September 8, 2025 • 45 mins
Estate Planning Reimagined: From Step-Up Basis to Blockchain Governance
Chris Boyd and Jeff Perry welcome returning guest F. Keats Boyd III to unpack advanced
estate planning strategies that go far beyond drafting a simple will. They explore how
revocable trusts, step-up in basis rules, and beneficiary-focused tax planning can keep
wealth concentrated and shielded from high trust tax rates. Next, the trio dives into
family governance tools, from legacy letters and constitutions to LLC structures for
managing shared assets like vacation homes without friction. Finally, they introduce the
revolutionary potential of blockchain-based DAOs for anonymous, transparent
multigenerational wealth stewardship. To sign up for one of Keat’s upcoming seminars,
click the link below:
www.youresvp.com and enter the code: CEGBUS
#EstatePlanning #TrustsAndTaxes #FamilyGovernance #StepUpInBasis #LLCStrategies
#BlockchainDAO #WealthPreservation #FinancialPLanning
For more information or to reach TEAM AMR, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome to the program.
Thanks for being with us.
I'm Chris Boyd, certified financial planner, practitioner here
with Jeff Perry.
We are both of the AMR team at
(00:42):
Wealth Enhancement, and our guest is recurring guest,
my brother, F.
Keats Boyd.
He is the third.
He is a principal at Boyd & Boyd,
well-known for estate planning.
Estate planning is for financial planners an essential
topic of conversation as we think about trying
(01:04):
to look at a variety of things that
our clients need to consider as they look
at their tax planning, their investment planning, their
insurance, and so forth.
Estate planning becomes one of those really big
topics and lots of nuance.
Today, we're going to talk not only about
some basic and important estate planning considerations, but
(01:26):
we're also going to be bringing in some
of the cutting edge, what's happening, and why
don't we start, Keats, I know it's seminar
season.
I see you have your seminar schedule in
front of you.
Maybe we want to mention that to anyone
who's interested in just learning a little bit
about estate planning.
(01:48):
I'm reluctant to say it's the basics because
you get into some really important and dynamic
components of things for people to think about
in their estate planning that's not very basic.
These seminars for people who haven't been, they're
entirely educational.
(02:10):
It is an opportunity to really get a
grasp of the issues of what do I
need to be thinking about?
Who are the players?
Who do I need to be thinking about
to fill what roles?
What kind of concerns that I have?
We think of sometimes estate planning as the
practice of who's going to get my stuff
when I'm gone.
(02:30):
It's a lot more than that.
It's really more importantly about you in the
process for many of the decisions and the
concerns we think about and the structures, the
tools that you can help people have to
utilize to make sure that they have things
(02:51):
working for them while they're alive the way
they want and for their distribution of wealth
subsequently how they want.
Let's tell a little bit about when these
seminars and where they are.
It's local to Cape Cod.
This is really about how to make sure
that the brand new tax law that went
(03:14):
into effect, it was signed on July 4th,
many of the features go into effect next
year.
You want to make sure your estate plan
is properly reflecting the opportunities that this new
law provides.
We've got some seminars set up.
We actually started on the 10th and we've
got more on the 16th, 17th, 23rd, and
(03:37):
24th of September of 2025.
We're going to be able to just provide
some good education, talk about really the shift
away from estate tax avoidance while it's still
an issue for people who reside in the
few states that still have an estate tax
like Massachusetts.
We're more concerned about making sure the estate
plan does proper income tax avoidance planning, getting
(04:01):
the most step up in basis as possible
whenever we can, looking to make sure that
the trusts and the wills that we're using
will minimize the income tax impact because very
often most structures are set up to have
a very high income tax.
You're in the highest bracket at a very
(04:21):
low tax rate, a very low income amount.
So we want to make sure that we're
at a low threshold of income.
Suddenly you're into a very high tax rate.
And so what we're trying to do is
restructure it so that we're looking through to
the beneficiary to make sure that it's the
beneficiary's tax rate we're paying, not the separate
trust tax rate.
That can be very high.
(04:42):
So there's a lot of things like that.
We'll want to make sure we're dealing with
asset protection.
What we find is most people think of
estate planning as a once and done event.
I go and see my lawyer once every
10 years.
I maybe update my will or update a
trust, but I don't really need to do
much else.
And it's really a process.
You know this with financial planning.
(05:03):
You're constantly updating and tweaking, revisiting the investment
portfolio to make sure that things change, decisions
are being considered.
Oh, we're thinking of buying that other house.
We might relocate or whatever.
And many people are still thinking, oh, I
just need a will.
(05:25):
And surprisingly, that's not really the case.
You really need to be doing something more.
The problem with a will and traditional estate
planning is you gather up your wealth during
your lifetime.
And then when you pass away, you're really
using an upside down funnel.
You take your wealth and you're spreading it
out amongst a bunch of people.
(05:46):
Some of it goes to the government, some
of it goes to your dad, some of
it goes to the attorneys, some of it
goes to your family, some of it might
go to charity.
It's going off in all these different places.
And your family, there's lots of different people.
And so it's getting chopped up and smaller
and smaller.
So we're spreading out that wealth so it's
not as effective.
A good estate plan will take that funnel
(06:07):
and turn it right side up so that
we're keeping that wealth concentrated and controlling it
and using tools like vehicles for family governance,
a family constitution effectively to say, here's what
we as a family want to have this
wealth do and achieve to borrow off the
Rockefeller model rather than using other models that
(06:28):
just let the wealth be dissipated.
And so a lot of that structure is
done through a revocable trust as the centerpiece
of the plan, but then you supplement it
with things like legacy letters.
Hey, the trust gives the legal stuff, but
here's the value set that I hope you'll
use with my wealth.
(06:49):
Yeah, I think that's overlooked a lot.
It is.
And so that's something that we're putting an
emphasis on with our clients.
And then as I mentioned, the idea of
a family constitution, some mechanism to make sure
that there are rules for family governance, that
as things change that we don't anticipate today,
(07:10):
your plan can be flexible and deal with
those changes.
I just want to be clear.
It sounds like you're saying something a little
different than I've heard in the past, and
that is the idea that I have wealth
and I want to pass it on to
my heirs, my children primarily.
Granted, there may be other hands out in
the process with taxes and administrative concerns.
(07:34):
You sound like you're saying to retain that
in a single location, a trust or perhaps
or some kind of corporate entity, not to
disseminate that to the different parties.
I'm thinking that sounds like a recipe for
conflict.
Is this- Concentrate it and not disperse
(08:01):
it out.
I think the big difference is a preposition
that our dad used to talk about.
You give it for your family, not to
your family.
And so using a trust that's built to
retain the wealth, it's not to say that
we don't want the kids to use and
enjoy it.
That's not the goal.
The goal is to make sure that-
(08:22):
It's not to prevent that.
Yeah.
We want to make sure that they're getting
the benefit of the gift that you're leaving
the kids, that they can decide how to
invest, for example, their portion of the inheritance.
We're not trying to take that away.
So their portion of the inheritance, they still
control their piece of it.
Their portion, right.
The difference is really understanding that ownership, property
(08:46):
rights are analogized to a bundle of sticks.
Jeff, you may remember this.
If I own a piece of land, when
I own it outright, I got the whole
bundle of sticks.
That might be the right to take crops
off the land.
That might be the right to live on
(09:06):
a house that's on the land.
That might be the right to dig out
minerals from the land.
It might be the right to sell the
land in its entirety.
It might be the right to retain the
right to live there, but sell the remainder
interest.
It's all different rights that are one big
bundle.
What we're trying to do with a good
estate plan these days is to say to
(09:28):
the kids, here's the entire bundle of sticks
except one stick.
We're going to keep the ownership stick in
the trust set up by mom and dad.
So mom and dad's trust will own it.
You can do everything else with it.
And why is that desirable?
Okay.
Because if you own all the bundle of
(09:49):
sticks and I sue you for some reason,
I can take away some or all of
the sticks.
But if I don't own the sticks, you
have a harder time taking those from me.
Right.
I can't take the ownership away because I
may sue you, but I'm not suing mom
and dad's trust.
