Securing Your Financial Legacy: An Insightful Discussion with N Z Bryant Jr., Co-Founder of Patterson Bryant Incorporated

How often do we contemplate the financial legacy we are leaving behind? This week, we're thrilled to have the remarkable N Z Bryant Jr., co-founder of the financial services firm Patterson Bryant Incorporated, joining us. Our conversation revolves around his inspiring personal journey, his vast experience in financial services, and the importance of planning your financial legacy. 

We start off with a deep-dive into Mr. Bryant's life story, and the financial legacy his great-great-great grandfather left for his family. His insights into the beauty of saving and investing are truly thought-provoking. We also discuss the significance of financial literacy among young people, laying stress on the understanding of 'why' behind money management. He also sheds light on the powerful tools of insurance and buy-sell agreements, and the role they play in securing business legacies for future generations. 

As we navigate the complex world of estate planning and trusts, Mr. Bryant provides a roadmap to the implications of buy-sell agreements and key person insurance policies for businesses. From varying state laws concerning estate planning to the potential consequences of not having a trust, we touch upon it all. If you're looking to take control of your financial future and secure your legacy, this episode is a treasure trove of knowledge. Remember to tune into Crouchydale Men podcast every Thursday to equip yourself with the essential financial tools to build wealth and maximize health.

Transcript

Speaker 1: 0:03

Hi, this is George with the Crotchety Omen podcast. Hopefully you've enjoyed listening to the Crotchety Omen as much as we've enjoyed making each episode. If so, send us some feedback. We'd love to hear from you at thecrotchetyoemanpodcastatgmailcom. Let us know what you enjoy about the show, what you'd like to hear more of. We'd love to receive your feedback. Remember that's thecrotchetyoemenpodcastatgmailcom. As we always say, if you didn't know, nah, you know.

Speaker 2: 0:42

Peace, welcome, welcome. Welcome to another exciting episode of the Crotchety Omen podcast. Hello, I'm Dary Smith. One of the co-hosts With us today is an amazing guest. I tell you we're super, super excited about the show today. I always say wherever you are in the hemisphere, so it's good morning, good afternoon, good evening or even good night, all right, but anyway, without any further ado, let me welcome my partners here in the studio, george and PC. Whichever one want to speak, first, go get it. What's up?

Speaker 1: 1:23

What's up, Smitty? How are we doing today?

Speaker 2: 1:25

Oh man, you can tell I'm on 10.

Speaker 1: 1:28

Yeah, you are on 10. That is for sure, that is for sure.

Speaker 3: 1:32

What's going on? Smitty and George and brother NZ.

Speaker 4: 1:37

Oh he ain't great.

Speaker 2: 1:39

Man. You know PC, always spilling the beans man, he telling people stuff we don't want him to know yet. But that's okay, because I'm not the only one on 10 on the Crotchety Omen podcast I got three partners here. Anyway, let's get into it. It gives me great pleasure because today's guest is not only and I always use these terms, you know, forgive me. You know I use the words amazing and phenomenal and things like that, but I say it sincerely when I talk about this young man, because I happen to know this young man quite well. I say young man, man.

Speaker 2: 2:16

You're going to find out as we get into this podcast exactly what this young man has. He's a graduate of Western Michigan University, because both his MS I mean master degree, as well as a bachelor's degree one time even pursued a doctorate in psychology. I can clearly understand why he went that, considered that direction. But not only is he an educator, I mean he's taught in the Pontiac public school system, he's taught at the university level. You matter of fact, he's taught at all my modern mind Detroit College of Business. Where is the academic coordinator?

Speaker 2: 2:51

But moving forward from his academia, this gentleman started co-founded, I should say, his own company, patterson Bryant. He and his partner back in 1982, darrell Patterson. They formed what's known today as Patterson Bryant Incorporated, a financial services firm. And what they specialize in, gentlemen, is employee benefits, state planning, executive compensation, buy-sell agreements and all those business type insurance type products and vehicles. And I'm not going to get into it because he's the expert in it and he's certainly going to break it down for us.

