Transcript
Intro
Stephan Shipe: Welcome back to the Scholar Wealth Podcast. In today’s episode: When does it make sense to go beyond wills and set up a trust to make wealth transfer smoother for your family? Next, private REITs in the senior living community — is it a trend or a trap that we have to watch out for? And finally, a fresh attending physician with a big bonus — where should that money go?
Plus, in our From the Field segment this week, an early look at the 2026 Personal Wealth Conference, with registration now officially open. So let’s get into question one.
Question 1 – Wills vs. Trusts
Listener: My parents only ever had wills, and it is making things complicated now that they’ve passed. Now that my wife and I have accumulated a $5 million estate, we’re wondering how to avoid this for our kids someday. At what point does it make sense to set up a trust instead?
Stephan Shipe: When it comes to the trust conversation in your case, it’s not a number perspective. And I think that’s what some people get very wrong — they look at this and say, well, I hit a number, so that means I have to have a trust. It’s not as much about hitting a number.
It’s when the overall complexity of the estate or family dynamics or legacy goals are going to call for something a little bit more intense, more structured than a simple will. And the reason for that is because once you start moving into a multimillion-dollar range or this high complexity, wills are likely going to fall short or not really get the end goals that you’re expecting.
What I mean by that is you’re going to end up going through probate process where the courts are going to be determining where money goes. That can cause delays. You’ll have a year before all assets are distributed, sometimes worse depending on what types of assets are there. So the nice thing about a trust is that it streamlines that transfer.
So we’re saying it’s not necessarily a number as much as it is: as assets start to increase, then there’s more assets out there, which means you want to have a little bit more control of where all that’s going. That way it has a much smoother time getting to your heirs, but also less time. There’s some added cost savings there too.
But with the trust, you’re going to add a whole new level of control around distribution, protection against mismanagement. You can add in different factors related to divorce, creditors, anything. So when you start thinking about this now — your case with $5 million — and this is not uncommon, the amount of times I’ve worked with people who’ve come in and said, we’re dealing with this with our parents now, this was an absolute disaster, we don’t want our kids to have to go through this type of disaster. What can we do?
In your case, with a $5 million estate, that’s a good amount of money. That’s going to be a situation where, depending on how many kids you have, you’ll likely have millions of dollars going to children all at one time with the will, and the court’s going to determine that. That’s life-changing money. So with that type of money going out to the kids, it probably does make sense to talk to an attorney about setting up a trust so that way you have a little bit more control over: you’re going to inherit this kind of money, this is what’s expected, this is how the money should transfer. And it helps protect them as much as it protects you — in a way of really preventing your estate from being a burden on them, when it should be a benefit to their family and to their financials.
Question 2 – Senior Living Community Private REITs
Listener: We’ve been pitched a few opportunities to invest in senior living communities through a private REIT. Between aging demographics and rising care needs it seems like a strong trend. What kind of due diligence would you recommend before investing?
Stephan Shipe: So we have to be careful with something that sounds like a sure thing. And I know that’s not what you’re saying, that it’s a sure thing. But whenever there’s a really good trend — and there’s no question there’s a trend toward senior living communities, and of course REITs have now come into that — they look strong, they’re hard to get into, and you hear regularly of people trying to get into these types of communities and they can’t. There are waiting lists that are years long, and the money is huge that they’re making. So it’s really easy to see that and say, well, I want to get in on that action.
Of course there are going to be plenty of REITs and opportunities for you to participate in that. The only problem, especially with these private REITs, is that you’re running into the issue that any other private investment has — it’s not as regulated. So you have to be careful about what type of assumptions are being made on the investments within the REIT.
The first thing we want to go through is high level: what are the things you should be looking at? And then we can go into the specifics. At a high level, the things you’re going to be looking for are obviously manager quality, fees, and portfolio fit.
What I mean by that is: does it make sense for you to be investing in any type of private investment right now for your broader portfolio, no matter how good it is? Once you go through that, we’re going to look at how much you’re going to allocate. Generally, you’re not looking at more than 10 to 15 percent of a portfolio in alternatives. You’d want to allocate that out. And you don’t want to go take all 10 to 15 percent and dump that into just one senior living community. You’d want to have a variety that you get into. You would start small, build up a portfolio of alternatives, with different vintages and different exposures.
