Estate Planning Webinar 2024

Do you understand the differences between trusts, wills, powers of attorney and advanced directives? What functions do they serve and which ones do you need for your situation? Is your current estate plan set up properly? Join Ryan and attorney Phillip Reed to learn about these topics and have your questions answered.

• transcript

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  Hey, welcome everybody.

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  We're gonna give just another minute or so for a few

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  or more people to get, uh, signed in and set up.

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  Um, quick housekeeping.

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  If you have any issues getting logged in, well,

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  you probably wouldn't be listening to me right now.

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  Um, but, uh, Tara is, uh, is listening in

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  and she's available to call the office and help you.

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  Office number is 2 6 9 3 2 1 7 4 7 2.

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  Alright, it's 1202. So we'll go ahead and get started.

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  Thanks everyone for joining us today.

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  Uh, this is being recorded, so if you would like a copy

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  of the presentation, please let us know.

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  And it's available for you, your family,

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  or friends and your colleagues.

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  So, uh, today I'm joined by, uh, attorney Phil Reed.

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  Uh, I've known Phil for 15 plus years.

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  Um, you've been what, practicing law for just over 11?

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  Yep, that's Right. Uh, second career.

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  And then Phil's based in Kalamazoo, Michigan.

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  He's the owner and, and head partner of Reed Law.

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  Um, he's got a lot of expertise.

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  He was a, a lender before that.

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  I believe he still carries his real estate

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  license and realtor's license.

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  Um, a lot of expertise there.

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  We've done a lot of back

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  and forth forth work with mutual clients.

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  Um, I've always gotten really good remarks on,

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  on Phil taking care of the clients

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  and gotten, uh, pretty close with him.

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  So he's one of only a few people we, we work

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  with in the Kalamazoo area.

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  So he was generous enough to, uh, donate some time today,

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  which is always rare with attorneys.

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  I have to have to get an attorney joke in there.

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  Um, and he's allowed to, uh, us to, you know, kind

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  of pick his brain, uh, when it comes to estate planning.

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  So in a minute I'm gonna turn it over to him.

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  Uh, before I do, we had a couple people join in now.

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  So again, housekeeping items.

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  We will be taking questions throughout as well

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  as at the end, we'll leave about 10

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  to 15 minutes for questions.

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  Um, you can chat a question

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  by clicking the chat box and entering in there.

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  Tara's already shown you some info on that.

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  You can put it in the q and a.

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  Um, and then at the end we'll ask again.

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  So we'll, we'll start moving through this.

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  And again, we encourage this.

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  We don't wanna just be talking at you.

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  Let's try to keep it interactive

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  and we would love to have your questions.

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  So with that, uh, Phil, how you doing today?

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  I'm doing well, Ryan. How are you

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  Doing? Doing great. Doing

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  great. Like I said,

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  You, I showed up and I'm not even billing

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  for this time, so that's

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  Good. I, you know,

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  I, I gotta throw the crack in there about, but,

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  but we really appreciate you doing that.

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  So, you know, we've been doing this now 22 years,

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  and when I sit down with prospects

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  and clients, one of the first questions I, I ask is usually,

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  Hey, tell me about your estate plan.

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  And, uh, nine times out of 10, they kind

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  of sit back in their chair

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  or they, they sort of shrug their shoulders and look up

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  and say, yeah, I don't really have one,

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  or, yeah, I've been, I've been meaning to address that.

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  Um, in your words, can you, can you tell us, you know,

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  what is an estate plan and what are,

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  what are the major documents?

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  Absolutely, absolutely. So it's funny

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  because a lot of times people know

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  that they should have an estate plan,

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  but they, it's not urgent enough to get it done

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  until life kind of throws stuff at you.

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  But estate planning, generally speaking, is

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  a matter of life and death.

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  So it's putting together a plan that's going to take care

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  of you while you're still here,

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  but maybe unable to handle your day-to-day stuff,

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  and what happens to your family and your stuff

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  after you pass away.

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  So when you're looking at a plan, it's making sure

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  that everything connects together

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  so life will continue forward.

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  When I say life and death documents or life

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  and death, I'm talking about the documents.

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  So there's three primary life documents

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  and two death documents.

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  Essentially, the three primary life documents are gonna be a

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  durable power of attorney, uh,

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  which is essentially is your financial power of attorney.

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  So that's gonna allow somebody to

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  make financial decisions for you.

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  Uh, when you're unable to, maybe you're disabled,

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  maybe you have Alzheimer's, dementia, memory issues,

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  you're in a coma, something

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  that's gonna keep you from handling your day-to-Day stuff.

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  And you think about a financial power of attorney is,

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  if I gotta go run errands, uh,

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  this is all the stuff that I can do.

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  I, I gotta go deal with the, you know, the,

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  uh, power company.

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  I gotta deal with the bank, I gotta deal with creditors,

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  I gotta deal with my social, um,

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  or my online presence, emails and that kinda stuff.

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  Power of attorney's gonna encompass all that,

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  that's gonna put somebody in that trusted position.

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  Second is gonna be the advanced directive,

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  which essentially is gonna be the medical power of attorney.

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  So think of my person, if, if I can't make a decision

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  for my medical treatment, I need somebody to step into

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  that role, who is a trusted position,

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  who's gonna make those decisions?

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  And that could be, you know, care that could be, uh, hey,

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  I need assisted, uh, living.

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  That could be hospice decisions,

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  it could be memory care physician or, uh, uh, decisions.

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  That's gonna be the healthcare power of attorney.

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  And then last is, is a directive to physicians

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  or what they call a living will.

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  And that's gonna be the document that's kind

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  of a transitional document.

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  It's if death is imminent

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  and imminent means it's gonna happen really, really soon,

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  permanent vegetative state or incurable condition,

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  am I gonna be kept alive, artificially invasively

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  to prolong the dying process?

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  And that's real personal document.

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  And then we'll flip over to the death documents,

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  and that's primarily your will.

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  The will allows you

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  to file a lawsuit against your dead self, essentially.

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  Basically it's an administrative hearing

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  or procedure that allows the court

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  to dictate where your stuff goes.

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  Then overarching, that is gonna be a trust.

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  And a lot of times people hear about

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  trust and estate planning.

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  They're probably the most functional, uh, tool

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  that's in my toolbox for estate planning.

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  But what it does is it covers both the life and death.

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  All of your stuff gets compiled into the trust

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  and attached to the trust, and the trustee is gonna step in

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  and make sure that everything's handled

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  for you while you're still here, but maybe incapacitated

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  or after death.

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  Where does your stuff go?

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  Uh, and real quick, I I like

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  to describe a trust as like a pickup truck.

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  It's kind of an easy analogy to look at.

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  So you have a truck, you get to drive it,

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  you put all your stuff in the bed of the pickup truck,

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  your house, your bank accounts,

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  your paying death beneficiaries, it all goes in there.

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  Wherever you go, that goes with you.

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  And then that successor trustee,

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  you slide over the passenger seat.

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  When you can't drive because of incapacitation,

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  somebody else is gonna drive for you.

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  So that's essentially kind of the, the primary documents in,

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  in the estate plan run.

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  Great, thank you. So, yeah, uh, we got the wills,

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  got the powers of attorney for medical

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  and financial living will, and then the trust.

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  Uh, and one thing I like to touch on, you know, I would say,

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  and again, you, you correct me if I'm off,

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  but probably about 95 to 99% of trusts are

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  what we call revocable living trust.

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  Yeah. That's the most common.

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  Um, I think sometimes people get overwhelmed when they

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  think, oh, if I put my money,

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  my money in a trust, I can never change it.

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  I can never get it out there. There are trusts like that.

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  Generally those are gonna be for very high net worth

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  who have an estate tax issue, correct?

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  Yeah, that's correct. So most, most trusts are

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  what they call revocable living, uh, trust,

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  which means they're revocable.

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  So you can, you can change it, you can,

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  you can stop at any time in they're living.

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  So they're modifiable.

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  The nice thing about a revocable living trust is

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  you still maintain 100% control over all of your assets.

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  And that's really the key point.

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  Like you said, there's other things called irrevocable

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  trusts, which basically I'm gonna give my assets

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  to the trust and forgo all control, so we're gonna give it

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  to some separate trustee.

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  Those are useful in certain circumstances.

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  A lot of times it is high net worth.

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  Sometimes it has to do with Medicaid planning,

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  and sometimes it has to do

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  with some asset protection provisions.

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  But generally speaking, 90, 95%

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  of people are gonna have a revocable living trust

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  that they can modify, they can change, that will adjust to

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  how their lifestyle is,

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  and they still maintain a hundred percent control over all

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  their assets, which is really important.

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  Great. Great. Um, so kind of the next question.

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  You know, we, when I talk to people and,

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  and say, yeah, you know, I did my estate plan,

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  it was about five years ago,

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  and I said, great, well, what does it say?

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  Well, I I don't remember, you know,

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  I haven't looked at it since so and so attorney did it

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  and it's up, it's in my safe, it's in my vault, et cetera.

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  How often should somebody, you know, really be looking

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  through that and,

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  and making updates, talking

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  to their attorney, that sort of thing?

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  So it's a, it is a great question.

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  So a lot of times I usually recommend the good sweet spot is

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  about every three years.

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  I is when you want to at least take a

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  look to see what changed.

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  And I say three years, because if you look at it,

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  usually a lot changes within three to five year period

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  of time as life proceeds forward

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  year to year, you could do it.

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  I have clients that meet with me every single year

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  to review their trust, but not a whole lot changes,

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  you know, but you go three to five years, you may have

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  had a new child, you may have gotten a grandkid,

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  you may have bought a second home,

  232

  00:09:18.025 --> 00:09:20.485

  you may have gotten some new investment accounts, uh,

  233

  00:09:20.625 --> 00:09:23.005

  you may have experienced some new health issues

  234

  00:09:23.005 --> 00:09:24.165

  that we need to pay attention to.

  235

  00:09:24.585 --> 00:09:27.165

  So every three years, it's nice to at least touch base

  236

  00:09:27.165 --> 00:09:29.245

  with your attorney and say, Hey, you know,

  237

  00:09:29.245 --> 00:09:31.245

  tell me what's in my estate plan again.

  238

  00:09:31.245 --> 00:09:33.765

  You know, who do I have designated for this stuff?

  239

  00:09:33.765 --> 00:09:35.445

  Because like you said, you'll take it,

  240

  00:09:35.445 --> 00:09:37.285

  you'll put it on the shelf, you'll never look at it again.

  241

  00:09:37.285 --> 00:09:39.805

  And that's okay. I mean, it's designed to do that,

  242

  00:09:40.305 --> 00:09:41.405

  but it's always nice

  243

  00:09:41.405 --> 00:09:43.165

  to make sure you have it on the back of your mind.

  244

  00:09:43.285 --> 00:09:44.685

  I, I can't tell you how many people come in

  245

  00:09:44.685 --> 00:09:47.565

  and they're like, why do I have Uncle Bob as my trustee?

  246

  00:09:47.835 --> 00:09:48.925

  He's the worst choice.

  247

  00:09:49.225 --> 00:09:51.125

  And it was the right choice 10 years ago.

  248

  00:09:51.185 --> 00:09:53.885

  But now things have changed, uh, substantially.

  249

  00:09:54.105 --> 00:09:55.845

  So it's always nice to keep an eye on that.

  250

  00:09:55.915 --> 00:09:58.245

  It's just like any, any plan you want

  251

  00:09:58.245 --> 00:10:01.085

  to continually adjust it so it fits your lifestyle, uh, uh,

  252

  00:10:01.105 --> 00:10:02.205

  and the changes in your life.

  253

  00:10:02.855 --> 00:10:03.945

  Yeah. Yeah, I agree.

  254

  00:10:03.985 --> 00:10:05.865

  I mean, one thing that's constant right is changed, right?

  255

  00:10:05.865 --> 00:10:09.065

  Things change every day and, and those who you name and,

  256

  00:10:09.065 --> 00:10:11.145

  and maybe what you want to have happen today is,

  257

  00:10:11.165 --> 00:10:13.145

  is not necessarily the way you're gonna feel in

  258

  00:10:13.145 --> 00:10:14.265

  5, 10, 15 years.

  259

  00:10:14.405 --> 00:10:15.585

  Um, people come into our lives.

  260

  00:10:15.585 --> 00:10:17.425

  People come out of our lives. Situations change.

  261

  00:10:17.925 --> 00:10:20.305

  Um, like what you said too, like definitely, you know,

  262

  00:10:20.305 --> 00:10:21.305

  if you're getting new property,

  263

  00:10:21.325 --> 00:10:23.265

  new businesses certainly reevaluating it.