Mom and dad's trust didn't get into a
(10:09):
car accident.
Mom and dad's trust didn't have some negligent
act.
Didn't have an employment disagreement.
So there's value in having that protection in
effect.
That's right.
And so- So I still can control
it all.
I can have the benefit of it and
enjoyment of those resources without the liability of
(10:31):
the risk- The risk of loss that
someone can take it away from you.
Right?
Okay.
And so what we're trying to do is
keep it concentrated in mom and dad's trust
and then supplement that or compliment it with
family governance documents, whether that be an LLC
or in the new technology world, right?
(10:55):
Yeah, it's a business entity.
And so effectively in some cases, let's say
that mom and dad have a home here
on the Cape and they want the kids
and grandkids to keep the home and use
it for multiple generations, right?
Haven't seen that.
What are we doing?
We're putting our kids into a business relationship.
(11:17):
We may not think of it that way,
but we're forcing our kids to be partners
in the ownership of this home.
And we need to set up a business
structure to allow the kids to properly manage
that, to say, hey, you as the owners,
you may need to contribute to do a
renovation.
(11:38):
If we decide we can rent the property
out and use the rent to pay for
some of these expenses, or maybe we're all
going to take turns.
But now if one of the kids moves
to California and we're forced to stay in
this business relationship, what's going- What's fair?
What's equitable?
How do we manage that?
What if my finances require that I can't
afford to maintain this relationship and I need
(12:00):
to sell- And other family members pick
out what happens.
No, I like to stay there.
I don't want to sell.
Right.
Now what do we do?
Right.
And that can be handled through a business
structure like a limited liability company.
LLCs are great because they are the simplest
of business structures if you're going to get
into a formalized business relationship, right?
(12:21):
That doesn't have a lot of formalities to
deal with.
Annual meeting or whatever.
You don't have to have officers and elections
and corporate resolutions and all this other stuff
that keep the lawyers busy if we use
a corporation, right?
Corporations are great if you're a lawyer because
you've got lots of work that you need
to do.
Not so great if you're the business owner
(12:43):
who just wants to do the business of
managing the real estate, right?
And so LLCs are a great tool for
people who are- Families in that circumstance.
Yeah.
They're really good at whatever their business is,
but not great at the formalities.
All right.
So LLCs, trusts, things like that.
And now with the advent of blockchain technology,
(13:06):
there's another opportunity for family governance called a
decentralized autonomous organization.
Hold that thought.
Okay.
Let's wrap up the mention of the more
familiar type of estate planning that you'll be
talking about at the seminars and share where
those are going to be or how people
(13:27):
can register before we go on to-
All right.
Great.
So yeah, if you're interested in learning about
just general estate planning devices, wills, trust, powers
of attorney, healthcare proxies, living wills, how they
all interplay with each other, how they handle
incapacity care planning, how they handle passing wealth
to death, how they handle taxes and asset
protection.
And you'll touch on things like the LLC
(13:49):
and things like that as well.
Yeah.
Exactly.
So again, they are at the Wauquoset Resort
on Tuesday, September 16th at 10 in the
morning.
These are all at 10 in the morning,
by the way.
Wauquoset, Tuesday, September 16th.
The Courtyard by Marriott in Hyannis on Wednesday,
September 17th.
The Daniel Webster in Sandwich on Tuesday, the
(14:09):
23rd.
And finally, the Windsor House in Duxbury on
Wednesday, September 24th.
And to register, it's a really easy URL.
You can go to www.ursvp.com.
So that's the word, U-Y-O-U
-R-S-V-P.com.
(14:31):
And enter a code C-E-G-B
-U-S, or you can call our office
at 508-775-7800 and just tell somebody
that you'd like to register for the upcoming
seminars.
We just need to know how many people
are going to be there.
And they'll help you figure out which one's
the best time and location for your availability.
So that number again is 508-775-7800.
(14:55):
All right.
That's what you'll be talking about at the
seminars.
Now we want to talk about an evolution.
There is a new technology people may want
to know about, be familiar with, and maybe
start to gravitate towards this making use of
(15:17):
a blockchain technology.
And what did you say?
Decentralized?
Decentralized autonomous organizations, DAOs.
Some people say DAOs.
It's a business entity that is used primarily
in blockchain technology for managing a blockchain.
(15:40):
Okay.
This is going to sound confusing to people.
What's blockchain?
We've heard the term primarily in the context
of cryptocurrency, but that's not the only use
of the blockchain.
Blockchain is a technology.
In a sense, it is not necessarily tied
to cryptocurrencies.
(16:02):
Historically, it's been, we're all familiar with because
of Bitcoin and Ethereum.
If you've followed that type of cryptocurrency at
all, that is where this was first developed.
To me, it's taken a distracting side turn
into NFTs, non-fungible tokens for lions and
(16:23):
apes and silly things.
The real beauty of this technology is it
is effectively a ledger that has a permanent
record of transactions.
Think of- A registry of deeds of
sorts.
Effectively, yeah.
(16:44):
Or with stocks, the transfer agent keeps a
record of who owns stocks.
Who gets what shares, where do those shares
go?
And who gets the dividend.
So we're keeping these kinds of records on
paper.
We can keep these kinds of records on
a blockchain that can be anonymized.
(17:06):
So if you're looking for privacy, there's a
way to do it so that- If
a number represents it instead of- A
number represents you, right.
And that number is frequently referred to as
a wallet.
So I keep my cryptocurrency in a wallet,
like I keep my dollar bills in the
wallet in my back pocket.
And the wallet has an identifying number that
(17:31):
says, that wallet belongs to me.
That sounds scary if I were to have
my estate plan somehow anonymized in the sense
of this wallet because people get concerned.
I've heard stories about wallets being lost.
Right.
And in the case of cryptocurrency, the access
to their wealth that's tied to that cryptocurrency,
(17:53):
inaccessible.
Is this something that is typically expected, the
idea, not the loss of that, but the
idea of anonymizing one's wealth that is essentially
tied to the blockchain?
I think the ability to keep it anonymous
(18:14):
if somebody wants that is desirable.
A lot of people like the idea of
privacy.
In fact, that's one of the reasons many
people choose to have a revocable trust over
using a will.
A will becomes a matter of public record.
The assets going through the estate can become
a matter of public record.
And that loss of privacy is undesirable to
(18:35):
most families.
You don't want the nosy neighbor next door
being able to just run down to the
probate court and say, hey, I'd like to
see the probate estate for Jacqueline open it
up.
And there's all her financial affairs right there
in black and white.
So a trust helps avoid that.
We can use blockchain technology to do the
(18:56):
same kind of a thing, to keep things
private, to say, hey, I have a desire
to give my stuff to this person or
that person.
And I don't need anybody else to know
who's getting it.
Now, that doesn't eliminate the need to file
estate tax returns and disclose information to government
entities when we're required to.
It simply means that it's not necessarily going
(19:19):
to be a matter of public record.
And it's something that we can structure in
a way that maintains family privacy.
No doubt people might hear this and say,
well, why would I want to do this?
Why would I want, instead of a more
traditional means of transferring wealth from one generation
to the next or whatever, tell about the
(19:40):
virtues of why this is designed.
So traditionally, when we use a will-based
estate plan, a probate's going to last anywhere
from a year to a year and a
half.
In Massachusetts, one year is mandated by statute.
We can't close a regular probate until that
one-year timeframe is over.
So we've baked into the cake a delay
(20:04):
for your family to get their money.
If we use a revocable trust, we're often
dealing with a similar delay.
Now, if it's a smaller estate where there's
no estate tax return required, sometimes we can
wrap those up relatively quickly.
I'm going to say six months.
But that's still a delay.
(20:25):
Wouldn't you like a system where within 30
days, everybody can get whatever they're entitled to?
Quite frankly, we could make it virtually instantly
once certain criteria are met, that wealth could
transfer from the deceased to the heirs, lickety
-split.
(20:46):
But I think it would be wise to
put a little bit of a delay in
there so the system that we're building has
a 30-day delay, so that if there
is fraud, we have a way of stopping
the transfer to someone who's not supposed to
receive advance.
