Stephan Shipe
Welcome back to the Scholar Wealth Podcast. This week we open with a listener who's managed every dollar of her family's $19 million balance sheet for 30 years while her husband has never opened a statement. A recent health scare has forced the question of what happens when the spouse who runs everything is out of the picture. Then we hear from a couple whose beach house income just disappeared overnight. A county zoning change killed short-term rentals on their street, and the $10,000 a week they were counting on for retirement is gone. They're weighing whether to sell, convert to a long-term rental, or rethink the property's role entirely.

And in From the Field, we're joined by Jessica McGawley, founder of Dallington, who has spent the last decade preparing the next generation of family wealth and family business heirs for everything traditional estate planning typically leaves out. So let's go ahead and start with question number one.

I had a small health scare last month and realized my husband doesn't know where any of our money is. Thirty years of marriage, about $19 million across retirement, brokerage, and a vacation property. And my husband has never paid a bill, reviewed a statement, or met with our advisor. I'm not trying to be morbid, but I know this is a problem. How do other families handle the transition when the spouse who manages everything is suddenly gone?

This is a huge question that comes up. It was actually one of the questions that surprised me most when I first started advising. I was fully expecting to have questions where everyone was coming into the meeting excited to be talking about their finances. And instead, what I found out is there was a certain subset of people who were coming to me for advice that knew everything they were doing with their finances. They were very comfortable with their finances. They had no real need for an advisor. And they would sit in the meeting and say, Stephan, I agree with everything you're saying. I'm already doing a lot of those things. I'm really here because

my wife's never looked at our finances. I just want to make sure there's somebody she can call if something ever happens to me. And that still to this day is a segment of people we work with who are not looking at us as advisors but looking at us as a hedge against something happening to them. So what that's led to is us having this conversation fairly often — how do you go from having one spouse managing everything, what I've always called the family CFO.

That's not uncommon. We see this separation of responsibilities all the time — one spouse is handling the bill payments, the investments, talking to the advisor, handling all the details, and the other spouse is handling other things in the family. The problem with that is there's a major knowledge gap that shows up operationally. And it's not a gap of we have the money so we're going to be fine. That's one thing. If

the assets are there, it sounds like you have that under control because you've been a good family CFO. The question is, how do you actually do the stuff if you're gone? What is he going to do? So what I recommend is what I've always called the when-I-die document. You need a when-I-die document that breaks down: if something happens to me, these are the people you call, what the logins are, what bank accounts you have, what's in them.

All the basics. What would you want him to know? And it doesn't have to be long. I recommend mixing in some sort of family balance sheet with that. One page: where are the assets, where are the liabilities, what are the account numbers. Passwords and usernames — I'm a little skeptical on those. I'm not a fan of putting usernames and passwords all in one document that says, hey, hack my accounts and get access to everything I own. That's not what we want. Account numbers you can put in there, but

use a password manager. They're popping up all over the place — Apple Keychain, LastPass, all these different technology companies set up as password managers to allow you to have complicated passwords. What they'll also have is a succession setting that allows you to say, if something happens to me, my spouse can get into these accounts and access all those passwords. Because where this becomes a problem is not that he won't be able to get into the accounts eventually.

It's that this is going to be a very stressful time. Something happens to you — he's not going to be in the best state of mind. And now it adds a ridiculous amount of stress and complexity when you're already going through something so hard. He's trying to figure out what the password is to the Wells Fargo account, or even whether you keep your money at Wells Fargo or Bank of America. He might not even know that much. So having that

balance sheet set up and knowing where he can find it is a big deal. Now this might be asking for too much, but I would recommend at least every quarter — 15 minutes — go out to a nice dinner, do whatever you need to do, and present the family balance sheet to him. Here's where our money's at. Here's how bills are paid out of this account. These are the main contacts. If something ever happens to me, you call this person — that's our attorney. You call this person — that's our advisor. You call this person — that's our CPA.

