[00:00:00] Intro: Welcome to Private Banking Strategies Podcast with Vance Lowe and Seth Hicks, your secret weapon to protect your assets and never have to start over financially again. Vance and Seth help high net worth individuals, families, business owners, and investors structure and asset protected fortress for their families.
[00:00:21] Intro: Learn how to keep what you earn and use the velocity of money. To create your own private banking system. Join us on this journey as we explore the secret strategies of the rich and political elite and help you take total control of your financial security. Now onto the show.
[00:00:37] Seth Hicks Esq.: Welcome to Private Banking Strategies with Vance Lowe and Seth Hicks
[00:00:41] Seth Hicks Esq.: Vance, how are you today?
[00:00:42] Vance Lowe: Absolutely fantastic. And you, Seth, how you doing these days?
[00:00:46] Seth Hicks Esq.: Doing great, and I’ve got a great topic that I wanna lay out for our audience today. It is the hundred year private family bank.
[00:00:57] Vance Lowe: Yeah, Seth, you know, we get comments [00:01:00] on that quite a bit. How we, as successful bankers and having, you know, lots of money inside these policies.
[00:01:09] Vance Lowe: What’s a smooth transition? How do we set it up so that our family can benefit from it? We get that all the time.
[00:01:15] Seth Hicks Esq.: I think that in the infinite banking concept world, there are a lot of folks out there that place people in what they. Tell them is our banking policies. But then don’t really teach them how to bank and particularly don’t teach them how to bank multi-generational level after level so that you go from patriarch matriarch to children, to grandchildren, to great-grandchildren.
[00:01:43] Seth Hicks Esq.: And that’s what we really want to address and help to identify for folks is that that is the purpose of a hundred year family bank, create generational wealth.
[00:01:54] Vance Lowe: That’s one of our advantages, Seth. One of the draws that people keep coming in [00:02:00] is the fact that we’re not transactional. We’re not here to sell ’em a product.
[00:02:05] Vance Lowe: We’re here to teach them a way of life, teach them what money is, how it works, and bring them something that is ever building, ever growing. And so this is probably. To the heart of it as far as what we’re trying to do, this a hundred year thing, it tells people right off the bat that, look, folks, this world is all about quick short term fulfillment, gratification.
[00:02:35] Vance Lowe: But our families, you know, are eternal, I like to say, and they last a long time. So what we’re trying to build is something, a legacy so that our kids don’t have to start all over again. There can be some momentum, there can be opportunity that they can learn into that’s already in existence.
[00:02:56] Seth Hicks Esq.: Right, right.
[00:02:57] Seth Hicks Esq.: One of the key features that is [00:03:00] created for. High value life insurance policies in this generational plan is the tax free distribution of death benefit, and so that within the certain and proper structure flows through. Like a windfall to the beneficiaries of that person’s life insurance policy.
[00:03:19] Vance Lowe: Yeah, we could take a deep dive there.
[00:03:20] Vance Lowe: But what that is meaning folks, is that we get a tax advantage right off the bat, and that tax advantage stays with us throughout this type of strategy.
[00:03:31] Seth Hicks Esq.: Right? So when you have your cash. In your private bank structured in a properly structured whole life insurance policy, it acts as the bank and as those funds are accessed and utilized, there’s no tax consequence for it.
[00:03:48] Seth Hicks Esq.: There’s liquidity year round, and you’ve got that internal banking function from your policies. That creates that tax flow system tax free [00:04:00] flowing system. Now when the patriarch dies, a mother or father or grandfather or grandmother dies and they have a death benefit, where do death benefits go? I mean, we touched on it, but how does that flow?
[00:04:13] Vance Lowe: Well, yeah, so we have a death benefit. The death benefit goes someplace and many times it goes to their kids, their children, their, however, I think the best scenario is if they want this to help prolong and grow. Their family, their future, their grandchildren, their great-grandchildren. It needs to be formalized in such a way that it can’t be spent out, and that’s the main thing we see.