So we've built a 30-day delay in
(21:06):
there, but it could be instantaneous that estate
taxes are calculated and paid, income taxes are
calculated and paid, debts of the decedent are
calculated and paid, and the heirs get their
wealth, perhaps with a small reserve, and then
we go from there.
So speed is the big advantage here, but
it's not the only advantage.
(21:27):
I thought that was one of the reasons
I used a trust.
Doesn't that happen faster than a probate?
Yes, but the difference is this.
So once a death occurs with a trust,
the new beneficiaries, the kids, step up into
the place to be the beneficiary, so they're
able to have access to things.
(21:50):
But the reality is, when we're settling an
estate, there's really five steps that we're going
to go through.
We have to take an inventory.
What did somebody know?
I'm sorry, what did somebody own?
With blockchain technology, that's already on record, so
we don't have to do a new inventory.
(22:11):
So if there was something that wasn't recorded
as part of the blockchain, then that still
remains a probate issue.
Or some other method of passing wealth.
But if it's on there, it could be
instant.
We have to get appraisals.
What was it worth?
Well, real estate, we have to go out
and get a paid appraisal.
(22:31):
It slows things down a little bit.
That can take several weeks to get.
If it's stocks, there's a process for that,
but basically, the day after that, information is
available.
So there's a number of steps that need
to be taken.
Inventory appraise, we got to retitle, take the
decedent's name off, transfer to the successor trustee
(22:54):
who will eventually transfer to the heirs.
We have to pay taxes, income taxes, and
estate taxes, and then we divide and distribute.
And to get through that process, if an
estate tax return is required, we're probably going
to be nine months to a year.
So even with a trust, we're not going
to get through the steps until we've done
all those things.
(23:16):
And it takes time to file the estate
tax return, gather the data, fill out the
form.
Now we're reaching a point where much of
that can be done through automation and can
be tied to blockchain technologies to value and
distribute.
Kate, sometimes when someone passes and they've kept
(23:37):
their estate planning private, meaning just themselves sometimes,
and they're an attorney, sometimes documents aren't readily
available.
No one knows where they are.
There's issues of, well, there's two sets of
documents, or there was a new set assigned,
all these things that you deal with every
day.
I know the blockchain, you say the blockchain
(23:58):
is private, but would it, in this example,
if this individual put it in the blockchain,
would the blockchain be searchable to see?
Yeah.
Did Mr. Jones have an estate plan or
some documents on the blockchain?
There would be a couple of ways of
dealing with that.
So typically documents like wills or trust could
(24:21):
be converted to a non-fungible token, a
digital representation of the document, and that would
be recorded somewhere on the blockchain so that
there'll be access to it.
It would be determinable.
You'd probably need to know the wallet information.
But again, assuming the family has some information
about the wallet or the drafting attorney who
(24:42):
assisted with this would have that information, then
you'd be able to identify it quickly and
get the NFT available to show what the
plan actually was.
So that's a benefit in itself.
Right, right.
You talked about calculated and paid, right?
Yeah.
You said things like an estate tax or
(25:06):
whatever.
Part of what was the delay in the
regular current process in a trust, for example,
is the notion of valuations.
What's my real estate worth?
(25:28):
And that often requires an appraisal for me
to get a calculation.
There's a delay in that process.
How will you navigate that kind of an
issue with the notion of that transference, that
conveyance of transfer of ownership?
There's a couple of ways.
(25:49):
Some of them are available.
Some of them aren't yet, but will be
in the not too distant future.
With the advent of AI, it is very
possible to create an AI agent that will
be able to do an appraisal.
You just need to go out and find
(26:11):
the comps.
And so the technology isn't there yet, but
it's probably right on the horizon.
The other option would be to memorialize the
real estate ownership as a non-fungible token.
(26:32):
There are some technologies out there that do
this with stocks right now.
And you could then see what that NFT
is trading at as it's assessed value in
a sense.
So if I understand that correctly, essentially I
would say the ownership of my property that
(26:55):
I own here now is connected to this
non-fungible token.
And if I wanted to transfer the ownership
of that, I would be selling in effect
this non-fungible token which owns this real
estate as a means of transferring ownership.
(27:15):
And therefore, there's a potential for a market
of sorts for assets like that.
And you think that's likely to be the
way some of this is happening in the
not too distant future.
Yes.
Okay.
And very interesting.
Very interesting.
Yeah.
So the question is going to be, where
(27:36):
do you want record of your real estate
ownership to be at the county registry of
deeds and books and pages on paper?
Or do you want it to be more
digital and there's going to be a competitive
alternative solution for real estate for stocks and
bonds instead of transfer agents?
(27:56):
Well, I bet you could name dozens of
heirs that you are working with after the
passing of their parents who presently expect this
to be like, aren't we done?
It's been a month.
Yeah.
Like every one of them, probably.
And so the idea of moving this process
(28:17):
to something more efficient, let's call it, would
have great appeal if you're maybe automating, for
lack of a better term, some of the
process of how is this accomplished?
Right.
Sounds pretty appealing.
Right.
Right.
So now this...
(28:38):
All right.
So I'm someone who says, oh, this sounds
interesting.
I should do this.
Is this doable today?
We're on the cusp.
We've submitted a patent for this process for
what we're calling the Wealth Blockchain.
So we're technically patent pending.
Takes a little bit of time for that
(28:58):
patent to come through.
As far as the technology is concerned, we're
probably about a month out from starting testing
of transfers, artificial transfers.
Should I think in terms of, hey, a
year from now, this is going to be
(29:19):
very different, or is it six months?
Is it 10 years?
I think we're hoping to be...
How quickly is this going to impact people?
We're hoping to be live before the beginning
of the year.
Wow.
So do you think...
Now, most of our clientele and I know
most of your clientele tend to be people
who are in retirement, maybe an older set
(29:42):
who are maybe a little more skeptical of
this technology.
It's unfamiliar.
Who's the target audience for this kind of
planning?
Initially, the people who will be the first
adopters of this approach will be people who
are already active in the crypto field.
Kind of cryptocurrency, familiar with blockchain technology already
(30:03):
to some extent.
They'll get it and they'll understand the application,
and so they'll be ready to adopt this
relatively quickly.
I think the next step for more broad
adoption will be a hybrid approach where we
still have traditional estate planning documents that control
some of the assets, and we digitize other
(30:23):
portions of the estate to be controlled by
blockchain while transfer process.
So that will probably be the next stage.
And with final adoption, I'd say within five
years, this could replace traditional estate planning.
Really interesting.
I wanted to ask you about another element
of this, and that is when we talk
about trust, typically we kind of hit a
(30:43):
fork in the road, and we think in
terms of two different approaches to the estate
planning.
One that's intended to shelter wealth that is
essentially giving it away prematurely before I have
a long-term care event, a Medicaid need,
and where that might take it out of
(31:05):
my access.
And one that's more designed to plan for
taxation and some of the kind of things
you were talking about earlier.
How does this technology fit into the prism
of this kind of approach?
In order to answer that, I have to
step back for a second just to explain
kind of some of what we're doing with
(31:26):
the technology.
All right.
So when you look at a trust, that
is essentially a contract, an agreement amongst three
parties.
The person who's making the trust, the donor,
settler, grantor, trustee, trustor, whoever, whatever terminology you
want to use.
The person who will manage the assets that
are owned by the trust, a trustee, and
(31:47):
the person who gets to use and enjoy
the assets, the beneficiary.
Yes.
Will's technically aren't necessarily contracts, but they are
contractual in nature as well.
I'm going to put down on paper who's
going to get my stuff when I die,
and my executor's going to oversee it and
make sure it happens.
But the court has to approve the process,
which is kind of the difference.
Right.
Okay.
(32:07):
So what we're doing with this technology is
recognizing the fact that there is something called
a smart contract in certain portions of the
blockchain world.
Ethereum initially, Solana is another one that you
can put an agreement that says- If
this, then that.
Right.
Yeah.
Basically.
(32:28):
My wallet is going to transfer X amount
of Ethereum because Joe Blow mows my lawn.