And here's where all the passwords are. Here's what you need to know. That little letter of what he needs to do and who he needs to contact will go a long way. And I think if you help him understand that this isn't only a benefit for you — so you don't have to worry about this — but a massive benefit for him if something happens to you

and he's stuck in the situation where he has to handle this, your family is going to be very glad there's a repository somewhere that says, here is where all the accounts are and exactly what's in them. Updating that once a year makes perfect sense. You've got to prepare for that process, not just the money that's there. It has to be accessed some way.

All right. And on to our second question. These have come up more and more over the past few years and are starting to become even a concern when buying a property. The county just passed a zoning change that killed VRBO rentals on our street. We're 63, and $10,000 a week of summer income from our beach house is a key piece of how we thought about that property. The house is worth around $4 million. We have another $9 million invested. We don't strictly need the retirement income, but losing it changes the math on what the property is actually for. Should we sell, convert to a long-term rental, or hold it as a family asset and move on?

$10,000 a week is no joke on a $4 million investment. No wonder it was a key component of your income. And I'm sure you're able to enjoy the property for the rest of the year as well, and that $10,000 a week was offsetting a lot of those expenses. And that's typically how we hear about vacation homes being used —

or at least thought about at the beginning before purchase. It goes like this: we're going to buy this rental, we're going to pay $4 million for it, it would be expensive for us to maintain on our own. But if we rent it out during the summer we've got $160,000 coming in, and that's going to help pay some of the taxes and the insurance and the overall upkeep. And for the other eight months of the year we're going to be able to use it, we're going to love it, and the family can use it too. That's the typical story.

And you actually seem to be one of the few people who used it like you were supposed to. A lot of people do the short-term rental for a little bit and then say, you know what, I don't want people staying in our house. So they cut that off and just bear the full expense of the property. But now you're in a situation where you need to decide what the use of this house is. And I would completely reframe this entire conversation by taking a step back and asking honestly:

would you buy this house today for $4 million if you were completely starting over? If the answer to that question is no, there's no way we would do it, then it's time to sell the property. If the answer is, well, maybe if we could afford it, then start digging into the numbers and see whether or not you can personally afford the holding costs of this property for as long as you'd like to own it. That's how I would look at it.

This is such a significant shift in the math for this property that I would look at it completely from scratch and say, what is this property worth now if we were to sell it? And do we want to own it personally? You might be able to jump into the long-term rental discussion, but my only problem with that is it opens a whole other can of worms. The question then becomes, would we buy this property as a rental investment? And my guess is going to be no. Very, very rarely does a vacation home work out as a pure long-term rental investment. The reason is that you're competing against people who want to buy the home for pleasure. When somebody's buying the home with discretionary income for pleasure, they're willing to overpay.

So they're not looking at it purely as an investment opportunity. And that's who you're competing against when you try to sell it. So the odds are you're probably going to be able to sell it for a good amount, but as a pure long-term rental the cap rates are probably not going to be competitive. So you're really looking at this as: can you use this as a personal family property purely for enjoyment? And is that something that fits in your budget? If yes, keep the property.

But if the answer is no, we can't afford it and we wouldn't buy it right now for $4 million, then it's time to put it on the market. There may be some concerns with capital gains there, depending on whether you've been taking any depreciation on it over the past few years. You're going to have that lack of step-up in basis, so you're going to pay tax on those capital gains. But that's the decision you're dealing with now. And that's how I would look at it — purely, would you buy it today for $4 million? If the answer is yes, go for it, enjoy the beach house. And now you get the benefit of being able to use it during the summer instead of renting it out to someone else.

Stephan Shipe
Next in our From the Field segment, we're joined by Jessica McGawley, founder of Dallington, an advisory firm dedicated to preparing the next generation of family wealth and family business heirs. For more than a decade, Jessica has worked with the rising generation across multi-generational families and family enterprises, building curriculum and coaching around things that traditional estate planning typically leaves out — things like identity, governance, communication, and the psychological side of inheriting significant wealth.

Stephan Shipe
Jessica, welcome to the Scholar Wealth Podcast. To start, why don't you give us a little bit of background on how you got into this corner of the family wealth space?