Speaker 2: 3:24

But before we bring him on to the studio or on the air, I should say I want to talk to you about some of his background and also some of his accomplishments. I mean, he's going to get into it, I'm sure, but he's well-rounded. I mean he's been on management CEO magazines. He's had an unparalleled work history in terms of working out with anywhere from small clients to large clients. This guy has the largest clientele of over 27,000 employees. How many of us can say that? So, without me continuing to read his complete bio, let me say with honor and gratitude welcome to the studio, mr N Z Bryant Jr.

Speaker 4: 4:08

Thank you very much, gary. I consider it a privilege as well as an honor to be in the presence of you. Fine young gentlemen Proud to you old man, you may call yourselves, but young gentlemen you are.

Speaker 2: 4:20

Well, thank you so much, Z. I'm not going to haul, you know I want to talk to you all dog all day. But the question I had right starting off with why was it that you guys started an insurance company an insurance business, if you will that got into? That was geared more toward companies and businesses, as it was for us individuals. You know, so often in our African-American community only our first exposure, if you will, to the insurance industry is primarily through life insurance, through the sales person used to come to the door either. You know somebody send the money in, but you guys decided to go a totally different route.

Speaker 4: 5:06

That's an interesting question, gary, and you're absolutely right. First, folks that are. After that, many of the people that are in it were either motivated in some way or inspired in some way or came through Patterson Bryan. So we're happy to be able to to say that we felt that there was a need in the community to be able to look out at the person that's talking about your employee benefits and have them look like you, a businessman that can talk with employees as well as employers, the CEO, cfos, the COOs, as well as the employees, and so it was important for us to kind of establish and be a role model in that area.

Speaker 1: 5:50

What that said. Where do you see your, your biggest focus as far as from a day to day perspective? Where do you see yourself providing the most information, the most expertise?

Speaker 4: 6:03

So our clientele ranges from, as Gary said, to employees to 23,000 employees, and so, on the larger scale, we may do consulting. On the smaller scale, we may do the actual benefits, which would be the health insurance, life, disability and dental, vision, etc. And when we go to corporations, one of the things that we're talking about is, of course, the health insurance and other ancillary benefits to the employees. However, we do have the ear of the CEO and the CFO, so we want them to know that there is this thing that's called a legacy. In other words, if you're the business owner, you should be concerned about leaving this business to someone else.

Speaker 4: 6:47

I always say that we're first generation thousandaires and we should be second generation millionaires, and we're not, because, one, we've not learned the importance of leaving a legacy and, two, we've not learned how to properly leave a legacy. Every time we die, the next generation has to start all over again. I can also tell you that we get just calls and emails on a weekly, maybe a daily basis of people wanting to purchase this corporation, which is one, as I've said, one of the few African-American corporations that are employee benefits in the country. So at this point, we're not interested in selling, we're interested in leaving a legacy to other folks that look like us and that can actually and it's not just look like us but that have an interest in doing some exciting, some beneficial kinds of programs and information that we want to leave to other people that are in this space or in business.

Speaker 1: 7:54

You know I am so glad that you went there because that's one of the challenges that I see on a day-to-day basis. You know that aha moment from individuals where they're clueless on how to prepare for later on in life, how to prepare for, prepare their family for the afterlife. I mean I see this so often. I mean it's just basic things and I'm just curious to, from your perspective, why do you think we as a whole don't gravitate to more of the preparation side of, you know, financial literacy? You understand what I'm saying.

Speaker 4: 8:39

No, absolutely, and one of the reasons is because we've not been told, we've not been taught, we've not been shown and, as a result of that, that behooves me and people like me to actually talk about what's important and leaving a legacy why it's important.

