Well, I'm excited because we have a cool guest here today, Phil Kriszenfeld, fellow colleague. We do some similar work, but he's an expert in his area. I'm just going to kind of give my perspective here, Phil. You're an expert when it comes to, let's just say the word, S-H-I-T hits the fan for families and family businesses. You're in there doing the mediation, but you're also doing something cool here as well.

You're doing work in the estate, in the executor area. That's something that you started doing not too long ago, but it seems like it's a pretty hot topic and it's of, you could say, significant importance.

But first, I want to welcome you back.

Thanks, Purdeep. It's great to be back.

You guys, the business brothers put on an awesome podcast.

Yeah, I appreciate that.

So Phil, what are you up to these days?

How are things in the estate and executor world going?

It's interesting. If I can just dial back to give you sort of what that trigger point was to jump into this was being brought into an estate during COVID where there was a lot of tension amongst the beneficiaries. And I've always done estate mediation, but more in the formal sense. It dawned on me in working with this family that the dynamics behind managing the soft side of family business is so similar.

The only difference between the family business dynamics and the estate dynamics, family business doesn't necessarily have a defined end date. Its target is more we want things to be better ongoing, whereas an estate has a wrap up goal. The goal is to wrap it up.

So aside from those differences, managing expectations, maintaining enough transparency that people feel like they're part of the process is what was really missing with a lot of estate windups. You get executors who are, you know, imagine a family with four next generation, four kids, and two are executors and two are not.

If the family relationship isn't like tighter than the Walton family, someone's going to think someone's doing something or they're not being told something. When the executors have an obligation to work within the law, that doesn't include calling another beneficiary every week and giving them an update.

So I became inserted into this family to recover from what was a disintegrating sibling relationship over the level of work being done and the lack of transparency and pulled them across the finish line of winding up the estate, all the disbursements, no lawsuits necessary, nobody took legal action, although it was being waived at one point, and just maintaining a transparency that kept everybody's expectations in check. You said something there, Philly.

You said there's a goal, there's an end goal.

Now is it fair to say, because I've gone through this process when my dad passed away, that one of the end goals is obviously to keep the relationships alive and keep things civil, but the speed matters because I remember just the anxiety of just these things lingering because it's like, okay, what's the tax guy going to say?

What's the government going to say?

What's going on here?

Like, how many lawyers do we have to get involved?

There's a sense of stress there involved. Absolutely. And I too lost my dad and had to deal with that, but that's the easy part. Sounds wrong, but when one spouse is remaining, like your mom or my mom, everything kind of traditionally just shifts to them. When the last parent has passed away, that's when the real work starts, but on the timing issue, there are a couple things that can't be helped.

And I will very affectionately, happily point to Ottawa and blame the government because certain steps are required, primarily a certificate of clearance. Not the will has been probated. You've already probated the will, but you filed your tax return. You've paid your final or terminal taxes on your terminal return. And then you sit down and you do this and you wait.

And the certificate of clearance is the government's way of saying, okay, there are no more tax bills coming. You can disperse the rest of the assets in accordance with the will, which usually at that point is just some cash being withheld. So for wealthier families and next generation, it's not enough money to change their life.

But for someone who's that inheritance is going to make a difference in their life, that's an uncontrolled weight. And weights for certificates are from six months to 14 and 15 months.

Now, I'm not an expert in this area, but as an executor, there's a lot of obviously pressure and liability as well put on that. Because from my understanding, you can be personally liable if you don't do something properly. So when you're talking about, I'm just going to call it a hold back. I don't know what it's technically called. But how do you...

Yeah, so how do you estimate that?

What do you do?

Do you go to the lawyers?

Do you go to the accountants?

How do you figure that part out?

Well traditionally, as an executor advisor, I would work with the accountant to come up with what that hold back number should be. You want it to be enough to cover worst case scenario, government saying, oops, somebody made a mistake, you owe us more money in taxes. Because let's be honest, if all the funds are dispersed and then the government says, oh, wait, you still owe us money, nobody's writing checks back in.

And as you said, the executor is liable. Their fiduciary responsibility will be to make that tax bill paid. Now the big changes years ago, if somebody said, I would like you to be an executor, it's like being asked to be a pallbearer.

I mean, it would be an honor. It's not an honor to be an executor. You're agreeing to take on a part-time job that is going to be under the microscope. And that's why as an executor advisor, I can help spearhead the process because you may be taken on that job in addition to your full-time job.

Just out of curiosity then, because there's a liability on your part, there's a risk factor on your part.

Obviously, you're a professional, you know what you're doing, but there's still some risk involved. I know some of the big banks and other institutions and organizations charge a percentage to manage, you can say the estate.

So how does it work for you?

Do you typically just do a flat fee?