Jessica McGawley
Of course — it is pretty niche, so the story probably does help. For seven years I worked in a succession firm in London, working with families as they were preparing their assets to transfer to the next generation, but slightly more on the technical side — trusts, wills, estate planning, all the things you'd expect a family to have. But I was working on the next generation piece, really looking after a much younger cohort, more 18 to roughly 30, on what are the other pieces you need to know to be prepared for this. And the thing I repeatedly saw was that this is not a one-off event that needs to happen once a year. Children from these families

really need an ongoing curriculum and education that supports them. And so that's where Dallington was born, and that was 10 years ago.

Stephan Shipe
When you think about those gaps that aren't in the official documentation — when you're looking at the trusts and all the partnership agreements and everything — what are the things you noticed as gaps that show up that maybe go unnoticed when it comes to whether it's parents or attorneys or just the business management team that you tend to see?

Jessica McGawley
The phrase I always like to say is that very successful families — affluent families, wealthy families — are very good at preparing the wealth for the people. They are not so good typically at preparing the people for the wealth. They're two sides of the same very important coin, and one without the other is lost. Both are completely necessary, but we need to prepare the people. So what I kept seeing were

beautifully constructed trusts, a lovely constitution and charter, a beautifully written letter of wishes, a will, investment structures, philanthropy structures. If you turn to the people who are inheriting those structures and ask them: what is a trust? What is a beneficiary? Do you know you're a beneficiary? Do you know who your advisors are? Do you know who this person is versus that person? Do you know the difference between a single and a multi-family office?

None of them could answer it. So what I kept seeing was that all of these very technical aspects were being taken care of, but the educational piece — and also the psychological and relational piece that is quite unique to this group — was missing. That's just to give you an overview.

Stephan Shipe
Can you go into that in a little bit more detail when it comes to some of those non-technical skills that come up? Because I can understand the need for what I'd call the textbook education — this is what a trust looks like, this is what a beneficiary is, you have all of these areas covered. But then I imagine there's the other side of the coin that has nothing to do with the written technical skills or the ability to sit in a board meeting. What are the things you come up with and say, these are the ones you really need to learn? There's a significant range of topics in your curriculum — some of it is the technical skills, but other pieces get into character and philanthropy. How do you go about training someone with those things that typically aren't known as textbook-trainable topics?

Jessica McGawley
Well, I think it's a really good point. A lot of what we teach frankly should in an ideal world be available to anybody regardless of their wealth. However, if you are the child of a very wealthy family or a family business, yes, of course there are privileges that come with that, but there are also very unique challenges and responsibilities. And therefore, you need to learn certain things. So like you say, basic beneficiary education, financial education — that stuff needs to happen. What also needs to happen is:

if I'm inheriting a business with my siblings and cousins who I don't spend too much time with or who are all dispersed across the globe, how are we going to make decisions together? How will we manage if there's a conflict in the generation above us? Will it filter down to us? Are there other agreements in place for this? What if none of us want to take up leadership? What if we all want to take up leadership? Things like that really need to be addressed before they become a problem.

And to give you a perfect example — when I'm working with a family enterprise, I will sit down and say to them: a family business only ever has three real options. Option one, it remains family owned and family run. Option two, it remains family owned but professionally run. Option three is it's sold. All three options have very different outcomes, but they all have different responsibilities. Some of them are very practical, but some of them will massively impact

how you see yourself, how you raise your children, and how you relate to each other. Some of the main challenges we see with the rising generation are things like isolation — feeling that these problems are only theirs, and that there's so much stigma and shame around talking about them that they daren't. There are issues with motivation. What do you do if you really need to get a job

when you know there's always a safety net there or a job available if you needed one? That can kill that fire that most of us actually look back on as being a great part of our teens or early twenties. And another part of it is if you are ambitious, but every room you walk into someone says you're so-and-so's daughter or son. The reason you got this job or were able to start this business is because of that. That can be so defeating

and demoralizing. So a lot of people, when I talk like this, will either roll their eyes and think these aren't real problems. But we have to remember that this younger generation is highly aware of the privilege they've come into. And most of the families I work with do enormous amounts to offset that and to try and be very engaged in their community and in philanthropy. But these young people are just trying to

do their best with the information they have.

