The Red File: A Simple, Powerful Gift for Your Family's Future with Marvin Blum

Marvin Blum
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The Blum Firm, P.C.

Marvin Blum established The Blum Firm, P.C., over 40 years ago. The firm has law offices in Fort Worth, Dallas, Austin, and Houston and specializes in the areas of estate planning and probate, asset protection planning, planning for closely-held businesses, tax planning, tax controversy, and charitable planning. The company has grown to be the largest group of estate planning attorneys in the State of Texas.

Mr. Blum is known for creating customized, cutting-edge estate plans, now serving hundreds of high net worth families, several with a net worth exceeding $1 billion. Mr. Blum was chosen as one of the “Nation’s Top 100 Attorneys” by New York’s Worth magazine, and was also named one of the Top 100 Super Lawyers in Texas by Thomson Reuters. He was selected by his peers for inclusion in The Best Lawyers of America – Trusts & Estates. Mr. Blum has had the honor of asking questions to Warren Buffett at Berkshire-Hathaway Annual Meetings three times, attracting international media attention. He is a highly sought-after speaker, has been quoted by The Wall Street Journal and The New York Times for his expertise on the estate tax and income tax and also serves on the Editorial Advisory Committee for Trusts & Estates Magazine.

Mr. Blum is dedicated to his community, having previously served as Treasurer of the Fort Worth Symphony for over 40 years, and is a Board Member and Former Presiding Chairman of the Board for The Multicultural Alliance, a service organization fighting bias, bigotry, and racism. Mr. Blum serves as Treasurer for the Texas Cultural Trust to help raise public and legislative awareness of the importance of the arts in Texas, and after serving over 40 years as Treasurer, he is currently on the Emeritus Council of the Fort Worth Symphony Orchestra. He is a member of the national Board of Directors of TIGER 21 and is also a member of The University of Texas School of Law’s Alumni Association Executive Committee. Mr. Blum has also recently been named to the Anti-Defamation League Texoma Board of Directors.

Mr. Blum, an attorney and Certified Public Accountant, is Board Certified in Estate Planning & Probate Law and is a Fellow of the American College of Trust and Estate Counsel. He earned his BBA (Highest Honors) in Accounting from The University of Texas in 1975, where he graduated first in his class and was named Ernst & Ernst Outstanding Student in Accounting. Mr. Blum received his law degree (High Honors) from The University of Texas School of Law in 1978, where he graduated second in his class and was named the Prentice-Hall Outstanding Student in Taxation. Mr. Blum and his wife, Laurie, reside in Fort Worth, Texas.

Kirby Rosplock

Hi, my name is Dr. Kirby Rosplock. I'm here today with Marvin Blum, and we're talking about the red file checklist. I'm so excited to talk to Marvin because he is is the creator of this very ingenious red file checklist, and it's an activity process approach to be used during the estate planning process. Marvin, do you want to talk a little bit about it? I'm happy to show it while you're talking about it.

Marvin Blum

Excellent. Well, thank you, Kirby, and I'm honored to be here. The red file came about because I have been practicing for about 45 years doing very elaborate estate plans, big stacks of documents. It occurred to me that when clients died or became incapacitated, their loved ones didn't know all the information that they needed to know. They were missing a roadmap. The documents told important information, but there was a whole lot that's not in the documents, and it sent these loved ones out fishing. What I came up with was this red file checklist that you're sharing, and I broke it into four segments. The first segment, Section 1 here, is personal information. It's pretty much the obvious stuff, the information about you and your family members, legal documents. You can scroll through and see other things that are involved here. But listing out the different documents that they know what to go look for. Keep scrolling, if you will. Financial information, asset information. I'd keep going here. Just give you a feel. Insurance information. So these people don't have to guess and go searching. Keep going, if you will. And medical information. People like to know the medical history of their ancestors.

Marvin Blum

It's not in your will. And so this can divulge information about your medical conditions. And listen, this next one up, funeral and burial. Let's hit on that one for a moment. That's a very important one. I'm a member of an organization called Tiger 21. And one One of the things we talk about in Tiger 21 when we have our monthly meetings is, what's going on in your life? What's happened in the last 30 days? One day, a man said he lost his father-in-law and the family was just devastated because it was unexpected. They were left with about a three-day window of time to figure out what funeral to put together for him, what his service should contain, what to put in his obituary, what photos they should gather to display, all these things. He said to us, I want to do each of you a favor. I want to suggest to each of you that you sit down and put together that information for your loved ones. It really grew into the red file. It started with that. I actually wrote At that point, the chair of my Tiger Group said, Marvin, your assignment for the next meeting is I want you to go write your own obituary, and I want you to read it to us next month.