Do you do a percentage?

Do you do a combination of... I charge an order.

Again, I'm all about the transparency. I'm not an executor ever. I will not be appointed as an executor. I'm just an executor advisor. I am however insured just to protect myself against, but I'll never act as an executor because then you can charge up to fees and everything, up to 5% of the total value of the estate. So a $10 million estate, you're looking at fees of half a million dollars.

When you turn your affairs and your executor duties over to one of the trust companies as part of the banks for them to handle it, you can expect to be up to 5%. Interesting. And so for individuals, let's talk about the pros and cons of being an executor then, because I think that's really interesting. Because I think some...

Let's just say the next generation taking over the funds or if there's a family business involved, there's this sense of control perhaps to say, hey, look, I'm an executor, maybe even a sense of some kind of pride or respect because someone's putting that much, you can say trust into them. But what are some of the other...

Are there any other pros?

And what are the cons that are involved?

Because I think people as they're watching this need to be aware before they volunteer their name or accept the position of being an executor, what it actually entails.

Yeah, the pros, I mean, are pretty simple. If we've been asked by our parents, one of the commandments is to honor thy mother and father.

I mean, you're respecting that commitment to honor your parents' wishes. That's a pro. The other pro is you generally will know more about the affairs of your parents' lives than an outsider. So you'll be more efficient at being able to address things. And the other pro is some of us are control freaks.

The thought of turning over this to an outsider to manage with the fees and everything associated is not comfortable for some people. The cons are it's a lot of work. When the last parent is passed, remember, it's a lot of work.

You are legally responsible to make sure the work is done in accordance with the law and the respect of the last will in a state, last will and testament of what your last parent wants. And if you are doing this alone and you have siblings, you're not going to win any popularity contests. You have taken on this burden to fulfill your parents' obligation and wishes for their kids.

But there's a lot of work along the way to get there. And there's a lot of, I'm generalizing, so forgive me, but there's a lot of baby birds with their mouths open waiting to be fed along the way. And it's just a lot of pressure, especially when that inheritance is significant enough to change a beneficiary's life. If somebody's getting $50,000 and they earn $300,000 a year, nobody's losing sleep over it.

If they're getting half a million dollars and they make $60,000 a year, they're going to be mortgage free and be able to take their first vacation. And that's a thing that will be hanging over your head as the executor, especially in the areas of things you can't control.

So what do you see as the sticking points when executors are going through stuff?

And I think it's a good, again, just kind of a tip for the listeners out there when they're actually going through or before the process, when they're even maybe talking to their parents about wills and estates and so forth.

What are some key sticking points that either executors get stuck on or people who have expectations of the executors?

For the people who have yet to pass away, have your will done and tell your beneficiaries, don't give them financial statements or they might throw banana peels in front of you when you're walking down the stairs, but have your beneficiaries understand what your goals are.

Mediations I do where we're sitting in a room of people that are now mad at each other with lawyers trying to hammer out the argument over who's entitled to what stuff. They really, I mean, there's no technical term. It sucks because you're watching a family that has been crumbling, sitting before you, continuing to crumble.

Every mediation I've done, I've asked the people in the room, did mom and dad ever tell you what their wishes were?

The answer is still no. I'm waiting to hear yes. I practice what I preach. When I redid my own wills five years ago, my kids are both adults and they're professionals. My wife does not want to talk about a will. We were booking a trip and I said, I'm not booking it until we get our wills updated. That brought her to the table.

Then after leaving the lawyer's office, I said, now we're going to sit and tell the kids what we want to do. She's horrified because you just don't talk about that stuff. We sat down with the kids and literally for about three hours, we sat there. I even went through the house and put stickers on stuff that you don't throw out. You don't have to like it, but it's worth something.

Some changes where there are things in my will and another time we could get in more detail because I'm happy to share that even the lawyer said, I'm borrowing this stuff because I put things in place to avoid the fighting, to avoid the disputes. After we went through that, it was very satisfying and I would love other people going through that to feel that same sense of comfort.

I remember saying to my wife, hey, we're going on this trip. If the plane crashes, I'm content that our kids will not fight over what has to be done. It was really a nice feeling because most of the time people find out after the person has passed.

Yeah, I can see that. I can just see how families can be torn apart. I've seen it myself, but I'm just thinking for the person who has passed, obviously they're not around.

They no longer get to see it, but what happens to their legacy when their family falls apart after that?

I don't think any parents want to see the siblings fight over money. It's not even about money, Pradeep. Sometimes it's about one of the families I worked with in the last two years. It was more two parents had passed away within a year of each other and they were in their early 90s and lived wonderful full lives. Two of their four kids were in their 70s.

