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The Hub for Important Ideas

Episode 48 · 1 month ago

Legacy featuring Bruce Hirshfield- Episode 48 – The Hub for Important Ideas

ABOUT THIS EPISODE

What is the psychological importance of leaving a legacy? This episode looks for explanations for some seemingly ordinary aspects of our society that appear strange when examined more closely from a social psychological perspective.

What is the psychological importance of leaving a legacy? Welcome to the hub for important ideas. I'm Steve James and I'm Ken Swain. This episode is called Legacy. We're looking for an explanation for some seemingly ordinary aspects of our society but that are strange to us as we examine them more closely. We want to look at our everyday society in terms of a social psychological perspective. We're going to play for you a recent conversation we had with Bruce Hirschfield. Prior to retiring, Bruce Hirshfield had a thirty year career in the financial services industry as an expert in life insurance, with professional designations including chartered life underwriter and accredited estate planner. His focus was on ultra high net worth planning, philanthropic planning, business succession and planning deferred compensation and qualified retirement programs. He has an economics degree from Rutgers University and a degree in project management from the University of new haven. Here's the conversation with Bruce. Bruce, welcome to the hub for important ideas. Thanks very much. Looking forward to there. It's great to have you. Hi Bruce, Hi Ken, thanks for getting up so early in Los Angeles California. Yeah, well, I'm about thirty Los Angeles time, so good deal for me. You're an early riser. So thank you for that. My pleasure and I've got the great privilege of having really my two best friends in the world on the screen with me right now and that never happens. So this is a marvelous, marvelous turn for me. So Bruce knows tangentially about the work of Ernest Becker, because Steve and I've been working on that for twenty five years or so, much longer for Steve because he's much older than I am. And what did you get to the point, please, and not discuss my age. I'll try in I'll try. So Becker is concerned with the human mortality and our terror of death, as is our friend Sheldon and terror management theory. And one day bruce and I were talking after we had done something on the podcast, and I was talking about that and we were talking about Bruce's old job, as Bruce spent many years in the estate planning business at the highest levels, and we talked about that in conjunction with life insurance, which it's closely related to, and we were talking about how that business is integrally tied in with human mortality and are fear of it because, just by the nature of what it is, if you were using Bruce's services, you were automatically in a state of what the terror management people call mortality Salience, just by acknowledging the fact that you're gonna Need Life Insurance to protect your family and the event of an unplanned event, your own death, that they will be provided for by some societal mechanism which we call life insurance, and how it naturally relates to the ideas of Ernest Becker. So great thanks, Ken So, Bruce. I guess the first question for our audience is what is Life Insurance? What is its purpose and it's stated purpose and it's unstated psychological purpose? Well, life insurance is a mechanism that any event of a person's death, a benefit is paid. In general, its stated purposes to identify the surviving parties, to replace their income or to make sure that certain events occur or in the future.

Let's put it at the family level, such events would be the event of a breadwinner. They have a desire and a dream of making sure the family that has been built up at that point is going to maintain that lifestyle that they've grown accustomed to and take care of future events such as college, education and funeral expenses, maybe just building wealth in general. So that's, in general, what life insurance purposes. Now it's also used in a business environment and in an state planning environment. As far as a psychological purpose, that gets a little bit into what I've always referred to, especially when speaking to those in the estate planning market, as being able to sell immortality, because a lot of people, when you're in the high net worth environment, they have built an empire, albeit however small. Why us to know that their vision that they had and have been enjoying is going to be continued in perpetuity. Ideally, not always possible, but that is there psychological desire. They know that they have had a lot of trials and tribulations through their life and they want to make sure that future generations can either avoid them or at least be able to cope with them in a better format or a better manner. It's bizarre to me the whole life insurance unstated psychological purpose. I understand if I'm alive, my spouses alive. She's my primary beneficiary. If we both die and our kids are young, then we want them to be taken care of. So you get term insurance and you take care of their growing up without but beyond that, I'm going to be dead and I assume that when I'm dead I'm not going to care. I assume if there's an afterlife I'm going to be too busy frolicking with the angels, and if there's no afterlife, I'm absolutely not going to care. So it's all about the present and it's all about my psychology in the present moment. Am I say sitting this incorrectly? Well, the latter part, the last thing you said, sounds right. But when you said when you're dead, I'm not going to care, you won't have the ability to care or not care because you're going to be dead right. So it's sort of a very strange way to look at things, because the whole idea is that you're know what it is for someone to no longer be there and, depending on your upper again, you may know what it is to not have money to do things, and so that is going to be the driving decisions that's going to make you go forward. With a purchase of life insurance if the kids. But if the kids are young, I understand that. But if they're grown, as my kids are, what is this leaving them money gonna do? They have their own careers, they have their own money. MHM. What's a couple of thousand bucks? You know, more gonna matter, you know, after I'm dead. Okay, we're now hinging on two different things. There's wants and there's needs, and I think up to this point we've been mostly focusing on needs, although when you want, excuse me when I spoke of estate planning and Legacy Planning, that get dives a little bit more into the want area. But you may want to leave money to your children. You may want to say...