Speaker 4: 8:56

I think a lot of times people say things like well, I pulled myself up by the boot, scraps, they can do just as well. Or I'm not leaving anything for anybody for them to destroy. Well, if you leave a trust, then you can put things in a trust and you can actually speak from the grave. And oftentimes people don't know that, they don't understand that and, as I've said, that we've been offered millions of dollars to purchase this corporation and I've turned it down because that's not what's important to me. What's important to me is to be the next afford or the next corporation that's been around for 100, 200 years. That's what I want to do, not necessarily leave, get a lot of money personally and then spend it, and I think that the more we talk about that, the more people understand that, the more people will do it.

Speaker 3: 9:47

I'm glad you're on the show with us today, because you're really covering some very important aspects of our lives and, as of our legacy, as you just described, and one of the things that I'm curious about, since you've been an educator and since you pointed out the fact that we are lacking in terms of knowledge and understanding of how to set these things up. What are some of the things that you can think of right off the top of your head that could be applied to educational systems around the globe that will bring us into the fold in terms of understanding? You know the economics, how to set up your legacy, and so forth.

Speaker 4: 10:31

That's an excellent question, cp, and probably the easiest and the first thing that everyone should do, could do, can do, is purchase a life insurance policy. Oftentimes in the old days there were 5,000 dollar policies, 12,000 dollar policies that people in fact. It was interesting, I just looked at a policy that one of my team members brought in that their cousin or someone had brought to them, and they had a 2,000 dollar policy, a 3,000 dollar policy, a 10,000 dollar policy, a 15,000 dollar policy. Well, they're looking for burial expenses because it may cost anywhere from 10 to 20,000 dollars just for the funeral arrangements, the home going services. So what's left over for the five kids and the spouse if you have a spouse, what's left over for the grandchildren? Why don't we put this into some kind of trust that says okay, when we pass away? This is what I want to have done.

Speaker 4: 11:26

I remember Saying to that old man tell me, granddad, why did granddad, great, great, great granddad NZ, leave us with this great legacy? He left us with a fund that you can use for education. He left us with a fund that you can use to start a business. He left us with a fund that is an emergency fund for our family, and he did this so many years ago. Those are the kinds of conversations that we need to instill in our children. It doesn't cost. I mean, you think about it. You can make $100,000 a year and over 10 years you've made a million dollars. Over 20 years you've made $2 million, but yet you die and you leave nothing. How do you explain that? And so people explain it because no one told them. People explain it because they didn't know, and ignorance of the law is no excuse. But it is my responsibility to make certain that people know the value of their life and the value of leaving something for those they love.

Speaker 1: 12:43

From your perspective, how do you educate folks on? It's not how much you make, but it's what you do with what you make.

Speaker 4: 12:52

You said it very, very well. So, as you know, I do the financial advisory for the NFL players, and it doesn't matter how much you make. What matters is how much you keep. And it's a basic philosophy. Many people spend first and then try and say and you have to save first and then spend what's left. You have to say, and it used to be 10% of your income, but the higher your income, the more you should save. And that is because when you're just making a little, you cannot save as much. And so 10% is a good number.

Speaker 4: 13:26

But as you make 200,000, for example, you may not need to spend that amount in your household to keep things going.

Speaker 4: 13:34

If you make 500,000, it shouldn't take as much. If you're making 2 million, it shouldn't take as much for you to live a comfortable and a nice life as it would for someone who's only making 10,000. Yeah, you're going to buy your house, you're going to buy your car, but you're going to have a lot of money left over. That's where you should start thinking about investing. That's where you should start thinking about a legacy. That's where you should start thinking about I don't need to spend every dime that I have, and I think a lot of that comes from when we're growing up and we're kids and I remember I had just probably nine, 10 years old and we'd have this little hustle where we lived next to a golf course and we would catch the balls as they came over the fence and then sell them back. That's the introduction of saving and not spending every dime I had, and so that comes from us as adults, teaching our children the things that they need to know later on in life.