So portfolio fit is one piece. Manager quality is a really big one. When you’re dealing with these private investments, especially on the real estate side, what is the experience of the people running this REIT? Because I’m telling you, just as much as you’re seeing this as a trend, there are absolutely plenty of people who are only semi-in real estate — or have never been in real estate — saying: this is a great way for me to start a REIT for the first time because I’m going to be getting into a space where people want to give me money really easily.
So if I’m out there and I’ve always dreamed of opening a REIT, this seems like a great idea. Because I could jump in and say, who’s going to disagree with me that there’s not a huge need for senior living facilities and communities out there? No one’s going to argue with that. So how easy is it going to be for my pitch to you to say: you’ve seen the demographics, I’ve seen the demographics, wouldn’t it be great if you participated in it? Come fund my REIT and put $200,000 down as an investment.
That’s going to be an issue with manager quality. You’ll tend to see that vary a lot more. Hopefully you find somebody who has a good track record, their experience is solid. You can look at how they’re compensated too — you want to make sure that they’re compensated based on the success of the REIT, not just funding parameters.
Then fees. Fees and expenses can be really high, especially compared to public REITs. So we want to make sure we’re looking at fees, comparing them against different types of REITs. Because it’s not just going to be one. You could go today and find 10 to 20 different private REITs that are focused on senior living communities. Compare fees, compare management experience, and narrow that down.
From there, you’re going to have to dive into the details a little bit, and that’s more on the real estate side. You want to look at their assumptions. Whenever these REITs put together a pitch deck, they’re going to have all of the information — happy people at their new condo or the new community pool, laughing at each other, riding bicycles around the community. And it’s all going to look great. The PowerPoint is going to look good. The numbers are all going to look good. The charts will all be going up and to the right. Everything’s going to look fantastic when you pull up these documents.
The problem is there’s really not a lot of oversight of whether the information in there has to be realistic, and that’s when problems tend to show up with these REITs. So whenever you start seeing return expectations — if you’re seeing return expectations of 25, 30, 40 percent — that’s going to be a red flag from a due diligence perspective. Because we have to be concerned with the fact of how good of an investment is this? If it’s too good to be true, it probably is.
If you see something in the 10 to 15 percent range, that’s probably realistic as an expectation. But if you start breaching that 20 percent area, I start being very careful about what’s there. Fortunately, a lot of times you’ll see their expectations of what they think will happen in the future and how that lends itself to the value that they’re putting on the whole investment.
This is where it gets interesting with the breakdown of the trend you’re seeing versus the actual investment. The trend is: a lot of people going into senior living communities. So if I invest in that, then you have this great cash flow, an investment with a good occupancy rate. That’s fine. But the issue for the REIT is they need to have liquidity.
So what they’re going to want to do is either build these communities from scratch, or they’re going to be buying older communities, pitching the idea that they’ll fix them up, raise the rents, and then in a few years they’ll exit. They have to exit. They have to be able to create some sort of cash flow so that they can give you your money back and they can invest in something else.
The issue is if you go throw your money, let’s say a couple hundred thousand dollars, at one community and they just use that to buy a senior living community and run it, you’re only going to get profit off of that. So you’re not as liquid. They know they have to maintain some liquidity. So their expectation is: we’re going to collect all this money, maybe buy 10 senior living communities, fix them up and increase the rents, so that the value of each of those communities gets larger. Then we’ll sell them to somebody else. Then we’ll have more money, and we’ll use that to buy two or three more communities at the same time. That’s how they work. That’s how they keep profit rolling and continue to expand.
Otherwise, what are they doing? They’re just taking your money, buying a senior living community, and just giving you a dividend without expanding. And they’re in the business of expansion.
They’re also likely going to be holding debt. So you want to watch the interest rates on that debt. Not only the interest rates now, but be very careful about what their expectations of interest rates are in the future.
For example: they may be looking at this and saying, we’re going to buy a community right now for $10 million. We plan to fix it up, put some new paint on the walls, increase the rents, have a new sales procedure, and it’ll be great. And because we’re leveraged, we expect to refinance the debt at a lower rate in two years. That’s going to drop our costs, drive up profits, and then we’re going to sell it for a multiple of that profit five years from now.
In theory, that sounds fine. But there’s a big assumption there — that they’ll refinance the debt at a lower rate. What happens if they don’t? If they can’t refinance at a lower rate, are they still going to be able to pay their bills? What multiple are they going to get at that point? How much profit is there? And if there is no profit, are they stuck holding this community? Or worse, going into financial trouble where they hit you with a capital call — meaning they reach out and say: we weren’t able to refinance, now we need an extra $100,000 to keep your equity in the project or in the REIT.