...it my death, I want a half a million dollars to go to each child and their family. You may want to say I don't give a darn and not leave anything to them, and that may reflect on their opinion of you and possibly that may be the motivator to make sure something is left to them. So so thanks, thanks, Bruce. That I think that explains it. When we get to the legacy part, we'll we'll get into it a little bit more. Doesn't this doesn't this line of questioning deviate a little bit from the mortality idea of this and it has more to do with I mean to to just to reframe what Steve is saying. You care about your family now while you're alive, and I guess we're trying to imagine that you would still want to care about them after your deceased and no longer have the capacity to care. Because the human animal is aware of its immortality and the inevitability of its death. We can project into the future and say, when I'm dead, it's true that I won't care, but I do care now so I can take steps to make sure that that caring transcends my life. That's that's pretty much in a nut shell. Yeah, just to address Steve's concern about actually caring, one did not here anymore correct and there are a lot of people that have Steve's attitude and because I'm not saying you know, it's not an anomaly. It is people to say, Hey, what the heck do I care? I'll be dead. Let them fend for themselves and that's that's their decision and that's fine. It doesn't necessarily go with the classic nuclear family. If you will, where there's the connectivity that is established and the desire to maintain that going forward in the event of death, because death's death is an inevitability, it's an absolute. So if it is an absolute, then you need to plan for it. And Life Insurance is basically a bet against yourself, because you know you're gonna die. The question is when. And the Insurance Company says, well, we think you might be dying, suitor, we hope you die late, but in the event you die young, we're going to pay a benefit. And you're saying, I hope I live old, but an event I die young, my family is going to be made whole. Okay, so we're talking about how this relates to the human mortality, fear of death. So that would tend to indicate that life insurance is different from fire or, say, flood insurance that doesn't involve death. Would that be accurate to say? Well, that's absolutely accurate to say, and life insurance is something that is really done for others, for sure, whereas fire insurance can and oftentimes will include benefiting yourself an event of destruction, because insurance in general is an indemnifire. So with fire insurance in the event of a fire or theft insurance and event of someone stealing things, you're personally impacted. So you're making this and saying, Hey, I don't want to ruin my house and, assuming that you own the House and the mortgage company isn't forcing you to buy, uh, some sort of homeowners insurance, you have to take care of that because, hey, not only is this for my family, but it's absolutely impacting my life, so I'm going to get some sort of coverage that will make me whole and allowed my life to continue on and etcetera, etcetera. What is their ego or status involved like in choosing the amount of the life insurance? Oh, most definitely there's ego involved and in some situation shs, especially when you get into the higher...

...net worth environment. It's status. I've often cited these common things that happens when they get really wealthy guys inside the golf club and they're buying and inside the golf club. Yeah, and so if they got these guys that are at the golf club and they're at their tea and off and they find out that they're golfing buddy just bought a twenty million dollars second to die life insurance policy, and I'll explain what that means in a moment. And they're sitting there going I'll be damned if I'm not going to have a twenty million dollar policy, and then he calls up his insurance and give me million dollars. I'm damn that guy's gonna outstatus me. And that happens. That has happened. I've had actually a couple of cases like that over the years that had happened. That's that's a form of immortality as well your status. It's a big part of your defense against death anxiety. Absolutely in fact, if you look at some of these buildings that are named if the people, and now often it's named if the people because they gave a donation during their lifetime. But there are times that wings of Buildings Hospital. In fact, I did a lot of charitable planning where I say, you know, you are able to provide a wing to a hospital at your death. Isn't that a nice feeling to know that your name will live on forever because you have funded this, the wing of the hospital in your name through the use of a life insurance policy and a trust, and so that as a big impact on status. Well, I don't know if you can get much more tangible immortality than that, which is why we tend to carve those things into marble so that they'll last a lot longer than if you paint them on a on a word piece of paper. Well, I mean, if you want to take a quick aside into the light from the life assurance industry and look about what happened with the opioid addiction and the sackler family, they were carved into sides of buildings and now they're having to put those new marble in there to fill in those carvings. I had heard that it's hilarious. So, Bruce, but we were talking before and you had said a large part of Japanese culture is based on shame or or the avoidance of shame. Right, that's what motivates people. Is there an American equivalent to this tendency to want to avoid shame? I don't know if it's quite deeply embedded in our culture like it is in Japanese culture. I guess it goes back with a little bit towards that Status Element and possibly when you do a little legacy planning, when you have children or well, you're not interested and having the children think ill of you, then there could be a little bit of that shame element come into play. How about key man insurance in the in the corporate world? What's that about? Okay, so key man insurance is it could be used in a couple of different ways, but primarily it's used because the person who is contributing to the success of the company that can be measured in the form of profits. And so they're saying, in the event of this person dying, the company will suffer a loss of profits. And it's truly recognized because the company has what's known as an ensurable interest. That's a technical term, truly a technical term that's used in general whenever you're buy life insurance, and it's sort of like is. It's sort of like when the courts say do you have standing in order to provide a suit? An insurable interest basically means that the beneficiary need to be identified. Go back to that word identify. In the...

