Jon J. Gallo

Partner

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Profile

Jon J. Gallo has earned a national reputation for developing innovative and sophisticated tax-based wealth transfer strategies that are unique in helping the next generation manage wealth responsibly.

He is the co-developer of The Financial Skills Trust, and the first attorney to help clients create trusts that focus on financial skill-building and responsibility through mentorship by trusted financial advisors.  

Leadership in Estate Planning and Strategic Wealth Transfer

Mr. Gallo has been prominent in estate and tax planning and intergenerational wealth transfer for more than 40 years.  Along with his wife, Eileen Gallo, Ph.D., a nationally known psychotherapist specializing in the psychology of money, he  is the co-author of two books on raising responsible children in an affluent environment, and frequently speaks on emerging issues involving the transfer of wealth.  Mr. Gallo established the American Bar Association’s Committee on the Psychological and Emotional Issues of Estate Planning and was a founding member of the NYU Family Wealth Institute.

Highly rated by Best Lawyers and recognized as a Top Attorney by Worth magazine, Mr.  Gallo and Dr. Gallo are regular columnists in the Journal of Planning

Trusts to Teach Responsibility to the Next Generation

The Gallos co-developed The Financial Skills Trust to address the universal problem of “shirt sleeves to shirt sleeves in three generations.”   The “shirt sleeves” proverb recognizes the familiar scenario in which the first generation starts with nothing, works hard, becomes successful and by the time grandchildren are in charge, the family is back where they started, with nothing.  

Based on motivational psychology and business management research, the Financial Skills Trust is a component of a Results Oriented Trust Environment™ (ROTE™) developed by the Gallos as a flexible curriculum for families and their advisors to teach responsible wealth management. 

Mr. Gallo guides clients in incorporating ROTE into trusts to create transparent criteria for discretionary distributions to beneficiaries that enhance the likelihood of financial responsibility. In addition, ROTE provides an objective standard for children becoming trustees and reduces the likelihood of disputes between trustees and beneficiaries, and strengthens the connections between existing financial advisors and   the next generation.  

Mr. Gallo consults with several institutions, including the UCLA Anderson School of Management.  He advises on adapting the ROTE™ concept to challenges involved in transferring an interest in a family business to the next generation.

 

Estate Planning Experience

  • Co-founder and developer of Results Oriented Trust Environment (ROTE™), which turns the next generation’s search for autonomy in their life choices into a potent source of intrinsic motivation to learn to manage wealth responsibly
  • Co-founder of Gallo Consulting, which works to create financially intelligent families
  • Works with the UCLA Anderson School of Management to adapt the ROTE™ concept to the challenges involved in transferring an interest in a family business
  • Assists clients in creating values based estate plans
  • Creates and administers wealth transfer vehicles including:
    • Qualified Personal Residence Trusts
    • Grantor Retained Income Trusts
    • Family Limited Partnerships
    • Installment Sales to Grantor Trusts
    • Private Annuity transactions
  • Establishes and administers charitable giving vehicles such as Charitable Lead Trusts, Charitable Remainder Trusts and Private Foundations, both operating and non-operating
  • Evaluates, drafts and administers complex insurance plans
  • Creates family constitutions and family councils

Family Wealth Advisors

Results Oriented Trust Environment (ROTE™)
Building Financial Responsibility and Connecting Advisors to the Next Generation

For several years, Mr. Gallo has been refining a concept that addresses two of the biggest challenges facing financial advisors and affluent families: 

  • What can advisors do to retain existing business when funds under management are inherited by the next generation?
  • What can affluent families do to increase the odds that the next generation will be able to manage inherited wealth responsibly?

Currently advisors try to address both concerns through a range of optional ancillary services, ranging from newsletters and programs for parents and grandparents, to financial boot camps for the next generation.

However, this approach does not position the advisor, and his or her firm, as integral parts of the family's plan for the successful transmission of wealth to the next generation.

In 2007, Mr. Gallo was retained by the guardian of an 11-year old who had inherited $60 million when his parents passed away.  The guardian wanted to motivate him to learn to manage money responsibly.  With his wife, Eileen Gallo, Ph.D. and Boston psychologist, Jim Grubman, Ph.D., he created an approach that is based on more than a hundred studies in motivational psychology and business management.  These studies showed that the best way to motivate behavior that involved judgment and reasoning (a good description of learning to manage money responsibly) was to identify the desired results and give the person autonomy in achieving those results.  Such an approach is known in the workplace as a Results Oriented Work Environment (ROWE).          

Mr. Gallo identified seven results of responsible money management, ranging from living within one’s means to having savings and not abusing credit.  He then used the ROWE approach to create a trust which not only identified the desired results, but it also supported the trustee and financial advisors in helping the young man acquire the skills necessary to accomplish these results.

The Gallos call this concept a Financial Skills Trust utilizing a Results Oriented Trust Environment (ROTE™). 

The Financial Skills Trust makes the advisor, and his or her firm, an integral part of the process by which family wealth is transferred and the next generation learns to manage wealth responsibly.  It enhances both the likelihood that the advisor will retain funds under management when control passes to the next generation, and the likelihood that the next generation will learn to manage the wealth responsibly. 

The Financial Skills Trust uses contemporary findings in economics and motivational psychology to create a trust that is a tax-efficient vehicle to transfer wealth down the generations.  The trust also addresses the second common challenge by positioning the advisor in a key role in that process.  Rather than being viewed as the parents’ advisors, the Financial Skills Trust places the financial advisor as a mentor to the next generation, increasing the likelihood of retaining existing business when next-generation clients receive their inheritances.

