In this week’s Ten Money Questions, we speak with Alexis Martin Neely, a mom, writer, speaker and the Personal Family Lawyer you love. She gives the kind of guidance that is critical to the growth of your family wealth and she’s speaking at the virtual Wealthy Girl Summit in January. Get a sneak peek below about what she has to say about money, death and taxes. Enjoy!
1. How are you revolutionizing the world of financial and estate planning for families?
I’m revolutionizing the world of financial and estate planning for families in a few ways. First of all, I’m bringing back the idea of the personal lawyer as the family’s trusted advisor and making a personal relationship with a lawyer both affordable and accessible for families who need the regular guidance of a lawyer, but have not felt that was possible. I see too many people turning to stock pickers and insurance agents for legal and financial advice and getting taken advantage of because they don’t have enough in investable assets to get good, objective advice. The personal lawyer is the answer.
Second, I’m helping people see that an estate plan is so much more than just a set of form documents, like a Will or a Trust, and it’s not something you wait until you are old, sick or getting ready to retire to think about; very often by then it’s too late.
Last, an estate plan isn’t something you “do” once and forget about. It’s a lifelong process that is about passing on not just your financial wealth, but your whole family wealth, including your values, insights, stories and experience. If you “do” it once and never look at it again, your plan is likely to fail.
2. How did a failed estate plan personally impact your life?
Failed estate plans personally impacted my life three times … all when men in my life died without having planned adequately, though in each case they thought they had.
First, when my grandfather died. He had children from his first marriage and my grandmother was his second wife. My grandfather thought he had everything taken care of, but after his death there was a huge fight between my grandmother and my grandfather’s children from that prior marriage. It was ugly and didn’t need to happen.
Second, my father in law died when I was in law school. All of the sudden, we were dealing with the probate court, which I couldn’t understand because I knew my father in law had worked with a lawyer to prepare an estate plan specifically so we wouldn’t have to deal with the probate court. I remember looking through his fancy estate planning binder and seeing a letter that said “Congratulations on your estate plan, now go transfer your assets into your trust.” Well, my father in law never did that and neither did his lawyer. At the time, I thought his lawyer must have committed malpractice. I was shocked when a few years later I went to work at one of the best law firms in Los Angeles and found out that it was the exact same way we did things; it wasn’t malpractice at all … it was common practice!
Last, when my own father became ill with cancer at only 57, he did not have his own estate plan finished. We had been talking about it for a couple of years, but there were still many open issues. Once he became sick, it was impossible to talk about estate planning because it would have meant acknowledging he might die and he had to maintain the mindset that he was going to beat the cancer. My dad died with an unfinished plan that left my step mom with a big mess. Luckily, my sister and I love our step mom as if she was our own mom and I was able to help her through the process, but most families don’t have that.
3. What is your most significant memory about money?
I grew up in South Miami in a community with people who had a lot of wealth, but my family didn’t have a lot, so there was always a huge insecurity around money in my house and a definite sense that we were struggling. Mind you, relative to the rest of the world we had a lot, but relative to our community, we didn’t. I remember once my mom took me with her to look at houses we couldn’t afford to buy and there was one we absolutely fell in love with. I think it was $350,000, which back in the 1980s was a huge amount of money. I asked my mom if we could buy it and she said no, that even if we sold our house we’d still be $200,000 short and I remember thinking okay that doesn’t sound like a lot, we can come up with a plan to get that. My mom looked at me strangely and of course we didn’t get the house. The funny thing is that I still have that kind of financial optimism. If there is something or some experience I want badly enough, I have the confidence that I can find a way to earn the money to get it.
4. What is your worst habit around finances?
My worst habit around finances is projecting fear about things that haven’t happened. Because of my family’s financial insecurity, I’m often aware of a gnawing feeling that I’m going to run out of money and when I indulge that feeling, I subject myself to way more stress than is necessary and it holds me back from my dreams.
As an example, I used to get seriously stressed out by Christmas because there were so many presents to buy and things I felt like I had to spend money on, but what I started to realize is that by February that financial stress was gone, it always worked out and I never ran out of money. One way or another, I always made it work.
That realization helps me in my business when I’m going through a time of tight cash flow or have to make a big investment that scares me because I can remember that the fear will pass and do what it is necessary to move forward and not get stuck in it.
5. Unlike most lawyers I know, you seem happy with your career choice. Why is that?
When I first started out in practice, I wasn’t happy. I felt as if I wasn’t really making a difference in anyone’s life; I was just shuffling paper through transaction after transaction and hoping I’d bill enough time at the end of the month. I spent a lot of time beating myself up for that thinking there must be something wrong with me because I couldn’t appreciate the job so many others would kill for at one of the best law firms in Los Angeles making buku bucks. It was only when I accepted the fact that I wasn’t happy even though I “should” be that I was able to move on and find something that did make me happy.
I knew I wanted to make a difference, so I considered working in the nonprofit sector or leaving the law and doing something else altogether. There were tradeoffs though if I chose either of those paths. In nonprofit, I’d have a hard time supporting my family. If I left the law, I’d feel as if I’d wasted three years of my life in law school and I’d be giving up on the dream I had when I went to law school of being a problem solver for my clients, someone they could turn to in times of trouble.