...event of this person's death. Now, in a family, the spouse, the children, the heirs, if you will, have an insurable interest. The business as an insurable interest. So recognizing that the loss of profit from the death of that key person will be offset by a death benefit coming into the company. And that's what key man insurances in general. But it's also quite an ego trip to say, well, you're the key man in this enterprise and you know without you we'd all fall apart, and so we have to ensure you for ten million dollars, and the key man is going, well, I'm worth at least twenty. Well, the Insurance Company, the underwriters, will make a determination. If you're really going for big bucks, you've got to prove that that is going to be an accurate figure and you can't use future project actions. So they will allow formula to be used going forward. So this is far more rational and business like in the corporate environment than the person ensuring himself for the benefit of his family. Or so they'll think better of him after he's dead. The key man insurances. It's a business need. It is a business need and struck by the way you phrase that, it's more business like then when you're taking care of a family. I mean I think they're saying there's there's less emotion involved. Okay, in that sense that I can understand that. Thank you again. That's what I meant right. Okay, okay, yeah, it's cut and dried. Yeah, it's going going back to dollars. And forgive me for digressing a little bit here, just as far as talking about the value of human life, when you get down to the cold hard facts of it, the Reuters Foundation research shows that the United States frequently paid undred dollars in response to the death of a civilian killed by the US military in Iraq and made payouts of around this amount in Afghanistan. In contrast, the US government pays families of US soldiers killed in those countries a death gratuity of one hundred thousand dollars. Payout abroad is equivalent to just over twice the average annual income in Afghanistan, and the hundred thousand dollars that we pay here is just under twice the average income in the United States. Based on International Monetary Fund estimates, however, a low cost life insurance scheme for U s service personnel pays up to four hundred thousand dollars in addition to the death gratuity, and I've read that this statistical value of life is ten million dollars. How is the value of a life determined in your business. Well, in general it goes I think the formulation is it's a similar formula, but there might be different factors or it's usually saying how much does the person make? Let's go to the family level and then we'll go to the business environment. Then you know the state planning environment. But let's at the family level. How much are you making? What are your expenses? How many children do you have? How far are you from the Children's education? How what are the planning events that you might want to consider? How far are you from that? And then there's a multiple of that. When you put it all together, that says this is the amount of that's justifiable and that's what the underwriter will say. In the business environment, basically the same idea. What is the future profits? What is this contribution? How much is the person's salary, etcetera, etcetera, and they'll put a multiplier on that. It might be a slightly different valuation and different multiplier, but nonetheless it's basically the same kind of analysis. A state planning would be what's the net worth of your estate today, what has projected...

...growth of that under reasonable expectations, and what may be the taxation of state tax because in the event of death, when you pass access between parties other than a spouse, there's a potential of an estate tax. There's an exemption of that that amount above a certain level which, although I don't remember the exact figures in today's market, but it's probably about twelve or thirteen million dollars per person. Today, each person is allowed to bequeath billion dollars to anyone other than their spouse and without incurring in a state tax. Anything above that number is subject to in the state tax. I think it starts at but quickly Rus and then if you skip a generation in the state planning market, it's a double taxation. To call the generation skipping attacks, which is basically they double, they double the taxation. Is this what we're quibbling about when we're talking, when the Republicans talk about a death tax, talk about the death tax and the people who are subjected to a death tax is not only the one percentage, it's the one tenth of the one percentage. How many people in the population having a state an excess of twelve or thirteen million dollars? If you're ad, if you're let me finish, if you're a married couple, you get to use it two times. So now, if you're a married couple, you're able to pass well million dollars with no estate tax to your heirs. So how many people in the United States, how many family units in the United States have wealth and excess of million dollars? And I was just gonna say that's what we're complaining about. You. You already under law, get a free pass. Here's thirteen million. I mean for most people you would think that might be enough. We're close to enough. That's the thorn in the PAW. That's the Thorne in the polly, the thorn and but what we're saying here is there is a value placed on a human life. colloquially, normally people say, Oh, you know, human life can't be valued in terms of money, but juries do it all the time, of course, and the government does it. And the government does it in terms of people that they kill, like you know in war and civilian collateral damage. And then here we are talking about, Oh, putting a value on your present, but the government's calculating two years annual income, which hardly covers your kids going to college and and things like that. So this is very complicated well, it doesn't say optional to me at all. Well, ensuring an individual family without hardly any problem. You can take your income and multiply by Ted and get that amount as a death benefit you purchase. So that's something. In ten years from now it's going to be. Well, no, it's because you well, let's well, no, let's say you're making a hundred thousand dollars today and you want to go into underwrite for a life insurance policy. I don't see many insurance companies denying you're getting a million dollar life insurance policy at all, ten times at Anna Income. Right, that's the rational part. But what I'm saying is this all sounds very irrational to me when I'm thinking about I'm going to be dead and I'm not going to know any of that. What's going on here? We're talking about how I feel about myself, how I feel about what I'm doing here, purchasing this life insurance, whatever it is. So when we talk about how I feel about it as the reason for doing it, the justification for doing it, we've abandoned all this actuarial, statistical analysis and now we're into...