Stephan Shipe
I imagine that identity issue is something that comes up pretty often, especially when your family has created this massive organization or enterprise that it would almost be odd if you didn't run it. There's really not another option for you. There are some other options, but the gap between those other options and the path you're kind of slated for is so vast that you run into this

identity component — how do you be yourself when you're supposed to follow this very narrow path to run a business that was created generations ago for you?

Jessica McGawley
It's a huge amount of pressure, and there is so little empathy or understanding of that for this group. If we think about most challenges, there's somewhere you can go for it — there will be other people who understand. But like I said, there is the stigma and shame of thinking, well, I have money, so I really shouldn't be seen to be complaining about this. But that doesn't help anybody. Because in some cases I have families where they employ thousands of people, in some cases internationally. And if the son or daughter I'm working with is set to be either working in that business or at least a shareholder with decision rights over how that business is run, we really want those people making well-adjusted decisions from a grounded place.

Stephan Shipe
How do you effectively coach or teach that? Because that is very much not something that can be on one page of a handout — here's how to have identity in this type of business. Do you find that case studies work? Is it just examples? Is it talking through those scenarios with other people in a similar situation? How do you mix in different ways to convey that information to that generation?

Jessica McGawley
I've tried many times to get that on one page and failed, so I hear what you're saying. First of all, a family or an individual has to be ready and willing to actually think about this and learn it. You have to be at least curious about this stuff for it to land. If they are, and then you get the family in the room — because I could be working with

an 18-year-old from a multi-generational family, or I could be working with the whole family. But we always say the family is in the room — it's a system. So even if you're working with one person, the whole system is there in effect. You really ideally want the whole family on board that this is worthwhile. The way we do that at Dallington over the last 10 years is we've designed essentially a course, a program. There are very

straightforward curriculum modules that everyone goes through. But then there's the coaching, the psychological component, and the group peer piece that's really important as well — sitting with other people from similar circumstances where you can talk about and share your experiences and how you handle things. So it will hopefully be of no surprise to your listeners that whilst we might be talking about big companies that employ lots of people,

the average person who comes through these doors also wants to talk about: I've just started dating someone. I really like them. I don't know when to tell them who my family is. I wonder how that will change how they see me. Or: I'm just about to go off to college. I know there's going to be a diverse mix of people from different backgrounds and financial statuses. How do I manage that? Will they look at me differently? What do I say? So some of this is just really rites of passage.

Stephan Shipe
Related to that rites-of-passage idea — I imagine the conversations vary quite a bit depending on age. With your curriculum, do you find that the same material works for different age groups, or do you have it broken down? Because the pre-college conversation seems very different from the I'm 25 to 30, now I'm a VP of some division in the business, and maybe I'm up there faster than what would traditionally be expected in the company.

Jessica McGawley
Don't get me wrong — while we do work with some who are a little bit older, on the whole we are really working with that late adolescence and early adulthood formative years. When we tend to work with people who are in their 30s or coming up to 40, it's in what we call the sibling-cousin rising gen program. But you're absolutely right that the sorts of conversations a 16-year-old versus a 30-year-old are having will vary, but the core messages are often still the same.

Stephan Shipe
That's interesting — because where you started, you said you were in that 18-to-30 range, but you seem to have picked the younger end there as the area of focus. Was there a reason for that?

Jessica McGawley
Well, for one, we started the business 10 years ago and at that point I looked a little bit less like their parents. And now I'm starting to morph into that age. What we find is really important is to feel somewhere at least between the age of them and their parents. You're not their natural authority figure. You're also not their best friend. You're somewhere in between. And so I say this — and it sounds like I'm going to see myself out of a career in the process — but what I'm also trying to do is train and build up more formally qualified people to do this sort of work, where they can engage that younger generation.