They're not about to start and the parents lived in a 5,000 square foot, 100 year old home. Those guys are old. They're not about to start digging out of closets and that sort of thing. The younger siblings took over and that's fine, but what happened was the inequality because the executors all agreed they weren't going to take fees for doing the work.

Two of them said, we thought we were going to do the work together, but we're not. It actually is, they're better the family, but boy, the one guy looked at me and says, I can't wait until this is done so I don't have to talk to my siblings ever again.

I was like, do you really think that's what your parents wanted?

The inequality of the workload was also a big issue in terms of how families get fractured. People with young kids, they live out of town. They can't contribute in the same way as someone who's local. We understand that.

I guess I'm stumping about it, but you know what?

The others could at least say thank you. We couldn't have done this without you. We want to take you out for dinner. There wasn't the appreciation even for the imbalance.

It was, well, it happens. Things like that that you don't see. Parents plan their will in a state. You got three kids, you say, I'm going to leave everything equal to my kids equally. Done.

Well, as you know, in family business world and the estate business world, fair is not always equal and equal is not always fair. Maybe there needs to be a deeper discussion in the planning phase of creating an estate. Maybe somebody whose mother or father says, I'd like you to be my executor, they should know what an executor has to do.

Maybe mom or dad should say, and I want you to meet with the lawyer before you accept and see what your role will be. Things like that can keep families closer together. There's two things that stood out for me as you're talking here.

The first point was actually talking to the kids before you pass away and letting them know potentially what could happen or giving them some kind of insight so it's not a surprise after. It's not like opening up a jack in the box to see what's actually coming out of it.

And the second thing that pops up is this concept of even though you might think it's fair, it might not be seen as fair for the kids or equitable or however they want to see it. And being aware of that is important.

Do you find that families who get, let's just say parents, who get the kids involved in the process, and when I say involved, like part of the conversation around how should we split things up, do you think that works out better or do you think it works out better for the parents just to say this is what we did but then tell the kids prior to them actually passing?

I mean, either or is better than not talking about it, letting them find out when they read the will.

Myself, my issue in going through it, I'm happy to share this.

I mean, my wife would probably say, why are you telling people this?

Because I think it's a valuable lesson. It was interesting sitting down with my kids about the equality things. And it's not the cash. The cash is, that's the easiest thing to divide. For instance, jewelry. My wife has some jewelry. I don't. I have a $150 wedding ring. So my son says, well, you know, for the jewelry, you know, if she's getting all my daughter's getting all the jewelry, that's not fair.

And my daughter sat there and said, if you are married, I will give your wife one of the pieces of jewelry that's nice that mom would want her to have. My son said, he goes, yeah, that's cool. Next.

So, you know, just by bringing it up, that alone and I was observing while I was leading this with my kids and my wife, I was really a student of this whole process because that's the item that I sit with in estate mediations is the jewelry. Mom promised it to me. If it's not in writing, it didn't happen.

But if if but if the kids knew that beforehand together, if you've got two kids there and the other one says, yeah, mom promised her that rain. That's not an issue.

You know, it's really interesting because I want to share just a personal story. And some of the individuals aren't really around. They don't watch this, my YouTube channel or the podcast. So I don't think they'll really care. We're safe.

Yeah, we're safe. But this is a personal story. And it was my dad really didn't care about money at all. And when my grandmother passed away, he actually took her back to India to see the rest of her children because a majority of her children were back in India. And it was interesting because when she passed, you're talking about jewelry versus money.

The money obviously sitting in the account, you know, that had to be split by the siblings equally, just just even in India, they have those basic laws. But the jewelry, the minute that my grandmother had passed away, I would say not the minute, but the way my dad described it was within that same day, her jewelry was completely stripped and no one wanted to talk about it.

No one wanted to say, where did the jewelry go?

My dad didn't care about the money, but he asked after just from a respect perspective, because he said, how do you guys that's your mother, how do you just do that?

The same day and then pretend like you guys didn't take any of her jewelry.

Yeah, and it was just just the things that people do when it comes to these things. And just boggles my mind. So sometimes I think we see the worst in people in these situations. Unfortunately, it's human nature. It's part of who we are. And part of part of that is I've learned that the person like in your case, your grandmother, the referee is gone.

So now they're you know, take a hockey game, pull the refs off and say, go play boys. They don't play nice.

Okay, there's nobody to blow the whistle. There's nobody to send them to the penalty box. They don't play nice because that matriarch or patriarch is gone.

Yeah, it's interesting you say that. And so the rules go with them. And anarchy breaks out and I'm being dramatic, but you're very once your grandmother had passed, it was like, forgive me, I don't mean to be rude about it, like free for all. Grab while you can get it's like it's like going to a car crash and not helping the person but looking for their wallet.