...well, how do you feel, Steve? Well, I think I'm worth fifty million dollars. Well, you know, let's let's write up that policy. It's just there's something very strange to me about this. It's not like fire insurance at all, because I'm going to be dead right and for our purposes our discussions, the I don't care because I'll be dead should be removed from the conversation in the Canada because, well, let's go back to what you're saying. I feel, as you were saying, that I was remembering when I sat down the day before my birthday, when my second child had just been bored, and writting a life insurance policy in my own life, and I remember submitting it into the to be underwritten. That whole day I felt like a weight was lifted off my shoulders and I felt terrific. It wasn't how much I bought it for, it was the fact that I took responsibility, to care of business, took care of being a bench, in the words of the wisdom of Jews, to be a good person, to do the right thing, and that's that's what the feeling I had. Do I feel I have I'm worth fifty billion dollars. That's your ego talking, unless you truly are worth fifty million dollars, but if you're not worth it, the million dollars. Now that you're ego talking, I'm not phrasing this correctly. So let me let me take another shot at this. Okay, sure, that feeling of being a ment of that feeling, I've done the right thing. That is a defense against death anxiety. And when Ken brought up before the whole mortality salience idea, by even thinking about life insurance, which will pay money after I'm dead, I'm thinking about being dead. So now, as I'm thinking about being dead, this idea of being a Mensch is a defense against the anxiety, the dread of dying. So so that's what I'm saying. There's an irrational that makes sense, but that makes sense to me. I don't see that as irrational at all. That makes perfect sense to me say that again. It makes perfect sense to me what you just described, saying the feeling of being a men's offset to death anxiety feeling. That makes perfect sense to me. Right, so you're in a weird loop at that point, a psychological loop, because on the one hand you're saying, Oh my God, I'm gonna die, consciously thinking I'm gonna die, then you may put that out of your head or it might just now you've changed the subject, but it's still there, it's still your your unconscious, it's still processing it. That's what they need by mortality salience. Now it's not front of mind, but it's back of mind, but it's still there. So then you're thinking about your kids and you're thinking about your legacy, the way people think about you, your reputation, and those things become amplified by this mortality salience in the back of your mind. That's what I'm saying. This sounds irrational to me because you're in a loop of Oh, I'm going to die, therefore I should have levengers. Oh, I'm thinking about dying, therefore I should. You see, it's like there's this this feedback which is driving what's going on here. I think it's important to say that it's part of what's going on. Okay, you don't think you can...

...reduce the thing to death anxiety? Don't know. I think there's still such a thing as a mensch no, no, and there is such a thing as the analysis, the financial and statistical analysis that Bruce is talking about, and certainly on the corporate level it's a much more cut and dried because the board of directors is saying, well, let's make a calculus here, whereas when it's you thinking about your own life, your own family, your own death, it still has practical implications. Certainly, like I said, when my kids were young, my wife and I were saying, well, how much insurance can we afford and how much insurance insurance do we need? If we both die at the same time, like we're in a car crash or something like that, the kids need to be cared for or in some way financially. So there's that. There is that practical part of this. But the very fact that you're thinking about you're both gonna be dead, yeah, I mean you're unconscious. has to deal with that, has to process that, and those decisions you're making are being affected by that. It's like if you're in a jury and it's a murder case and they hold up pictures of this mutilated corpse and everybody goes Oh, you know, recoils in horror. Well, that's a trick. The prosecutor is manipulating you at that point. So that's what I'm saying. This is to me that's involved. You're right, it can. It's not all, it's not the whole story, but there's something about this that just is not like fire insurance at all. It's not like flood insurance. It's like, like you say, your death is inevitable. All right, you can't ensure that you're not going to die, not yet, maybe some day, maybe right around the corner, and Jeffs is working on that, believe me. Steve, I'd like to ask you a question. When you and your wife are discussing and thinking about purchasing insurance, did how much you want to leave your children ever enter the discussion? Yeah, I mean we we tried to figure what they would ultimately need, if you in the terms, you know, not forever. Well, what about did you want? Did you have the feeling of I want to leave this to them here is not a need analysis, but I want analysis. Well, I think it's more like you, as a parent, are obliged to feed your kids every day, sometimes more than once a day. Up to a certain age's a question all your all, your all your children now are grown, but now that they and they can and they're more than taking care of themselves. So that initial thing that you and Goldie discussed about taking care of them is really moot at this point, and I mean other than having enough to take care of your final expenses. I mean do you really need life insurance? Because, as Bruce is trying to make a distinction between need and want, you know what, on your passing, you know they're all going to be grief stricken. And is it? Are they going to be slightly less brief stricken if if a state court hands them a large check and says here, I know you're upset about your parents, but here's a whole boatload of money, take a vacation. I don't know if that's gonna impact their restrictingness well, but this gets back to want, do you?...

