for estate and gift tax purposes, and you're going to pay 40 cents on the dollar for that value, you'd want to make it as small as possible. If you're looking to sell to a third party buyer, you'd want that value to be as large as possible. And so when we are thinking in terms of legacy planning, we're always thinking about what are the things that we could do in terms of restructuring the business, in terms of gain in business value, in terms of working with the valuation experts to ensure that that value is as depressed as possible.
Now, that doesn't go anywhere. It doesn't go to an outside person. It's a confidential process, other than possibly reporting it to the IRS. There is no disclosure of that. But it's really critical that it gets done.
Evelyn Ashley: Right. Absolutely. We also often tell clients, "If you're overly concerned about it, it is confidential, but we'll put attorney client privilege on it too by being kind of the intermediary there, so we're not going to be producing that to anyone."
John Monahon: Right, yeah.
John Monahon: Just timing wise, it seems that a lot of people put it off because they say, "Well, I might sell." And then they ... The sale is always a lot further away than what they initially think. And so by the time they should be getting it, they could have already had it done years before and would have been insignificant.
John Monahon: Welcome back to In Process. We're here today with Jonathan Fitzgerald of Wilmington Trust. Jonathan, going back to the business owners and things that they can do to prepare, what role does insurance play in their planning process?
Jonathan: Sure, so insurance is a huge part of the process. I always start with the buy sell agreement and what does the buy sell agreement say? Many buy sell agreement mandate insurance in the event of a premature death. And so that's one of the things that I see very frequently. People have a buy sell in place, it's outdated, therefore the insurance coverage is outdated, so that's sort of like the basic blocking and tackling with insurance. Make sure your insurance is reviewed regularly and it comports and agrees with whatever's in your buy sell agreement to the extent you have one.
But there's much more exotic things you can do with insurance. I mean, insurance is a great product for business owners. And I think about it in sort of two levels. The first is insurance helps pay the tax if the business owner dies prematurely. So you have a plan to know that if you were to die in the next 5, 10, 15 years, that the value of your business and the tax you'd have to pay on it would be fully hedged by an insurance product. So that's sort of the sort of second level. The third level, for me, is when you have a business, and you know there's going to be estate tax that's going to be paid, you need to have multiple techniques in place that ensure that that business is sort of fixed in value.
And then you need to know that when you pass away, that whatever that value will be in your estate is fully hedged with insurance. There's just so many, what I consider to be horror stories out there, with business owners that had to engage and fire sales of their business, the family is squabbling, fighting over the assets in the estate, and there's a liquidity crisis. And so that life insurance provides that liquidity to make sure that you don't ... Whatever the business owner has built over the course of his life, is not just fire sold to the lowest bidder at the time of death because you have a liquidity problem.
Evelyn Ashley: I think that's a really critical perspective on this, because so many of the businesses that we work with are high-growth, and a lot of times, they don't take into account that your key man, it's just a moment, you don't know what could happen. And because they don't engage in advanced planning, because they're so focused on, "I'm building the foundation of this." We've seen situations where majority shareholders have passed away unexpectedly, and everything just totally collapses, even to the point where because they don't really have a management team inside that business, it can't consume you, even though it's an excellent one from the perspective that you've got that key man who actually knows what he's doing. But that whole planning perspective I think is incredibly critical.
Jonathan: Yeah. And I would just add one point to that, which is that most insurance planning that's in place is not well-coordinated with the plan, the overall plan. So when we sit down with a business owner, the key man in the business, he has assumptions on what his business is growing at. He may think it's 10, he may think it's 15, he may think it's 20% annually. Insurance products don't grow at that rate. No investment product grows at that rate. And so very quickly you see this divergent effect where the business owner's value is significantly in excess of the insurance that he keeps for his sort of tax hedge. And what I would say is we don't ever put the insurance in place until we have a comprehensive estate plan around freezing that value.
So we know that we have a frozen value in time, and there's techniques that we're going to talk about how to do that. But that frozen value, which is not appreciating, we can have it fully hedged by the insurance product. So I just think that making sure that the insurance is well-coordinated and it is talking to the rest of the estate plan is a big gap that we see.
Evelyn Ashley: So it's interesting. So that basically means too that we put all of this plan in place, we execute the plan, and talk to us a little bit about how compliant are these business owners? Do they come back every year and do the review that they're supposed to?
Jonathan: Sure. No, I mean business owners tend to be among the worse offenders in terms of their estate planning gaps. And I think there's a number of reasons for that that I've seen over time. The predominant one is that they're just so focused on growing their business, so they don't have the time to set aside. The second one is I often hear business owners tell me that they're immortal, so they're not worried about estate planning. But our math says that they're probably wrong. And the third is we really ... It's amazing to me how little business owners want to engage in the process for the most part.