[00:04:51] Vance Lowe: One of the things that ruin a family or the younger generation faster than anything else is getting an inheritance and so [00:05:00] much money. They don’t know what to do with it. They spend it unwisely, they’re not prepared for it. They buy bigger homes, cars, whatever. And then the second year comes around, usually that money spent in the first six months, and it’s devastating afterwards.
[00:05:16] Vance Lowe: They can’t even come up with a property tax once it’s spent.
[00:05:20] Seth Hicks Esq.: Right? Yeah. I mean, there’s a phrase I, I don’t recall exactly what it is, but it effectively illustrates the point that. Three generations has typically been the term for children and grandchildren to waste family wealth, and you’ve got case studies with rich families like the Rockefellers and the Vanderbilts, which have used.
[00:05:45] Seth Hicks Esq.: Family legacy structure and some haven’t. And it very much highlights the fact of having family wealth architecture for a hundred years versus just thinking about yourself and what you need right now. So one of the fundamental [00:06:00] principles of this is that you’ve got tax-free access to your cash and it compounds and grows within your family bank every year without tax consequence.
[00:06:09] Seth Hicks Esq.: That is unlike any other type of financial instrument. It also is unique in that when it matures or the death occurs, that that death benefit transfers with no tax event, no taxable income to the people receiving it. That creates the opportunity to fund next generation policies, top them off, and keep liquidity for your family bank, correct.
[00:06:34] Vance Lowe: Absolutely. The next thing that comes to mind on that are definite guarantees With this type of thing, these contracts that we build, they keep pace with any type of investment that you pretty much could want to go into long term. These contracts have outperformed a stock market since inception of the stock market.
[00:06:56] Vance Lowe: The contracts have been around before the stock market, [00:07:00] by the way, and now we can hold money. We don’t have to worry that we need to take undue risk to try to earn a lot more money. Can we do that? Yes. We’re free to do that. We can literally borrow money out or use money that’s in the account. Tap into an investment if we feel the collateral is there and the risk is mitigated, but even if we don’t, these things keep pace with the market.
[00:07:27] Vance Lowe: So they’re pretty much inflation proof.
[00:07:30] Seth Hicks Esq.: The mechanism for creating liquidity is the policy loan. We use the funds in our bank to go and utilize the cash for other investment, sometimes necessities. But talk to us a little bit about. When that cash is deployed and under what circumstances and how a family would govern that If it’s a father and a mother and they’re responsible for like college tuition for children that are becoming of age [00:08:00] to go to college.
[00:08:01] Seth Hicks Esq.: That’s kind of a simple scenario. But what if it’s a grandfather and a grandmother that has created this system and has family policies on their children and their grandchildren? How do you suggest people begin to. Create a framework that those children and grandchildren can access family liquidity in a governed way by the family structure.
[00:08:24] Vance Lowe: Well, outside the ownership of the structure, the policies comes into play here. Do the, are they owned individually? Do the beneficiaries, is it a whole bunch of different people? What is the structure? So you’re gonna get a different answer with every individual, and that’s the whole purpose we’re having this meeting today, is to formalize this, to give everybody an opportunity to say, Hey, it doesn’t have to be disjointed.
[00:08:53] Vance Lowe: There’s a logical way of putting these things together, the ownership. And the beneficiary [00:09:00] so that multiple people and multiple generations can access this. We have to talk about trust. We have to talk about the ownership of the contract and the beneficiary owner, if that’s all structure in going into a formal situation.
[00:09:17] Vance Lowe: Then people just like with a bank or their own business or another type of structure that they have can formally access that money and be accountable for it.
[00:09:27] Midroll: Did that story feel like it was about you? Do you feel like you are generating a lot of revenue, but are not moving forward as fast as you would like?
[00:09:38] Midroll: Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get unstuck. Are you ready to take action and get your own private bank? Please visit us at www.privatebankingstrategies.com.
[00:09:58] Seth Hicks Esq.: So one thing that we [00:10:00] continually try to teach and implement with clients is that in this multi-generational architecture for policies, there has to be some type of family governance.