I mean you want them to want them to think well of you and you want them to be not only think well of you, but you have at the being a parent never ends. You could be ninety years old and you're still a parent of your child and that parental feeling still exists and you still, at least for me, I still want to do as much as I can for my children and I may or may not be able to afford to do as much as I want to for my children, but I still want to do something for them. So that enters the into the decision process, at least for me and I think for many other people going into that wants. I mean I I going back to that purchase of that policy when my second child was born. I wanted to leave a little bit more than I probably needed to, and I chose to do that because it made me feel a little bit better and also maybe say, you know what, this will really set them up a little bit better, just a little bit better, and now that makes their life a little bit easier. Not so much my ego saying, Oh, dad was a great guy, he left us that big fat check. No, it was that just it really showed that it cared to about us. Or something like that. I don't but anyway, well, you care about me and Steve, are you going to leave us some kind of a check? Yeah, I'm just thinking about that. Feeling really overlooked here. Well, we'll go back to ensurable interest. Oh, neither of you have an insurable interest in me. And how about grandchildren? Is there a difference between the way some people, many people, think about leaving money to their children and then leaving money to their grandchildren or beyond, grandchildren, great grandchildre or whatever. Sure, sure, so a couple of things come to mind. First of all, especially when I'm sitting down with a doing an estate plan, those who have substantial means, they offer times sit down, sometimes reluctantly, but oftentimes they sit down with the idea of leaving something for their errors and making sure the empire they built is going to be maintained and pass on in a very orderly manner. When talking about the children, it's not unusual for them to say kids, but when soon as you mentioned the grandchildren of the grand children. So that's the emotional element that comes out. As far as legacy is planning, UM, there are. Well, there's a couple of things I should talk about. When you do a state plan, you have oftentimes you're using trusts, and trust is a way of holding the policy. And if you have what's known as an irrevocable trust, meaning the trust is completely out of your hands and it's irrevocably out of your hands can never come back to you, then it's deemed to be outside your taxable estate. But then there are rules against having perpetual trusts meeting at some point the trust has to end, except if you have the trust domiciled in certain states. Then you can have a perpetual trust and that's when you can talk about legacy planning. That the kids, the grandkids, the unborn great grandchildren, etcetera, etcetera. Let's talk about that after the break. Folks, we've been talking with Bruce Hirshfield about insurance and now we're going to get into legacy and the states. Don't go anywhere. We'll be right back. We're having a conversation with Bruce Hirshfield about mortality and life insurance and now we're going to talk about the states and legacy planning and things like that.

Bruce, this is this is really interesting to me. I don't know if anybody else cares, but I find this really interesting. It's interesting that you're to say that because whenever you're in a party to say what do you do, and as soon as you mentioned life insurance, the crowd turns away and they gloss over their eyes. God, a clearer room. Yes, yes, the guests has overstayed their welcome. Well, let's not talk about like wow, look at the time, we really need going. Oh, so, state planning and Legacy Planning and trusts. What are they and how are they different from one another? Well, there were actually I don't know if they necessarily different from one another. They're sort of all part of the same thing. A trust as a tool in our tool kit to help pass on the wealth in its most effective way. So when you talk about trusts, we spoke about irrevocable trust before. There are revocable trusts and a revocable trust means you still can reach it. You, the person creating the trust, can still reach the trust and therefore it's included in your intoxable state. It's as if you own it. The benefit of having a revocable trust is that the assets that are inside that trust don't pass through the probate system. When you die. There's three ways assets pass. One by function of law, two through by beneficiary and three, everything else that falls into the probate system and that goes through your will. And if you don't have a will, then you go to the intestate laws of the state that you die in. So if you have a house that's jointly owned with your spouse, that's function of law, joint ownership, tendant right to survivorship, joint tendency right to survivorship, that asset will pass directly to your spouse. Doesn't matter what the will says. It's gonna Happen, no matter what functional law comes in and takes over. If you have a beneficiary of a life insurance policy, that goes directly to the beneficiaries without going through the the will. So you could say I leave two dollars of my death benefit to my my mistress in your will, but the beneficiary is only lined up to leave a percent to your family. It doesn't matter what the will says. It's the beneficiary designation on the policy that happens, and then anything else that, anything else that's leftover, goes through the will. So a trust that's a revocable trust, passes by beneficiary, so you avoid having the assets go through the court system and it helps keep your affairs somewhat private. So that's the benefit of having a revocable trust. And you could do certain things withinside there that you can't and as I don't, you can probably do about the same things in a will that you can do in a trust. But it's all laid out perfectly and you can manage that during your lifetime and irrevocable trust is used. It is oftentime choosing in a state planning situation, and that's because it's outside your taxable state. So if you say I got a fifty million dollar state I don't want to know I'm going to be subjected to twenty million dollars of state taxes. I want to have twenty million dollars inside at irrevocable trust so it passes outside the estate. So you have the policy owned. The policy is owned by the irrevocable trust. Just thinking about the word legacy and the word estate. Yeah, you're talking about what's going to happen after I'm dead. My legacy. Right, I'm very bad at quotes, but I remember from High School Latin that, I think it was Caesar said it's all about glory, and the Latin Term Gloria. It includes this idea of your legacy,...