And when the certification comes through that he's
completed the job, go ahead and move the
Ethereum from my wallet to Joe Blow's wallet.
Well, that's a trust by another name, effectively.
(32:49):
It's a contract to transfer wealth from one
person to another when a certain event occurs,
in this case, a death, or can transfer
control from the owner to the next person
who's going to be in control if there's
an incapacity.
So we can put certifications onto the blockchain,
an affidavit through an NFT that says the
(33:11):
person has died.
Here's a copy of the death certificate.
We can verify that through records, through social
security administration, for example, to show that yes,
social security shows the person has passed away.
So we come at it from multiple sources
to confirm that the death has occurred.
And now we know, okay, it's okay to
transfer the wealth from the first person to
the second person.
Okay.
(33:31):
Again, we're going to build this with similar
types of trust feel to it.
We can make it a smart will.
When I die as certified by a couple
of instances, then take my stuff and give
it to so-and-so, my spouse, my
kids, my favorite charity.
(33:51):
Okay.
And then the wealth is transferred to the
ultimate beneficiary and it's done.
We can build it like a trust that
is for someone.
Give it to a wallet that is managed
by a trustee for the benefit of the
ultimate beneficiary.
And the trustee will decide how to dish
it out to that beneficiary based on pre
(34:12):
-designed parameters.
You can say, give them the income every
month.
Give them principal for health education, maintenance, and
support.
Give them principal at your discretion.
And again, the trustee in that situation, it'll
move from the wallet of the deceased to
a wallet of the trustee who will hold
it in trust for the ultimate beneficiary, much
(34:34):
like a revocable trust does now, but it
happens automatically because it's on this blockchain technology.
It is possible to let the smart contract
act like the trustee itself to actually dish
things out.
Make decisions.
Make decisions.
Yeah.
As to when to distribute on certain, again,
(34:56):
certain parameters that are predefined and recorded on
the blockchain.
What if we haven't thought of something?
And that's where there are safety nets that
you can put in.
I mentioned a decentralized autonomous organization a few
moments ago.
Initially, that's going to be the easy way
to accomplish this.
(35:18):
You put your assets into a business entity,
a DAO.
You have the DAO subject to the contract.
Well, now the DAO ownership changes, but so
does the assets owned by the DAO.
You can use an LLC the same way
if you don't want it to be totally
blockchain oriented and it transfers from the ownership
(35:42):
of the membership of the LLC transfers at
death from one person, one wallet to another
wallet.
And that manager of that LLC can act
like the trustee to distribute out to the
beneficiaries.
A DAO basically allows the various owners to
vote on things.
And so it's managed in a more flexible
(36:03):
nature because the owners can take into account
things that we don't consider today.
So they can vote on liquidating the DAO
if it makes more sense to do that.
They can vote on making partial distributions because
there's a need for one person to get
some money.
They can vote on changing the investment structure
(36:25):
from a stock account to a bond account
or whatever the nature might be.
So it gives more of a democratic management
structure than traditional business entities would provide.
All right.
You got all that, Jeff?
I think my head exploded about five minutes
(36:45):
ago, actually.
I know.
I think I lost him on that last
part of managing the DAO stuff.
So there's obviously a lot of opportunity in
blockchain technology and this is a small piece
of those opportunities.
I think for people maybe my age and
older, they'll have some hesitancy because they don't
(37:07):
understand it.
They don't know how it works.
They can't go into the office and talk
to somebody.
Well, they will be able to.
Part of what we're doing is we're going
to...
So the blockchain, this is really, to me,
it's a two-level approach to address planning.
The first level is the blockchain and the
(37:27):
smart contract.
The second level will be a software application.
For the implementation.
Yeah.
And so most lawyers are not going to
learn how to write a smart contract.
They may know the law, but they're not
going to know the technological programmatic portion of
this.
So a software application that the lawyer can
(37:49):
subscribe to to say, okay, let's build a
smart contract that works like a domestic asset
protection trust or a spousal limited access trust
or a Medicaid planning trust, they'll be predefined.
That goes back to my prior question, I
think, too.
So it's going to come down to the
programming that a legal expert might select as
(38:15):
the mechanism to use to provide the instructions
that are placed into the smart contract.
Right.
And most lawyers right now, when they're doing
estate planning, they use software to build the
trust.
Well, so what we're doing is we're changing
it to be software to build a smart
contract rather than software to build a trust,
but the smart contract replaces the trust.
(38:37):
But it's in many ways going to do
a lot of the same kinds of things.
It's going to act in a similar way.
It's just moving it from paper, if you
will, to digital.
And then the application of the decision making
is more efficient and rapid.
(38:59):
Interesting stuff.
So with every advance comes bad actors looking
to take advantage of technology and try to
figure out how to monetize in a bad
way.
There's been some articles about the increases in
technology regarding quantum computing and whether or not
(39:20):
the ability of quantum computing will be able
to threaten the blockchain and destroy that privacy
or security of it.
How would you respond to someone who's concerned
about that?
We have to be realistic.
There is some risk that basically what blockchain
is built on is the idea that we're
(39:42):
using cryptography to provide security.
As supercomputing comes online, I think it's going
to be a double edged sword.
There will be bad actors out there who
will try to use supercomputing to break the
code, break the cryptography, and therefore gain access
(40:06):
to things.
I think though realistically, the idea of the
cryptography, I'm sorry, cryptotechnology is built on a
peer-to-peer network.
You have a computer that is running programs.
Chris has a computer that's running programs.
I have a computer that's running programs.
(40:27):
There's a thousand of these computers or thousands
of them all over the world running and
trying to break the code and solve a
problem to say, yes, we all agree this
is the answer.
When one bad actor comes in and says,
hey, I've got a different answer, they're going
to get boxed out because they've got the
(40:49):
different answer.
That's part of it.
I think too, the idea of supercomputing is
going to give us an opportunity to develop
the cryptography to a higher level of security.
I think both of these are sides that
will provide adequate protection and comfort to everybody
that eventually once we do have supercomputers online,
(41:12):
we're going to be able to go to
a much, much higher level of security in
blockchain technology than we currently have.
Just as there might be if we're just
looking at it relative to today, that supercomputing
capability might be able to undermine some of
that cryptography.
But if we have the ability to use
that for advancing the cryptography, it will be
(41:34):
a much harder code to break.
Again, then you still have that idea of
the peer-to-peer network.
Just for people who aren't computer geeks like
I guess I am, a peer-to-peer
network is a network where each computer can
talk to all the other computers and each
computer stores all the data on its own
(41:55):
hard drive.
Most commercial networks are built differently that there
is a server that holds all the data
and all the computers feed onto that server
and pull the data off, do what they
want to do and then put the data
back on.
Peer-to-peer networks are something that we've
been working with since we started using networks
at Boyd & Boyd PC where every computer
(42:17):
can talk to the other computers and the
data isn't necessarily stored in one place, it's
all over the place and that adds added
security.
My mind is going back to the music
shared file program.
What the heck was that?
Yeah, that was a peer-to-peer network
where everybody was sharing their music files, their
(42:39):
mp3s.
Granted, it did violate copyright but it was
conceptual how it works essentially.
All right, well, we're going to talk to
you more about this in the future no
doubt because it sounds like this is just
at its early stages of adoption and really
(43:01):
intriguing, interesting stuff.
In the meantime, don't hesitate to deal with
your estate plan but be aware that there
are really interesting possibilities evolving over time and
may have some impact in the future as
it relates to this.
I think for those of families who are
(43:23):
looking at doing a traditional estate plan and
saying, well, is this new technology going to
undo what I just did?
It's going to be irrelevant.
No, it's not.
Will it replace it?
Maybe someday but I think there will be
people who will be hesitant to adopt it.
So over our lifetimes, there's still going to
be traditional estate planning.
There's going to be traditional estate planning.
(43:46):
Once this technology is out there, you may
be able to hybrid it but if you
want to just work with your paper documents,
that's going to work and it works well.
We know it.
It's been around since the 1500s.
Yeah.
Yeah.
So again, if you want to learn more
about those seminar dates, maybe send them to
a web page.