Speaker 1: 14:30

So it sounds to me it's more exposure. We've got to be more mindful of exposing our youth to the benefits of saving, as opposed to just be a sports star, be a rapper, be those types of things. Here again, it goes back to once you make the money, what you're going to do with it. I was listening to a podcast yesterday and the general question was so if someone approaches you and says how do I invest this money, the first thing out of your mouth should be what are your goals, what are you trying to do? And that sometimes is not thought about. The first thing people want to do is start spewing out. Oh well, you should look in the stock market or you need to go buy a house or things like that, some rental property. But I think the most important question is the why.

Speaker 4: 15:34

You said it well, george. That's the most important question in life, because the why will actually lead you towards the what. If you find out why you're doing something, then you find out what you want to accomplish. Exposure, I think, is so important. I can think about the people that have been exposed to me and the business I do and that they are in a similar kind of business or they're in the same kind of business. You think about LeBron James. He's exposed his children to what he does. You think about Serena Woods she's exposed her daughter to what she does.

Speaker 4: 16:15

Many people, just via being there, expose their children to how they work. If you are a person that doesn't spend much time at home and you work all the time, your kids will be exposed to that and they'll wonder should I work that hard or should I find another way to work? It behooves the parent to then talk about why they work so hard. Is there another way? And maybe they've done some things wrong. I didn't know. Perhaps that there was a better way Because you are exposed to it, you can now research and find is there a better way? Could I have done it differently?

Speaker 2: 16:59

That's good, z. I had a question in terms of I know you speak to how important it is for families and individuals of insurance, but in regards to leaving a legacy as an entrepreneur, as a business owner there's a lot of entrepreneurs and business owners out there listening would you kind of share with us how important and where are some of the applications of insurance as it relates to businesses in terms of leaving legacies, as well as the transition?

Speaker 4: 17:35

Yeah, that's that's important, gary, because they're what we call a buy-sell agreement, and oftentimes you'll have a partnership, or you may have two or three or five people working in the business, and they all have important roles. So let's just say it's two of you. One of you is great in sales, the other one is great in administration. Without the salesperson, you would have nothing to administrate. Without the administrator, all your sales would go right out the door, and so you need both parties to make the business successful. Well, let's say that both people are married, and so you now have two individuals. If one of them passes away, then the stock value of that corporation 50% of it goes to the spouse. The spouse has no expertise either in sales or in administration, and so now you're bringing in another partner that you've got to give 50% of the proceeds to, and they don't do 50% of the work. And so it is very important to have what we call a buy-sell agreement. That simply says in the event that you're going to have a buy-sell agreement, in the event you've got two partners, in the event of one of their debts, then that person's stock must be sold to you. That's in your agreement, and it must be sold at an agreed-upon price. And so when the spouse comes in, you're buying that stock from her or him at an agreed-upon price and they give all of that stock to you. Now you're 100% owner and you can run the business whatever way you want.

Speaker 4: 19:09

Now there's such a thing as having what we call a key person insurance policy on there. So just remember, you've just given the life insurance which you had on that person's life. You were the beneficiary, so you took that money, gave it to the spouse for the purchase of the stock, but once again you've lost a valuable component of the business. And so there lies the need to have what we call a key person insurance policy. So one insurance policy is to buy the spouse out. The other insurance policy is to come in to replace the person who ceased to exist. So, for example, let's say that's a million dollar policy. So you receive a million dollars. If you could invest it at 10% interest, that 10% would produce $100,000 every year. You could perhaps hire somebody at $100,000 a year to do what your partner used to do. You still have the million dollars saved and it's the interest that's paying the salary for the other person.

Speaker 3: 20:15

When people come to you for a state planning, every state has a different procedure and different rules per the probate court. So how is it, from state to state, are you able to coordinate to where you're satisfying the rules of that probate court for that particular state?

Speaker 4: 20:39

So the one thing that you want to do is you want to avoid probate, and so it doesn't matter the rules of each state If you avoid probate. One way to avoid probate is to make certain that you have a trust. If you have a wheel, then that tells it to go straight to probate. If you don't have a wheel, you don't have a trust, it goes straight to probate. But you want to have enough so that you have a trust. And then now there is what we call an unlimited marital exemption.