...what lives on after you. They were all carving each other in marble statues meant to last thousands of years, which they did, by the way. So this idea that my legacy is vitally important to me, and from a Becker standpoint we look at it and say, well, why, why is your legacy important? When you're going to be dead and you're not going to care. Like you said, your name, your mistress in the will. Well, hopefully no one reads that until after you're dead, and then you don't care. I think you know, Sally's getting her million. That's great, you know, and everybody in the in the family, is up in arms. How dare he? But there you don't you're gone, you don't care. Getting back to the same the same notion legacy and a state. MM HMM. To me when I hear it, I say this is a defense against death anxiety. To see planning as a defense against death anxiety, it's an immortality project. Right, yeah, so again this is to me not rational. Well, you're feeding someone's Ego. People Purchase Life Insurance for a love of something. People do legacy planning for a love of something, and oftentimes it's a love of others, but oftentimes it's a love of yourself and it's an ego. It's an EGO. Thing. Goes back to that. But discussion that I had earlier about the golf guys on the golf club, on the golf course. You know, I'll be darned if I'm going to have a less a lower death benefit than my golfing buddy. It's an ego driven decision. And Legacy Planning oftentime is ego driven. Not Always, but oftentimes it is. So that goes, I think, ties right in with your your death anxiety. Right, this isn't your isn't it your ego? That's that is being challenged with death anxiety and this is a way to offset it your self esteem. According to Becker, your self esteem is a primary defense against death anxiety. Okay, the problem that we have talked about, Ken and I and others have talked about, is self esteem on steroids, or the lack of self esteem. But this need for self esteem on steroids becomes narcissism. And we're in an age of narcissism. are of multi billionaires rocketing into space with Captain Kirk for their claiming business reasons. But we're looking at it going yeah, come on, Ye, there's a lot of ego there, a lot. And so we in our discussions, and you and and actually you were in the room at the time, but we were talking to Sheldon Solomon and we were talking about humility and gratitude, right, and as antidotes to narcissism. Well, humility. It's being studied and the studies so far have indicated that humility is a defense, a viable defense, against death anxiety. You can be humble and health self esteem, obviously, but but not self esteem on steroids. So I wonder if the Buddhists have the same death anxiety issues because they are very humble, they walk very humbly through life. Yeah, but they're immortal, they're not going to die. The Buddhists are going to be reborn, they're going to come back. Reincarnation, which which does, which does say what I believe. It does have that effect to an extent. Right. We know a guy in Becker Foundation, David Lloyd, who I think has done research and Buddhists, I think, are less prone, and we are because of that belief, to death...

...anxiety traps. Yeah, I don't know. I Know David Lloy and I know what you're talking about, but I don't I never heard that one. But that's very possible. It's very possible. Religion, whatever. Buddhism is a very different kind of religion. It's more like a philosophy than but it does have that immortality belief, reincarnation belief built into it. So it's hard to say. That's a tough one. I'd like to go back just for a second one, because Bruce was talking about irrevocable trusts and he said kind of surreptitiously it's basically a way to beat taxes, specifically what the Republicans would call the death tax. Yeah, I think, I think a lot of people listening to this, let's say probably most people, certainly everyone I know. When you get into the kind of numbers that Bruce was dealing with, Jeff bezos type numbers, there'd be a tendency of people to look at society and say, really, you've got all this and you're gonna leave all this to your heirs and you're telling us that you can't afford to peel off this number of millions to help the society in general. Isn't there going to be a certain amount of resentment with a lot of our listeners? Probably, I realized, Bruce, you lived in that you lived in that world and people feel that I made this, it's mine and nobody is going to tell me what to do with my stuff that I made. So if I can come up with a legal way of not having the society, the government, leverage a portion of my wealth that I made out of my hands and out basically out of my children's mouths, if you want to look at it that way. I think we're in such different worlds here. I think it would be very difficult to get a general consensus from people. When you're talking about this kind of wealth and these kind of numbers. We're basically talking about your children's Children's Children's children are never gonna have to work a day in their lives. Right when you get to certain numbers, we're talking about three, four years down the road, nobody's not going to be rich. And we have that now since the industrial revolution and the giant families, Johnson and Johnson, and I mean rockefellers. None of those people are ever gonna work a day, not a day. They don't have to work and they used to, and they fly prior right, which is I was speaking with someone the other day who said that was the moment where we lost the person. If you want to know a threshold where it becomes truly obscene and evil, it's when they started lying private they no longer have to deal with the rest of humanity in those Pesky airport lines and be searched by anybody. They're getting on their own aircraft. It's all they're up to them and a lot of times they pay a huge fee and the airport shuts down. Basically, the other plane circle while they land, and this is a hundreds of people are circling overhead so one guy and his family don't miss their tea off time. Hm. At the same time you've got five thousand homeless people in America right and you have cities like San Francisco that especially on the West Coast. Out there, where you are Bruce, where it's spring all the time, you don't have the problems you have being homeless in New York, where you could freeze to death. Out there it's life at the beach. And you've got a city like San Francisco, which has incredible wealth, and People Complain, Oh, we've...