It's www.yoursvp.com and there's a code
(44:14):
you can enter C-E-G-B-U
-S and or call the office at 508
-775-7800.
We hope you can join us for one
of those.
We try to share lots of good information.
We'll include that link in the show notes
so you'll be able to find that more
easily.
And in the meantime, thanks everybody for being
with us for another show.
(44:36):
Until next time, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
(44:56):
.com or call us toll free at 866
-771-8901, or send us your questions to
amr-info at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
(45:17):
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome to the program.
Thanks for being with us.
I'm Chris Boyd, certified financial planner, practitioner here
with Jeff Perry.
We are both of the AMR team at
(00:42):
Wealth Enhancement, and our guest is recurring guest,
my brother, F.
Keats Boyd.
He is the third.
He is a principal at Boyd & Boyd,
well-known for estate planning.
Estate planning is for financial planners an essential
topic of conversation as we think about trying
(01:04):
to look at a variety of things that
our clients need to consider as they look
at their tax planning, their investment planning, their
insurance, and so forth.
Estate planning becomes one of those really big
topics and lots of nuance.
Today, we're going to talk not only about
some basic and important estate planning considerations, but
(01:26):
we're also going to be bringing in some
of the cutting edge, what's happening, and why
don't we start, Keats, I know it's seminar
season.
I see you have your seminar schedule in
front of you.
Maybe we want to mention that to anyone
who's interested in just learning a little bit
about estate planning.
(01:48):
I'm reluctant to say it's the basics because
you get into some really important and dynamic
components of things for people to think about
in their estate planning that's not very basic.
These seminars for people who haven't been, they're
entirely educational.
(02:10):
It is an opportunity to really get a
grasp of the issues of what do I
need to be thinking about?
Who are the players?
Who do I need to be thinking about
to fill what roles?
What kind of concerns that I have?
We think of sometimes estate planning as the
practice of who's going to get my stuff
when I'm gone.
(02:30):
It's a lot more than that.
It's really more importantly about you in the
process for many of the decisions and the
concerns we think about and the structures, the
tools that you can help people have to
utilize to make sure that they have things
(02:51):
working for them while they're alive the way
they want and for their distribution of wealth
subsequently how they want.
Let's tell a little bit about when these
seminars and where they are.
It's local to Cape Cod.
This is really about how to make sure
that the brand new tax law that went
(03:14):
into effect, it was signed on July 4th,
many of the features go into effect next
year.
You want to make sure your estate plan
is properly reflecting the opportunities that this new
law provides.
We've got some seminars set up.
We actually started on the 10th and we've
got more on the 16th, 17th, 23rd, and
(03:37):
24th of September of 2025.
We're going to be able to just provide
some good education, talk about really the shift
away from estate tax avoidance while it's still
an issue for people who reside in the
few states that still have an estate tax
like Massachusetts.
We're more concerned about making sure the estate
plan does proper income tax avoidance planning, getting
(04:01):
the most step up in basis as possible
whenever we can, looking to make sure that
the trusts and the wills that we're using
will minimize the income tax impact because very
often most structures are set up to have
a very high income tax.
You're in the highest bracket at a very
(04:21):
low tax rate, a very low income amount.
So we want to make sure that we're
at a low threshold of income.
Suddenly you're into a very high tax rate.
And so what we're trying to do is
restructure it so that we're looking through to
the beneficiary to make sure that it's the
beneficiary's tax rate we're paying, not the separate
trust tax rate.
That can be very high.
(04:42):
So there's a lot of things like that.
We'll want to make sure we're dealing with
asset protection.
What we find is most people think of
estate planning as a once and done event.
I go and see my lawyer once every
10 years.
I maybe update my will or update a
trust, but I don't really need to do
much else.
And it's really a process.
You know this with financial planning.
(05:03):
You're constantly updating and tweaking, revisiting the investment
portfolio to make sure that things change, decisions
are being considered.
Oh, we're thinking of buying that other house.
We might relocate or whatever.
And many people are still thinking, oh, I
just need a will.
(05:25):
And surprisingly, that's not really the case.
You really need to be doing something more.
The problem with a will and traditional estate
planning is you gather up your wealth during
your lifetime.
And then when you pass away, you're really
using an upside down funnel.
You take your wealth and you're spreading it
out amongst a bunch of people.
(05:46):
Some of it goes to the government, some
of it goes to your dad, some of
it goes to the attorneys, some of it
goes to your family, some of it might
go to charity.
It's going off in all these different places.
And your family, there's lots of different people.
And so it's getting chopped up and smaller
and smaller.
So we're spreading out that wealth so it's
not as effective.
A good estate plan will take that funnel
(06:07):
and turn it right side up so that
we're keeping that wealth concentrated and controlling it
and using tools like vehicles for family governance,
a family constitution effectively to say, here's what
we as a family want to have this
wealth do and achieve to borrow off the
Rockefeller model rather than using other models that
(06:28):
just let the wealth be dissipated.
And so a lot of that structure is
done through a revocable trust as the centerpiece
of the plan, but then you supplement it
with things like legacy letters.
Hey, the trust gives the legal stuff, but
here's the value set that I hope you'll
use with my wealth.
(06:49):
Yeah, I think that's overlooked a lot.
It is.
And so that's something that we're putting an
emphasis on with our clients.
And then as I mentioned, the idea of
a family constitution, some mechanism to make sure
that there are rules for family governance, that
as things change that we don't anticipate today,
(07:10):
your plan can be flexible and deal with
those changes.
I just want to be clear.
It sounds like you're saying something a little
different than I've heard in the past, and
that is the idea that I have wealth
and I want to pass it on to
my heirs, my children primarily.
Granted, there may be other hands out in
the process with taxes and administrative concerns.
(07:34):
You sound like you're saying to retain that
in a single location, a trust or perhaps
or some kind of corporate entity, not to
disseminate that to the different parties.
I'm thinking that sounds like a recipe for
conflict.
Is this- Concentrate it and not disperse
(08:01):
it out.
I think the big difference is a preposition
that our dad used to talk about.
You give it for your family, not to
your family.
And so using a trust that's built to
retain the wealth, it's not to say that
we don't want the kids to use and
enjoy it.
That's not the goal.
The goal is to make sure that-
(08:22):
It's not to prevent that.
Yeah.
We want to make sure that they're getting
the benefit of the gift that you're leaving
the kids, that they can decide how to
invest, for example, their portion of the inheritance.
We're not trying to take that away.
So their portion of the inheritance, they still
control their piece of it.
Their portion, right.
The difference is really understanding that ownership, property
(08:46):
rights are analogized to a bundle of sticks.
Jeff, you may remember this.
If I own a piece of land, when
I own it outright, I got the whole
bundle of sticks.
That might be the right to take crops
off the land.
That might be the right to live on
(09:06):
a house that's on the land.
That might be the right to dig out
minerals from the land.
It might be the right to sell the
land in its entirety.
It might be the right to retain the
right to live there, but sell the remainder
interest.
It's all different rights that are one big
bundle.
What we're trying to do with a good
estate plan these days is to say to
(09:28):
the kids, here's the entire bundle of sticks
except one stick.
We're going to keep the ownership stick in
the trust set up by mom and dad.
So mom and dad's trust will own it.
You can do everything else with it.
And why is that desirable?
Okay.
Because if you own all the bundle of
(09:49):
sticks and I sue you for some reason,
I can take away some or all of
the sticks.
But if I don't own the sticks, you
have a harder time taking those from me.
Right.
I can't take the ownership away because I
may sue you, but I'm not suing mom
and dad's trust.
Mom and dad's trust didn't get into a
(10:09):
car accident.
Mom and dad's trust didn't have some negligent
act.
Didn't have an employment disagreement.
So there's value in having that protection in
effect.
That's right.
And so- So I still can control
it all.
I can have the benefit of it and
enjoyment of those resources without the liability of
(10:31):
the risk- The risk of loss that
someone can take it away from you.
Right?
Okay.
And so what we're trying to do is
keep it concentrated in mom and dad's trust
and then supplement that or compliment it with
family governance documents, whether that be an LLC
or in the new technology world, right?