[00:10:11] Seth Hicks Esq.: And structure so that there’s a committee that effectively helps to govern the release of cash, the repayment of cash to the family bank and terms. And so that is something, like you said, that is a case by case, family by family basis. That has to be. Modified and applied specific to their family structure.
[00:10:33] Seth Hicks Esq.: But you’ve outlined the idea that we don’t waste money. We don’t just pull out money for brand new shiny toys and sports cars, although that’s okay sometimes. But this is not consumptive wasteful spending. Correct?
[00:10:47] Vance Lowe: Yeah. Let me give you an example. The Rockefellers, there’s the Rothchilds and whatever else, two dynamic different family structures.
[00:10:56] Vance Lowe: This story really consists of [00:11:00] after this Baron dies, all the children, I think he had seven or eight kids, they came in to listen to the will and they thought they were gonna get all of this money ’cause he was absolutely wealthy. The executor, which was an attorney who was actually in charge and remained in charge of this Baron’s money, laid out the structure.
[00:11:22] Vance Lowe: If I want to abbreviate this to the kids, here’s the deal. You do not get an inheritance. I felt this were his instructions. I felt like if I gave you an inheritance, you would squander the money. But here’s what I’m going to do. I’m going to give you access to money through loans. So I have set up a family private type of bank where you can borrow money for the things that you need.
[00:11:49] Vance Lowe: You’re going to pay back the interest, but the family will get the interest. So the interest is not gonna go out of house, but I’m going to. List procedures and [00:12:00] mandates, which are required. One of the kids have to be voted in as the president to run the operation and to keep the loans and everything on track.
[00:12:09] Vance Lowe: There were several procedures that he required. He said, you can’t dissolve it. You can’t vote it down or it will go to a charity and you’ll lose out the whole thing. The second thing is we have many holdings. You have to keep the money in the family. It was very vague on that part, and they said, you’ll have to solve how to keep the money in the family, but to those who borrow money, who think, oh, I’ll borrow all this money and I won’t pay it back.
[00:12:37] Vance Lowe: You’ll have a limit on how much you can borrow at the beginning, and if we don’t pay it back, then the committee. Will vote and decide that’s acceptable or not, which if it breaks the contract, it’s unacceptable, and that person will be given a letter. And congratulations. We hope you enjoyed your inheritance.
[00:12:58] Vance Lowe: You are now out of the family [00:13:00] bank and tell you make restitution, and you can do that throughout the rest of your life. The loan won’t stop and the interest will not stop. But if you make it. Back. If you decide to pay it off, then you’ll be welcomed back into the family wholeheartedly. But without that, then we hope you enjoyed your inheritance.
[00:13:18] Vance Lowe: So that was the incentive to keep him in. The problem was there was so much money here that the executor, when he would come in and, and do a, an audit, they weren’t fulfilling, keeping the money in the family. They voted the new, uh, president end that each of the kids took turns being president. And, uh, the youngest son was the president that year and they were addressing how are we gonna keep the money in the family?
[00:13:43] Vance Lowe: And one of the older sisters said, Hey, can we get this thing over? This is actually in the, in the story. He said, because I need to get my kids over to the mall and shop for their school clothes. And the question was, they couldn’t find any place. To invest their money. They [00:14:00] had so much money and all of a sudden this young kid, the youngest of of all of ’em said, Hey, wait a minute.
[00:14:06] Vance Lowe: Do we own that mall? And they all opened their eyes and said, Hey, yo, wait a minute. They had more than enough assets to buy that whole mall out to own it. And now the whole family, the extended family, were required that they could only shop at that mall that’s keeping the money in the family. They next bought a car dealership.
[00:14:28] Vance Lowe: And then they bought several because, and that was the mandate for all family members to qualify for loan and access to money. They had to buy the vehicles at that place. So this is what we’re talking about. This is down the road, but this is a structure that several private families, even today follow.
[00:14:53] Vance Lowe: You’ll never even know it. You can rub shoulders with them. They don’t advertise this, but they access their own money and it’s [00:15:00] multi-generational and they’re on their fourth and fifth generation as we speak.
