Ep. 8 - Elements of an Estate Plan

Narrator: [: 00:00:00

Ledly Jennings: Welcome back to the Good Steward Law Wealth Podcast. And today we are going to talk about what makes up a complete estate plan. So we're going to talk about every aspect and component of an estate plan that you need to know. In your overall plan and this topic came up because several meetings I had last month, um, brought it up that people come in with the concept that they have an estate plan and maybe they come in and sit down and hand me a will or hand me a power of attorney and maybe one or two documents, but really an estate plan is [00:01:00] several documents that work together, um, to accomplish, um, The total goal of the plan.

So it's more than just one document for one purpose. You need a separate document for every purpose and they all work together, including those documents. You also need to plan for your financial accounts. Those accounts need to actually work with your estate plan. In coordination with the documents you have, so we'll highlight what should you walk away with in your binder or your packet when you get your estate plan implemented?

And these documents that I'll mention are, you know, the majority, I'd say almost every client that I work with walks away with most of these documents. And again, it varies by a client, by family situation, by goals, But when we sit down and meet with clients, we analyze, do you need this? Do you need this?

of. So really there is, I'm [: 00:02:00

The first one is a revocable trust. So. And see our previous episode on revocable trust. We'll have it linked in the show notes here to go in more detail of that. But essentially a revocable trust acts like a wheel, whereas it tells where you want your stuff to go and who you want it to go to. But a revocable trust avoids probate.

So that is the base of almost every plan I do is that revocable trust. The second document is a durable financial power of attorney. We had another episode on that previously. So see the show notes for the details on that, but it is a document that allows someone to manage your finances for you and make decisions on your behalf.

um, the third document is a [: 00:03:00

Okay. So those all three work together. The healthcare power of attorney is a power of attorney that lets someone make healthcare decisions for you. Same thing as a financial power of attorney, but this one is for healthcare. Um, the HIPAA authorization lets you name your power of attorney and other family members who you want to be in the room when the doctor's talking.

Um, basically gives them access to your medical information. So if you're incapacitated, they can be in the room and the doctor's talking, they can access your medical information and they can use that to make an informed decision about your health care. The next one is the living will. So that's the final document with the healthcare documents.

y what it is, a living wheel [: 00:04:00

They can use your HIPAA authorization to gather all the information and make an informed decision and then use the living wheel to make end of life decisions if that moment comes. Um, and the Genesis of that is you are naming someone you trust to take in all the facts and make a decision. Um, so those are the three healthcare documents.

eel just in case I say this, [: 00:05:00

But it's there in case we need it, meaning our job as an attorney is to fund the trust and make sure everything that we own gets in your trust like it's supposed to be. But sometimes something slips through the cracks or we do not have time to achieve those goals in the time frame before you pass away.

Um, so sometimes you have a bank account that you opened 20 years ago that you forgot about, or maybe you inherit something and somehow it just does not get in the trust. What your poor overwheel says. Is put it in my trust. Um, now why it's an airbag that I hope never gets used is because we have to follow that wheel with the probate court.

t the pour over will said is.[: 00:06:00

Put everything I own in my trust. And really that's all we know. We don't know what he owned. We don't know who got what. We just know he had a trust and now everything's in it. Um, so it was cool to see that this poor overwheel worked for, uh, the famous Jimmy Buffett, who had a lot more wealth than most of my clients.

And, you know, it worked for him, so it should work for most of you. Um, so that is a valuable document that. Most attorneys leave out if they do not specialize in estate planning. Um, the seventh document, I think we're on number seven now. Is a deed. The reason I clued this in the package is most people own a home or own some form of real estate.

on that. Even if you have a [: 00:07:00

So there's always a deed involved in an estate plan. If there's real estate involved. And the eighth one is an assignment of personal property. A lot of people are concerned about, well, where does my stuff go when I'm gone? Like you're. Uh, we consider personal property like your jewelry, um, car, furniture, household furnishings, anything like that.

