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Welcome to Financial Freestyle. I'm Ross Mack, and this is sponsored by Vanguard.

A state settlement is after someone has passed away, they leave an enormous amount of things behind, and these things can take up to 900 hours of effort for the, the, the children of someone who's passed away.We thought that this is something that we could bring technology to bear, solve a problem for consumers, take those hours off of the shoulders of the executor, and make it so that they can get back to doing the things they should be doing, which is helping family, grieving, preparing for things that need to happen next.

Welcome to Financial Freestyle here on Yahoo Finance. I'm your host for All Smack. And look guys, no matter where you are on your financial journey, whether you're a seasoned professional on Wall Street, a retail investor, or just starting out, every success begins with a single step, and you've landed right at the right spot because in this series, I'm sitting down with some of the most influential minds.Finance to explore their paths to economic success. And today, guys, I'm thrilled because I'm talking to Hugh Tamasia, co-founder of Alex. And look guys, Alex focuses on automating a state settlement or the transfer of wealth. And guess what? Through 2045, families are expected to inherit about $84 trillion. So Alex,Well, co-founder of Alex Hu, my man, thanks so much for being here. Thanks for having me. It's great. So to the world, right, we got a chance to talk a little off camera and you're pretty fascinating,

right?

I think the world you guys need to know, he's very fascinating, but let's actually talk to them. Who is you?

Uh, I'm Hugh Tamasia. I've been in technology pretty much all my life, mostly fintech. Uh, I was tinkering with computers when I was in 7th grade and just, you know.Coding away and learning tech, uh, love it, puzzle solving, problem solving, really loved the pieces though that like connected with people and solving people problems. I've never been sort of that back office tech guy. I've always been that guy. I just want to solve problems for people and so, uh, whether it's Alex or Acorns, JP Morgan, always been in the business of putting together that technology that you would interface with, uh, and, and would help you every day.

7th grade, I think I was playing with like a Nintendo 64 and you were, I mean, but you were learning how to potentially build the software of it. So let's actually talk about your career path because like you say, you were Acorns, JP. Walk us through your career trajectory.

I actually started off in defense way back in the days, but quickly got into to finance. I just, I really enjoyed kind of the finance space, um.I, uh, early days was with the early credit card startups, um, before they kind of got gobbled up by, uh, large, large corporates, um, I kind of bounced back and forth over time between large corporate and kind of starting my own businesses.I always liked sort of understanding what it took to kind of start something from scratch versus what it took to operate something at scale. I thought that was kind of neat. So that followed me through many years. I did about 15 years at JPMorgan. I did a lot of mobile payment stuff, which, you know, it's a great example of something that back 10 years ago seemed really hard to do and seemed really improbable to come around.In New York City today, I can walk around without a credit card and just tap at things, and it's something that's, you know, now second nature to all of us, but it was a hard problem back in the days. And I, I just like solving those problems. I spent some time at acorns, helping people understand how to save and invest for their futures better, financial literacy, and then Alex, you know, Alex is an an interesting problem. Um, most people don't know what a state.is. Most people don't know they're going to have this problem sometime in the future, is a completely new space. And I think this it's a completely new space, that's what kind of attracted me to this.

So let's jump right in there because I think, you know, when it comes to Alex, like you say, you are a problem solver. Your company is solving a problem. Let's actually back it up because the average person, right, doesn't even know what a state planning is, right? And I think that, you know,When you think about it, it's like, oh, you got to be rich to do that, right? So let's back it up. Like, what is the state planning and more importantly, what is Alex doing? So,

um, Alex is a state settlement and it's a little different from a state planning in a way. State planning is putting together your will and your trust and preparing for when you pass away.Uh, state settlements after someone has passed away, they leave an enormous amount of things behind. No matter how well you did your planning, there is house, cars, financial accounts, there are subscriptions, there's insurance policies, there's utilities. There's the newspaper that lands on the front door that has to be canceled. There's all these things that have to be dealt with by the next generation.And these things can take up to 900 hours of of effort for the, the, the, the children of someone who's passed away. And it really happens at a time when no one really wants to deal with this. Someone's just passed away, you're grieving, um, you're probably a busy professional, you've got a lot of things going on in your life. 900 hours of effort is like a full-time job.On something you haven't been trained to do, uh, you don't know probate, you don't know where to call, uh, to, to liquidate the bank account. Um, selling the house is complicated, dealing with all these bills and all these subscriptions. These are very complicated things that, uh, Americans don't know how to deal with until you're thrown into this problem.And you're probably only going to do it once, frankly, in your life. So what we found was this is a real problem that affects Americans every day. It's a problem where technology hasn't come in to help people. People are just doing this by hand today themselves, and we thought that this was something that we could bring technology to bear, solve a problem for consumers, take those hours off of the shoulders of the execu.and make it so that they can get back to doing the things they should be doing, which is helping family, grieving, preparing for things that need to happen next.