...got all these homeless people, they're pitching tents, they're defecating in the street, this is horrible. You know, they're shoplifting all this stuff, and you say yeah, but are you building homeless shelters or are you building yet another mcmansion? Are You doing anything? Two, provide work opportunities for these hundreds of thousands of homeless people? Or are you buying a five hundred million dollar yacht like Jeff Bezos? I would love to know if he's writing that off as a business expense, but that's just you know me. You know you know he is well the rocket companies as a business. There you go. So the question, I guess, is, are we now in another gilded age? We mentioned Rockefeller, I guess Getty. You know all of those. How are our wealthiest different from the vanderbilts and the asters of the nineteenth century? I don't think they're much different, candid with you. They're just more of them and they're more noticeable and the more in your face. And people said. People said that could never happen again, regardless of how you feel about taxes, because of the institution of the income tax, the progressive regressive income tax system. But we've gotten around that now. There was a time where vanderbilt level people paid seventy percent of there. They paid seventy percent of their income in taxes and they still lived a perfectly dandy life on the ten percent that remained well, but it was of the last dollars they made. It was a very progressive tax structure. So I don't know the numbers, but you paid a certain amount up to uh, you know, and as you made a million, two, three, five, million, whatever was but once you're over a certain dollar amount, and you were in the millions, than it's ten cents on the dollar. You keep, but you've also had a lot of money up until that point that you were able to keep. Socrates is supposed to have said the displaying of wealth should be done virtuously. A wealthy man to be admired, should contribute to public works and communal feasts. Brash, undirected luxury is immoral. It has no social use. But what do we have today? is displaying of wealth more like the virtuous or the less virtuous kind? As a silly question, it just seems that it's not virtuous. I think socrates would be appalled at what we're now about and I think what we've been talking about in terms of state and legacy, it's in some ways is UN American. It's the antithesis of democracy. It's another aristocracy. We're creating new royal families. Well, I just did a little research and in there were two hundred and fourteen thousand households with net worth and excess of twenty five million dollars. Two hundred fourteen thousand households, and I used twenty million because that's basically the number that a husband and wife can leave to their heirs without in the state tax. Now it might be a little bit higher, but that we're in that ballpark. Versus a hundred and twenty three point six million households in the US. So you're talking about point one tenth, one tenth of one percent of households are going to be subjected to an estate tax. And look at all the noise that's being made about it. M Right. Two fourteen thousand families. That's that's it. That's almost none. I mean it's almost one, one tenth of one percent. You can't even graph that on a pie chart right. You can't...

...see it. You can't draw lines in a night. Because they have the power to make noise about and because they are the people in the media, in the corporate media. They own the corporate media. When somebody like Elizabeth Warren goes on Rachel Nadow and says, well, we have to tax the wealthy, and Rachel Nadow Gulps uh Um because she's worth twenty two million dollars. I hope she doesn't mind tax at her death. Yeah, I think. I think a lot. I mean just just working at the low level that I've always worked at. I remember once to the past, January one, and you're thinking about your taxes. It seems to be kind of a game that we play, that people play, and the goal is to pay as few taxes as possible. Sure, but that's legal, but that's it's yeah, but it's legal, but it used to be. I saw someone talking about capitalism fifty years ago and I think it was General Electric Right, you're talking about that? Yeah, I saw a video where they said it was Jack Welsh who ruined America, because he's the one who said, you know, fifty years ago in there the annual report listed all the things they're doing and things they do for their employees and it also mentioned taxes and said we we pay our taxes proudly. Right, right, proudly, probably. Can you imagine anybody today saying something like that? GNAM Chomsky feels April should be a celebration. But all of us come together as a country and unite, let's say, we're here, we are together as a society and helping us, helping the whole it's an interesting perspect that. They just scoff. That's a lovely thought. Could we circle back to something that you mentioned in passing. But the will, which to me is an amazing word. Yeah, the will of the dead person is honored, the last will and testament. This is the last thing I get to say and as my will, my desire. Yeah, it's held very, very high in the courts, very very high. soone wants to challenge that. They got to have really strong evidence not to have that will executed as written, because the person is no longer here to defend him or herself. That that is primarily the reason, and of sound mind is oftentimes one of the early clauses of that being of sound mind. Hereby state the following. That becomes a point of contention, right, sound the sound mind part. He was drinking, he was drinking every day and he didn't have sound mind for the last ten years. Well, let's let them con test. But the point being is that that is one's ability to say this is what I have and this is how I want to leave it. But legacy. But the question is why? Yeah, legacy. Why is it so sacrosanct in the eyes of the court and society and the and the lawmakers? Well, it's the courts prefer to have wills then not have wills. And if you don't have a will, that's what the intest state laws are about. They don't like having orphans because they don't want to have children words of the state. They want to make sure that they're settled in families and they'll they'll go to great pain so avoid it becoming award of the states. So it's the same thing. We want to make sure that whatever this person's accumulations are over over their lifetime is being passed in a properly orderly matter. Wills are something that a lot of people get freaked out over. There are certain cultures. That said, I am not going to talk about having a will because that's an admits of death and if...