  264

  00:10:23.845 --> 00:10:27.825

  So speaking of, of trust, uh, let's talk about the,

  265

  00:10:27.865 --> 00:10:29.345

  what I call the funding of the trust.

  266

  00:10:29.605 --> 00:10:31.785

  So an attorney like yourself has drawn up,

  267

  00:10:31.805 --> 00:10:34.585

  has executed the documents, the documents are binding,

  268

  00:10:35.125 --> 00:10:37.465

  and, um, you know, a lot of times people think, okay,

  269

  00:10:37.525 --> 00:10:39.905

  I'm done now, but there's another really important step

  270

  00:10:39.905 --> 00:10:41.065

  known as funding the trust.

  271

  00:10:41.205 --> 00:10:42.745

  Can you, can you sort of speak to what

  272

  00:10:42.745 --> 00:10:44.625

  that entails? Yeah, both

  273

  00:10:44.625 --> 00:10:45.625

  Things. And, and that's, that's,

  274

  00:10:45.625 --> 00:10:47.105

  that's probably the biggest thing

  275

  00:10:47.105 --> 00:10:48.385

  that a lot of people miss.

  276

  00:10:48.385 --> 00:10:49.385

  They'll, they'll go in

  277

  00:10:49.385 --> 00:10:50.625

  and they'll say, I make the decision

  278

  00:10:50.685 --> 00:10:51.865

  to get my estate plan done.

  279

  00:10:51.935 --> 00:10:54.025

  I'll do a trust. And then they sign it

  280

  00:10:54.405 --> 00:10:55.985

  and they think it's all good, but it's not.

  281

  00:10:56.125 --> 00:10:58.465

  We still have to make sure that everything's connected

  282

  00:10:58.465 --> 00:11:00.825

  to the trust, and that's what they call funding the trust.

  283

  00:11:01.265 --> 00:11:03.305

  A lot of times people go, well, a trust, is it a bank?

  284

  00:11:03.325 --> 00:11:06.545

  Is it, no, it, it really just is that vehicle to hold it.

  285

  00:11:06.605 --> 00:11:08.225

  So how, how that works.

  286

  00:11:08.255 --> 00:11:11.505

  Typically, I had referenced earlier in our conversation

  287

  00:11:11.505 --> 00:11:13.025

  that it's kind of like a pickup truck

  288

  00:11:13.485 --> 00:11:14.665

  and you wanna put all your stuff

  289

  00:11:14.665 --> 00:11:15.825

  in the bed of the pickup truck.

  290

  00:11:15.895 --> 00:11:17.145

  Well, how do you do that?

  291

  00:11:17.325 --> 00:11:20.025

  So any, any asset that has a title,

  292

  00:11:20.165 --> 00:11:21.905

  and that could be a piece of property,

  293

  00:11:22.045 --> 00:11:23.305

  it could be a bank account,

  294

  00:11:23.425 --> 00:11:26.585

  it could be an investment account, anything that's formally

  295

  00:11:27.265 --> 00:11:29.945

  registered to you as an individual, we want

  296

  00:11:29.945 --> 00:11:31.545

  to get connected to that trust.

  297

  00:11:31.765 --> 00:11:33.545

  So if you're dealing with real estate,

  298

  00:11:34.095 --> 00:11:36.025

  it's basically using a deed.

  299

  00:11:36.035 --> 00:11:37.425

  We're gonna transfer the ownership.

  300

  00:11:37.565 --> 00:11:40.985

  So instead of it being, you know, Ryan Doss,

  301

  00:11:41.115 --> 00:11:42.465

  it'll be Ryan Doss, trustee

  302

  00:11:42.525 --> 00:11:44.625

  of the dos revocable living trust.

  303

  00:11:44.845 --> 00:11:45.945

  So we're gonna do a deed.

  304

  00:11:46.125 --> 00:11:48.305

  You don't change any, uh, there's no one capping.

  305

  00:11:48.325 --> 00:11:49.905

  We don't lose control of the property.

  306

  00:11:50.005 --> 00:11:52.185

  All we're doing is we're just putting it into

  307

  00:11:52.295 --> 00:11:53.765

  that revocable living trust.

  308

  00:11:54.275 --> 00:11:57.045

  Same thing with, you know, financial investment accounts.

  309

  00:11:57.045 --> 00:11:58.725

  If it's not an ERISA protected account

  310

  00:11:58.745 --> 00:12:01.965

  or there's no, uh, tax ramifications for changing it.

  311

  00:12:01.985 --> 00:12:03.725

  And there are certain things we don't put in the name

  312

  00:12:03.725 --> 00:12:06.725

  of the trust, like a 401k, uh, an IRA, those,

  313

  00:12:06.725 --> 00:12:08.685

  those things you want to keep in your personal name,

  314

  00:12:09.025 --> 00:12:13.085

  but we may wanna list the trust as the beneficiary, the,

  315

  00:12:13.145 --> 00:12:14.525

  the pay on death beneficiary.

  316

  00:12:14.785 --> 00:12:16.325

  Uh, and there's some, there's some planning

  317

  00:12:16.345 --> 00:12:17.685

  and some technique that goes into that.

  318

  00:12:18.185 --> 00:12:19.925

  But you know, your firm's really good at that.

  319

  00:12:19.955 --> 00:12:21.525

  I'll call after we finish the trust.

  320

  00:12:21.585 --> 00:12:24.445

  You guys are great at making sure all of the ownership

  321

  00:12:24.465 --> 00:12:26.645

  of all the investment accounts are reassigned to the trust.

  322

  00:12:26.905 --> 00:12:28.285

  We do the same thing with the bank.

  323

  00:12:28.305 --> 00:12:31.925

  We call the bank and say, Hey, we set up this trust, we need

  324

  00:12:31.925 --> 00:12:33.245

  to make sure it's connected to the trust.

  325

  00:12:33.245 --> 00:12:35.565

  Either it becomes in the name of the trust

  326

  00:12:35.705 --> 00:12:37.885

  or the trust is the pay on death beneficiary.

  327

  00:12:38.135 --> 00:12:40.045

  We'll do the same thing with personal property,

  328

  00:12:40.375 --> 00:12:43.645

  maybe life insurance beneficiaries and so on and so forth.

  329

  00:12:43.785 --> 00:12:45.365

  So that's really the key component.

  330

  00:12:45.365 --> 00:12:48.045

  It's not hard, but sometimes people just kind

  331

  00:12:48.045 --> 00:12:49.445

  of forget about doing it.

  332

  00:12:49.625 --> 00:12:51.925

  So your attorney, whoever you're working with,

  333

  00:12:51.925 --> 00:12:53.365

  should help you along with that.

  334

  00:12:53.485 --> 00:12:55.205

  A lot of times people will fund their own trust

  335

  00:12:55.475 --> 00:12:57.285

  because it's really simple to do.

  336

  00:12:57.625 --> 00:12:58.925

  But make sure your attorney's kind

  337

  00:12:58.925 --> 00:13:00.725

  of helping you out hand in hand saying, Hey,

  338

  00:13:00.865 --> 00:13:02.205

  here's the deed that we prepped.

  339

  00:13:02.235 --> 00:13:03.525

  This is the bank you need to contact.

  340

  00:13:03.665 --> 00:13:05.245

  You need to make sure these things are done.

  341

  00:13:05.465 --> 00:13:08.285

  So, um, that's really the, the key component.

  342

  00:13:08.485 --> 00:13:10.685

  'cause if nothing's in your trust, then it won't work.

  343

  00:13:11.305 --> 00:13:13.645

  So you wanna make sure everything is interconnected

  344

  00:13:13.705 --> 00:13:16.525

  and then your plan's going to, to go off without a hitch.

  345

  00:13:17.105 --> 00:13:19.295

  Great, thank you. So in terms of, we're kind

  346

  00:13:19.295 --> 00:13:21.335

  of talking about transitioning assets here into the next

  347

  00:13:21.335 --> 00:13:24.415

  generation, and so you funding the trust, obviously,

  348

  00:13:24.415 --> 00:13:26.055

  you know, getting it into the trust provides

  349

  00:13:26.055 --> 00:13:27.255

  that mechanism of transfer.

  350

  00:13:27.675 --> 00:13:29.735

  Um, a couple other common ways would be

  351

  00:13:29.735 --> 00:13:31.055

  with the beneficial interest, right?

  352

  00:13:31.075 --> 00:13:33.655

  For life insurance, IRAs, 4 0 1 Ks, et cetera.

  353

  00:13:34.035 --> 00:13:37.135

  Um, titling now, I I want you to talk just a minute about,

  354

  00:13:37.135 --> 00:13:39.295

  you know, some people have said, well, I don't need this

  355

  00:13:39.415 --> 00:13:40.855

  'cause I've just added my son to the account,

  356

  00:13:40.855 --> 00:13:42.895

  or my daughter, or my, my uncle Eddie.

  357

  00:13:43.355 --> 00:13:45.855

  Um, especially around the real estate, you know,

  358

  00:13:45.855 --> 00:13:48.815

  sometimes it's, it's the the cheap alternate estate plan.

  359

  00:13:48.845 --> 00:13:50.775

  Yeah. What, what are some of the pitfalls

  360

  00:13:50.775 --> 00:13:53.055

  and why wouldn't you wanna just title something jointly and,

  361

  00:13:53.055 --> 00:13:55.335

  and some aside from a spouse, um,

  362

  00:13:55.745 --> 00:13:57.015

  maybe talk through that a little bit.

  363

  00:13:57.395 --> 00:13:59.175

  So that is the number one problem

  364

  00:13:59.175 --> 00:14:01.855

  that I run into all the time with estate planning is this.

  365

  00:14:01.895 --> 00:14:04.015

  I don't wanna do a trust, I'm just gonna put people's

  366

  00:14:04.015 --> 00:14:05.095

  names on the accounts.

  367

  00:14:05.195 --> 00:14:07.135

  And the thing is, is you can do that

  368

  00:14:07.235 --> 00:14:10.415

  and it does function to hopefully avoid probate,

  369

  00:14:10.475 --> 00:14:13.735

  but it ends up usually causing a whole bunch of problems.

  370

  00:14:14.325 --> 00:14:15.575

  Real estate, especially

  371

  00:14:15.575 --> 00:14:20.375

  because real estate has to do with, with deed and,

  372

  00:14:20.475 --> 00:14:22.135

  and the record of the deed.

  373

  00:14:22.155 --> 00:14:24.375

  So if it's done wrong, it becomes problematic.

  374

  00:14:24.535 --> 00:14:27.695

  A lot of times what I'll see is they'll add a child to it,

  375

  00:14:27.715 --> 00:14:28.735

  and that's okay.

  376

  00:14:29.315 --> 00:14:30.975

  Um, but there is a problem.

  377

  00:14:31.235 --> 00:14:34.135

  So let's say you own a a piece of property, Ryan,

  378

  00:14:34.155 --> 00:14:36.735

  and we're just gonna add your kids to that property as,

  379

  00:14:36.875 --> 00:14:38.695

  as tenants in common or joint tenants.

  380

  00:14:39.155 --> 00:14:41.615

  Uh, and if you're wondering what those things are,

  381

  00:14:41.685 --> 00:14:43.095

  then definitely don't do it that way

  382

  00:14:43.095 --> 00:14:45.335

  because it, it's precise with how you have

  383

  00:14:45.335 --> 00:14:47.055

  to title those, uh, those assets.

  384

  00:14:47.555 --> 00:14:50.335

  But once you do that, let's say you added, um, directly

  385

  00:14:50.335 --> 00:14:54.645

  to the property, what happens then is they're gonna lose a

  386

  00:14:54.645 --> 00:14:56.765

  step up in basis later down the road.

  387

  00:14:56.985 --> 00:14:59.445

  And I'm, I'm sure we'll talk about this in a bit,

  388

  00:14:59.505 --> 00:15:02.685

  but you might cheat 'em out of some of the tax advantages

  389

  00:15:03.265 --> 00:15:04.845

  by simply putting their name on it,

  390

  00:15:05.025 --> 00:15:07.605

  or, uh, let's say it's a a a piece of,

  391

  00:15:07.825 --> 00:15:10.285

  or I'm sorry, it's a bank account or an investment account.

  392

  00:15:10.425 --> 00:15:12.645

  We can do that. But here's the issue.