So, when I think of like a state planning, right? It's like, all right, here are the rules that I want in place when I pass away, right?My son is going to get this, my daughter's going to get that. The dog is getting this right. And on top of that, right, if something gets to happen to me, if I'm incapacitated, this is going to take care of my family. But I never thought of and and I always understood is like technically if you die without a will or some type of state in place, then it goes to probate and then you're in there fighting. So like let's talk about what would happen prior to Alex existing, right? So when you talk about, you know, say you know grandparent passes away.They tell me who's who inherits what. But now we're talking about their credit card bills and you know, Grandpa might have had, you know, OF, right? Like what happens? What happens, you know, with that?Just please help me. No, I understand.

I think that's exactly this is exactly why we built the business. It's because I think a lot of people think, oh, I have a will in place. I'm OK. You know, there's a couple of things with that. A will is definitely helpful, so I of course recommend everyone do what you're doing right now, which is, you know, plan, go get a will, put a trust in place, definitely do that.Um, but that doesn't handle everything. There's a couple things about planning that a lot of people won't tell you. One is, uh, the best plans begin to go stale the moment you leave the lawyer's office, for instance, you buy a new car, you buy a house, and if you don't refresh those plans constantly, there's always some assets out there. It doesn't handle all the other things associated with this, like bills and subscriptions, credit card payments, and all those things that have to happen.Those are the things that can really tie you down. So, yes, definitely go off, do a plan, get a plan in place, but a state settlement, really wrapping up someone's life, really like taking all that that person was and moving it on to the next generation, there's a lot more to that than just, uh, a good estate plan. And that's where we stepWe, we handle the planned items, we handle all the unplanned items. We just wrap it all together and solve that.

So I'm the estate planner, right? So I'm the person who has the estate. Am I coming to Alex while I'm alive or is my family coming to Alex after I pass away?

Right now, both, and the answer is both. Right now it's mostly families after.Someone has passed away. families who know that they're about to have to deal with this, who have the awareness that, um, we just don't have the time to do this, and we really need someone to help us. Either we personally don't have the time or we don't live in the same state as our parents. There's a lot of reasons why families come to us and say we can't handle this, and then we step in and say, look, we can do it all foryou.

That's fascinating. That isThat's fascinating. Look guys, we're going to take a quick break, but when we come back, we're gonna have more with Hugh Tammania.All right guys, welcome back to Financial Freestyle. And today we're joined by Hugh Tamsy, a co-founder of Alex. And listen, I think that you know the biggest buzzword in the world right now is AI. And so let's actually talk about how Alex is utilizing AI.

AI is an enabler for everything we do. It makes everything easier in our technology. Now,Our experience is very much led by humans still. So, you know, when someone passes away, you're not talking to a machine, you're not talking to an app, you're talking to someone at Alex, you're talking to an expert at Alex, someone who has done this for other families many times before.But behind the scenes, we are using some really advanced technology to work with banks, to work with insurance companies, to work with realtors, to go off and manage and close those assets. It makes us a better business to our customers, we're still the same old humans facing off with you and, and giving you good advice, empathetic in a situation where you need some empathy, giving you help where you, you need help.

So when it comes to, you know, Alex, obviously you utilize AI but I think one of the things that we were talking kind of off camera was the ability to still maintain that human element, that human touch. Why is that so important?