Speaker 4: 21:11

So if you've got an estate that's worth $20 million, for example, you can exempt that entire estate from estate taxes, which is the other thing that people should be concerned with. They're not aware of, but they should be concerned with it as their estate rolls. So, in answer to your question, if you leave things in a trust, then there's no need to go to probate. If you have a wheel, then the wheel will say that you go to probate, but it will also say who your executor is or who the personal representative is that you want to handle your estate, as small as it may be, as inexpensive as it may be.

Speaker 2: 21:59

Good, does that answer your?

Speaker 4: 22:01

question.

Speaker 3: 22:04

Good answer, Absolutely Good answer. Good answer Because probate I've seen people's legacy just totally abolished. If it has to go through, probate the argument that takes place. It's a very good point.

Speaker 4: 22:23

You know, I want to mention this also. When we think of people like Aretha Franklin and we think of Prince, it's a shame that their estate ends up in probate, and it's typically because they didn't have a trust. And so what happens is that when it ends up in probate like that, you're going to find that 40 to 50% of it is going to go in taxes. So if, for example, I had a $10 million estate and 20% of it, or 30%, what did I say? 40% of it went in taxes, taxes then the IRS gives you nine months not nine months in one day, but nine months in which to pay them via state taxes. And so now you've got to sell your real estate at a fire sale, and so you won't get full value. And so what you're gonna do is you're gonna sell it for maybe 50 cent on the dollar, pay 40 percent to the IRS, and then maybe you got 10% left. If that, wow.

Speaker 1: 23:25

So, so let's stay right here. So for your average, average American, what type of thing should you put in that trust? Do you put your primary residence in that trust? Do you put any rental property in that trust Kind of expand.

Speaker 4: 23:44

So, yeah, you can put in the trust and you should put in the trust everything of value that you, that you have. One of the things that it does is it speaks from the grave and it is more in control of who gets what, how it's spent, how it's invested. So, for example, if you had a house and you may be married and maybe you never changed, you may have gotten married just recently and you may have never changed the major wife, the part owner. Well, after a while she becomes the owner ordinarily, but you can say who gets that house. Same with rental property you can say who controls the rental property and you can say whether or not you want. Here's a good example.

Speaker 4: 24:35

Oftentimes we'll find that someone will have a house, for example, and they won't say a word about it and they'll die. They will have three children. One of the children will say you know, I want to live in the house. The other child will say I want to rent the house. The other child will say I want to buy the house. I mean, I want to sell the house.

Speaker 4: 24:51

And so now you've got a dilemma where you want your family to be together. Now you have them arguing about some asset that you gave to them. So you can simply say, in your trust, this is what I want to do. We oftentimes find, even in a life insurance policy, you don't want to leave a million dollars, for example, to an 18 year old child. So what we'll put down in terms of the beneficiary is we'll put down well, the money to be held in deposit until the child reaches age 30, for example. From age 30 to 35, they get to 20% of the proceeds, from age 35 to 40 they get 50%, and age 45 they get it all, so that you're not giving all of that to one 18 year old child and, in fact, you're preventing them from going to college because you're giving them so much money to go out and spend.

Speaker 3: 25:47

You have all your assets. Okay, you put them all in a trust, but is there any advantage in having two or three trusts, depending upon what assets that you've acquired in your life Not well there.

Speaker 4: 26:06

Actually, you can have what we call a real estate trust. You could have a charitable remainder trust, you could have an idly a trust. So you can have different trusts, but they're in a sense, they're very similar or they're all a part of one trust. For example, with an idly a trust and this is for people that have millions and millions of dollars, which I'm certain that the people that are listening to this, as well as the three gentlemen that are on the show, would fit into that category and so let's say, for example, that you are over 23 million dollars in assets. Well, if you're married and you're going to pass the entire 23 million on to your spouse, and when that person dies, that's when the estate taxes come into play, and so your children will then have to pay the estate taxes.

Speaker 4: 26:51

So, in this particular situation, if you had an idly a trust, what you are doing is you are gifting, because you can gift $15,000 per child to this idly or to this child.