Stephan Shipe
Have you seen a shift in that generation? We hear so much about generational shifts as a whole. In your world, where you're focused on all these different struggles and concerns, have those concerns changed over time — let's say over the past 10 or 20 years?

Jessica McGawley
I think it's a really good question. I find it actually really irritating and quite lazy when you see things on LinkedIn and Instagram that say, millennials do this and Gen Z do that, because you can't bunch people quite so easily like that. What you can see — and you'll know more about this than I would — is that the way a younger generation is investing and looking at money has changed. The younger generation I work with is certainly having more

conversations, or dare I say it, even debates with their parents and their advisors about how ethical the investments they're making are, what the boards look like, how diverse they are. They really care about that, which is no bad thing. But what I would say is the biggest shift is also what we must not forget — the parents. I don't know if you or your listeners have read Jonathan Haidt's The Anxious Generation?

Stephan Shipe
Yes.

Jessica McGawley
It's a fantastic book, fantastic research. What I would argue is that this younger generation is not the anxious generation. I would argue that we — and I'm a millennial, I'm 39, I'm a mother — we are the ones who are far more anxious. We're the ones constantly throwing in safety nets, checking in on our kids, tracking them, fixing things. And when we look at this with

the client group we look after, it is absolutely essential that they learn how to problem-solve. And we need to better tolerate our discomfort with that. If some of these young people are set to inherit the vast sums they are — and in some cases the businesses they are — they have huge responsibilities. They can't do that if they've been mollycoddled and shielded

their entire adolescence and then expected to take up these huge, pressurized roles.

Stephan Shipe
That's a great way to think about that, especially the problem-solving nature of a lot of these decisions, especially with AI and everything now coming into play. I'm sure that makes it even more of an important role.

Jessica McGawley
A lot of it — when you think, I guess, as we start to wrap up on this idea of preparing the next generation — any situation where I've seen this done really well, the family had to be willing to show up consistently and with curiosity.

Stephan Shipe
When you think about wrapping up on this idea of preparing that next generation, do you have a story you go to, or a situation you look back at and say, if I can look at what we do, this is a good example of it going right? I know there are countless situations like that, but is there one that you constantly hang your hat on and say, this is exactly why I created this type of curriculum, and this is what happened?

Jessica McGawley
Oh, absolutely. I have lots of individual cases where — now we're 10 years into the business — I'm seeing them get married, take up positions, have their first child. Seeing that is just the biggest joy. But what is probably a more complicated example is when you're working with a family business, because in that instance you're working with at least two generations, and likely the family office and other advisors. There are lots of people and moving parts. And if I think about one of our earlier families,

they were quite traditional in their values and quite traditional in communication. A lot of things were boundaried and kept contained — not out of control, just that's always the way things had been done. And the younger generation were really in the dark about what to expect and what pathways were available. I remember them saying, if our parents would just tell us what the roles are, then we'll show them if we're interested. And the parents were saying,

if they show us they're interested, we'll tell them what the roles are. And no one was having these conversations. So we did what we do best and stuck our oar in and said, look, we are not having some important conversations. Some of this is going to be pretty tricky, but what we need is your consistency, your time, and your curiosity — just show up to these meetings. And if it feels uncomfortable, that's fine. We just want you to say it, to be honest.

I'm not enjoying this, this is tough for me — that's okay, we can work with that. It's when you're avoidant, you don't show up, you don't do the work, that we won't get a result. Bless them, they trusted us, stuck the course, and three years in, two of those family members joined the family business in roles that they actually wanted with clear pathways. The other two took different paths but were still shareholders, and they formed a family council.

They're still going on their family holidays every year together and they have much better lines of communication. So for me, the ultimate joy is when the priority being the family is the thing that becomes strengthened through all of it. If the money and the business improve in the process, fabulous. But for me, the family is first.

Stephan Shipe
Absolutely, as it should be. Well, Jessica, thank you so much for coming on today and spending some time with us. I very much appreciate it.

Jessica McGawley
Much appreciated. Thank you.

Stephan Shipe
That's our show. Thanks for listening, and we'll see you next week.