  393

  00:15:13.265 --> 00:15:16.245

  If we have more than one child, uh,

  394

  00:15:16.425 --> 00:15:18.485

  or we want to have limitations,

  395

  00:15:18.705 --> 00:15:21.045

  or we want to protect them from certain things,

  396

  00:15:21.345 --> 00:15:22.725

  the trust is gonna allow us to do that.

  397

  00:15:22.745 --> 00:15:24.685

  For example, if we have little children

  398

  00:15:25.425 --> 00:15:28.325

  and something happens to you and your spouse

  399

  00:15:28.745 --> 00:15:31.485

  and you don't want 'em to get it at 18, guess what?

  400

  00:15:32.305 --> 00:15:34.085

  The trust is gonna help avoid that.

  401

  00:15:34.225 --> 00:15:37.205

  Or, Hey, I wanna, I want to slowly give them the money.

  402

  00:15:37.325 --> 00:15:38.725

  I wanna make sure that it's there for them

  403

  00:15:38.745 --> 00:15:40.405

  and that it's used for the health and education,

  404

  00:15:41.065 --> 00:15:42.885

  but I don't want 'em to get in control over it

  405

  00:15:42.885 --> 00:15:45.205

  until a certain age or something along those lines.

  406

  00:15:45.795 --> 00:15:48.925

  With real estate, if it's pro improperly titled,

  407

  00:15:49.025 --> 00:15:51.125

  and we've added some people to it,

  408

  00:15:51.515 --> 00:15:54.165

  what can happen is is we may end up having to probate,

  409

  00:15:54.305 --> 00:15:55.365

  uh, a portion of it.

  410

  00:15:55.465 --> 00:15:59.125

  We may get a, um, uh, uh, an issue with the chain of title,

  411

  00:15:59.425 --> 00:16:01.285

  and then all of a sudden you're doing a quiet title action.

  412

  00:16:01.625 --> 00:16:05.525

  So there's a lot of little things that can fracture

  413

  00:16:05.525 --> 00:16:09.125

  and go wrong when you're just adding a name to, to a,

  414

  00:16:09.445 --> 00:16:10.765

  a beneficiary designation.

  415

  00:16:10.765 --> 00:16:13.045

  Sometimes it works, if it's a direct line down,

  416

  00:16:13.785 --> 00:16:15.405

  it could be a good option for it,

  417

  00:16:15.585 --> 00:16:16.765

  but there's a lot of other reasons

  418

  00:16:16.985 --> 00:16:18.805

  to do, for example, a trust.

  419

  00:16:18.825 --> 00:16:21.205

  But I've seen it more often than not, people try to do it

  420

  00:16:21.625 --> 00:16:24.085

  and something is missed or something changes.

  421

  00:16:24.785 --> 00:16:28.485

  Uh, or somebody, let's say we've got people on the bank

  422

  00:16:28.485 --> 00:16:29.685

  account, somebody can go in

  423

  00:16:29.685 --> 00:16:31.285

  and just take that money, you know, they, they,

  424

  00:16:31.285 --> 00:16:32.525

  they don't need to spread it.

  425

  00:16:32.525 --> 00:16:34.045

  Well, it's in my will. Yeah.

  426

  00:16:34.045 --> 00:16:36.285

  But if they're on the account, they can just take the money.

  427

  00:16:36.475 --> 00:16:38.125

  Well, I have, I have my oldest on the account

  428

  00:16:38.125 --> 00:16:39.725

  and he knows what to do with it. Well,

  429

  00:16:40.035 --> 00:16:41.035

  Yeah, I hear that one a lot. Not,

  430

  00:16:41.035 --> 00:16:42.525

  yeah. Then the other kids may

  431

  00:16:42.525 --> 00:16:43.645

  not get it because guess what?

  432

  00:16:43.705 --> 00:16:47.245

  He owns that money. So when it's in the trust, now he has

  433

  00:16:47.245 --> 00:16:49.805

  to distribute it, uh, pursuant to the terms of the trust.

  434

  00:16:49.905 --> 00:16:52.525

  So lots and lots of issues that can come across there.

  435

  00:16:53.745 --> 00:16:55.365

  And in terms of that, again, you know,

  436

  00:16:55.365 --> 00:16:57.085

  just another scenario, uh, we talked about,

  437

  00:16:57.385 --> 00:16:59.045

  and I'm gonna have you talk about stepped up basis,

  438

  00:16:59.225 --> 00:17:01.045

  but you know, if,

  439

  00:17:01.065 --> 00:17:04.565

  if somebody adds their 26-year-old son is a co-owner

  440

  00:17:04.565 --> 00:17:07.285

  to their house, and we'll pick on attorneys again, they,

  441

  00:17:07.285 --> 00:17:08.885

  they're rear end car full of attorneys

  442

  00:17:09.265 --> 00:17:12.325

  and they get sued, uh, that house is part

  443

  00:17:12.325 --> 00:17:14.405

  of their assets subject to claim creditors, right?

  444

  00:17:15.085 --> 00:17:17.005

  Absolutely. So if you have interest in any

  445

  00:17:17.005 --> 00:17:18.965

  of these accounts, joint bank account,

  446

  00:17:19.005 --> 00:17:22.485

  joint financial account joint, uh, uh, uh, on real estate,

  447

  00:17:22.775 --> 00:17:25.805

  those assets are part of my portfolio.

  448

  00:17:26.065 --> 00:17:28.565

  So if I'm getting sued or somebody's coming after 'em

  449

  00:17:28.565 --> 00:17:31.725

  or creditor's coming after me, they can pursue those assets

  450

  00:17:31.725 --> 00:17:32.725

  because I own a percentage

  451

  00:17:32.725 --> 00:17:34.325

  of 'em I own, I own a portion of them.

  452

  00:17:34.585 --> 00:17:35.845

  Now there's some caveats with that,

  453

  00:17:36.105 --> 00:17:39.885

  but for the most part, you're opening up a larger exposure

  454

  00:17:40.185 --> 00:17:43.645

  to people who may not have anything to do with the lawsuit

  455

  00:17:43.825 --> 00:17:45.285

  or the creditors coming after 'em.

  456

  00:17:45.425 --> 00:17:46.565

  So that's a really good point. Right.

  457

  00:17:46.975 --> 00:17:48.925

  Great. So let's, let's break down.

  458

  00:17:49.165 --> 00:17:50.605

  I think a lot of people are familiar with this term.

  459

  00:17:50.605 --> 00:17:52.365

  We've got some real estate experts on here,

  460

  00:17:52.425 --> 00:17:54.685

  but this, this phrase stepped up basis.

  461

  00:17:54.995 --> 00:17:58.405

  Yeah. Um, and so maybe I'll start with with two examples.

  462

  00:17:59.025 --> 00:18:03.485

  Um, so mom and dad buy a house for half a million dollars.

  463

  00:18:03.595 --> 00:18:05.045

  They live in it for a long time.

  464

  00:18:05.865 --> 00:18:07.845

  Um, maybe they're in their eighties.

  465

  00:18:07.875 --> 00:18:11.285

  They, they assign their son is is a co-owner of the house.

  466

  00:18:11.285 --> 00:18:13.005

  They've got one child, they're gonna get it.

  467

  00:18:13.465 --> 00:18:16.485

  And then lo and behold, you know, they pass on and,

  468

  00:18:16.705 --> 00:18:19.165

  and son, uh, then puts the house up for sale.

  469

  00:18:19.745 --> 00:18:21.845

  Um, how does that play out in terms

  470

  00:18:21.845 --> 00:18:24.125

  of a taxation versus them waiting

  471

  00:18:24.705 --> 00:18:26.685

  and transferring it to the sun,

  472

  00:18:27.105 --> 00:18:28.285

  uh, through their estate plan?

  473

  00:18:28.705 --> 00:18:30.765

  So this is something that people do all the time and,

  474

  00:18:30.825 --> 00:18:33.125

  and they, they think they, they're doing the right thing

  475

  00:18:33.125 --> 00:18:35.685

  because they're, they're passing the property to it,

  476

  00:18:35.795 --> 00:18:37.485

  it's gonna transfer outside of probate.

  477

  00:18:37.795 --> 00:18:39.725

  Well, the problem with it, let's say, let's say mom

  478

  00:18:39.725 --> 00:18:41.805

  and dad bought this house in the eighties or nineties

  479

  00:18:42.065 --> 00:18:43.925

  and they've lived there and they've paid it off

  480

  00:18:43.925 --> 00:18:46.125

  and they've bought it for a hundred thousand dollars

  481

  00:18:46.225 --> 00:18:48.445

  and now it's worth $600,000.

  482

  00:18:48.835 --> 00:18:50.165

  They added son to it.

  483

  00:18:50.745 --> 00:18:52.885

  Son goes to sell it after mom and dad's death.

  484

  00:18:53.665 --> 00:18:55.325

  Son is now gonna have to pay

  485

  00:18:55.325 --> 00:18:57.885

  that capital gain difference from when they bought it.

  486

  00:18:57.885 --> 00:18:59.245

  The basis was a hundred thousand

  487

  00:18:59.545 --> 00:19:00.925

  versus the fair market value.

  488

  00:19:00.925 --> 00:19:03.645

  What he's selling it now because he was put on it.

  489

  00:19:03.645 --> 00:19:05.205

  So we're gonna go back to the original basis.

  490

  00:19:05.345 --> 00:19:07.165

  Now there's some arguments to say, well, it, it,

  491

  00:19:07.225 --> 00:19:08.965

  the basis is when he was added to it.

  492

  00:19:08.985 --> 00:19:11.045

  But, and that, and that's, that's fair.

  493

  00:19:11.305 --> 00:19:15.245

  But the issue is, is if he was to inherit it as soon

  494

  00:19:15.245 --> 00:19:17.245

  as he inherits the property, so that,

  495

  00:19:17.245 --> 00:19:19.005

  let's say it went from a hundred grand to six

  496

  00:19:19.005 --> 00:19:21.845

  or 700,000, he inherits it now at fair market

  497

  00:19:21.845 --> 00:19:23.045

  value at 700,000.

  498

  00:19:23.425 --> 00:19:25.005

  He has that stepped up basis.

  499

  00:19:25.145 --> 00:19:27.005

  The original basis was a hundred thousand.

  500

  00:19:27.185 --> 00:19:28.725

  But now that he's inherited it,

  501

  00:19:28.875 --> 00:19:30.765

  they're gonna step up the basis to

  502

  00:19:30.765 --> 00:19:32.445

  what the fair market value is.

  503

  00:19:32.705 --> 00:19:37.565

  So now all of a sudden that $600,000 taxable gain is erased

  504

  00:19:37.565 --> 00:19:40.205

  because you get a new step up in basis.

  505

  00:19:40.585 --> 00:19:42.845

  So he turns the property for 700,000,

  506

  00:19:43.235 --> 00:19:45.725

  he's not paying any capital ga uh, gains for

  507

  00:19:45.725 --> 00:19:47.405

  that differential, which is a huge thing.

  508

  00:19:47.825 --> 00:19:52.045

  You can do that by deeding through a labor bird deed, uh,

  509

  00:19:52.505 --> 00:19:53.725

  or through a trust,

  510

  00:19:53.725 --> 00:19:54.845

  because again, it's about,

  511

  00:19:54.955 --> 00:19:56.805

  it's about inheriting the property

  512

  00:19:56.805 --> 00:19:58.165

  and then you get that stepped up basis.

  513

  00:19:59.225 --> 00:20:01.255

  Great. And that, that also applies similarly

  514

  00:20:01.315 --> 00:20:03.895

  for non-qualified investment accounts, correct?

  515

  00:20:04.615 --> 00:20:06.655

  Absolutely. Mom and dad paid a half million investments grew

  516

  00:20:06.655 --> 00:20:08.695

  to a million if it transactions

  517

  00:20:08.755 --> 00:20:10.935

  or transfers a debt to get that stepped up basis.

  518

  00:20:10.995 --> 00:20:13.375

  And they sell for little to no taxes. Okay. Yeah. And

  519

  00:20:13.715 --> 00:20:15.375

  That's so huge. So huge. Yeah.

  520

  00:20:15.635 --> 00:20:18.255

  We talked about trusts, we talked about the documents,

  521

  00:20:18.255 --> 00:20:19.655

  we talked about funding the trust,

  522

  00:20:19.795 --> 00:20:20.855

  we talked about real estate.

  523

  00:20:21.265 --> 00:20:23.335

  Let's talk about business ownership. Yeah.

  524

  00:20:23.335 --> 00:20:26.575

  Um, you know, people that own LLCs, s corps, you know,

  525

  00:20:26.575 --> 00:20:28.335

  they've got a business, they're running the business.