UmThis is a really large asset, let's just put it that way. When someone passes away, there's a lot of wealth, there's a lot of money at stake. Um, no one's, it's not like Uber, no one's going to treat that to an app. Uh, people want to talk to a human being. Second, uh, this is one of the most personal moments in someone's life. Someone's passed away.Um, again, you don't want to really be working with a piece of technology at this point. You want a problem solved. That's why it's important to be working with a person, no matter how much great automation we have behind the scenes, great AI, great agent, uh, technology behind the scenes, um, we think it's really important that this still be a very much a human experience. We have a really neat app, by the way.So if you don't want to talk to a person and it's 11 o'clock at night and you want to see what's happening with the insurance policy, you want to see what's happening with the credit card that's supposed to be closed off, you can still go into our app, you can still see everything that's going on, but if you don't want to do that, we always have a human working with youas well.

So when it comes to the state settlement, right, who is this mainly impacting, right?

Um, every American is going to have this problem. It doesn't matter whether you're poor or rich. Everyone is going to have this problem. There's always in a state, and there's always decisions that need to be made, and there's always things that need to be settled. This is actually a problem that, um, even though it impacts everybody, it probably impacts, um, frankly, women and underserved uh uh uh communities more than other people. Here's the reason why.Um, when the next generation takes on the wealth of the previous generation, the people who have to deal with that transfer, the inheritance, tend to be women. Um, the executor of estates for the baby boomers, more than 60% of the time will be the eldest female daughter. Um, wealth transfer is very much a, a female problem.The other problem is is that um in wealth transfer, uh, access toYou know, lawyers and accountants and real estate, uh, people, uh, tends to be something that, uh, more wealthy people have access to and, and others do not. So we're leveling the playing field. We're coming in with a solution that everybody can use regardless of who you are, where you are, we can help you settle the estate for the previous generation using all the technology and tools we have available to us. I love

it, and we talked about this earlier, but 84 trillion.Of assets will soon become inherited. So what are some, you know, call it common financial mistakes you see or, you know, people are making or more importantly, Alex is going to help people avoid, you know,

a lotof people just don't know where to start. It is a really complicated process and people get into a state settlement thinking it's easy. So I would say the most common mistake is underestimating what's really ahead of you. Someone's passed away and you say, hmm.There's a house, there's a car, it's bank accounts. How hard can this be? It seems simple on the surface. If you back up and you say, what all the mom and dad have going on? What was really happening? And you're like, wow, they had Disney.And they had Netflix, they had electric, they had water, they had all these services, they had all these subscriptions. They had some maybe a whole bunch of like different accounts that we didn't know about. Oh, by the way, someone has to pay the taxes, we've got to file a state taxes, we've got to file their last personal tax return. There's actually an enormous amount of work in shutting down someone's life beyond just what we would immediately think are the small things that need to be done.The problem is, most people don't learn this until they get halfway into it, and it's too late. So part of our challenge and what we're trying to solve it, Alex, is get people to know that early on. Get them to know what they're about to encounter. If you still want to do it yourself, great. But I think a lot of people, when they really understand the breadth of things that's ahead of them, will say, you know what, I have a lot of other things to do. I'm going to let someone who does this professionally handle it for me. That's what we do.

So as a person that started out effectively, you know, on Wall Street as a CTO real tech guy, now full time entrepreneur, what are some of the challenges you've come across, right? Let's talk to some of the entrepreneurs that are watching us. Yeah,

well, um, I think when you're starting your own business like Alex, uh, what's really interesting and difficult about this business is no one's done it before.So, you know, uh, we always talk about, you know, second mover advantage or people coming in and replicating another business that's out there, um, and we've seen that happen before. This is a very different type of business. This is a type of business that hasn't been constructed. No one's ever tried to automate what we're trying to automate.So we're innovating and learning every day. We sit in the office trying to figure out how to automate the bank account closure, how to automate working with the utilities, and how to automate working with Netflix and the subscriptions and all those things that go along with it.Um, it's fun. I will tell you it makes it a lot more fun, but as an entrepreneur, it makes it a lot more challenging because there's no cookbook for this, there's no roadmap, there's no thing out there that we can replicate. We have to kind of learn it by doing it, and then automating what we do.