So you have to be careful about those assumptions. That’s probably the biggest thing when you’re talking about due diligence and what you should be looking for. You’re looking at things like management quality, fees, lock-up periods. When they tell you you’ll have the ability to get your money back in five or six years because that’s when they’ll have their liquidity event — that’s not guaranteed. That’s just what they’re projecting.
So when you get into the actual due diligence of these REITs, don’t fall for just “the demographics are favorable, this is going to be a hot area.” That’s where problems show up. Because when there’s a hot area, you not only have great investment opportunities, but you end up with very predatory investment opportunities as well.
So jump into the details. Look at their expectations for occupancy rates. What’s their liquidity plan? What are their costs? Do they make sense? Look at their assumptions: if they say they’ll put new paint on the walls and increase the cost of a unit from $300,000 to $500,000 — does that make sense to you? Really dig into that.
You’re probably about to put a couple hundred thousand dollars, at minimum, into an investment like this. You shouldn’t think of it as a gamble: “I’ll just throw it over there and see if it works out.” That’s a horrible way to think about money. Do the work and look at the due diligence — or bring somebody in who can — to make sure you’re investing in something that actually makes sense. Not only from a demographic and high-level side, but also at the fund level. Do the expectations of this investment make sense? And does it fit for your portfolio?
Question 3 – Physician Signing Bonus
Listener: I just received a $75,000 signing bonus as a new attending physician. I’ve already maxed out my retirement contributions this year. Since I don’t have any loans or debt, how should I think about the tax impact and the best way to put this money to work?
Stephan Shipe: So bad news on the tax impact: it’s going to be taxed as ordinary income. So there’s no real strategy there. You’re probably looking at planning for $40,000 as opposed to $75,000 is my guess. But with that $40,000, we can try to do some things with it.
You’ve already maxed everything out, which is good. That’s going to be the base layer. You’re going to do that no matter what. If you haven’t already, this is probably where the taxable account is going to show up in your life and stay there forever.
What commonly happens — and we see this with a lot of physicians — is they start having all this income come in right after residency or fellowship. Expenses aren’t high yet, but income is really high. So they quickly max everything out. What they find is that being able to max out accounts, generally you don’t have fantastic investment options from a hospital or university. You’re usually stuck with your 403(b). You might have a 457, maybe a 401(a) or something like that. But for the most part, your contributions are capped. It’s going to be hard for you to contribute more than $50,000 or $60,000, which may not be enough to meet the savings goals that you should be hitting.
So if that’s the case, we need to have something else. That’s where that taxable account is going to come in. You’re going to have a taxable investment account to flow that money through.
Now, some people say, well, with a lump sum, go put it into charitable stuff, open a DAF, all of that. Now’s not the time. Maybe that makes me the Scrooge in this situation, but this is your bonus money coming in. You should be using this to set a really strong foundation for your finances as opposed to worrying too much about the tax side of things.
If you’re focused too much on tax, you’re not worried about the base level of your finances, and right now it’s liquidity. We want to make sure we have some cushion there — whether it’s short-term goals, any career stuff that comes up. Cash flow and having cash is still king here. We want to make sure you have liquidity. You’re going to have a lot more optionality in your finances now and later with good liquidity. If everything just goes into retirement accounts and everything’s locked up, then you end up in the situation where you may have a million dollars sitting there locked up in 403(b)s and 401(a)s and you can’t touch any of it. And you have no cash and you become cash poor.
You could look at stuff like starting a backdoor Roth. That’ll make a little dent in that $40,000. If we’re working backwards from your $40,000, the backdoor Roth will take away about seven or so. Now we’ve got $33,000 left to allocate.
I know it’s boring, but the emergency fund setup is going to be there. We don’t have to call it an emergency fund if you don’t want to. We can call it just a brokerage investment, and you should put some money over there. You keep it in the money market fund — that would work.
If you have kids, it’s a good opportunity. You could seed some 529 accounts if you want to, with a few thousand dollars for each of those.
But I think the big answer to your question is not to get fancy with this right now. It’s a signing bonus. You’re just starting off. Keep some of that for liquidity. There’s not a lot you’re going to do on the tax side. Make sure you have the accounts set up. You’ve already maxed everything. Focus on cash. Build yourself up a nice $20,000 to $30,000 account right now and treat it as sunk cost. It’s going to go there, it’ll be in cash.
The nice thing about the emergency fund though is you only have to fund it once. You don’t have to keep funding an emergency fund every year. Next time you get a big bonus, it’s not like you’re going to have to refill your emergency fund again. You’re going to have that already done, and then you’re going to push it over to the brokerage account.