So I hear a lot of business owners will tell me, "Well, it's for my kids to worry about. It's for my employees to worry about. I'll be dead. Who cares?" And we hear that, even with business owners that have a $500 million business. I had a meeting two weeks ago where I was told that by a guy with a $500 million business. And the reality is that we've seen the aftermath, and what happens to the employees-
Evelyn Ashley: Yes, they have no idea.
Jonathan: Yes. What happens to the employees, what happens to the family, it's not a gift. And it's totally avoidable. So I can't say it enough, the tax that they would save in doing the right planning would pay for the attorney input, our input, multiple times over. It's just a matter of getting it done.
Evelyn Ashley: Well, and I think too that if a business owner, and I do agree that, I think many business owners do think they're immortal. And while they might not be so focused on, "I want to provide high wealth to my family and my employees left behind," this is part of their legacy. It is their legacy that ... They certainly don't want to die and then suddenly it's like, "Oh my god, what a terrible thing. Why wouldn't he have planned like this? Why are we in this situation now?"
Evelyn Ashley: Or her.
John Monahon: So you talked a little bit ... You touched on freezing the value of the business. And you said that you were going to follow up, talk to us a little bit about some of the strategies. Can you tell us how that fits in for a business owner and how they can freeze the value of their business?
Jonathan: Sure. So there's number of techniques that people use. they have fancy legal names, like GRATS and sales to intentionally defective grant or trust, or sales to grants or trusts. But the concept is normally fairly simple. The implementation can be a little bit complicated, but the idea is that if you have a business today that's worth say 10 million, 20 million, then you set these techniques in motion so that all the appreciation of your business over time enters to vehicles that are outside your estate rather than inside. So put another way, if you start with a business at $10 million, and it's going to double every 10 years, when it goes from 10 to 20, you want to make sure that the owner retains only the value of the 10, and the 10 that has been appreciated is going into some sort of trust vehicle for the benefit of their heirs. And then it just keeps doubling and tripling over time and all of the appreciation ideally would be outside of their estate. So that's a simple explanation of what a freeze technique is. The techniques tend to be, and implementation, like I said, is a little more complicated, but that's the idea.
John Monahon: And how do they transfer that value outside of their estate usually?
Jonathan: So generally, the beneficiary of all the appreciation tends to be, in the strategies we create a trust vehicle. And so that trust vehicle has unique features in that it is what we call estate gift and generation skipping transfer tax exempt. So basically, all of the taxes related to the, what is commonly referred to as the death tax, are avoided by virtue of using these vehicles, not just today, but forever. These vehicles allow the growth of the business to be outside of the estate tax as long as they're done in certain states, literally forever. A trust can last for an indefinite period of time, so it can be five, six, seven hundred years long, long after we're all gone.
Evelyn Ashley: Wow. And they can also use those GRATS and certain trusts for other kinds of investments that they make too, correct, outside of their business?
Jonathan: Absolutely. So one of the unique features of the playing that we do in Delaware, where our company is headquartered, is Delaware is a trust jurisdiction for certain business owners, can allow them to maintain control over the investment of those assets as well. So should they want to invest in new businesses, if they want to invest in different types of private or public investments, it's totally their choice. I like to say to the business owners that the only thing you're losing is the right to pay tax on the asset. In terms of the right to invest in any sort of business, many of my clients think about it as their fun money. They have the money in their individual name they know they're going to live on. They have money in the legacy vehicle they've created. And they can continue to wet their appetite for risk taking or business development within those vehicles.
Evelyn Ashley: Right. Kind of a maybe also a way to kind of give back to other business owners I guess in the sense if it's kind of play money.
Jonathan: Sure. Absolutely.
John Monahon: Jonathan, recently there's been something sweeping tax changes. How has that affected estate planning?
Jonathan: Yeah no, the recent changes have been very significant. There's sort of two main things that I think business owners are looking at. On the estate planning side, they're really focused on the fact that there's now basically a doubled lifetime exemption. So before, someone could give away $5.6 million per person free of estate gift, or GST tax. Now that number's doubled, 11.2 million per person, meaning that a married couple can now give away 22 million plus in total assets outside of the estate and gift tax system.
So how that's applying to a business owner has actually been fairly profound. I've probably had more meetings in the last three months than ever because when we think about giving away business assets and the ability to give away 22 million worth, it's not just giving away the 22 million today, it's also giving away all the appreciation, like we talked about. So the ability to give away those assets if you start early enough is just so powerful, and the additional $5.6 million exemption gives an amazing opportunity to start that process.
Evelyn Ashley: I think that's really important, and we've had situations where ... In fact, it's just a couple of years ago, we had a business that was founded by a dad, and he sold off part of the business, had his daughter in the business, and was looking to transfer shares to her, which ultimately we had to do a total reorganization of the business in order to do that, with the valuation and everything. But that whole idea that ... And that was a very profitable business, about $15 million, so part of that, what we were looking at is when he granted shares to her, what was going to happen to his overall exemption. I think that this increase would completely change the way a lot of business owners look at moving that cash around, because they would still have some exemption left basically, since it is a lifetime one.