(10:55):
Yeah, it's a business entity.
And so effectively in some cases, let's say
that mom and dad have a home here
on the Cape and they want the kids
and grandkids to keep the home and use
it for multiple generations, right?
Haven't seen that.
What are we doing?
We're putting our kids into a business relationship.
(11:17):
We may not think of it that way,
but we're forcing our kids to be partners
in the ownership of this home.
And we need to set up a business
structure to allow the kids to properly manage
that, to say, hey, you as the owners,
you may need to contribute to do a
renovation.
(11:38):
If we decide we can rent the property
out and use the rent to pay for
some of these expenses, or maybe we're all
going to take turns.
But now if one of the kids moves
to California and we're forced to stay in
this business relationship, what's going- What's fair?
What's equitable?
How do we manage that?
What if my finances require that I can't
afford to maintain this relationship and I need
(12:00):
to sell- And other family members pick
out what happens.
No, I like to stay there.
I don't want to sell.
Right.
Now what do we do?
Right.
And that can be handled through a business
structure like a limited liability company.
LLCs are great because they are the simplest
of business structures if you're going to get
into a formalized business relationship, right?
(12:21):
That doesn't have a lot of formalities to
deal with.
Annual meeting or whatever.
You don't have to have officers and elections
and corporate resolutions and all this other stuff
that keep the lawyers busy if we use
a corporation, right?
Corporations are great if you're a lawyer because
you've got lots of work that you need
to do.
Not so great if you're the business owner
(12:43):
who just wants to do the business of
managing the real estate, right?
And so LLCs are a great tool for
people who are- Families in that circumstance.
Yeah.
They're really good at whatever their business is,
but not great at the formalities.
All right.
So LLCs, trusts, things like that.
And now with the advent of blockchain technology,
(13:06):
there's another opportunity for family governance called a
decentralized autonomous organization.
Hold that thought.
Okay.
Let's wrap up the mention of the more
familiar type of estate planning that you'll be
talking about at the seminars and share where
those are going to be or how people
(13:27):
can register before we go on to-
All right.
Great.
So yeah, if you're interested in learning about
just general estate planning devices, wills, trust, powers
of attorney, healthcare proxies, living wills, how they
all interplay with each other, how they handle
incapacity care planning, how they handle passing wealth
to death, how they handle taxes and asset
protection.
And you'll touch on things like the LLC
(13:49):
and things like that as well.
Yeah.
Exactly.
So again, they are at the Wauquoset Resort
on Tuesday, September 16th at 10 in the
morning.
These are all at 10 in the morning,
by the way.
Wauquoset, Tuesday, September 16th.
The Courtyard by Marriott in Hyannis on Wednesday,
September 17th.
The Daniel Webster in Sandwich on Tuesday, the
(14:09):
23rd.
And finally, the Windsor House in Duxbury on
Wednesday, September 24th.
And to register, it's a really easy URL.
You can go to www.ursvp.com.
So that's the word, U-Y-O-U
-R-S-V-P.com.
(14:31):
And enter a code C-E-G-B
-U-S, or you can call our office
at 508-775-7800 and just tell somebody
that you'd like to register for the upcoming
seminars.
We just need to know how many people
are going to be there.
And they'll help you figure out which one's
the best time and location for your availability.
So that number again is 508-775-7800.
(14:55):
All right.
That's what you'll be talking about at the
seminars.
Now we want to talk about an evolution.
There is a new technology people may want
to know about, be familiar with, and maybe
start to gravitate towards this making use of
(15:17):
a blockchain technology.
And what did you say?
Decentralized?
Decentralized autonomous organizations, DAOs.
Some people say DAOs.
It's a business entity that is used primarily
in blockchain technology for managing a blockchain.
(15:40):
Okay.
This is going to sound confusing to people.
What's blockchain?
We've heard the term primarily in the context
of cryptocurrency, but that's not the only use
of the blockchain.
Blockchain is a technology.
In a sense, it is not necessarily tied
to cryptocurrencies.
(16:02):
Historically, it's been, we're all familiar with because
of Bitcoin and Ethereum.
If you've followed that type of cryptocurrency at
all, that is where this was first developed.
To me, it's taken a distracting side turn
into NFTs, non-fungible tokens for lions and
(16:23):
apes and silly things.
The real beauty of this technology is it
is effectively a ledger that has a permanent
record of transactions.
Think of- A registry of deeds of
sorts.
Effectively, yeah.
(16:44):
Or with stocks, the transfer agent keeps a
record of who owns stocks.
Who gets what shares, where do those shares
go?
And who gets the dividend.
So we're keeping these kinds of records on
paper.
We can keep these kinds of records on
a blockchain that can be anonymized.
(17:06):
So if you're looking for privacy, there's a
way to do it so that- If
a number represents it instead of- A
number represents you, right.
And that number is frequently referred to as
a wallet.
So I keep my cryptocurrency in a wallet,
like I keep my dollar bills in the
wallet in my back pocket.
And the wallet has an identifying number that
(17:31):
says, that wallet belongs to me.
That sounds scary if I were to have
my estate plan somehow anonymized in the sense
of this wallet because people get concerned.
I've heard stories about wallets being lost.
Right.
And in the case of cryptocurrency, the access
to their wealth that's tied to that cryptocurrency,
(17:53):
inaccessible.
Is this something that is typically expected, the
idea, not the loss of that, but the
idea of anonymizing one's wealth that is essentially
tied to the blockchain?
I think the ability to keep it anonymous
(18:14):
if somebody wants that is desirable.
A lot of people like the idea of
privacy.
In fact, that's one of the reasons many
people choose to have a revocable trust over
using a will.
A will becomes a matter of public record.
The assets going through the estate can become
a matter of public record.
And that loss of privacy is undesirable to
(18:35):
most families.
You don't want the nosy neighbor next door
being able to just run down to the
probate court and say, hey, I'd like to
see the probate estate for Jacqueline open it
up.
And there's all her financial affairs right there
in black and white.
So a trust helps avoid that.
We can use blockchain technology to do the
(18:56):
same kind of a thing, to keep things
private, to say, hey, I have a desire
to give my stuff to this person or
that person.
And I don't need anybody else to know
who's getting it.
Now, that doesn't eliminate the need to file
estate tax returns and disclose information to government
entities when we're required to.
It simply means that it's not necessarily going
(19:19):
to be a matter of public record.
And it's something that we can structure in
a way that maintains family privacy.
No doubt people might hear this and say,
well, why would I want to do this?
Why would I want, instead of a more
traditional means of transferring wealth from one generation
to the next or whatever, tell about the
(19:40):
virtues of why this is designed.
So traditionally, when we use a will-based
estate plan, a probate's going to last anywhere
from a year to a year and a
half.
In Massachusetts, one year is mandated by statute.
We can't close a regular probate until that
one-year timeframe is over.
So we've baked into the cake a delay
(20:04):
for your family to get their money.
If we use a revocable trust, we're often
dealing with a similar delay.
Now, if it's a smaller estate where there's
no estate tax return required, sometimes we can
wrap those up relatively quickly.
I'm going to say six months.
But that's still a delay.
(20:25):
Wouldn't you like a system where within 30
days, everybody can get whatever they're entitled to?
Quite frankly, we could make it virtually instantly
once certain criteria are met, that wealth could
transfer from the deceased to the heirs, lickety
-split.
(20:46):
But I think it would be wise to
put a little bit of a delay in
there so the system that we're building has
a 30-day delay, so that if there
is fraud, we have a way of stopping
the transfer to someone who's not supposed to
receive advance.
So we've built a 30-day delay in
(21:06):
there, but it could be instantaneous that estate
taxes are calculated and paid, income taxes are
calculated and paid, debts of the decedent are
calculated and paid, and the heirs get their
wealth, perhaps with a small reserve, and then
we go from there.
So speed is the big advantage here, but
it's not the only advantage.
(21:27):
I thought that was one of the reasons
I used a trust.
Doesn't that happen faster than a probate?
Yes, but the difference is this.
So once a death occurs with a trust,
the new beneficiaries, the kids, step up into
the place to be the beneficiary, so they're
able to have access to things.