[00:15:04] Seth Hicks Esq.: So what, what you just described in that story was really awesome and it, what it does is it creates a generational blueprint and a kind of a smart risk framework whereby there’s a governing family committee and there are.
[00:15:21] Seth Hicks Esq.: Rules for governing. The way the family money is distributed through the policies, it shows cash flow support protects the capital. It’s actually something you have to roll up your sleeves and dig in family by family to help create the architecture for, but it relies upon a first generation founders type of, let’s call them grandparent grandmother.
[00:15:45] Seth Hicks Esq.: It doesn’t have to be, but then. Next policy generations are their grandchildren and even their great-grandchildren. And so for those people to all be on the same page and protect their family wealth together, they have to have a [00:16:00] governing structure and a framework to make those decisions. And that’s what you just described in that story, which is a critical, critical point.
[00:16:09] Seth Hicks Esq.: And so that’s a great place, Vance. I mean, you got other comment to make on that.
[00:16:14] Vance Lowe: It is. I’m just trying to say that folks, this is the end game. We’re going to try to lead you step by step into setting a structure up like this and taking the benefits. When we get to this level, a newborn baby automatically gets, you know, one or two policies put on them.
[00:16:35] Vance Lowe: When a member of the family dies, those death benefits go straight into that structure and. To help buy new contracts or pay off policy loans, whatever else it is. It’s just an ongoing engine, and it’s always current. It’s not based on the past. It’s not something that government can even come in and say, well, [00:17:00] that was this.
[00:17:00] Vance Lowe: Trust and it’s only worth three generations or something. This is an ongoing living, breathing thing. We haven’t even touched on things that the family gets because there’s profits every year from their own family bank that you know, depending on use and ownership, how much you’ve contributed into the family bank, you get your share of profits every year.
[00:17:24] Vance Lowe: And these wealthy families, they don’t even have to work. If their profits alone will give them a comfortable lifestyle,
[00:17:32] Seth Hicks Esq.: right? Well, that’s a great place to segue. This is a very deep topic. It’s something that we could do multi-part series on, and we may do further series on this. I think we barely scratched the surface of a top level summary, but
[00:17:47] Vance Lowe: let’s tell ’em that.
[00:17:48] Vance Lowe: I think we’ll continue. There’s a whole lot to this outline. Let’s do another podcast where we just continue to kind of give them a little bit more of an outline as we go along. [00:18:00]
[00:18:00] Seth Hicks Esq.: Well, thanks folks for tuning in with us. You can find just an abundance of resources on our website, private banking strategies.com.
[00:18:10] Seth Hicks Esq.: That’s private banking strategies.com. Go to the resources drop down. We’ve got. Probably 150 podcast episodes at this time and growing, and we’ve got just volumes of articles and subject matter that you can drill down on. And if you’re resonating with this content and our podcast and you wanna learn more, take the first popup that comes on our website and put your email and your name in.
[00:18:36] Seth Hicks Esq.: We’re gonna give you a free gift for doing that. It’s called What the Banks Don’t Want You to Know That Help you create Wealth In Return. We’re also gonna give you emails that are loaded with value announce future podcasts, and most importantly give you a link to Vance’s calendar if you wanna schedule an exploratory call.
[00:18:56] Seth Hicks Esq.: And that’s the only way you’re gonna be able to access that exploratory [00:19:00] call link is to sign up. On the popup on our website with the book offer and jump into what we’re doing. Folks, we look forward to seeing you on the next podcast.
[00:19:11] Vance Lowe: Thank you very much. Have a good day.
[00:19:13] Outro: Did that story feel like it was about you?
[00:19:17] Outro: Do you feel you should be making more progress toward your financial goals? Do you feel stuck? Let us help you get unstuck. Are you ready to take action and get your own private bank? Please visit us at www.privatebankingstrategies.com.
[00:19:37] Outro: Thank you for listening to the Private Banking Strategies podcast.
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