Marvin Blum

Well, that's a powerful thing to do. And what a gift to the family, because now they have a starting point when the time comes. So that's an item that I think is very significant. There's other information here that is... Some of it's mundane, some of it's much more hard stuff, but this is the first section dealing with personal information. Go ahead.

Kirby Rosplock

I was just going to add, too, the medical stuff might also be helpful to loved ones to know if you had certain medical conditions that have bearing on their medical conditions, because oftentimes things are hereditary. And sometimes people don't know because we're so private around our own health care issues, and we don't share that we have X, Y, or Z issues. So upon your death, sometimes it's actually helpful to disclose that I had the BRCA gene or I had whatever issue, because especially in hereditary types of issues that oftentimes get passed down, rheumatoid arthritis, autoimmune types of issues, those things are materially important for other members of the family to actually know because it might be passed on. It might be actually a hereditary condition that your children or your grandchildren might want to know. And if you at least acknowledge that it was in your medical file, quite honestly, I know families that never disclosed that a family member had X, Y, or Z, and it comes up later. And then it's like, oh, my gosh, all my health issues have actually been something that was passed down. So I'm also just thinking that sometimes family members are so private, they don't share during their life some of these things.

Kirby Rosplock

I mean, you wish they would, but maybe this is a time, too, that you will pass on some of this key information. Sorry to interrupt.

Marvin Blum

I have a personal connection to that because when my brother passed away from pancreatic cancer, and that's actually the same disease that killed my father, I became high risk in that area, and they put me through all kinds of testing. And I was required to fill out and they asked those questions about ancestors and if any of them ever had cancer, and a lot of it I did not know. This is section 2. For anybody who's a business owner, I'm a big believer in leaving some instructions to the family as to what happens the day you don't wake up, who will step up? I got some of this idea from Warren Buffet. I had the privilege of three different times getting to ask a question at Berkshire Hathaway annual meetings to Warren Buffet. I'm a big, big fan of him. He's a hero to me and to many others. He requires the manager of every one of his Berkshire Hathaway companies to have a letter that states, If I get hit by a truck, here's who takes over. Here's what to do. They update it every two years and they have to provide it to him or to whoever succeeds him now that he has, quote, retired.

Marvin Blum

But it's so critical because families are left so often in the dark with how to operate these businesses. This is triggering some information there. Let's move to section three. This one is a really big deal. Planning for your incapacity. More and more people are living longer and suffering from diseases that deprive them of their cognitive ability late in life. They end up in the hands of caregivers who are guessing what to do. This is saying, Here's how I would want my care to be provided. Who's who I would want. Here's where I would want to live. Here's where I want to spend my final days. Here's how I want to pay for it. Here's how I want them to be paid. If it's family members, do I want them to be paid for it? You resolve all that so the family doesn't go to war over these things. In the middle of this page is a real favorite of mine, personal preferences. What's your favorite color? My mother-in-law's favorite color was blue. Another family member, they hated blue. Well, she would have loved to have been in a room that was painted blue, and it would have made the other family member miserable.

Marvin Blum

So you need to know, what foods do you like? And, Kirby, you and I were talking a little earlier, and you brought up a very important point. What foods do you not like?

Kirby Rosplock

Yeah. If you don't like mayo on your sandwich, and all of a sudden, the caregiver always puts mayo on the sandwich because you think everybody wants mayo and you like Miracle Whip, I mean, those little preferences matter a lot when that is your quality of life at the end. So I can imagine that having some of those little things that bring you a lot of joy in those final days can make or break some of those important times. I think the caregivers are such a powerful part. I wanted to add one other thing about planning for incapacity. A wonderful woman I got to work with not too long ago. And one of the things she did, because she was really afraid that if she became infirm in her leadership role of her family office, she actually put into place. She signed a document when she was a sound of mind saying that her circle around her always had the ability to ask for her to have a cognitive test at any point to make sure she was sound of mind to make all decisions on behalf of the business and businesses in her estate because she was so worried that she would do something inadvertently if she was slipping.