  526

  00:20:28.915 --> 00:20:30.415

  Um, how does, how does, how does

  527

  00:20:30.415 --> 00:20:31.575

  that tie into the estate plan?

  528

  00:20:31.675 --> 00:20:32.935

  You know, what sort of things need to happen?

  529

  00:20:32.965 --> 00:20:34.175

  What are the consequences

  530

  00:20:34.235 --> 00:20:37.135

  or tax ramifications of, of making those changes?

  531

  00:20:37.995 --> 00:20:39.775

  So once again, it's an asset, right?

  532

  00:20:39.955 --> 00:20:42.575

  So all assets, we want to get tied to the trust.

  533

  00:20:42.755 --> 00:20:45.735

  So what we typically do with an LLC

  534

  00:20:45.735 --> 00:20:47.925

  or an LLP, uh, ownership,

  535

  00:20:48.165 --> 00:20:50.725

  interest limited liability company li limited liability

  536

  00:20:50.725 --> 00:20:52.925

  partnership is we're gonna do an assignment

  537

  00:20:53.065 --> 00:20:55.125

  or a transfer of interest, uh,

  538

  00:20:55.305 --> 00:20:56.965

  my membership interest to the trust.

  539

  00:20:57.305 --> 00:20:59.405

  And we can do that simply by a written record.

  540

  00:20:59.665 --> 00:21:01.845

  It, we kind of formalize it, we put it in the trust.

  541

  00:21:02.265 --> 00:21:04.725

  Now all of a sudden, if something were to happen to me

  542

  00:21:05.385 --> 00:21:08.645

  and my trustee, maybe it's my wife, maybe it's my kids needs

  543

  00:21:08.665 --> 00:21:10.205

  to run the company,

  544

  00:21:10.425 --> 00:21:14.165

  or they need to sell the company as trustees, they can do

  545

  00:21:14.165 --> 00:21:15.845

  that because I have now transferred

  546

  00:21:15.845 --> 00:21:17.285

  and signed my interest over.

  547

  00:21:17.845 --> 00:21:20.045

  A lot of people don't do this because it's my business

  548

  00:21:20.145 --> 00:21:21.765

  and then I have my personal estate plan.

  549

  00:21:21.765 --> 00:21:23.125

  But they are interconnected,

  550

  00:21:23.125 --> 00:21:24.645

  especially if you're a business owner,

  551

  00:21:24.715 --> 00:21:26.525

  because that's usually the livelihood

  552

  00:21:26.705 --> 00:21:29.125

  and that's usually a pretty substantial part

  553

  00:21:29.585 --> 00:21:31.125

  of an individual's estate.

  554

  00:21:31.625 --> 00:21:35.085

  Uh, so what we do is we transfer the membership interest.

  555

  00:21:35.105 --> 00:21:39.565

  If it's an S corp or C corp, we'll assign the stock, uh, uh,

  556

  00:21:39.585 --> 00:21:40.925

  the ownership stock in that,

  557

  00:21:41.105 --> 00:21:42.445

  or we'll, we'll have a document

  558

  00:21:42.645 --> 00:21:45.365

  that transfers it upon debt directly to the trust.

  559

  00:21:45.825 --> 00:21:47.845

  Um, the assignment is a little bit better

  560

  00:21:48.045 --> 00:21:49.525

  'cause you don't run into a few issues.

  561

  00:21:49.985 --> 00:21:53.885

  But, uh, that's usually how we do that. Same thing happens.

  562

  00:21:54.105 --> 00:21:57.165

  We can get a stepped up basis as far as valuation in,

  563

  00:21:57.265 --> 00:22:00.045

  in the, uh, in the business, it's a little more complicated,

  564

  00:22:00.145 --> 00:22:03.525

  but the fact of the matter is, is we can still take a look

  565

  00:22:04.065 --> 00:22:06.605

  at benefiting on some of the, some

  566

  00:22:06.605 --> 00:22:08.885

  of the valuation difference with inheritance.

  567

  00:22:09.345 --> 00:22:12.965

  But getting that membership interest attached to the trust

  568

  00:22:13.805 --> 00:22:17.165

  properly is really key for any, any business owner.

  569

  00:22:17.855 --> 00:22:20.395

  And is, is there any tax to transfer that into the trust

  570

  00:22:20.415 --> 00:22:21.475

  or assign that to the trust?

  571

  00:22:21.855 --> 00:22:25.355

  No, because you are the owner and controller of the trust

  572

  00:22:25.735 --> 00:22:28.435

  and it's a, it's a direct transfer, so there's no,

  573

  00:22:28.435 --> 00:22:30.555

  there should not be a taxable basis.

  574

  00:22:30.725 --> 00:22:32.595

  We'll double check with the CPAs on that,

  575

  00:22:32.695 --> 00:22:35.915

  but, uh, typically no, there's not gonna be any, uh,

  576

  00:22:36.265 --> 00:22:39.155

  taxable event that's gonna occur for that assignment.

  577

  00:22:39.825 --> 00:22:42.075

  Okay, great. So we have our first question.

  578

  00:22:42.125 --> 00:22:44.595

  Thank you for participating and asking the questions.

  579

  00:22:44.595 --> 00:22:47.275

  The question is, do you typically put small items

  580

  00:22:47.505 --> 00:22:48.755

  like vehicles in a trust?

  581

  00:22:49.145 --> 00:22:53.275

  This is a good question. Um, so small items, I usually,

  582

  00:22:53.535 --> 00:22:55.835

  we usually have, uh, like a personal property,

  583

  00:22:56.355 --> 00:22:57.555

  a transfer document.

  584

  00:22:57.615 --> 00:23:00.555

  So anything that's at the house, your furniture, your TVs,

  585

  00:23:00.555 --> 00:23:01.755

  your silverware, all that kind of stuff,

  586

  00:23:01.895 --> 00:23:03.955

  we kinda lump it together and say it's transferred over.

  587

  00:23:04.675 --> 00:23:06.755

  Vehicles is a little bit different.

  588

  00:23:07.035 --> 00:23:10.275

  I don't particularly like to put vehicles into the trust.

  589

  00:23:10.335 --> 00:23:12.995

  And the reason being is if all your other assets are in the

  590

  00:23:12.995 --> 00:23:15.835

  trust, they can sometimes be connected.

  591

  00:23:15.875 --> 00:23:17.875

  And if you're gonna get, uh, in a lawsuit,

  592

  00:23:18.585 --> 00:23:20.635

  chances are it's gonna come from an auto accident.

  593

  00:23:20.745 --> 00:23:23.275

  Most people aren't prone to litigation,

  594

  00:23:23.455 --> 00:23:24.835

  but if they're gonna hurt somebody,

  595

  00:23:24.835 --> 00:23:25.835

  it's probably gonna be in a car.

  596

  00:23:26.355 --> 00:23:29.875

  I usually recommend keep tr cars outside of the trust.

  597

  00:23:30.375 --> 00:23:33.195

  It doesn't necessarily protect, uh,

  598

  00:23:33.195 --> 00:23:34.595

  create an asset protection,

  599

  00:23:34.855 --> 00:23:37.515

  but it does create a little bit of a separation from it.

  600

  00:23:37.585 --> 00:23:40.795

  Plus, in Michigan, cars are really easy to transfer

  601

  00:23:40.795 --> 00:23:42.275

  through the Secretary of State.

  602

  00:23:42.345 --> 00:23:44.355

  It's a, it's a half a page form,

  603

  00:23:44.735 --> 00:23:46.445

  you don't even need to open a probate.

  604

  00:23:46.445 --> 00:23:49.325

  So it's really simple. Now, if you did have collectible cars

  605

  00:23:49.665 --> 00:23:53.445

  or you had like, you know, a 1964 Mustang that was,

  606

  00:23:53.545 --> 00:23:54.725

  you know, vintage

  607

  00:23:54.905 --> 00:23:57.125

  and we kind of move it, it's gonna be an

  608

  00:23:57.125 --> 00:23:58.565

  heirloom that kind of passes forward.

  609

  00:23:58.575 --> 00:24:00.965

  We've got a collection of cars. Those are something I would

  610

  00:24:00.965 --> 00:24:02.565

  take a little bit dnce at,

  611

  00:24:02.825 --> 00:24:05.325

  but we may wanna put those into like a holding vehicle,

  612

  00:24:05.325 --> 00:24:07.125

  like an LLC or something like that,

  613

  00:24:07.145 --> 00:24:08.805

  and then attach that to the trust.

  614

  00:24:08.865 --> 00:24:11.725

  So it's separate, but your day-to-day vehicles,

  615

  00:24:11.845 --> 00:24:14.045

  I don't typically recommend putting it into the trust.

  616

  00:24:14.105 --> 00:24:16.605

  We can do a, uh, a on death sale

  617

  00:24:16.705 --> 00:24:18.205

  or we can just transfer

  618

  00:24:18.205 --> 00:24:19.285

  it right through the Secretary of State.

  619

  00:24:20.165 --> 00:24:23.515

  Great, thank you. So somebody, you know,

  620

  00:24:23.645 --> 00:24:24.795

  let's look at two scenarios.

  621

  00:24:25.035 --> 00:24:26.795

  Somebody has, has done their estate plan,

  622

  00:24:26.985 --> 00:24:29.035

  they've created the trust, they've funded the trust,

  623

  00:24:29.035 --> 00:24:31.515

  they've got everything titled and nice and neat and clean.

  624

  00:24:31.775 --> 00:24:32.835

  That's scenario one.

  625

  00:24:33.355 --> 00:24:35.235

  Scenario two is they've done no estate planning,

  626

  00:24:35.235 --> 00:24:36.475

  there's no will, no letters

  627

  00:24:36.495 --> 00:24:38.035

  of instruction, no trust, no nothing.

  628

  00:24:38.605 --> 00:24:41.435

  Could you kind of walk us through the settling

  629

  00:24:41.575 --> 00:24:43.755

  of the estate in terms of timeline

  630

  00:24:43.755 --> 00:24:46.715

  and potential cost for scenario one and scenario two?

  631

  00:24:47.265 --> 00:24:48.395

  Yeah, absolutely.

  632

  00:24:48.455 --> 00:24:50.835

  So scenario one, we've got the estate plan done,

  633

  00:24:50.835 --> 00:24:52.475

  we've got the trust on somebody passes,

  634

  00:24:53.135 --> 00:24:56.755

  and we need to reconcile the estate and get it distributed.

  635

  00:24:57.185 --> 00:24:59.715

  Well, everything's in the trust, it's all connected.

  636

  00:24:59.735 --> 00:25:02.955

  So whoever's stepping into that successor trustee, um,

  637

  00:25:03.835 --> 00:25:05.475

  position, usually it's an error,

  638

  00:25:05.775 --> 00:25:09.315

  but it doesn't necessarily have to be all of the, uh,

  639

  00:25:09.465 --> 00:25:12.155

  accessibility of their estate, their cash accounts,

  640

  00:25:12.155 --> 00:25:13.035

  their investment accounts, their

  641

  00:25:13.035 --> 00:25:13.995

  real estate, it's all there.

  642

  00:25:14.105 --> 00:25:15.755

  They can easily control that.

  643

  00:25:15.755 --> 00:25:18.835

  They can easily get access to it, disperse it.

  644

  00:25:18.835 --> 00:25:20.355

  They can easily sell real estate.

  645

  00:25:20.665 --> 00:25:23.595

  They can liquidate financial holdings, whatever it might be,

  646

  00:25:23.645 --> 00:25:26.515

  distribute it out to the heirs as may be necessary,

  647

  00:25:27.475 --> 00:25:28.755

  minimizes a ton of costs.

  648

  00:25:28.895 --> 00:25:30.795

  You may still have an attorney help

  649

  00:25:30.795 --> 00:25:31.995

  with the trusted administration,

  650

  00:25:32.055 --> 00:25:34.555

  but if it's pretty straightforward, it shouldn't be all

  651

  00:25:34.555 --> 00:25:35.595

  that difficult to do.

  652

  00:25:36.095 --> 00:25:40.075

  So what it does is time-wise, it, you can do it immediately

  653

  00:25:40.105 --> 00:25:44.915

  because, um, uh, you don't have to wait to run

  654

  00:25:45.175 --> 00:25:46.235

  and open a probate.

  655

  00:25:46.385 --> 00:25:49.355

  It's instantaneous. As soon as that person passes,

  656

  00:25:49.535 --> 00:25:51.675

  the successor trustee steps into that role.