Jonathan: Sure. And I think it almost changed the apex of how we think about gifting, because before you might consider giving 100% ... Sorry, 50% from each spouse, like $5.6 million gift from one spouse, 5.6 from the other. And now we're really advising clients to give away 11.2 million from only one spouse if they're going to make a total gift of that amount. The reason being that in 2025, the rules will sunset. And so having the ability to use it now before you lose it in 2025, absent further political action, we're really changing the way that we think about how to make those gifts.
John Monahon: And when you talk about it sun setting, I mean, what does that mean between now and 2025? Does it decline at any certain years? At what happens in 2025?
Jonathan: So between now and 2025, it'll start at roughly 11.2 million, and it will increase with inflation until 2025, and then on the sunset date, what happens is it will revert back to the way it was prior. So it will go back to a $5.6 million exemption, plus likely an index for inflation of some kind. So roughly a $5.6 million exemption would be lost if it is not used during the available period.
Evelyn Ashley: Interesting.
John Monahon: I think it was George Steinbrenner, he was the one that died during the year in which there was unlimited estate tax exemption. I can't remember what year that was. It was in 2011 or...
Evelyn Ashley: You think he planned it?
John Monahon: Yes.
Jonathan: That's right. That's right. And the Red Sox fans everywhere were just lamenting. But I would say it's unbelievable to me because most ... A lot of business owners I work with, they almost plan for that eventuality. Many people thought Trump was going to get rid of the estate tax and all these things. But I believe the estate tax has been around for 99 of the past 100 years. And for every person that says to me, "Hey, George Steinbrenner died and didn't pay any tax." I say, "Yeah, but everyone else did, so better to be planning for a tax situation rather than not."
John Monahon: Yeah, it's a pretty big anomaly. So much that I can only remember one person who's actually been able to take advantage of it.
Evelyn Ashley: Been able to take it. And he didn't even know.
John Monahon: Right.
Jonathan: That's right, that's right. Pure luck.
John Monahon: Well what about some other techniques. Tell us a little bit about gifting. I mean, what are some strategies that people can take advantage of from that perspective?
Jonathan: Sure, I mean I think that we talked a little bit about some of the freeze techniques around GRATS and sales to defective trusts. But we like to just start with a basic gift to a trust vehicle that is generation skipping transfer tax exempt, estate tax exempt. Utilizing as much of the lifetime exemption amount that clients are comfortable with. We almost refer to that as sort of seeding the transaction. Giving the trust seed capital, from which it can do a lot of other very interesting planning techniques over time, sales and the like. So I would say that given the new exemption, given how fast businesses appreciate, that business owners today should be thinking pretty critically about starting the gifting process now.
Not even waiting until 2025, where it might sunset and doing it the last minute, but taking advantage of the fact that gifts today allow for all appreciation to be outside your estate, and so making those gifts in trust is really just such an unbelievable technique that has been used by Wilmington for 100 plus years.
Evelyn Ashley: So Jonathan, let's kind of talk a little bit about, "I just sold my business, and I have $40 million that I've just successfully taken out after tax." What services are you going to help me with. I know we've probably done some scenario planning on what my lifestyle is, maybe made projections on how long I'm going to need that money to last. What do you recommend kind of from a broad view of how I deploy that cash?
Jonathan: Sure. So I think of it in two buckets. The first bucket is what do you need? And that hopefully we've done the planning around. You're comfortable with how we're going to redeploy the assets, generally in the public markets, that those assets will, under a whole variety of shock testing scenarios, last until when you pass away and when your wife, or the second to die. In the case of what I consider to be the fastest growing business owner segment, the women-owned business owner segment, the husband, if he were to survive. So I think that we focus very critically on that. We focus on how does the cash serve you until the second spouse passes?
The next thing we talk about is trying to continue to let the business owner engage in what he loves. Like I said, in many cases, business owners are not done. They're first business sale is the one of many. And so what we try and teach them, or try and advise them on is to take risk with the money that they don't need. So the vehicles we put in place, hopefully the legacy type structures that are there, you want to put the next investment in those structures. You want to allow the business owner to allow his appetite for taking risk to me satiated. But you also want to make sure that to the extent he hits a second home run, second grand slam, that that money's outside the estate tax system as well.
Evelyn Ashley: That makes sense.
Jonathan: It's really an ongoing process of advisement as circumstances change and business owners get into different businesses.
John Monahon: Well, Jonathan, it's been great having you on the show today. I think we all learned a lot about estate planning.
John Monahon: If you would like to learn more about Wilmington Trust, please visit their website, at WilmingtonTrust.com. If you have any questions on the topic, please reach out to Trusted Counsel at Info at Trusted-Counsel.com. Thanks for joining us.