Now, I’ll warn you though: the thing you’ll probably run into is brokerage accounts can be tricky in the sense that because they are a source of liquidity, it’s really easy to bring a taxable account up and then bring it right back down for things like a new car or down payment on a house or anything else that’s going to come up in your life here in the beginning. That is normal. But you want to be careful in the sense that if your plan says, I need to max out my retirement accounts and I need to go save $50,000 in a brokerage account, you need to make sure that money actually goes into a brokerage account and is not taken out next year for a car, or taken out the year after for a down payment.
If you have to, you may end up opening up two different brokerage accounts so that you have one that’s structured for long-term goals — the boring stuff — and one that is for: I had a bonus come in, I don’t know what I’m going to do with the money right now, but I’m going to throw it over in this bucket. We’ll see what happens at the end of the year. If we haven’t spent it, then I’ll move it over to the boring account. That makes it a lot easier to manage those different accounts for different goals.
Now, that goes against all rules of mental accounting and behavioral finance, because money is fungible. But it does make tracking a little bit easier and takes away some of the guilt too, which you’ll likely have in the next few years — saying, I’ve saved all this money in my brokerage account, but now we want to take a trip or buy something for family, and you don’t know if you can because you’ve earmarked that money already mentally for retirement.
That’s the way I’d handle it. Focus on the cash. Don’t get fancy with it. Don’t worry too much about the tax side right now. It’s all going to be taxed as ordinary income, and the physician life is a life of a lot of tax on W-2 income — unless you go the business route, which we can always talk about at a different time.
Rotating Special Segment – From the Field
Stephan Shipe: For today’s rotating segment, From the Field, we’re highlighting the Scholar Personal Wealth Conference, since applications are now open for April of 2026.
In 2025 our conference was down in Charleston, and it was fantastic. We had advisors, professors, attorneys, CPAs — everyone talking about things like private equity, inflation, crypto, estate planning, and market concentration. All really good stuff. My favorite part about the conference is that it’s a no-pitch, no-sales environment. You’re not being pitched the latest and greatest REIT or which private equity fund you should jump into. Nobody is pitching anything. It’s purely education-focused.
The feedback we hear again and again from past conferences, especially this year, is how much value attendees found in the connections they made. As much as I’d love to say it’s the sessions that draw everyone there — and the sessions are fantastic with great speakers — the real value comes from the opportunity to connect with other people in the room. It’s very rare to have the chance to sit in a space where everyone is openly talking about finance for multiple days, without the awkwardness of wondering if it’s okay to bring up money over dinner.
In 2026, we’ll be at the Grove Park Inn in Asheville. Alongside the normal personal finance conversations, we’re planning a truly distinct experience: bike trips, golf, wine tasting, and exploring the gardens at the Biltmore. It should be a lot of fun, with great opportunities not only for financial discussions but also for meaningful connections.
The format will be the same as in past years: expert-led sessions, roundtable conversations, and dedicated time to meet with others and share what you’re navigating with peers who face similar challenges. This year we’ll dig into advanced tax planning, legacy and gifting, portfolio construction in a challenging interest rate environment, and, as always, the latest topics making headlines.
What makes this conference truly unique is that it’s designed exclusively for high-net-worth families. There are no product pitches. No one is trying to sell you insurance or funds. It’s a space to explore the kinds of questions that arise when wealth becomes more complex — questions beyond “How much should I put in my 401(k)?” or “Should I pay off my credit card debt?”
Applications are open now. Attendance is by application so we can ensure the environment remains focused and valuable for everyone. To learn more and apply, check out the link in the episode description.
And for this week, that’s our show. Thanks for listening, and we’ll see you next week.
Outro
Stephan Shipe: Hey, this is Stephan Shipe. Thanks for tuning in to the Scholar Wealth Podcast. If you have a question you’d like us to tackle on a future episode, share it with us at scholaradvising.com/podcast. We’d love to hear from you. Until next time.
Disclosures: The information provided in this podcast is for general informational and educational purposes only, and is not intended to constitute financial, investment, or other professional advice. The opinions expressed are those of the hosts and guests and do not necessarily reflect the views of any affiliated organizations. Investing in financial markets involves risk, including the potential loss of principal. Past performance is not indicative of future results. Before making any investment decisions, you should consult with a qualified financial advisor who can assess your individual financial situation, objectives, and risk tolerance.