  657

  00:25:51.745 --> 00:25:54.075

  There's no formal court proceeding that needs to be done.

  658

  00:25:54.505 --> 00:25:57.715

  It's just in play. Flip it to the person

  659

  00:25:57.735 --> 00:25:59.155

  who doesn't have an estate plan.

  660

  00:25:59.385 --> 00:26:01.275

  Well, first and foremost, they're gonna have

  661

  00:26:01.275 --> 00:26:02.515

  to figure out where everything is.

  662

  00:26:02.655 --> 00:26:04.195

  So that, that's always a problem.

  663

  00:26:04.315 --> 00:26:05.995

  I, I can't tell you how many times I've met with people

  664

  00:26:06.055 --> 00:26:08.395

  who are digging through the mail and digging through boxes

  665

  00:26:08.495 --> 00:26:09.555

  and stuff to find out where the

  666

  00:26:09.555 --> 00:26:10.635

  bank accounts are and things like that.

  667

  00:26:10.865 --> 00:26:11.875

  Usually with a trust,

  668

  00:26:11.875 --> 00:26:13.955

  it's someone a little bit more formalized.

  669

  00:26:13.975 --> 00:26:15.675

  Not always, but a lot of times it is.

  670

  00:26:15.895 --> 00:26:18.955

  Second, you gotta open an estate, you can't do anything

  671

  00:26:19.605 --> 00:26:21.635

  until you have what they call letters of authority.

  672

  00:26:21.935 --> 00:26:24.275

  You can, and the letters of authority basically says, Hey,

  673

  00:26:24.505 --> 00:26:26.475

  this person, this personal, this person

  674

  00:26:26.575 --> 00:26:28.475

  who represents the estate, the personal representative

  675

  00:26:29.015 --> 00:26:32.275

  now has the power to kinda marshal the assets

  676

  00:26:32.375 --> 00:26:34.195

  and marshal the assets is a legal term.

  677

  00:26:34.195 --> 00:26:35.275

  That basically means we're gonna,

  678

  00:26:35.275 --> 00:26:36.435

  we're gonna bring it all together.

  679

  00:26:36.815 --> 00:26:38.795

  So first and foremost, we gotta open a probate.

  680

  00:26:38.975 --> 00:26:40.195

  We gotta go through that process.

  681

  00:26:40.465 --> 00:26:43.645

  Once that's done, we gotta get all the, the assets together,

  682

  00:26:43.825 --> 00:26:45.405

  we put those all into the estate.

  683

  00:26:45.505 --> 00:26:48.765

  We then pay in an inventory fee once the estate's all done

  684

  00:26:48.765 --> 00:26:51.365

  to the state of Michigan, then

  685

  00:26:51.365 --> 00:26:53.805

  after that, then we can start making the distributions.

  686

  00:26:54.405 --> 00:26:56.525

  Additionally, we have to open up a notice to creditors.

  687

  00:26:56.705 --> 00:26:59.565

  We gotta post that. That's gonna take at least four months

  688

  00:26:59.745 --> 00:27:00.765

  for that to click through.

  689

  00:27:01.425 --> 00:27:04.205

  And on average, usually in a state's gonna take anywhere

  690

  00:27:04.205 --> 00:27:07.525

  from, I'll say four months to usually about 18 months.

  691

  00:27:07.625 --> 00:27:09.725

  It can be anywhere in between, just depending upon

  692

  00:27:09.745 --> 00:27:13.965

  how many assets, cost wise, the cost of doing the trust

  693

  00:27:14.755 --> 00:27:17.805

  dollars for dollars is always gonna be a better value.

  694

  00:27:18.425 --> 00:27:22.685

  Um, because it's, the cost of probate alone

  695

  00:27:23.275 --> 00:27:28.205

  usually is gonna run anywhere from 1500 bucks to five

  696

  00:27:28.225 --> 00:27:30.005

  or 6,000 bucks or more.

  697

  00:27:30.605 --> 00:27:33.965

  A trust is usually gonna run anywhere from, I don't know,

  698

  00:27:33.965 --> 00:27:35.845

  depending on if it's a whole package, a thousand

  699

  00:27:35.845 --> 00:27:36.885

  to 3000 bucks.

  700

  00:27:37.265 --> 00:27:39.765

  So, you know, the differential is a lot better,

  701

  00:27:39.875 --> 00:27:42.045

  plus you're using it now while you're alive.

  702

  00:27:42.225 --> 00:27:43.245

  So it's,

  703

  00:27:43.355 --> 00:27:46.965

  it's a long drawn out emotional period when people don't

  704

  00:27:46.965 --> 00:27:48.005

  have an estate plan done,

  705

  00:27:48.005 --> 00:27:49.325

  because again, you're also grieving

  706

  00:27:49.325 --> 00:27:50.565

  during this whole period of time.

  707

  00:27:50.945 --> 00:27:53.325

  The trust is gonna make things a lot easier for the family

  708

  00:27:53.795 --> 00:27:56.605

  because they don't have to think about going

  709

  00:27:56.605 --> 00:27:58.605

  through the process, hitting the court dates, you know,

  710

  00:27:58.605 --> 00:28:00.565

  getting things filed on time, et cetera, et cetera.

  711

  00:28:01.875 --> 00:28:04.205

  Okay, great. So you, you actually just hit one

  712

  00:28:04.205 --> 00:28:06.125

  of the questions, which is costs, you know, that's, uh,

  713

  00:28:06.125 --> 00:28:07.165

  something, you know, nobody

  714

  00:28:07.165 --> 00:28:08.405

  wants to pay more than they have to.

  715

  00:28:08.635 --> 00:28:10.565

  Yeah. And you know, we've, we've learned

  716

  00:28:10.565 --> 00:28:12.285

  that costs vary greatly.

  717

  00:28:12.285 --> 00:28:14.085

  Now some estate plans can be very complex

  718

  00:28:14.185 --> 00:28:15.365

  and can be significant.

  719

  00:28:15.945 --> 00:28:17.725

  Uh, I would say 95%

  720

  00:28:17.725 --> 00:28:20.365

  of the time it's those basic documents that fairly straightforward.

  721

  00:28:21.065 --> 00:28:23.085

  And, you know, I will say kudos to Phil and,

  722

  00:28:23.085 --> 00:28:24.925

  and he's one of a few folks we use

  723

  00:28:24.925 --> 00:28:26.165

  who I think are very reasonable.

  724

  00:28:26.665 --> 00:28:27.805

  Um, you know, they're not,

  725

  00:28:27.805 --> 00:28:29.085

  they're not the absolute cheapest,

  726

  00:28:29.085 --> 00:28:30.325

  but they're far from the most expensive.

  727

  00:28:30.325 --> 00:28:32.005

  You're not paying for the ivory tower building.

  728

  00:28:32.625 --> 00:28:35.245

  Uh, we have had folks who have, have wanted,

  729

  00:28:35.355 --> 00:28:37.445

  I've had one client I've gone through with the legal Zoom,

  730

  00:28:37.905 --> 00:28:40.245

  and I will tell you it was only cheap at the beginning.

  731

  00:28:40.245 --> 00:28:42.285

  And then they got nickel and dime for every document.

  732

  00:28:42.285 --> 00:28:45.605

  They got no legal advice Yeah. On help after the fact.

  733

  00:28:45.625 --> 00:28:47.845

  And it just ended up spending just way, way,

  734

  00:28:47.865 --> 00:28:49.005

  way more time in headaches.

  735

  00:28:49.005 --> 00:28:51.725

  So, um, you know, I don't wanna make a commercial for Phil,

  736

  00:28:51.725 --> 00:28:53.325

  but I, I definitely believe in working

  737

  00:28:53.485 --> 00:28:54.805

  with good professionals like him.

  738

  00:28:55.305 --> 00:28:57.765

  Uh, I think you'll save not only money,

  739

  00:28:58.025 --> 00:29:00.245

  but a lot of headache and time over the long run.

  740

  00:29:00.745 --> 00:29:03.725

  And, uh, to that point, if you are working with somebody,

  741

  00:29:03.725 --> 00:29:05.925

  if you have questions, uh, you know,

  742

  00:29:05.925 --> 00:29:08.165

  or you're out of area, just make sure they're,

  743

  00:29:08.165 --> 00:29:09.685

  they're an estate planning attorney.

  744

  00:29:09.905 --> 00:29:12.325

  You know, you, you don't go to a general practitioner

  745

  00:29:12.585 --> 00:29:15.125

  or general physician and get brain surgery or heart surgery.

  746

  00:29:15.585 --> 00:29:17.965

  You really want somebody who specializes in estate planning.

  747

  00:29:18.065 --> 00:29:19.845

  And, and Phil will tell you, you know, there's areas

  748

  00:29:19.865 --> 00:29:21.085

  of loss he won't practice.

  749

  00:29:21.105 --> 00:29:22.645

  You know, we don't do health insurance.

  750

  00:29:22.645 --> 00:29:24.165

  That is, that is not our wheelhouse.

  751

  00:29:24.625 --> 00:29:25.925

  Um, better you want somebody

  752

  00:29:25.925 --> 00:29:29.205

  who is a specialist in this area, um, that can take you

  753

  00:29:29.205 --> 00:29:30.445

  through it, you know, soup to nuts

  754

  00:29:30.605 --> 00:29:32.165

  and have that experience as opposed

  755

  00:29:32.165 --> 00:29:33.645

  to learn from your experience.

  756

  00:29:34.825 --> 00:29:36.565

  And that's, that's a, it's a great point, Ryan,

  757

  00:29:36.565 --> 00:29:38.845

  because there's so many little nuances

  758

  00:29:38.845 --> 00:29:40.125

  that pop up in estate planning.

  759

  00:29:40.125 --> 00:29:41.405

  People think it's pretty straightforward,

  760

  00:29:41.625 --> 00:29:43.045

  and for the most part it is.

  761

  00:29:43.065 --> 00:29:44.285

  But every family's different,

  762

  00:29:44.455 --> 00:29:46.285

  every relationship's different.

  763

  00:29:46.285 --> 00:29:48.765

  Every relationship with the kids and the grandkids

  764

  00:29:48.765 --> 00:29:50.445

  and the parents, it's all different.

  765

  00:29:50.445 --> 00:29:51.885

  Everybody has different assets.

  766

  00:29:52.345 --> 00:29:54.645

  So really having somebody kinda understand those little

  767

  00:29:54.755 --> 00:29:58.005

  nuances and pays attention with a client, it's, it's,

  768

  00:29:58.045 --> 00:29:59.725

  I think it's incredibly important.

  769

  00:30:00.085 --> 00:30:01.925

  I, I have people that say, well, I can do that

  770

  00:30:01.925 --> 00:30:03.525

  for 600 bucks on legal Zoom,

  771

  00:30:03.825 --> 00:30:05.645

  but you're right, they do nickel and dime 'em up.

  772

  00:30:05.645 --> 00:30:07.725

  They ratchet that up. That's kind of the, the,

  773

  00:30:07.745 --> 00:30:09.845

  the loss leader that they, they get in on.

  774

  00:30:10.265 --> 00:30:12.325

  Um, and there's no oversight.

  775

  00:30:12.325 --> 00:30:13.805

  There's no, there's no protection there.

  776

  00:30:13.805 --> 00:30:16.685

  Those are document preparation companies.

  777

  00:30:16.685 --> 00:30:19.485

  They're not legal advice companies.

  778

  00:30:19.665 --> 00:30:22.125

  And it's like anything, you want

  779

  00:30:22.125 --> 00:30:25.565

  to go get the advice from the expertise, you know, you're,

  780

  00:30:25.745 --> 00:30:28.645

  you go to the dentist to check out your teeth, you go

  781

  00:30:28.645 --> 00:30:29.725

  to the brain surgeon to,

  782

  00:30:29.785 --> 00:30:31.725

  to check out your brain and so on and so forth.

  783

  00:30:31.725 --> 00:30:33.485

  You go to the mechanic to check out your car.

  784

  00:30:33.905 --> 00:30:35.445

  It, it's the same things.

  785

  00:30:35.685 --> 00:30:37.085

  I don't, I don't touch criminal law.

  786

  00:30:37.125 --> 00:30:38.245

  I don't touch family law.

  787

  00:30:38.705 --> 00:30:40.645

  You know, I, I, I don't even litigate

  788

  00:30:40.755 --> 00:30:41.925

  very much at all anymore.

  789

  00:30:42.065 --> 00:30:45.445

  My primary focus is this, just because I enjoy it.