You know, I mean, there's something and that's another human relations study someday down the road, there's something in people that triggers that.

You know, there's, I better get mine now. You hear about that I hear about that with parents who are, you know, parents palliative and they go back to the the apartment or the home and they can't find things. This one client that I worked with, the old jewelry was missing. This was insured jewelry on an insurance schedule. It was missing. The daughter claimed mom gave it to me before she passed away.

The with legal advice, the other executor said, too bad, we don't believe it, because we've known our whole lives. And you take a $20 bill out of a dying man's hand. So past character sort of dictated, and they literally made adjustments. It was based on that, and the argument was on what it was worth. Now they had valuations done like they've done jewelry appraisals. And she didn't think it was worth that much.

She even said, well, I'll give it back. And they collectively said, Nope, you had to take it. You hope no one was going to find out. Go sell it yourself. And they adjusted out. They adjusted out the dollars based on a couple of expensive pieces of jewelry. I think there's so many stories here to share. My wife and I watched this movie, I believe it was on prime.

And I'm not sure what the name of the movie was. But it was David Duchovny was in there. But it was all about this, this woman who's on her dying deathbed. And all of a sudden, her nieces and nephews show up out of the blue to take care of her, because she's worth millions and millions of dollars is it was a hilarious movie.

So I'm going to see if I can find it. Maybe we'll post in the show notes here, because I think that's a prime example of what can happen if you don't do things properly. So for individuals that are executors or know that, let's just say they're going through the process right now, right, they're dealing with an estate, or they know that they're listed as an executor.

How do they go about finding someone like you or finding, we'll talk about finding you directly, but let's just say geographically, they're in the US or somewhere else.

Where should they look for someone that could advise them on the executor?

My first suggestion is always with the family lawyer, the lawyer who did the will. Hopefully they didn't predecease the person and they're you're dealing with somebody who bought that lawyer's will vault. The lawyer if the lawyer who knew mom or dad or whoever the last one to pass is, is still around, ask them what to do.

What's the best way to handle it?

Talk about the concerns. For those who aren't dealing with an estate yet, if they've been asked to be an executor, sit down with your, assuming it's a parent, whoever the executors are, sit down with the parent and say, we know what our role is. We would like to understand, not see, but understand what your intentions are in the will, especially regarding non-cash assets.

Those are the number one hand grenade in an estate. I'm dealing with one right now, a cottage that has storm damage that every week we can address is getting further damage. I will be your executor.

What do you expect in terms of your stuff?

Have those conversations and you know what?

It's tough. I'm happy to sit down and I do this often with clients. Let's sit and have a discussion. Let's just spend a couple hours. You're going to die. Here are some to tell the parents, whoever's remaining, assuming they're of capacity, to just share with them, here's what could happen if things don't go well.

Here are some ways to avoid some of these hand grenades that occur during estate management and estate windup.

Again, I'm dealing with three brothers who are arguing because they cannot file a terminal tax return because of the assets triggering a capital gains tax on shares in a company and a cottage as well. There's no cash to pay the terminal tax return.

What do we do?

Do we sell off assets at a fire sale price?

Just a heads up, we're close with one of the brothers has the means to fund the tax bill, but he's not doing it for nothing. We're not talking about loan shark and he just wants first right of a few things in consideration of.

Yeah, so we're working towards that goal because the taxes have to be paid. Anyone who thinks they're going to get a dollar before the tax man has another income. Your tax bills, your legal bills, your accounting bills, they all take a priority ahead of any disbursements or beneficiaries. Got it.

I think that's a huge, huge point of wisdom here for us to close it off because that gives a lot of people something to think about.

Where can people find you if they're in Canada and if they're in Ontario in particular?

Yeah, I'm in the I'm in southwestern Ontario, Toronto as well within my target, but I work primarily in Ontario and I would not work outside of Ontario because I would refer to somebody else with executive advising designation. But the laws per province are a factor in every estate wind up and my strength is in Ontario, but I would certainly create a referral network for people who are outside of Ontario.

It's a challenge.

I mean, even in my own will, my kids are both beneficiaries and executors so long as they live in Ontario. If they live outside of Ontario, it defaults to the other one because when you've got US beneficiaries, that's a whole other podcast unto itself. Interesting. It's not clean. It's not as clean as if they lived in Ontario.

OK, got it.

So what is your website again for people out there?

The website is www.transitionsgroup.ca and my email is right. You can connect with me through my website very easily. So it's transitionsgroup.ca and I look forward to having a chat with anyone who wants to learn more about what they're about to step into. Awesome.

Well, thanks, Phil. It's always a pleasure to have you on and I think I'm looking forward to the next conversation because there's so much we can talk about. So I appreciate it. For those of you out there, thanks for tuning in. My pleasure. Have a great week.