When a person answers the “How are you?” of an unknown phone caller with “Well, not too bad for an old, fat guy,” it doesn’t take much, after you stop laughing, to figure out that he doesn’t stand much on formality or being Mister Comme Il Faut. (When he later lists his favorite hobbies as “tennis and sleeping,” there’s really no doubt.) At age 70, planner Gene Balliett could be forgiven for a bit of stodginess and reserve, but somehow he manages not to take himself too seriously, despite the fact that he manages a pot of money worth “well into nine figures,” heads a firm of a dozen employees, and has a shelf of 11 financial planning and practice management books with his name on the cover.
But don’t be fooled: Not taking himself too seriously doesn’t mean he treats his firm as a lark. While his retired peers tool around in a golf carts, and by rights he should be scoping out a prime, palm-treed hammock location to practice his hobby of snoozing, Balliett is busy training employees, editing newsletters, lunching with clients, and developing new services, including everything from trust services to malpractice insurance solutions for his many doctor-clients. Although he does arrive at the office fashionably late (10:30 a.m.) most days following his morning tennis date, retirement in the all-shuffleboard-all-the-time sense isn’t even on the horizon. “When people ask me when I’m going to retire, I tell them I’ve been retired since 1967, from the moment I went into business for myself,” says Balliett, whose firm has been based in Winter Park, Florida, for the past 15 years. “Retire? To do what? You can’t be more retired than doing what you like to do.”
Fortunately, Balliett’s “best friend and favorite person in life or literature,” his wife and business partner, Dee Balliett, defines retirement the same way. A co-author with her husband of two financial planning books, Your Financial Plan (Professional Communications, Inc., 1997) and Your Financial Plan Is a Vision of Riches (Professional Communications, Inc., 1998), Dee was 59 years old when she started her master’s degree in mental health counseling, and she currently leads the firm’s financial planning team. Determined to be a lifelong learner, both she and her husband are proud of the fact that they consistently earn half again as many continuing education credits as they are required to by the National Association of Personal Financial Advisors (NAPFA). And she says she, too, is as retired as she can be.
Clearly, the Ballietts aren’t much for coasting; if they were, they certainly wouldn’t have tackled the firm’s most recent transformation, which turned Balliett Financial Services, Inc., a planning firm under SEC regulation, into Balliett Financial Services and Trust Co., an affiliate branch office of NITC (National Independent Trust Company), which is regulated by the Office of the Comptroller of the Currency. NITC is a nationally chartered trust company and non-depository commercial bank.
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Gene Balliett remains convinced that the transformation was worthwhile. “I believe that much of the future of financial services will belong to genuine fee-only advisors who work either in a good, independent trust company or with one,” he says. “Control is the issue; without it, I can’t see how I can have any chance of ensuring that the wishes of my client, as the trust’s creator, will be faithfully carried out for two and three generations or more.” That’s all very nice, but it hasn’t kept the actual process of transition from being a royal headache. “I was [Tom] Batterman’s guinea pig,” he says, referring to one of the founders of NITC. “The transition from [being an RIA under SEC oversight] to regulatory oversight by the Office of the Comptroller of the Currency is a sorry story of blunders and, well, situations. But then, maybe the first pig through the maze is the one that perfects the system. If that’s the case, I’ll stop whining.” Balliett notes that while he was an early investor in NATCO, the National Advisors Trust Company, based in Kansas City, and remains “among its many cheerleaders,” he turned to NITC because regulators told him that no NATCO branch would be approved until at least three years after the organization itself was off the ground and turning a profit. “That moment was not yet in sight in 2000,” he says, when he contacted NITC.
Balliett says clients have been slower to sign on for his trust services than he had expected, but notes that the firm hasn’t promoted them much, either, preferring to wait until the systems are more smoothly coordinated.
Trust and Consequences
When talking trusts with clients (whether those provided through his firm or elsewhere), the tool he most frequently recommends is the revocable living trust. “We uniformly tell our clients that they’ve got to have a revocable trust, and should own all their significant assets in it,” he says. Without it, clients’ assets will be dragged through the probate process, which is costly, time-consuming, and beribboned with red tape. “Lawyers, no matter what state they’re in, will tell you that ‘Probate is a problem everywhere else, but not in our state,’” he says, “but probate is still something to be avoided. Some lawyers retire on the money they make from probate. And when you have a sizable population that has outlived the rest of their families [as in Florida], and there’s nobody looking over the shoulder of the lawyer after the old person dies. There’s probably a Pulitzer Prize awaiting somebody who will do the story on how much legal plunder goes on in the name of estate planning or probate closing.”
Balliett’s clientele is a natural market for trust services because he serves so many physicians. Worried about being wiped out by a malpractice lawsuit, doctors can use domestic or offshore trusts to protect their assets from patients who might sue them. Balliett offers everything from a do-it-yourself model that can be cranked out by Nolo Press software to more complicated offshore trusts drawn up with the help of expert estate planning attorneys. He generally prefers trusts to the other asset protection strategies available. “There are a lot of way to shield assets, but too many doctors think of only one: Put them in your spouse’s name,” he says. “Which is a sort of sneaky thing, and it doesn’t work, either.” For one thing, when the plaintiff’s attorneys hunt around and find that, hmmm, Dr. Doe has zero assets and his wife has several zillion, they’re not stupid; they’re going to sue Dr. Doe for the zillion dollars–and Dr. Doe may get hammered for fraud, too.
The other problem is illustrated by a couple who learned it the hard way. Against Balliett’s advice, a doctor put all his assets in his wife’s name. Soon thereafter, the wife was in a car accident in which she was at fault: She ran a red light, and the passenger in the car she was driving was killed. In determining a judgment, the jury took every dime she had–which was also every dime her husband had, since all their assets had been in her name. The couple was left with nothing.
Afterward, the couple returned to Balliett at a seminar he was leading for physicians and told their cautionary tale to the group. “You can bet that after that, none of those doctors went home and ‘protected’ their assets that way!” says Balliett.