  790

  00:30:45.795 --> 00:30:47.485

  It's, it's great for the families

  791

  00:30:47.485 --> 00:30:49.645

  and there is a lot of nuance and specialty to it.

  792

  00:30:49.705 --> 00:30:51.205

  So just like any other area of law.

  793

  00:30:51.775 --> 00:30:54.525

  Great. So let's flip to switch now a little bit.

  794

  00:30:54.525 --> 00:30:57.165

  You know, back to the, the advice piece, which again,

  795

  00:30:57.245 --> 00:30:59.845

  I think is where having a person who has a lot

  796

  00:30:59.845 --> 00:31:02.045

  of experience in this is excellent, bouncing off.

  797

  00:31:02.505 --> 00:31:05.405

  You know, sometimes you have that perfect plan where it's,

  798

  00:31:05.515 --> 00:31:07.925

  it's a married couple with two kids or one kid

  799

  00:31:07.925 --> 00:31:09.685

  and everything's 50, 50 or a hundred percent.

  800

  00:31:09.685 --> 00:31:11.925

  There's no issues. Everything's squeaky clean.

  801

  00:31:12.545 --> 00:31:14.205

  But a lot of times that's not real life.

  802

  00:31:14.385 --> 00:31:15.845

  You know, there are second marriages,

  803

  00:31:15.845 --> 00:31:18.205

  there are stepchildren, there are complications,

  804

  00:31:18.255 --> 00:31:21.405

  there are kids with drug or alcohol problems.

  805

  00:31:21.405 --> 00:31:23.605

  There are kids that just aren't good with money.

  806

  00:31:23.755 --> 00:31:25.165

  There's a lot of uncertainty.

  807

  00:31:25.825 --> 00:31:27.485

  And so, you know, you talked about it

  808

  00:31:27.485 --> 00:31:30.125

  and I want you expand a little more on, you know, ways

  809

  00:31:30.155 --> 00:31:32.045

  with the trust, how you can structure

  810

  00:31:32.105 --> 00:31:33.645

  and layer distributions.

  811

  00:31:34.345 --> 00:31:36.885

  Um, and then also just let's talk a little bit about,

  812

  00:31:37.065 --> 00:31:38.325

  you know, discussing

  813

  00:31:38.385 --> 00:31:41.965

  or not discussing your wishes amongst the family, uh, when

  814

  00:31:41.965 --> 00:31:43.405

  that estate plan is completed.

  815

  00:31:44.285 --> 00:31:47.335

  Yeah. So, um, with a trust,

  816

  00:31:47.595 --> 00:31:49.095

  the nice thing about it is you can

  817

  00:31:49.095 --> 00:31:50.335

  design it however you want.

  818

  00:31:50.835 --> 00:31:53.935

  And you have that, you have that operational control, uh,

  819

  00:31:54.155 --> 00:31:57.695

  to decide when, who, where you know

  820

  00:31:57.715 --> 00:31:59.575

  how much somebody is going to get.

  821

  00:31:59.635 --> 00:32:01.455

  And that's really helpful for the family

  822

  00:32:01.475 --> 00:32:03.055

  to make sure everything is taken care of

  823

  00:32:03.475 --> 00:32:04.815

  for, I'll give you just an example.

  824

  00:32:04.845 --> 00:32:05.775

  It's probably the easiest way.

  825

  00:32:05.815 --> 00:32:06.735

  I have two little girls, right?

  826

  00:32:06.735 --> 00:32:08.095

  They're both under 18.

  827

  00:32:08.095 --> 00:32:10.455

  They're, they're seven and nine right now.

  828

  00:32:10.795 --> 00:32:11.855

  If something happened to my wife

  829

  00:32:11.855 --> 00:32:14.375

  and I, I don't want them getting all their money at 18

  830

  00:32:14.915 --> 00:32:17.215

  and by, you know, uh, standard

  831

  00:32:17.895 --> 00:32:19.855

  distribution inheritance, they'd get it at 18.

  832

  00:32:20.115 --> 00:32:21.735

  So we wanna avoid that. Now you tell people, listen,

  833

  00:32:21.735 --> 00:32:24.415

  if I got a ton of money at 18, I'd had a really nice car

  834

  00:32:24.435 --> 00:32:27.415

  and not a, a whole lot of money after 19.

  835

  00:32:27.755 --> 00:32:30.095

  So we wanna make sure that that's taken care of.

  836

  00:32:30.195 --> 00:32:33.335

  So how I have mine set up is I've designed it to say

  837

  00:32:33.565 --> 00:32:36.175

  that money's there for them to help them all the way through

  838

  00:32:36.175 --> 00:32:39.245

  until they hit hit 25, for example, at 25,

  839

  00:32:39.245 --> 00:32:41.885

  they can take a portion and they can do whatever they want,

  840

  00:32:42.145 --> 00:32:44.165

  but I've also retained some of that money,

  841

  00:32:44.275 --> 00:32:47.725

  then another chunk at 30 and, and so on and so forth.

  842

  00:32:48.065 --> 00:32:49.965

  So I've kind of designed it to keep it out.

  843

  00:32:50.085 --> 00:32:52.205

  I also have provisions in my trust that says, Hey,

  844

  00:32:52.205 --> 00:32:54.885

  if they're an addict or they're addicted to alcohol or drugs

  845

  00:32:54.885 --> 00:32:57.525

  or something, uh, they're not gonna get it.

  846

  00:32:57.525 --> 00:32:59.805

  We gotta maintain that stuff inside the trust.

  847

  00:33:00.185 --> 00:33:02.925

  Uh, there's some asset protection provisions

  848

  00:33:02.925 --> 00:33:05.365

  for the beneficiaries in there in case they're being chased

  849

  00:33:05.365 --> 00:33:07.925

  by creditors or they've made some bad money decisions.

  850

  00:33:08.255 --> 00:33:11.045

  Those things all, uh, tweak

  851

  00:33:11.105 --> 00:33:13.845

  and everybody can kind of design those how they want.

  852

  00:33:13.945 --> 00:33:15.405

  As long as it's not illegal,

  853

  00:33:16.315 --> 00:33:18.725

  then we can really design a trust to

  854

  00:33:18.795 --> 00:33:21.885

  however is gonna make the most sense for,

  855

  00:33:22.145 --> 00:33:24.485

  for the individual client, which is really, really exciting

  856

  00:33:24.485 --> 00:33:26.405

  because after I usually start to talk with clients,

  857

  00:33:26.755 --> 00:33:28.045

  something usually comes up

  858

  00:33:28.045 --> 00:33:29.925

  and we say, oh wait, let's go down this road a little bit.

  859

  00:33:30.385 --> 00:33:32.085

  And, and we find, uh, a plan

  860

  00:33:32.085 --> 00:33:34.325

  and a design that's really, really gonna be beneficial

  861

  00:33:34.505 --> 00:33:36.125

  for the client, which is really cool.

  862

  00:33:37.765 --> 00:33:39.025

  On the flip side, you said, Hey,

  863

  00:33:39.025 --> 00:33:41.105

  after the plan's done, do we share this with the family?

  864

  00:33:41.225 --> 00:33:43.425

  I think that was the question. And you know,

  865

  00:33:43.615 --> 00:33:45.425

  this is something that happens.

  866

  00:33:45.845 --> 00:33:47.785

  Uh, and, and it's case by case basis.

  867

  00:33:48.085 --> 00:33:49.945

  I'm always a big fan of open communication.

  868

  00:33:50.405 --> 00:33:54.185

  If you have certain designations or distributions

  869

  00:33:54.245 --> 00:33:57.465

  or percentages going to individuals, it's nice

  870

  00:33:57.485 --> 00:33:58.665

  to share that ahead of time.

  871

  00:33:59.085 --> 00:34:00.625

  Uh, some people don't want to though.

  872

  00:34:00.625 --> 00:34:02.105

  They're, they're like, listen, I don't want

  873

  00:34:02.105 --> 00:34:03.425

  that drama in my life.

  874

  00:34:03.425 --> 00:34:06.225

  They can deal with the drama afterwards. That's okay.

  875

  00:34:06.285 --> 00:34:08.345

  We can keep it private. Everything will remain private.

  876

  00:34:08.485 --> 00:34:10.065

  So there's not dispersed out,

  877

  00:34:10.065 --> 00:34:13.025

  or the information is not disseminated between the heirs.

  878

  00:34:13.095 --> 00:34:14.985

  However, I usually encourage the people

  879

  00:34:14.985 --> 00:34:16.305

  to say, Hey, write a letter.

  880

  00:34:16.325 --> 00:34:18.065

  If there's a reason you're leaving him 10

  881

  00:34:18.065 --> 00:34:20.105

  and the rest of them, you know, everything,

  882

  00:34:20.845 --> 00:34:22.625

  uh, outline that.

  883

  00:34:22.645 --> 00:34:25.425

  So, so they're not, there's not a question mark out there.

  884

  00:34:25.815 --> 00:34:27.625

  I've had a lot of times where people, you know,

  885

  00:34:27.625 --> 00:34:28.745

  they'll disinherit somebody

  886

  00:34:28.765 --> 00:34:30.745

  and the kids go, well, why did dad do this?

  887

  00:34:30.745 --> 00:34:32.585

  Well, you know, I, I don't, I can't really tell you.

  888

  00:34:32.965 --> 00:34:35.785

  Um, so I usually make sure that hey, there's,

  889

  00:34:35.785 --> 00:34:38.265

  there's some connection or some, um, uh,

  890

  00:34:38.655 --> 00:34:40.745

  explanation outline, whether they do a video

  891

  00:34:40.885 --> 00:34:42.185

  or a letter or something like that.

  892

  00:34:42.565 --> 00:34:44.665

  But nine times outta 10, most people say, Hey, yeah,

  893

  00:34:44.935 --> 00:34:45.945

  contact your family

  894

  00:34:46.005 --> 00:34:47.985

  and say, Hey kids, we did the estate plan.

  895

  00:34:48.355 --> 00:34:50.065

  We're dividing everything up equally.

  896

  00:34:50.765 --> 00:34:54.065

  Uh, you know, Sarah, Joe is the, the primary trustee and,

  897

  00:34:54.165 --> 00:34:55.945

  and John is the secondary trustee

  898

  00:34:56.005 --> 00:34:57.225

  and this is why we did it that way.

  899

  00:34:57.855 --> 00:34:59.985

  Nine times outta 10 people go, okay, great, thanks.

  900

  00:35:00.125 --> 00:35:02.145

  We know it, we have an estate plan in place.

  901

  00:35:02.165 --> 00:35:04.425

  We feel good about that. Thanks mom and dad, appreciate it.

  902

  00:35:05.125 --> 00:35:08.345

  So I always think open communications usually the better way

  903

  00:35:08.345 --> 00:35:10.585

  to go, but there are individual circumstances

  904

  00:35:10.925 --> 00:35:14.865

  for each family that may mean that's maybe not feasible

  905

  00:35:14.885 --> 00:35:15.985

  or just not a good idea.

  906

  00:35:17.405 --> 00:35:19.475

  Right? And that, and that ties back to having, you know,

  907

  00:35:19.475 --> 00:35:21.475

  a good advisor, a good attorney, you can discuss it with,

  908

  00:35:21.475 --> 00:35:22.755

  customize your situation.

  909

  00:35:23.315 --> 00:35:24.755

  Absolutely. We've, we've had a lot of those

  910

  00:35:24.755 --> 00:35:26.115

  where there's unique circumstances.

  911

  00:35:26.275 --> 00:35:27.435

  Sometimes it's not your children,

  912

  00:35:27.435 --> 00:35:29.195

  you worry about sometimes it's who they're married to.

  913

  00:35:29.345 --> 00:35:30.355

  Sometimes it's who you

  914

  00:35:30.425 --> 00:35:31.555

  That comes up more often than not.

  915

  00:35:32.175 --> 00:35:34.595

  Uh Right. What's the expression? Protect from creditors.

  916

  00:35:34.595 --> 00:35:35.795

  Creditors and in-laws. Yep,

  917

  00:35:35.895 --> 00:35:37.035

  That's right. That's

  918

  00:35:37.085 --> 00:35:38.085

  Right. Um, yeah.

  919

  00:35:38.085 --> 00:35:39.685

  So, you know, follow up, you know,

  920

  00:35:39.685 --> 00:35:41.725

  Warren Buffet has a famous statement, I,

  921

  00:35:41.765 --> 00:35:42.925

  I wanna leave my kids so much

  922

  00:35:42.925 --> 00:35:44.445

  that they can do anything, but not so much.