I'm a menting I'm going to die, I will die. So if I don't do the will, it allows me to keep that out of my frame of mind and I'm going to be able to live longer and if anything, if you have a will, it's going to give you peace of mind and allow you to live longer. Life because you don't have the anxiety associated with dying, because you say, okay, if I die, I die, but at least I know I've taken care of business. Yeah, you don't want it to go in probate court and then the lawyers get all the money and and all of that, but it's just the concept of will. MHM, my intent my will is not to be contested or dismissed. No matter what your status is. You can have no money, but you can leave a will saying, well, I want my cat to be cared for, the statue that I always loved, I want that to go to my great granddaughter. You know, those kinds of things. It's be on money. A lot of it is just very strange demands that you're making from the grave. Yes, you are right. I mean you're saying feet under and you're telling them what to do with the cat and the statue. Yeah, what was it, Helmsley? What I wanted? The Empire State Building that she had something with her dog. I believe big didn't the dog have an incredible amount of wealth, absolutely, absolutely huge amounts to take care of the dog? I mean I remember having a few cases that I've worked on where that family they wanted to have a certain trust set aside for the benefit of their pets. And then what's someone from the court has to go and check on that and make sure that. Someone periodically go and make sure they're not kicking the dog but they're in fact giving it silk pillows every night. Yeah, yeah, and it's done it and you do it in the flow of trust and that there's a there's a person assigned to the trust. The trustee is the fiduciary responsibility and all that stuff. And if and if you can prove to the courts that this fiduciary who's supposed to take care of the dog is not there in their job, they'll yeah, we were going to ask one of our last questions how much of this is irrational? I think we I think we pretty thoroughly. I think we've pretty thoroughly covered that. So I guess we often close with the question where is their hope? But I don't even know that's a relevant question in this case. Kenny, do you know? Well, this is just a very interesting aspect angle on the subject that you and I mostly talk about with people, and it's like you and I said before we started recording. Not Something I've ever really thought about and I don't think most people do think about it. Oh Wow, I never thought of that. You know, these thoughts are just not in most people's heads, but obviously people in the industry, like Bruce, they were the front and center of their thoughts. And I can't go back to one of your earlier comments, Steve. You talked about getting term insurance. Term Insurance is pure death benefits, so it's like no value to you. You can get a permitted policy that does have living benefits for you, that you can take care of your old age, so that that's a way to, you know, say hey, I can sort out my cake and needed too. I think what we've touched on here is this whole idea of this new gilded age that we're in and this legacy and estate planning, where you're talking about massive amounts of money that are not tax when they're inherited and they found ways to get around the estate tax by making trusts and making all these other tools at their disposal to avoid paying the tax. And so therefore, as Ken says,...

...you've got generations of people who are billionaires just by virtue of having been born they've done nothing else to earn it. This whole American dream thing goes right out the window and we're back to medieval royalty. And this is all predicated on our society allowing, even encouraging, lavish immortality projects that have no social value. We are suffering from massive economic inequality and this is part of the picture. To get back on the insanity portion, um quite insanity, but I think it's an interesting aspect of you may see advertised on television from time to time. Do you have a life insurance policy that you no longer in need? Would you be interested in having your policy convert to cash that you could use while you retire? Come join US and they're gonna get paid when you die and they're gonna give you some money now, not the same amount of money that you were going to get, because they're gonna take a little extra for their trouble, right right, correcty. Oh it is. It's called viatical. It's as viatical insurance, and there are companies on Wall Street that they have hedge fund type companies on Wall Street that put in money to buy these policies and a lot of times these policies are sold. I sell my policy to these companies because I may be sick and if I have a life expectancy that's maybe under five years, then they'll underwrite me to determine that. Even if I have a termaturance policy, they'll give me some money. And now I could use that for the last years of my life. And there are Wall Street companies that are come in there and they give you money and continue to pay the insurance policy and still give you money because they know that that, from an economic perspective, is a great deal, a great deal for them, for them, that's a good deal for you if you need the cash. If you need the cash, of course, of course. So that's you know, that's but it's a little bizarre, isn't it? It's a bizarre world, but nonetheless it exists. It exists and that's a service that I guess people want. In fact, I know they want and I love the way you did that commercial. It's just, you know, like I thought your soul on it, didn't I. Well, Bruce, thank you. This has been a great oh great folks who have been talking with Bruce Hirshfield, who has thirty years experience in this industry and he has been schooling us and we have been discussing the rationality and irrationality of the states and and legacy and insurance and wills and Bruce, thank you for a terrific conversation. We really enjoy my pleasures. Been Nothing but an enjoyable experience to work with you, folks. Thank you. Thank you. We've been talking with expert Bruce Hirschfield about life insurance, legacy and estate planning, wills and related subjects. Steve, what's your takeaway? Well, I think we answered our question. How much of all this is irrational? From one point of view it all makes sense, but from a becker perspective, immortality projects are everywhere you look. There's an entire multibillion dollar industry built around the notion that we are rationally planning for our own deaths, when much of it is serving the purpose of our irrationally defending against death anxiety. Is that news to us? I guess not. Well, thank you, Bruce, for your many insights and important ideas. Important ideas like always, folks, join us next time. Like us on facebook. Please recommend us to your friends.

Email your feedback or leave a comment or an apple podcast review. Let us know what you want and how we can improve. Become a part of our community of people who value these important ideas. You can find us at www the hub for important ideas dot com and support us on Patreon at www dot patreon dot com. Front slash the hub important ideas. We are listeners, supporting, and please check out our award winning Documentary Video Series Conversations with Solomon exploring human motivation, on Youtube. Thank you for listening to the hub for important ideas. I'm Steve James and I'm Ken Swain. Stay safe, everybody, stay well. This has been a contemporary heroism initiative. Production Nine.

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