SoHistorically, right, before Alex existed, right? Because what generally would happen when a person passes away without having proper settlement in place? So are like all accounts frozen and therefore subscriptions and all these other bills that you have, they effectivelyUm, you pay as due, delinquent, etc.

in bad cases. Hopefully it would never go to that. Typically what would happen is, you know, you have a funeral, you can go through the process of celebrating someone's life, and then a day later you'd be like, OK, now we have to do something with everything. First call would go to a lawyer. Um, any lawyer or maybe the lawyer that prepared the will, and you would say,What do we do? And that lawyer would give you a legal answer. That lawyer would read the will and tell you what's in that, or they would say you need to do these things in probate and let me help you through probate.But that lawyers are gonna only gonna help you with a fraction of this. That lawyer's not gonna help you with um all the other things that we talked about that go along with someone's life that's not in the will. That lawyer's not gonna help you with the taxes, um, that lawyer's not gonna help you sell the house. Um, so, you know, what Americans would do is they would have to cobble together a set maybe of professionals to kind of help them along the way, and then do the rest of the work themselves.Americans have to train themselves to do a state settlement, to do this really well.And to only do it once because you're probably never going to do it again. And I think that's the really interesting thing about our solution is we know how to do this. We are the experts. We have trained how to do this. We can do this repeatedly. So when you come into us, we're not just doing a fraction of the work, we're doing all the work necessary to alleviate this burden off of families. So

isthere ever a point where it's like too early to start planning for states?

Never a point where it's, it's too early to plan. Um, it's always good to plan, and the more you plan, the more you're gonna help the next generation. I think what's important in our message is, no matter how well you plan,It's never going to be sort of a push button. I'm an executor, I have this will, I hit the button and everything's distributed. There's always going to be work for the family to do. There's always more to this than just what's in the will. Settling someone's life, someone's affairs is, is complicated, and that's where we step in. Do the planning, do very good planning that works to your advantage.But understand that even the best plan is gonna require a lot more work than what's in that plan, and that's where we step in.

I love it. So let's go back to talking to, you know, the entrepreneurs, right? Let's talk about maybe some lessons you've learned along the way and then more importantly, right, maybe common mistakes a per entrepreneur might make, especially kind of from a CTO standpoint.

Yeah.Um, couple lessons I've learned in in my, uh, in, you know, I've always learned more from my failures and my successes, I think that's sort of, you hear that kind of from entrepreneurs, um, boy, I've done some startups before, um, uh, I did a lot of payment startups, and I'll tell you a little story because in my payment startups, um, fascinating technology, we built, we built some amazing, probably ahead of its time technology and uh learned the hard way right away that um.If you make something too complex and too good,Uh, but miss what the consumers want, then you're, you're going to miss in your business. You know how they say keep it simple, stupid, right? Keep it simple, stupid. Uh, you know, one of the things I've learned is, um, start simple. Think about what the customer problem is. Don't overengineer right away, solve the customer problem and then bring the engineering in behind it.And I tell you, with Alex, that is like exactly what we're doing right now. We didn't just come in and and and hire dozens and dozens of engineers to start coding things right away. What we did is we brought in people to settle estates and help customers settle estates and understand the difference between California and Texas and New York, and understand the differences between a checking account and a savings account and a credit card account.Or insurance policy, what are all the differences between all the companies that you're gonna deal with when closing out all those things? We've learned all those things over a period of time, and then we brought in the technology people to come in behind the scenes to make it all better.Good product, great customer experience, technology in the background, just to make it all great. And I think that's kind of the formula I would suggest for entrepreneurs.

I love it. So there's a saying, right? Build and they will come and you're like, no, no, no. Build after they told you what they want, right? So I I actually like that and keep it simple. Keep it simple. And so really quickly as we get ready to wrap up, if you could go back in time and talk to 18 year old Hugh.What would you tellyourself?

I really enjoyed solving customer problems.Uh, I am really happy with sort of having done some big company things and some small company things. Um, I think it helped train me really well. Uh, but if I could go back, I would say, um, start some more businesses earlier on, do some more like things that are going to improve people's lives immediately right away using technology. I, I have a personal passion around it. I think when you can do that, you can point back on those things and say,Wow, what I did really helped people. And, uh, I think it's one of the most like fulfilling things you can have when you can look back on something and say, what we did really helped people. That's what I'd go tell myself.

That's fascinating. That's it for this episode of Financial Freestyle, and a huge, huge thanks to.Our guest Hugh Tamasia for sharing his insights and inspiring us today. Guys, I really hope this helps you on your own journey when it comes to getting your finances right. But guys, be sure to tune into another episode here next week only on Yahoo Finance.

This content was not intended to be financial advice and should not be used as a substitute for professional financial services.