  923

  00:35:44.445 --> 00:35:45.765

  They do nothing. Yeah.

  924

  00:35:45.785 --> 00:35:48.245

  And, and along those lines, when I, when I sit down

  925

  00:35:48.245 --> 00:35:49.965

  with people and start talking with 'em about their estate

  926

  00:35:49.965 --> 00:35:53.045

  plan, I find often they haven't executed

  927

  00:35:53.265 --> 00:35:56.605

  or I've been afraid to execute or delayed execution

  928

  00:35:56.605 --> 00:35:57.885

  because they're not sure exactly

  929

  00:35:57.985 --> 00:35:59.165

  how they want everything to work.

  930

  00:35:59.555 --> 00:36:02.005

  They want, they wanna kind of get everything ironed out

  931

  00:36:02.005 --> 00:36:04.365

  and have it be just right before they take action.

  932

  00:36:05.025 --> 00:36:07.725

  Um, and you know, my, my thoughts around that,

  933

  00:36:07.725 --> 00:36:09.325

  and again I want you to share is, you know, look,

  934

  00:36:09.325 --> 00:36:11.205

  it's never going to be perfect, but,

  935

  00:36:11.385 --> 00:36:14.605

  but you know, progress is, is better than perfection.

  936

  00:36:14.625 --> 00:36:16.005

  Mm-hmm. Things are gonna change,

  937

  00:36:16.005 --> 00:36:17.205

  situations are gonna change.

  938

  00:36:17.705 --> 00:36:20.365

  But right now, whether you have a drawn up plan

  939

  00:36:20.365 --> 00:36:22.365

  or not, you do have an estate plan, right?

  940

  00:36:22.365 --> 00:36:24.285

  If, if you don't have it in writing, it's the state laws

  941

  00:36:24.285 --> 00:36:26.965

  of intestacy, which are probably not what you want anyway.

  942

  00:36:27.665 --> 00:36:30.125

  Um, so just, you know, if you could maybe just speak

  943

  00:36:30.125 --> 00:36:32.845

  to a second about, you know, what about those folks who,

  944

  00:36:33.075 --> 00:36:34.485

  yeah, they know they need to do something,

  945

  00:36:34.505 --> 00:36:37.285

  but they're just not quite sure who they want, where,

  946

  00:36:37.825 --> 00:36:39.765

  you know, let's talk about waiting

  947

  00:36:39.775 --> 00:36:41.685

  until everything's ironed out versus just sort

  948

  00:36:41.685 --> 00:36:43.445

  of putting the best foot forward and starting the process.

  949

  00:36:44.435 --> 00:36:46.845

  Well, you, you, you pointed out, hey, no plan is a plan.

  950

  00:36:46.985 --> 00:36:49.605

  Uh, it's just a lousy plan. You know, we want to avoid that.

  951

  00:36:50.335 --> 00:36:52.885

  Doing something is better than doing nothing.

  952

  00:36:52.885 --> 00:36:55.165

  Taking some sort of action is better than doing nothing,

  953

  00:36:55.165 --> 00:36:57.365

  because if you don't have a plan in place,

  954

  00:36:58.355 --> 00:37:01.205

  life isn't gonna stop until everything's perfect, everybody,

  955

  00:37:01.505 --> 00:37:04.365

  you know, we all have this, this, this hope

  956

  00:37:04.365 --> 00:37:07.045

  and dream that hey, when everything calms down,

  957

  00:37:07.555 --> 00:37:09.845

  then I'll get everything kind of organized and put together.

  958

  00:37:09.895 --> 00:37:11.245

  Guess what? It's never gonna happen.

  959

  00:37:11.625 --> 00:37:14.565

  Uh, 'cause life will just continue throwing life at you.

  960

  00:37:15.105 --> 00:37:16.765

  So it's a matter of putting into place.

  961

  00:37:16.865 --> 00:37:19.445

  If, if we don't know who we want to do,

  962

  00:37:19.445 --> 00:37:20.885

  what, let's just pick somebody.

  963

  00:37:20.885 --> 00:37:23.725

  And, and I will pressure people in a kind, gentle way,

  964

  00:37:23.725 --> 00:37:28.165

  obviously, to say, okay, if we had to today, if, if,

  965

  00:37:28.265 --> 00:37:30.045

  if tomorrow you were in the hospital

  966

  00:37:30.505 --> 00:37:33.125

  and somebody had to take the kids, who would watch those?

  967

  00:37:33.385 --> 00:37:35.085

  You know, or who would, who would take care of them?

  968

  00:37:35.185 --> 00:37:36.885

  And, and usually when they kind of put

  969

  00:37:36.885 --> 00:37:38.485

  that little pressure on themselves, they go, you know,

  970

  00:37:38.485 --> 00:37:41.005

  it's gonna be so and so, they have the answer.

  971

  00:37:41.435 --> 00:37:43.765

  They just are, they, you know, they're, they're, you know,

  972

  00:37:43.875 --> 00:37:46.045

  paralysis by over analysis type thing.

  973

  00:37:46.505 --> 00:37:49.605

  So I I, I encourage people to at least take the step.

  974

  00:37:49.745 --> 00:37:52.645

  The nice thing in about estate plan is it can be modified.

  975

  00:37:52.795 --> 00:37:54.405

  I've had clients where I've done the plan

  976

  00:37:54.785 --> 00:37:55.965

  and we've changed it

  977

  00:37:55.985 --> 00:37:58.645

  and modified it like four times in the first year

  978

  00:37:58.955 --> 00:38:00.805

  because they got it in place,

  979

  00:38:01.705 --> 00:38:03.845

  but then they thought it through and they got, and, and,

  980

  00:38:03.865 --> 00:38:06.565

  and by the time we were done modifying it, it was,

  981

  00:38:06.635 --> 00:38:08.485

  they were so thrilled about it.

  982

  00:38:09.025 --> 00:38:10.765

  But at least if something happened in the

  983

  00:38:10.765 --> 00:38:12.125

  interim, they would've been set.

  984

  00:38:12.125 --> 00:38:13.445

  They had something in place.

  985

  00:38:14.265 --> 00:38:17.165

  So that concern could have been alleviated from there.

  986

  00:38:17.345 --> 00:38:20.165

  So inaction is never a good thing.

  987

  00:38:20.195 --> 00:38:22.525

  Take some action to get the plan in place

  988

  00:38:22.715 --> 00:38:24.445

  because it's really a central hub.

  989

  00:38:24.725 --> 00:38:27.805

  I mean, you're, most of the clients that we see, Ryan,

  990

  00:38:27.805 --> 00:38:29.165

  they're coming to you for financial advice

  991

  00:38:29.325 --> 00:38:30.405

  'cause they're thinking about the future.

  992

  00:38:30.955 --> 00:38:33.325

  It's the same thing. This is kind of a core piece

  993

  00:38:33.665 --> 00:38:34.845

  of that future plan.

  994

  00:38:35.385 --> 00:38:36.605

  Uh, so, and it,

  995

  00:38:36.605 --> 00:38:40.045

  and it just makes things run a heck of a lot smoother, uh,

  996

  00:38:40.305 --> 00:38:42.925

  in case, you know, difficult things come up.

  997

  00:38:43.105 --> 00:38:46.285

  So my recommendation is take action if

  998

  00:38:46.285 --> 00:38:47.285

  You can. That's great. That's great.

  999

  00:38:47.285 --> 00:38:48.885

  So one, one more talking piece

  1000

  00:38:48.885 --> 00:38:50.285

  and then we'll, we'll round up for questions.

  1001

  00:38:50.285 --> 00:38:52.125

  So get your questions ready if you have 'em.

  1002

  00:38:52.705 --> 00:38:55.765

  Um, so in terms of the funding, again,

  1003

  00:38:55.765 --> 00:38:56.925

  we covered this pretty well,

  1004

  00:38:57.665 --> 00:39:00.525

  but you know, it is important that you've got a team

  1005

  00:39:00.525 --> 00:39:01.605

  of advisors, right?

  1006

  00:39:01.635 --> 00:39:04.245

  Someone like Phil's an attorney, you know,

  1007

  00:39:04.245 --> 00:39:06.445

  hopefully a tax advisor if you don't do your own taxes.

  1008

  00:39:06.505 --> 00:39:08.165

  And then a financial planner be us

  1009

  00:39:08.165 --> 00:39:10.725

  or somebody else who's looking at the big picture.

  1010

  00:39:11.505 --> 00:39:13.845

  And one of the things you really have to pay attention to,

  1011

  00:39:14.075 --> 00:39:15.365

  even if you've done the trust

  1012

  00:39:15.425 --> 00:39:17.005

  and you've, you've sort of funded the trust,

  1013

  00:39:17.385 --> 00:39:19.245

  is paying attention to beneficiaries

  1014

  00:39:19.625 --> 00:39:21.565

  and paying attention to different accounts.

  1015

  00:39:21.895 --> 00:39:24.125

  There was a story, Phil and I were chatting last week

  1016

  00:39:24.185 --> 00:39:25.805

  and it's probably been 20 years now,

  1017

  00:39:25.805 --> 00:39:27.445

  but it was a, a woman in Florida

  1018

  00:39:27.505 --> 00:39:29.565

  who started teaching when she was in her twenties.

  1019

  00:39:30.185 --> 00:39:32.485

  She had amassed I think a couple million dollars in her,

  1020

  00:39:32.485 --> 00:39:33.525

  in her retirement plan.

  1021

  00:39:33.985 --> 00:39:35.925

  Uh, over that time she got married,

  1022

  00:39:35.925 --> 00:39:38.245

  she'd been married 50 plus years to a gentleman

  1023

  00:39:38.625 --> 00:39:40.285

  and she never updated the beneficiary.

  1024

  00:39:40.285 --> 00:39:41.485

  Beneficiary was her sister.

  1025

  00:39:41.875 --> 00:39:43.405

  They had done their estate planning,

  1026

  00:39:43.465 --> 00:39:44.645

  all the documents, everything.

  1027

  00:39:45.025 --> 00:39:46.605

  She never updated that beneficiary.

  1028

  00:39:47.145 --> 00:39:48.565

  Uh, advisor never kind of worked

  1029

  00:39:48.565 --> 00:39:50.045

  with her on that, coordinated that.

  1030

  00:39:50.345 --> 00:39:52.965

  And so when she passed that 2 million plus dollars went

  1031

  00:39:52.965 --> 00:39:55.205

  to her sister, husband sued for the money,

  1032

  00:39:55.205 --> 00:39:56.325

  husband lost the case,

  1033

  00:39:56.465 --> 00:39:58.965

  the beneficiary superseded everything else.

  1034

  00:39:59.185 --> 00:40:01.965

  So it's just another kind of reminder that, you know,

  1035

  00:40:02.545 --> 00:40:04.805

  if you need to have help sometimes have a team

  1036

  00:40:05.185 --> 00:40:08.085

  to make sure they're looking at everything and, and,

  1037

  00:40:08.085 --> 00:40:09.085

  and checking those boxes

  1038

  00:40:09.185 --> 00:40:11.925

  and flipping over those stones to coordinate the plan.

  1039

  00:40:12.425 --> 00:40:14.605

  Uh, you know, and again, it may not always be perfect,

  1040

  00:40:14.825 --> 00:40:16.565

  but just some of those little nuances

  1041

  00:40:16.565 --> 00:40:17.605

  you don't know, you don't know.

  1042

  00:40:17.785 --> 00:40:19.285

  That's where a good team is,

  1043

  00:40:19.425 --> 00:40:20.725

  is really important to have in your corner.

  1044

  00:40:20.985 --> 00:40:23.245

  So, absolutely. Uh, with that, Phil, any,

  1045

  00:40:23.385 --> 00:40:25.805

  any closing thoughts where we open it up to q and a?

  1046

  00:40:27.485 --> 00:40:29.385

  Uh, no, not really.

  1047

  00:40:29.585 --> 00:40:31.145

  I mean, like you said,

  1048

  00:40:31.375 --> 00:40:33.825

  take action on your estate plan, do something.

  1049

  00:40:34.285 --> 00:40:36.945

  Um, there's lots of different levels of planning.

  1050

  00:40:36.945 --> 00:40:38.545

  Doesn't necessarily have to be addressed.

  1051

  00:40:38.545 --> 00:40:40.745

  Some people just need will and a power of attorney.

  1052

  00:40:41.245 --> 00:40:43.785

  So, you know, don't be concerned with that.

  1053

  00:40:43.895 --> 00:40:47.425

  There's always options, um, that we can utilize.