Published Articles

Seminar and program topics:  

  • An Introduction To Estate Planning
  • Advanced Estate Planning: A Case Study
  • Estate Planning And The Generation-Skipping Tax
  • The Use Of Life Insurance In Estate Planning

Books:

  • The Financially Intelligent Parent: 8 Steps To Raising Successful, Generous, Responsible Children, Penguin USA/New American Library (co authored with Eileen Gallo, Ph.D.), 2005
  • Silver Spoon Kids: How Successful Parents Raise Responsible Children, McGraw Hill/Contemporary (co authored with Eileen Gallo, Ph.D.), 2002

Published Articles:

  • "Allocating Assets between a Bypass Trust and a Marital Trust," Journal of Financial Planning
  • "The Business Skills Trust: Helping Younger Generations To Take A Leadership Role In The Family Business," Smart Business
  • "Another Case of Bad Facts Making Bad Law," Journal of Financial Planning
  • "Reciprocity Is a Virtue, But Maybe Not in Estate Planning!"Journal of Financial Planning
  • "Regulating Trustee Emotions and Their Compliance with Financial Objectives," Journal of Financial Planning
  • "Educating Trustees and Beneficiaries to Prevent Trust Litigation," Journal of Financial Planning
  • "Pipe Dreams Can Come True: Gifting Opportunities...At Least Through 2012!" California Trusts and Estates Quarterly, 2011
  • The Use and Abuse of Incentive Trusts: Improvements and Alternatives
  • How 18 Became 26: The Changing Concept of Adulthood
  • Good Grief, Journal of Financial Planning, August 2009
  • Low Interest Rates Make Charitable Lead Trusts More Valuable, Journal of Financial Planning, April 2009
  • Estate Planning and the 2009 Increase in Exemptions and Exclusions, Journal of Financial Planning, December 2008
  • Unintended Consequences: When Good Estate Plans Cause Bad Problems, Journal of Financial Planning, August 2008
  • Dear Trustee: Send Money, 42nd Annual Philip E. Heckerling Institute on Estate Planning (co-authored with Laura Zwicker), 2008
  • Avoiding IRS Challenges To Family Limited Partnerships, Journal of Financial Planning, December 2007
  • Private Foundations: A Great Idea Or A Trap For The Unwary, Journal of Financial Planning, August 2007
  • Taking The QPRT Up A Notch, Journal of Financial Planning, April 2007
  • Creating The Human Moment For Clients In Crisis Situations, Journal of Financial Planning, December 2006
  • Life Insurance To And From ILITs, Journal of Financial Planning, August 2006
  • Sorry SOLI; Goodby ILITS? Journal of Financial Planning, April 2006
  • Tax, Estate, Lifetime Planning For Minors (Contributor), Section of Real Property, Probate and Trust Law, American Bar Association, 2006
  • Life Insurance Due Diligence Or What You've Always Wanted To Know About Life Insurance But Were Afraid To Ask, 40th Annual Philip E. Heckerling Institute On Estate Planning, 2006
  • Planning and Drafting Life Insurance Trusts, USC 57th Institute on Federal Taxation – Major Tax Planning for 2005
  • Estate Planning Conundrums Worth Repeating, Journal of Estate Planning, August 2005
  • The Financially Intelligent Parent: 8 Steps To Raising Successful, Generous, Responsible Children, Penguin USA/New American Library (co authored with Eileen Gallo, Ph.D.), 2005
  • How Financial Planners Can Become Financially Intelligent Mentors: An Open Letter, Journal of Financial Planning, April 2005
  • Unique Estate Planning Opportunities For Gay and Lesbian Couples, Journal of Financial Planning, August 2004
  • Understanding the Hierarchy of Generation Skipping Transfers, Journal of Financial Planning, April 2004
  • Talking About Estate Planning, Journal of Financial Planning, December 2003
  • The Tax Court Does It Again: Strangi II and McCord I, Journal of Financial Planning, August, 2003
  • Maybe It Works, Maybe It Doesn't: Installment Sales to Grantor Trusts, Journal of Financial Planning, April 2003
  • Forget The Technical: Concentrate On The People: Understanding Your Client's Money Personality, 36th Annual Philip E. Heckerling Institute On Estate Planning, 2002
  • Silver Spoon Kids: How Successful Parents Raise Responsible Children, McGraw Hill/Contemporary (co authored with Eileen Gallo, Ph.D.), 2002
  • ALI ABA’s Practice Checklist Manual On Insurance (co author), 2002
  • The Psychological Education of an Estate Planner, Journal of Financial Planning, May 2001
  • The Developing Secondary Market In Life Insurance, Journal of Financial Planning, January 2001
  • The Generation Skipping Transfer Tax: Planning and Pitfalls, 59th Annual New York University Institute on Federal Taxation
  • The Use Of Life Insurance In Estate Planning: A Guide To Planning And Drafting, Parts I and II, Real Property Probate and Trust Journal, Volume 33, Numbers 4 and 5, 1999

Accolades

  • Listed, Best Lawyers in America, 1983-2012
  • Listed, Who’s Who In America, 1998-2008
  • Listed, Who’s Who In American Law, 1998-2008
  • Listed, Worth Magazine’s Top 100 Attorneys, 2007
  • Cited 1973 by United States Department of Defense for meritorious services in drafting and enactment of P.O.W.-M.I.A. Family Relief Act of 1973, Calif. Stats. 1972, CH 988, and P.O.W.-M.I.A. Tax Relief Act of 1973, Calif. Stats. 1973, CH 19
  • Listed, Los Angeles Magazine Super Lawyer, 2004-2013
  • Rated, "AV Preeminent 5.0 out of 5," Martindale Hubbell
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