Kirby Rosplock

And so she She did it while she was sound of mind. So she basically was giving authority for anyone to intervene. And if a cognitive test showed that she was in decline, that they could intervene. And that even if she got ornery or got upset, she laid the legal framework, essentially, for herself to be able to be taken out of the equation. I thought, wow, what a gift to herself and to all of her people around her. She was like, I don't want to be having anyone in this terrible role to say you're incapacitated. And I was like, wow, that was brilliant.

Marvin Blum

It really is. And the time to do it is when you have your faculties and you can think clearly.

Kirby Rosplock

Absolutely. I mean, she never had to use it, but what an incredible insurance provision that she put in place. And I was like, boy, I wish more leaders would have that grace and that awareness to say, I'm going to do this for the betterment of my family or my business or my enterprise so that they wouldn't put themselves or any of their stakeholders at risk.

Marvin Blum

Well, and the time to do all this is really when you're engaging in estate planning, because when you're busy day to day, these are not things you're going to stop and do. But if you're working on an estate plan, this is a natural time to say, Okay, let's also address this red file. In our law firm, we have a team who will help people put it together. Some people can fly solo on it. Most frankly, drop the ball. We have found that if we hold their hand and prompt them, we can help them put this together. It can be in a notebook, it can be in a It can be in an electronic file. The main thing is whatever works for the client. But you want it to be an update. You need to have it updated like you do the rest of your estate plan.

Kirby Rosplock

Yeah, it's It's really impressive. And then this final section.

Marvin Blum

That's the final section. It's legacy planning. This speaks to my heart. As I've told you, Kirby, I'm a big head and heart estate planning guy. And the heart side of me is I want families to succeed from generation to generation. I have found that part of the family glue comes from family philanthropy. This is talking about trying to encourage families to adopt causes that are meaningful to the family, do philanthropy together, and talk about the causes that do mean a lot to the family. Then this next section, Family history and culture: Preserve the stories of your ancestors. I've come from four grandparents who all four immigrated to the US, barely escaping Hitler. They all four miraculously got out of Eastern Europe just before the Holocaust. There's a lot of stories of survival there. I can cling to that whenever adversity strikes in my life and say, I can survive this because I come from survivors. So preserving stories. The last point on this page, legacy letter. You can write a will, but wouldn't it be nice to also write a love letter to your future generations and say, Dear family, here's Here's some reflections from my life.

Marvin Blum

Here are moments that meant a lot to me. Here are significant memories. Here's lessons I've learned. Here's mistakes I've made. Here's my wish for you. And you put all that in hand. I tell people, write it in handwriting. And if you scratch out, don't throw it away. I think family should have the handwritten version of this with the scratch-outs and see what was in your heart. What a gift to family to leave them that along with all these fancy legal documents.

Kirby Rosplock

Yeah. What a powerful, amazing tool you've created. This is just such an incredible thing. You've also provided some additional resources here. We're so grateful, Marvin. Tell us a little bit, just in closing, when you think about just how you would suggest somebody approaching using this.

Marvin Blum

I'm glad you're providing the link because I think everybody needs prompts. What I would suggest is that they click on this link and they use that as a guide. They may leave certain portions out, they may add others, but you'll search your heart as you go through it and enter this information either electronically or in writing. If there are questions, obviously, anytime, I'm honored to help elucidate I can clarify. If need be, as I said, my team can help. But the point is, don't procrastinate. It is so easy to put this off. Now is the time. It's just the perfect moment. We learned a lot during COVID. One of the lessons of COVID is we are not all here forever. Sometimes, unexpected things happen. I will take the gift of COVID as an excuse that prompted me into doing this, into putting together this whole red file idea.

Kirby Rosplock

Well, thank you so much for the gift of sharing and inspiring many of us to take a pause and take time to reflect and really just take time to give the greatest gift of sharing with our loved ones what's important. And we forget that we do all this planning for the future, but sometimes the most important thing is to download these very important details that we don't capture, and we don't organize, and we don't communicate effectively. And so your beautiful red file document Organizer is the greatest way to help somebody walk through and say, these are all the things that I need to capture. So thank you again for sharing that. My pleasure.

Marvin Blum

Well, thank you for giving me the opportunity.

Ready to get started? Download the Red File Checklist below.