(21:50):
But the reality is, when we're settling an
estate, there's really five steps that we're going
to go through.
We have to take an inventory.
What did somebody know?
I'm sorry, what did somebody own?
With blockchain technology, that's already on record, so
we don't have to do a new inventory.
(22:11):
So if there was something that wasn't recorded
as part of the blockchain, then that still
remains a probate issue.
Or some other method of passing wealth.
But if it's on there, it could be
instant.
We have to get appraisals.
What was it worth?
Well, real estate, we have to go out
and get a paid appraisal.
(22:31):
It slows things down a little bit.
That can take several weeks to get.
If it's stocks, there's a process for that,
but basically, the day after that, information is
available.
So there's a number of steps that need
to be taken.
Inventory appraise, we got to retitle, take the
decedent's name off, transfer to the successor trustee
(22:54):
who will eventually transfer to the heirs.
We have to pay taxes, income taxes, and
estate taxes, and then we divide and distribute.
And to get through that process, if an
estate tax return is required, we're probably going
to be nine months to a year.
So even with a trust, we're not going
to get through the steps until we've done
all those things.
(23:16):
And it takes time to file the estate
tax return, gather the data, fill out the
form.
Now we're reaching a point where much of
that can be done through automation and can
be tied to blockchain technologies to value and
distribute.
Kate, sometimes when someone passes and they've kept
(23:37):
their estate planning private, meaning just themselves sometimes,
and they're an attorney, sometimes documents aren't readily
available.
No one knows where they are.
There's issues of, well, there's two sets of
documents, or there was a new set assigned,
all these things that you deal with every
day.
I know the blockchain, you say the blockchain
(23:58):
is private, but would it, in this example,
if this individual put it in the blockchain,
would the blockchain be searchable to see?
Yeah.
Did Mr. Jones have an estate plan or
some documents on the blockchain?
There would be a couple of ways of
dealing with that.
So typically documents like wills or trust could
(24:21):
be converted to a non-fungible token, a
digital representation of the document, and that would
be recorded somewhere on the blockchain so that
there'll be access to it.
It would be determinable.
You'd probably need to know the wallet information.
But again, assuming the family has some information
about the wallet or the drafting attorney who
(24:42):
assisted with this would have that information, then
you'd be able to identify it quickly and
get the NFT available to show what the
plan actually was.
So that's a benefit in itself.
Right, right.
You talked about calculated and paid, right?
Yeah.
You said things like an estate tax or
(25:06):
whatever.
Part of what was the delay in the
regular current process in a trust, for example,
is the notion of valuations.
What's my real estate worth?
(25:28):
And that often requires an appraisal for me
to get a calculation.
There's a delay in that process.
How will you navigate that kind of an
issue with the notion of that transference, that
conveyance of transfer of ownership?
There's a couple of ways.
(25:49):
Some of them are available.
Some of them aren't yet, but will be
in the not too distant future.
With the advent of AI, it is very
possible to create an AI agent that will
be able to do an appraisal.
You just need to go out and find
(26:11):
the comps.
And so the technology isn't there yet, but
it's probably right on the horizon.
The other option would be to memorialize the
real estate ownership as a non-fungible token.
(26:32):
There are some technologies out there that do
this with stocks right now.
And you could then see what that NFT
is trading at as it's assessed value in
a sense.
So if I understand that correctly, essentially I
would say the ownership of my property that
(26:55):
I own here now is connected to this
non-fungible token.
And if I wanted to transfer the ownership
of that, I would be selling in effect
this non-fungible token which owns this real
estate as a means of transferring ownership.
(27:15):
And therefore, there's a potential for a market
of sorts for assets like that.
And you think that's likely to be the
way some of this is happening in the
not too distant future.
Yes.
Okay.
And very interesting.
Very interesting.
Yeah.
So the question is going to be, where
(27:36):
do you want record of your real estate
ownership to be at the county registry of
deeds and books and pages on paper?
Or do you want it to be more
digital and there's going to be a competitive
alternative solution for real estate for stocks and
bonds instead of transfer agents?
(27:56):
Well, I bet you could name dozens of
heirs that you are working with after the
passing of their parents who presently expect this
to be like, aren't we done?
It's been a month.
Yeah.
Like every one of them, probably.
And so the idea of moving this process
(28:17):
to something more efficient, let's call it, would
have great appeal if you're maybe automating, for
lack of a better term, some of the
process of how is this accomplished?
Right.
Sounds pretty appealing.
Right.
Right.
So now this...
(28:38):
All right.
So I'm someone who says, oh, this sounds
interesting.
I should do this.
Is this doable today?
We're on the cusp.
We've submitted a patent for this process for
what we're calling the Wealth Blockchain.
So we're technically patent pending.
Takes a little bit of time for that
(28:58):
patent to come through.
As far as the technology is concerned, we're
probably about a month out from starting testing
of transfers, artificial transfers.
Should I think in terms of, hey, a
year from now, this is going to be
(29:19):
very different, or is it six months?
Is it 10 years?
I think we're hoping to be...
How quickly is this going to impact people?
We're hoping to be live before the beginning
of the year.
Wow.
So do you think...
Now, most of our clientele and I know
most of your clientele tend to be people
who are in retirement, maybe an older set
(29:42):
who are maybe a little more skeptical of
this technology.
It's unfamiliar.
Who's the target audience for this kind of
planning?
Initially, the people who will be the first
adopters of this approach will be people who
are already active in the crypto field.
Kind of cryptocurrency, familiar with blockchain technology already
(30:03):
to some extent.
They'll get it and they'll understand the application,
and so they'll be ready to adopt this
relatively quickly.
I think the next step for more broad
adoption will be a hybrid approach where we
still have traditional estate planning documents that control
some of the assets, and we digitize other
(30:23):
portions of the estate to be controlled by
blockchain while transfer process.
So that will probably be the next stage.
And with final adoption, I'd say within five
years, this could replace traditional estate planning.
Really interesting.
I wanted to ask you about another element
of this, and that is when we talk
about trust, typically we kind of hit a
(30:43):
fork in the road, and we think in
terms of two different approaches to the estate
planning.
One that's intended to shelter wealth that is
essentially giving it away prematurely before I have
a long-term care event, a Medicaid need,
and where that might take it out of
(31:05):
my access.
And one that's more designed to plan for
taxation and some of the kind of things
you were talking about earlier.
How does this technology fit into the prism
of this kind of approach?
In order to answer that, I have to
step back for a second just to explain
kind of some of what we're doing with
(31:26):
the technology.
All right.
So when you look at a trust, that
is essentially a contract, an agreement amongst three
parties.
The person who's making the trust, the donor,
settler, grantor, trustee, trustor, whoever, whatever terminology you
want to use.
The person who will manage the assets that
are owned by the trust, a trustee, and
(31:47):
the person who gets to use and enjoy
the assets, the beneficiary.
Yes.
Will's technically aren't necessarily contracts, but they are
contractual in nature as well.
I'm going to put down on paper who's
going to get my stuff when I die,
and my executor's going to oversee it and
make sure it happens.
But the court has to approve the process,
which is kind of the difference.
Right.
Okay.
(32:07):
So what we're doing with this technology is
recognizing the fact that there is something called
a smart contract in certain portions of the
blockchain world.
Ethereum initially, Solana is another one that you
can put an agreement that says- If
this, then that.
Right.
Yeah.
Basically.
(32:28):
My wallet is going to transfer X amount
of Ethereum because Joe Blow mows my lawn.
And when the certification comes through that he's
completed the job, go ahead and move the
Ethereum from my wallet to Joe Blow's wallet.
Well, that's a trust by another name, effectively.
(32:49):
It's a contract to transfer wealth from one
person to another when a certain event occurs,
in this case, a death, or can transfer
control from the owner to the next person
who's going to be in control if there's
an incapacity.
So we can put certifications onto the blockchain,
an affidavit through an NFT that says the
(33:11):
person has died.
Here's a copy of the death certificate.
We can verify that through records, through social
security administration, for example, to show that yes,
social security shows the person has passed away.