Speaker 4: 27:04

They put it into the ILEA trust and then that money goes to buy the life insurance.

Speaker 4: 27:09

So the life insurance, and let's say that it's the $20 million that you leave and that the spouse leaves and that the children will have to pay estate taxes on.

Speaker 4: 27:18

So if that's the amount and let's just say it's 40% of that $20 million, which would come out to be $8 million then they would need to buy a life insurance for $8 million on your life or the life of the spouse, and once they put the money into the ILEA trust, that money goes to pay the life insurance and then when the person dies, then the life insurance is in effect. And the point that I'm making here is that you need an ILEA trust to do that, as opposed to you buying the life insurance yourself. So let's take, for example, that you've got a $20 million estate. You know that the estate taxes will be $8 million, and so you go out and you buy an $8 million policy. Well, now your estate has gone from $20 million to $28 million, and so you're going to have to pay a little more estate taxes on that, and so you use the ILEA trust so that you give the money to the children so that they can buy the life insurance and they can pay the estate taxes, and then they inherit the assets.

Speaker 1: 28:21

So real quick. What's the difference between that type of trust and an irrevocable trust?

Speaker 4: 28:27

There's a revocable living trust and there's an irrevocable living trust. So an irrevocable living trust simply says that whatever you put down there cannot be changed. It's irrevocable. You cannot revoke it. A revocable living trust means that you can make changes throughout your life. So typically you want to have a revocable living trust, but there may be certain instances, for whatever reason, you want an irrevocable living trust where changes cannot be made.

Speaker 2: 29:00

Wow. Well, I tell you, z man, you have come with a lot of information and wisdom and knowledge in regards to everything that you know, everything we discuss, and I'm so appreciative. I know our audience, our listeners are too, but before we wrap up, why don't you share with them? You know, how can people get in touch with you? I mean, what way? Method of what have you Would you prefer if people had questions? Or hey, perhaps we want to become a client, or what have you? How could they reach Patterson Brighton?

Speaker 4: 29:33

So the easiest way is, of course, via email, and the email address is nz at Patterson, p-a-t-t-e-r-s-o-n. Bryant, b-r-y-a-n-t. Dot com. So if they'd send any questions or concerns or interest to that email address, then I'm certain that I'll respond. All right, I didn't even get a chance to talk about employee benefits, but that's okay. That's a whole another subject.

Speaker 1: 30:02

Well, that gives us a reason to invite you back. Thank you, I was part of the plan, all right.

Speaker 4: 30:08

Good plan.

Speaker 1: 30:09

No, I have to say, man, I really appreciate you coming on. I mean that's what we all about. I mean we have four pillars on the Crouchydale that's information, education, exposure and opportunity. And you really nailed home the information part because, here again, a lot of stuff I learned on the podcast just listening to you explain some of the things that we talked about. So, here again, thank you very much for coming on. And, as usual, before we sign off, is there anything else you want to leave our audience with?

Speaker 4: 30:43

Yeah, I always just kind of say that it's always easier to think than it is to do, easier to pretend that it is to perform, easier to plan than it is to act, and so I ask you not to do what's easier, but to do what will bring you closer to the success that you seek.

Speaker 1: 31:02

Thanks again. You know it's interesting because we always leave in the podcast with some type of quote. I think you just fulfilled that.

Speaker 3: 31:10

That's it right there.

Speaker 1: 31:12

So, as we always say on the Crouchydale men, if you didn't know, now you know. Take care, be safe.

Speaker 3: 31:21

This is Dr Paul Clemens with the Crouchydale men podcast. If you're interested in financial tools to build wealth and you're interested in ways to maximize your health through holistic alternatives, then you are just the audience that we're looking for. Tune in each week, every Thursday, to the Crouchydale men podcast, where George Crumley, gary Smith and I offer you in depth discussions on health and wealth. Subscribe to the Crouchydale men podcast on Google, spotify, apple, iheart radio or wherever you get your favorite podcast.