Even guns, um, could be considered gold, silver. Some of that stuff could be personal property. So how do you get that in the trust? Well, we just do it with an assignment of personal property that says, I assign all my personal property to my trust, and then that enables your trustee to marshal it and divide it how your trust says.

depending on the situation. [: 00:08:00

Something, a family heirloom, maybe that they want to go to a specific person and how we deal with that is through a personal property memorandum. It's basically at the end of the trust, it's several blanks that says where the clients can go in and fill in. I want this ring to go to this person and they just fill in the blank and sign and date.

And we do that as a separate document because that changes so often, and there's just a lot of household items. So clients can take that document and walk through their house and fill it out themselves. And then that ensures that the trustee takes those documents and distributes it according to that list.

d its interest would have to [: 00:09:00

Sell the business or step in their shoes and manage the business. So they still have the income that it produces to do that. You need to assign your business, your LLC to your trust, and then your trustee can step in and make distributions and manage the business as you have instructed them to do. Um, so that is the.

The set of documents that we include in every estate plan. And we went over what each of them does, but they all need to work together because they have a separate purpose in how they function. You know, if you're incapacitated, these documents really become valuable. So your trustee can step in and manage things for you if you're incapacitated.

have a life insurance that's [: 00:10:00

So the power of attorney works for things outside the trust. The trust works for things. Inside the trust. And then we talked about the healthcare documents. Those allow people to make healthcare decisions for you. All this is separate from financial decisions. So you need the healthcare documents and that can be something that works with your financial power of attorney.

I see this with a lot of elder law clients that I have. Um, you know, we are applying for Medicaid to get them on Medicaid. We need to use the financial power of attorney to do that application, but we need to use the healthcare power of attorney to make healthcare decisions for them that happen within the nursing home.

nt to have all those in your [: 00:11:00

Into the trust and incorporated in the estate plan. Um, and by that, I mean, you know, you may have a IRA or a, um, bank account, life insurance, they need to flow with your estate plan. So they match up with your wishes. And each of those accounts have different set of rules around them, especially when we get into IRAs.

There's a lot of tax law changes that recently happened. And they specifically talk about how you pass on an IRA within an estate plan. And there's a lot of rules that go around that. So I wanted to show you my firm's process, um, about how we manage the entire estate plan. And I will, for those watching on video, I'll share my screen right now.

And So the [: 00:12:00

And then that's given to me to review because that helps me get a big picture Of everything they own, you know, I need that to develop a full plan. You got to have the full picture. If I'm only working with puzzle pieces, there's no way I can put the puzzle together. Um, I have to have all the pieces. So we, we get that intake and then we have a goal conversation, which is usually my first official meeting with the client.

nimize taxes as much as they [: 00:13:00

Um, so when we, when I get those goals, they vary for every client. When I get those goals, I step away and design a plan. That's the next step is the plan design. So I design a plan that incorporates all of their goals. And their assets that they informed me about and how that can work together to achieve those goals.

Once we design the plan, I present it to the client in a flow chart and a plan presentation. And we tweak it from there until we get it exactly right. How the client wants. And this is unique for every client. No plan looks the same. Um, but once we agree, we start drafting the documents, that's, you know, where the lawyer side comes in, where I draft the documents, um, usually takes me, you know, three weeks or so to draft everything, depending on how complex the plan is.

we execute the documents and [: 00:14:00

So you may be listening and think I have a wheel or I have a trust, but you really don't know if your assets are actually going to work. With your estate plan, the way you want, that's what we sit down and analyze. You need to make sure each individual asset is treated differently and incorporated into your estate plan, the way you intend.

So that involves me sitting down and looking at each asset, but it also involves coordinating with your financial advisor, with your CPA to make sure everything is aligned, how we want. Now, that final step, this is kind of my, um, favorite part of my estate planning process. It's the maintenance program and we call ours the good steward maintenance program.

cally where I have an annual [: 00:15:00

But the end goal that I tell my clients is I want to be able to sit down at a conference room table with your beneficiaries, with your kids, when you've passed away and confidently say, this is what they own. And this is what we do now. So it is really just eliminating the headache and the stress because we are organized and everything got to where they need it to go.

ys from this overall is that [: 00:16:00

To achieve the goals that you want.

Narrator: Thank you for tuning in to the good steward law and wealth podcast. If you're ready to take control of your financial future, visit good steward firm. com to book a meeting and sign up for our newsletter.