So we come at it from multiple sources
to confirm that the death has occurred.
And now we know, okay, it's okay to
transfer the wealth from the first person to
the second person.
Okay.
(33:31):
Again, we're going to build this with similar
types of trust feel to it.
We can make it a smart will.
When I die as certified by a couple
of instances, then take my stuff and give
it to so-and-so, my spouse, my
kids, my favorite charity.
(33:51):
Okay.
And then the wealth is transferred to the
ultimate beneficiary and it's done.
We can build it like a trust that
is for someone.
Give it to a wallet that is managed
by a trustee for the benefit of the
ultimate beneficiary.
And the trustee will decide how to dish
it out to that beneficiary based on pre
(34:12):
-designed parameters.
You can say, give them the income every
month.
Give them principal for health education, maintenance, and
support.
Give them principal at your discretion.
And again, the trustee in that situation, it'll
move from the wallet of the deceased to
a wallet of the trustee who will hold
it in trust for the ultimate beneficiary, much
(34:34):
like a revocable trust does now, but it
happens automatically because it's on this blockchain technology.
It is possible to let the smart contract
act like the trustee itself to actually dish
things out.
Make decisions.
Make decisions.
Yeah.
As to when to distribute on certain, again,
(34:56):
certain parameters that are predefined and recorded on
the blockchain.
What if we haven't thought of something?
And that's where there are safety nets that
you can put in.
I mentioned a decentralized autonomous organization a few
moments ago.
Initially, that's going to be the easy way
to accomplish this.
(35:18):
You put your assets into a business entity,
a DAO.
You have the DAO subject to the contract.
Well, now the DAO ownership changes, but so
does the assets owned by the DAO.
You can use an LLC the same way
if you don't want it to be totally
blockchain oriented and it transfers from the ownership
(35:42):
of the membership of the LLC transfers at
death from one person, one wallet to another
wallet.
And that manager of that LLC can act
like the trustee to distribute out to the
beneficiaries.
A DAO basically allows the various owners to
vote on things.
And so it's managed in a more flexible
(36:03):
nature because the owners can take into account
things that we don't consider today.
So they can vote on liquidating the DAO
if it makes more sense to do that.
They can vote on making partial distributions because
there's a need for one person to get
some money.
They can vote on changing the investment structure
(36:25):
from a stock account to a bond account
or whatever the nature might be.
So it gives more of a democratic management
structure than traditional business entities would provide.
All right.
You got all that, Jeff?
I think my head exploded about five minutes
(36:45):
ago, actually.
I know.
I think I lost him on that last
part of managing the DAO stuff.
So there's obviously a lot of opportunity in
blockchain technology and this is a small piece
of those opportunities.
I think for people maybe my age and
older, they'll have some hesitancy because they don't
(37:07):
understand it.
They don't know how it works.
They can't go into the office and talk
to somebody.
Well, they will be able to.
Part of what we're doing is we're going
to...
So the blockchain, this is really, to me,
it's a two-level approach to address planning.
The first level is the blockchain and the
(37:27):
smart contract.
The second level will be a software application.
For the implementation.
Yeah.
And so most lawyers are not going to
learn how to write a smart contract.
They may know the law, but they're not
going to know the technological programmatic portion of
this.
So a software application that the lawyer can
(37:49):
subscribe to to say, okay, let's build a
smart contract that works like a domestic asset
protection trust or a spousal limited access trust
or a Medicaid planning trust, they'll be predefined.
That goes back to my prior question, I
think, too.
So it's going to come down to the
programming that a legal expert might select as
(38:15):
the mechanism to use to provide the instructions
that are placed into the smart contract.
Right.
And most lawyers right now, when they're doing
estate planning, they use software to build the
trust.
Well, so what we're doing is we're changing
it to be software to build a smart
contract rather than software to build a trust,
but the smart contract replaces the trust.
(38:37):
But it's in many ways going to do
a lot of the same kinds of things.
It's going to act in a similar way.
It's just moving it from paper, if you
will, to digital.
And then the application of the decision making
is more efficient and rapid.
(38:59):
Interesting stuff.
So with every advance comes bad actors looking
to take advantage of technology and try to
figure out how to monetize in a bad
way.
There's been some articles about the increases in
technology regarding quantum computing and whether or not
(39:20):
the ability of quantum computing will be able
to threaten the blockchain and destroy that privacy
or security of it.
How would you respond to someone who's concerned
about that?
We have to be realistic.
There is some risk that basically what blockchain
is built on is the idea that we're
(39:42):
using cryptography to provide security.
As supercomputing comes online, I think it's going
to be a double edged sword.
There will be bad actors out there who
will try to use supercomputing to break the
code, break the cryptography, and therefore gain access
(40:06):
to things.
I think though realistically, the idea of the
cryptography, I'm sorry, cryptotechnology is built on a
peer-to-peer network.
You have a computer that is running programs.
Chris has a computer that's running programs.
I have a computer that's running programs.
(40:27):
There's a thousand of these computers or thousands
of them all over the world running and
trying to break the code and solve a
problem to say, yes, we all agree this
is the answer.
When one bad actor comes in and says,
hey, I've got a different answer, they're going
to get boxed out because they've got the
(40:49):
different answer.
That's part of it.
I think too, the idea of supercomputing is
going to give us an opportunity to develop
the cryptography to a higher level of security.
I think both of these are sides that
will provide adequate protection and comfort to everybody
that eventually once we do have supercomputers online,
(41:12):
we're going to be able to go to
a much, much higher level of security in
blockchain technology than we currently have.
Just as there might be if we're just
looking at it relative to today, that supercomputing
capability might be able to undermine some of
that cryptography.
But if we have the ability to use
that for advancing the cryptography, it will be
(41:34):
a much harder code to break.
Again, then you still have that idea of
the peer-to-peer network.
Just for people who aren't computer geeks like
I guess I am, a peer-to-peer
network is a network where each computer can
talk to all the other computers and each
computer stores all the data on its own
(41:55):
hard drive.
Most commercial networks are built differently that there
is a server that holds all the data
and all the computers feed onto that server
and pull the data off, do what they
want to do and then put the data
back on.
Peer-to-peer networks are something that we've
been working with since we started using networks
at Boyd & Boyd PC where every computer
(42:17):
can talk to the other computers and the
data isn't necessarily stored in one place, it's
all over the place and that adds added
security.
My mind is going back to the music
shared file program.
What the heck was that?
Yeah, that was a peer-to-peer network
where everybody was sharing their music files, their
(42:39):
mp3s.
Granted, it did violate copyright but it was
conceptual how it works essentially.
All right, well, we're going to talk to
you more about this in the future no
doubt because it sounds like this is just
at its early stages of adoption and really
(43:01):
intriguing, interesting stuff.
In the meantime, don't hesitate to deal with
your estate plan but be aware that there
are really interesting possibilities evolving over time and
may have some impact in the future as
it relates to this.
I think for those of families who are
(43:23):
looking at doing a traditional estate plan and
saying, well, is this new technology going to
undo what I just did?
It's going to be irrelevant.
No, it's not.
Will it replace it?
Maybe someday but I think there will be
people who will be hesitant to adopt it.
So over our lifetimes, there's still going to
be traditional estate planning.
There's going to be traditional estate planning.
(43:46):
Once this technology is out there, you may
be able to hybrid it but if you
want to just work with your paper documents,
that's going to work and it works well.
We know it.
It's been around since the 1500s.
Yeah.
Yeah.
So again, if you want to learn more
about those seminar dates, maybe send them to
a web page.
It's www.yoursvp.com and there's a code
(44:14):
you can enter C-E-G-B-U
-S and or call the office at 508
-775-7800.
We hope you can join us for one
of those.
We try to share lots of good information.
We'll include that link in the show notes
so you'll be able to find that more
easily.
And in the meantime, thanks everybody for being
with us for another show.
(44:36):
Until next time, keep striving for something more.
Thank you for listening to Something More with
Chris Boyd.
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
(44:56):
.com or call us toll free at 866
-771-8901, or send us your questions to
amr-info at wealthenhancement.com.
You're listening to Something More with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
(45:17):
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
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