Thankfully I figured out that I could make a real difference in people’s lives and make a great living as a lawyer if I changed the outdated, traditional business model that no longer served anyone, so I’ve set out to do that. And, it’s been a success.
I love being a lawyer because I’m not billing my time hourly, I have a whole team to support me in serving my clients and I know I’m making a real difference in my client’s lives. It’s why most lawyers went to law school. But most law school grads come out of school, go to work for a traditional law firm and get resigned to shuffling paper and billing time in 6 minute increments. Most lawyers just accept they made a bad career choice and suck it up, figuring they’ll deal with it until they one day leave the law and do something else. I wasn’t willing to wait, so I found a way to be a lawyer, make a difference and make a great living. It’s a recipe for happiness!
6. Are there stereotypes based on gender when it comes to finances and estate planning?
Historically, if you look at the family financial decision-makers, at least outwardly, it would appear that men were driving the financial decisions in families. And, I think it used to be common for husbands to handle finances and estate planning without their spouse’s input.
What’s great is that there’s a total shift happening now. I almost never see a situation today in which a man wants to come in to do planning without his wife. Much more often now I’ll see a woman who wants to plan without much input from her husband, typically because he is too busy with work to think about the family finances and she’s totally in charge. In general, there is usually one member of the family who is the family CFO. Today, it seems to be the woman more often than not. And, I see a huge number of single women doing planning whereas I see fewer men thinking about these issues.
If there were any stereotypes, I believe they are outdated and untrue today.
7. What did your parents teach you about money?
My parents’ beliefs and attitudes about money were at opposite ends of the spectrum, which forced me to discern the truth about money for myself. And, I’m still learning what that is every single day. My dad had an “easy come, easy go” money philosophy that meant that if he had it, we were living high on the hog and if he didn’t, we were eating a lot of pasta and red sauce. He was pretty much fine with it either way. My mom, on the other hand, lived in mortal fear of running out of money, convinced she’d end up homeless; she had what I’ll call the “fear factor” money philosophy. My own money philosophy is somewhere in between.
I was in the position of having to meet all my own financial needs pretty early in life (I’ve been working since I was 14, bought my first car myself and put myself through college and law school), so I have the confidence of knowing I will always have the money I need to take care of myself.
My challenge is raising my wealth level beyond my basic needs. I’ve discovered that I can increase my accumulation of wealth significantly by getting clear about my authentic purpose in life, investing in myself so I can live that purpose and then giving more than I think I can to others. The hard parts are staying on purpose, feeling confident that my investment decisions are on track even when I make some bad investments and giving without fear. But when I do these things, I see the return.
8. What are some mistakes parents make in choosing a guardian for their children?
The biggest mistake parents make when choosing a guardian for their children is not doing it at all. 74% of parents have never legally documented their decisions as to who would raise their kids. And, of the 26% who have, most have made 1 of 6 common mistakes. The two mistakes that are most relevant financially are:
1. Too many parents consider financial resources when deciding who should raise their children. The guardians do not have to also be financial decision makers for the kids. They should be the people that will be the people who will make the best health care, education, housing, discipline and care decisions for your kids. It’s the parents’ responsibility to leave enough money behind to take care of the kids either through savings or life insurance and they can name someone other than the guardians to take care of that money if the best choice guardians are not “good with money” people who would make the right financial parents for their kids.
2. Not providing for anyone to take care of the money they are leaving behind. If the parents don’t name someone to do it, the Court will decide and could appoint someone the parents wouldn’t want or even an expensive professional.
The most common mistake is that parents who have named guardians have only named guardians for permanent, long-term care of their children, but have not made any arrangements for the immediate term if they were in an accident. This oversight leaves kids at risk of being taken out of their home and into the care of child protective services, something no parent ever wants to have happen.
Parents can learn about the three other common mistakes, learn an easy process for choosing the right guardians and even complete free legal documents naming their kids’ long-term guardian on my website www.KidsProtectionPlan.com.
9. Do you and your boyfriend see eye-to-eye on money?
Not entirely. He’s quite a bit more conservative with his money. I’m making some significant investments right now as I launch my business and it’s beyond his comfort zone. Heck, it’s beyond my comfort zone too, but I don’t let that hold me back. In fact, I’m grateful for opportunities to move outside of my comfort zone because that’s where success happens.
10. What are your plans for retirement?
I don’t believe in the concept of retirement as it traditionally has existed. The word itself assumes I won’t be productive someday and I don’t believe that’s something to strive for.
My plan for retirement is that by the time I am 40, I will only be working because I want to and with zero need for income from my labor to support my family. I believe in finding what you love early in life and doing it now, not waiting until you are in your 60s and 70s to start living the life you want. By then, it’s often too late. Retire today and stay productive doing what you absolutely love to do even if you aren’t getting paid for it.
More about Alexis Martin Neely
Alexis Martin Neely is a mom, writer, speaker and the Personal Family Lawyer you love. Alexis makes it super easy for your family to talk about and plan for sticky subjects like money, death and taxes. Get Alexis' humorous, enlightening, and often quite revealing Family Wealth Secrets by visiting her website at www.FamilyWealthMatters.com.
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