  1054

  00:40:47.765 --> 00:40:49.225

  If you have aging parents

  1055

  00:40:49.445 --> 00:40:51.505

  and they don't have an estate plan updated,

  1056

  00:40:51.615 --> 00:40:53.745

  it's worth having that conversation with them.

  1057

  00:40:54.245 --> 00:40:55.945

  Um, I see that quite often

  1058

  00:40:56.125 --> 00:40:58.625

  and that's somewhat challenging, especially if mom

  1059

  00:40:58.625 --> 00:41:00.585

  or dad's getting, uh, quite a bit older

  1060

  00:41:00.605 --> 00:41:02.505

  and maybe is having some memory care issues

  1061

  00:41:03.165 --> 00:41:05.065

  or potentially that could come up.

  1062

  00:41:05.405 --> 00:41:08.185

  Um, definitely encourage them to say, Hey,

  1063

  00:41:08.405 --> 00:41:09.665

  did you, did you get it updated?

  1064

  00:41:09.665 --> 00:41:11.145

  And like you said, it doesn't have to be through me.

  1065

  00:41:11.225 --> 00:41:13.865

  I don't care who, who you use, but definitely get it done.

  1066

  00:41:13.865 --> 00:41:15.625

  Having the plan is really, really important

  1067

  00:41:15.645 --> 00:41:16.665

  and that's really the key.

  1068

  00:41:17.865 --> 00:41:18.935

  Great. No, great point.

  1069

  00:41:19.395 --> 00:41:22.015

  So we'll give, uh, any, any brave souls some time,

  1070

  00:41:22.015 --> 00:41:23.855

  this is your chance for legal advice.

  1071

  00:41:24.355 --> 00:41:26.015

  Um, I have one follow up question

  1072

  00:41:26.175 --> 00:41:28.215

  'cause it's come up so much and this

  1073

  00:41:28.215 --> 00:41:29.295

  has come up with our clients.

  1074

  00:41:29.395 --> 00:41:31.775

  So hey, we did all the trust fill, we did this

  1075

  00:41:31.775 --> 00:41:33.015

  that a couple years ago now.

  1076

  00:41:33.475 --> 00:41:36.245

  Yeah, we're kind of thinking we may want to, um, you know,

  1077

  00:41:36.245 --> 00:41:37.445

  we may wanna make some tweaks

  1078

  00:41:37.445 --> 00:41:39.045

  to the trustees or the beneficiaries.

  1079

  00:41:39.235 --> 00:41:41.005

  Yeah. Does that mean we've gotta redo the whole thing

  1080

  00:41:41.005 --> 00:41:42.325

  and pay you the whole fee again?

  1081

  00:41:42.325 --> 00:41:43.485

  Or what, what is, how much time

  1082

  00:41:43.485 --> 00:41:44.845

  and cost is that? What does that involve?

  1083

  00:41:45.425 --> 00:41:46.725

  So you can make an amendment

  1084

  00:41:46.745 --> 00:41:48.125

  to a trust really at any time.

  1085

  00:41:48.385 --> 00:41:51.965

  The cost on amending it is, is pretty minimal

  1086

  00:41:51.965 --> 00:41:54.165

  because you usually just take a portion of it

  1087

  00:41:54.505 --> 00:41:56.605

  and we put a, a first amendment, second amendment,

  1088

  00:41:56.605 --> 00:41:57.605

  third amendment on top

  1089

  00:41:57.865 --> 00:42:00.925

  and says, Hey, this section we've amended, uh, the costs on

  1090

  00:42:00.925 --> 00:42:02.005

  that should be pretty minimal.

  1091

  00:42:02.325 --> 00:42:04.805

  A lot of times attorneys will do a small flat fee

  1092

  00:42:04.805 --> 00:42:06.245

  or they'll just charge an hourly rate

  1093

  00:42:06.245 --> 00:42:07.525

  and it shouldn't take more than an hour

  1094

  00:42:07.525 --> 00:42:09.165

  unless it's really complicated.

  1095

  00:42:09.745 --> 00:42:12.005

  Um, so the cost should be minimal.

  1096

  00:42:12.345 --> 00:42:13.365

  For example, my clients,

  1097

  00:42:13.425 --> 00:42:15.125

  if they make an amendment in the first year,

  1098

  00:42:15.205 --> 00:42:17.045

  I don't charge 'em for it because like I said,

  1099

  00:42:17.045 --> 00:42:18.245

  sometimes they just need

  1100

  00:42:18.245 --> 00:42:20.165

  to figure out like, are they comfortable with this?

  1101

  00:42:20.585 --> 00:42:23.845

  Um, further on from that, it's real easy for us to do.

  1102

  00:42:24.155 --> 00:42:25.805

  It's usually a little bit of time we get it

  1103

  00:42:25.805 --> 00:42:27.085

  drafted up, we resign it.

  1104

  00:42:27.195 --> 00:42:29.565

  Sometimes if there's quite a few changes, we'll do

  1105

  00:42:29.565 --> 00:42:32.205

  what they call a restatement of trust so we don't redo the,

  1106

  00:42:32.205 --> 00:42:35.965

  the trust we restate, uh, large sections of the trust.

  1107

  00:42:35.985 --> 00:42:38.805

  So we will take the trust, we'll take out good chunks of it

  1108

  00:42:38.825 --> 00:42:40.445

  and re-put 'em in there, changing a lot

  1109

  00:42:40.445 --> 00:42:42.485

  of beneficiaries designations and that kind of stuff.

  1110

  00:42:42.865 --> 00:42:47.045

  Uh, that should still be less than the cost, um, uh,

  1111

  00:42:47.185 --> 00:42:49.085

  of the preparation of the trust.

  1112

  00:42:49.265 --> 00:42:52.325

  So it's usually really affordable to,

  1113

  00:42:52.385 --> 00:42:54.365

  to get the modifications and amendments done.

  1114

  00:42:54.785 --> 00:42:57.525

  But it's again, it, it's a cost of doing business,

  1115

  00:42:57.865 --> 00:43:01.605

  but it's not gonna, it shouldn't bankrupt to say the least.

  1116

  00:43:01.745 --> 00:43:02.925

  We wanna make sure the plan works.

  1117

  00:43:02.985 --> 00:43:06.965

  So anytime we need a modification, don't hesitate from that

  1118

  00:43:07.065 --> 00:43:08.325

  and talk to your attorney on it

  1119

  00:43:08.325 --> 00:43:09.765

  and say, Hey, this is all I need done,

  1120

  00:43:10.025 --> 00:43:11.245

  how much is this gonna run me?

  1121

  00:43:11.475 --> 00:43:14.605

  It's worth having that conversation, um, to make sure

  1122

  00:43:14.605 --> 00:43:16.205

  that it's, uh, your plan is,

  1123

  00:43:16.205 --> 00:43:18.285

  is functioning the way you want it to function.

  1124

  00:43:18.735 --> 00:43:21.485

  Great, thank you. Did have one more question come in just,

  1125

  00:43:21.625 --> 00:43:24.845

  uh, uh, can you have a joint trust or does your husband

  1126

  00:43:24.905 --> 00:43:26.645

  or wife, do they each need their own trust?

  1127

  00:43:27.225 --> 00:43:30.565

  So, good question. So most of the time, prior,

  1128

  00:43:30.965 --> 00:43:32.685

  I don't know, probably about 10, 15 years ago,

  1129

  00:43:32.685 --> 00:43:34.085

  there was AB trust.

  1130

  00:43:34.105 --> 00:43:36.565

  And AB trust are usually you had the husband

  1131

  00:43:36.705 --> 00:43:38.565

  and you had the wife, and then at death

  1132

  00:43:38.565 --> 00:43:39.605

  it kind of merged together.

  1133

  00:43:39.985 --> 00:43:43.005

  So each person had their own individual trust.

  1134

  00:43:43.635 --> 00:43:45.885

  Most of the time I usually do joint

  1135

  00:43:45.885 --> 00:43:47.085

  trust for married couples.

  1136

  00:43:47.505 --> 00:43:49.285

  If the assets are mostly joint,

  1137

  00:43:49.585 --> 00:43:51.765

  if the assets are mostly joint, there's really no need

  1138

  00:43:51.785 --> 00:43:54.205

  for an individual trust for each one.

  1139

  00:43:54.505 --> 00:43:58.005

  Now that doesn't mean that we wouldn't have, uh, a trust

  1140

  00:43:58.005 --> 00:44:00.965

  for both a husband and wife if you guys have separate assets

  1141

  00:44:01.715 --> 00:44:05.325

  that, or if we have maybe a blended family, um,

  1142

  00:44:05.415 --> 00:44:07.805

  where we want certain percentages to go

  1143

  00:44:07.865 --> 00:44:10.125

  to kids from a different marriage or things like that.

  1144

  00:44:10.425 --> 00:44:12.405

  At that point in time, it would make sense to have

  1145

  00:44:12.405 --> 00:44:14.365

  what they call an AB trust, a husband and the wife,

  1146

  00:44:14.625 --> 00:44:17.765

  and then we have one of them be the other beneficiary.

  1147

  00:44:18.105 --> 00:44:20.525

  It doesn't necessarily have to work that way.

  1148

  00:44:20.715 --> 00:44:23.365

  Only if there's a lot of, uh, separate assets

  1149

  00:44:23.735 --> 00:44:26.685

  where the other spouse is gonna inherit a good chunk

  1150

  00:44:26.685 --> 00:44:28.205

  of them, then we might want

  1151

  00:44:28.205 --> 00:44:29.565

  to take a look at a two-part trust.

  1152

  00:44:29.745 --> 00:44:33.765

  But if you have, for the most part fairly joint assets

  1153

  00:44:33.905 --> 00:44:36.445

  and everything kind of filters into the surviving spouse,

  1154

  00:44:36.845 --> 00:44:39.845

  a joint trust, uh, single trust will be more than sufficient

  1155

  00:44:39.945 --> 00:44:41.245

  and accomplish all your goals.

  1156

  00:44:42.385 --> 00:44:46.345

  Great. Okay. We're right at 1245. We're right on time.

  1157

  00:44:46.715 --> 00:44:49.625

  Great. Um, bill, thank you for all the knowledge and,

  1158

  00:44:49.625 --> 00:44:51.945

  and taking the time to, to share with everyone.

  1159

  00:44:52.025 --> 00:44:53.625

  I know I, I learned quite a bit

  1160

  00:44:53.625 --> 00:44:56.065

  and I think we've had this conversation 50 times over the

  1161

  00:44:56.065 --> 00:44:59.065

  last four years, so appreciate you, um, anyone who,

  1162

  00:44:59.125 --> 00:45:01.425

  who needs to connect with Phil, just just let us know.

  1163

  00:45:01.445 --> 00:45:02.545

  We can put you in touch with him.

  1164

  00:45:02.645 --> 00:45:03.785

  Uh, great resource for you.

  1165

  00:45:04.085 --> 00:45:06.265

  Any follow up questions, feel free to reach out.

  1166

  00:45:06.605 --> 00:45:09.065

  Uh, we, like I said, we will be recording this if you'd like

  1167

  00:45:09.065 --> 00:45:11.385

  to get a copy for friends or family, it's available.

  1168

  00:45:12.005 --> 00:45:14.625

  Uh, until then, any, any closing thoughts, Phil?

  1169

  00:45:15.085 --> 00:45:16.345

  Hey Ryan, I appreciate the time.

  1170

  00:45:16.345 --> 00:45:17.745

  It's always a pleasure to hang out with you

  1171

  00:45:17.765 --> 00:45:19.385

  and talk, uh, estate planning

  1172

  00:45:19.405 --> 00:45:21.145

  and financial planning, et cetera, et cetera.

  1173

  00:45:21.145 --> 00:45:22.705

  And uh, yeah, if anybody has any

  1174

  00:45:22.865 --> 00:45:23.905

  questions, feel free to reach out.

  1175

  00:45:24.365 --> 00:45:27.825

  Um, and or contact Ryan, they can get you in touch with me.

  1176

  00:45:27.925 --> 00:45:30.265

  But, um, I appreciate the time today, Ryan. It was fun.

  1177

  00:45:30.565 --> 00:45:32.785

  You're very welcome. Hey everyone, thanks for joining.

  1178

  00:45:33.005 --> 00:45:34.665

  Uh, appreciate you. Have a great day

  1179

  00:45:34.765 --> 00:45:36.265

  and we'll talk soon. Thanks

  1180

  00:45:36.265 --> 00:45:36.505

  Guys.