Ep. 25 - AMA - Ask Me Anything About Estate Planning

GSLAW Ep. 25 - AMA - Ask me anything about estate planning

Ledly Jennings: [: 00:00:00

Welcome

back to the Good Steward Law and Wealth Podcast. Glad to have everyone here today. And today we're going to have kind of a fun episode where I had several, uh, put out a request for, and I guess the young people call it AMA, ask me anything. Um, questions on estate planning and got a lot of answers back.

in order that made a logical [: 00:01:00

And hopefully some people had questions on this. Hopefully everyone will find it helpful. Um, and useful. So let's start. We had, and I won't read the names of these submitted because, you know, maybe you don't want to look dumb for, but there is no dumb questions. I'll start with that. Um, the first one I got that I think is a good starting point is at what age should I start thinking about estate planning?

And the answer to this is on one that really no one does. But really, when you turn 18, you need to Get an estate plan, specifically power of attorneys. You may not have many assets, but you need power of attorneys once you turn 18. And usually this falls under the responsibility of the parents, parents, when your kids turn 18, you need to get them power of attorneys because there's two, like we talked about, there's two different kinds of power of attorneys, healthcare and financial.

And when your kids turn [: 00:02:00

So you need a health care power of attorney. And then same for financial power of attorney. Um, you can't make financial decisions for them anymore because they are 18. And I hear about this a lot with colleges. You know, you're paying for their school, but the colleges will not release the grades to them, to you as parents, unless they, uh, authorize you to, or your power of attorney.

et this exact scenario in my [: 00:03:00

You know, you have your house, you have a good job, you have a retirement account. So why do you need to bother with the trust or any of that? Well, I could go on and on about this, but one, The basic parts of an estate plan, like we just talked about, you need power of attorneys because you want your wife, or if you are both in the same accident, someone else to make medical and financial decisions for you when you're gone, because if you're in the hospital incapacitated, your kids still need to have lunch money, they still need to eat, you know, someone needs to be able to access your bank accounts to take care of them.

And the second thing is just the 401k as an example. Okay. After, you know, you may make your wife or your spouse the beneficiary of that account, but if something happens to both of y'all, you do not want your entire 401k to go to your underage kid. Now, uh, most states have laws that put they, uh, That they can't inherit these assets until they're at least 18.

But [: 00:04:00

Um. Next question. Let's see. What happens if I die without a will? And the episode right, that I did right before this, um, the previous episode, we talked a lot about a will. But if you die without a will, you still go to probate. It's just called intestacy probate. And your estate would follow, um, what the statutory standards are.

t the uselessness of a will, [: 00:05:00

Um, but if you died without a will, and I think your question is about without any planning in place, you would go to probate. And the next logical question I saw was what's the difference between a wheel and a trust? Well, they both, in a simplified manner, they both tell where your assets go and how they get there.

But a wheel does it in the court system, in the public eye, a trust does it privately. At a conference room table in the, or in the privacy of your own home. And in addition, a trust can have a lot of other benefits, whether it's asset protection, whether it's tax protection, you know, there's all kinds of bells and whistles, um, to a trust that are, can't be added to a wheel.

just depends on your family [: 00:06:00

Um, I look at family. If you have young kids, usually a trust always makes sense. Um, if you have kids with, alcohol or drug problems or special needs, then a trust usually makes sense. So really, it just depends on your family. Um, another reason a trust makes sense is blending families. If you are second marriages and you have kids from previous marriages, then a trust usually solves that.

specific questions is, can I [: 00:07:00

They say, I am leaving my son. So and so 1. I don't know where that came from or why people feel the need to do that. You do not have to do that. What you do need to do is specifically name the person you want to disinherit. Like say, I am disinheriting my son, John. You need to name them because if you don't do that, they may have an argument that you accidentally left them out.

hat they're doing, then your [: 00:08:00

Um, meaning In a trust, you can pass things to your heirs that are protected from divorce, from creditors, or bankruptcy. So anything you leave your kids stays with them and no one else. Um, so the answer is yes. Uh, can I prevent my child's spouse from getting part of their inheritance? Yes, that is the main benefit of a trust.

When people come to me and we, they say, I love my son in law, but I want to make sure this stays with my daughter and my grandkids. You know, it happens a lot with family farms or land or, um, Yes, a trust can ensure that happens. Um, let's see what kind of trust is best for my family. And this is good cause it's really broad, but generally there's two kinds of trust, a revocable one.

le one and revocable is good [: 00:09:00

Now, an irrevocable trust, you lose a lot of that flexibility. But there are benefits of an irrevocable trust, like protection from estate taxes or maybe, um, long term care costs. Uh, there's a lot of benefits. So it just depends on your goal. When y'all come to talk with me, that's the first thing we sit down and say, What's the end goal?

What are we, what are we protecting for? What is, what do we want to have happen? And then I can tell you specifically if it's, um, revocable or irrevocable. Um, does a trust protect from nursing home care? Great question. And generally it can, a revocable trust does not protect from nursing home care. That needs to be said out there.

A lot of [: 00:10:00

You can scroll back up. It's one of the first handful episodes we did on long term care. Either you have to pay for your own care out of pocket, which is right now about eight to nine thousand dollars a month, or you can get on Medicaid and they pay the bill. But to get on Medicaid, you have to be broke.

heir name, they could get on [: 00:11:00

Um, so that's more of a specific conversation. Again, this is all educational, so don't take any of this and run with it, but come visit with me and we can talk about your situation. Um, we got time for a few more. Let's see. What if my trust owns nothing? Well, I don't know why you would pay for a trust that owns nothing unless it's by accident.

Because I always tell my clients, this is a stack of papers that cost you a lot of money until we put things in it. Meaning your trust is worthless unless you put your house in it, put your assets in it or make all of your assets go into the trust when you're gone. So We call that funding. The trust and unfunded trust is worthless.

that say. I'm putting all my [: 00:12:00

But then we actually get online and pull the deed, and the house is still in their name, the farm's still in their name. So it never actually got in the trust. A schedule is just an organizational document to let your trustee know what all's out there. Um, but it really means nothing. So you do the work to put your assets in your trust.

Um, How can I protect my state from lawsuits and creditors? Sorry, I couldn't really read that one. Um, Same thing as protecting from divorce. You can protect your estate from lawsuits and creditors. Um, and by estate, that means when you're gone. So once you pass away, we can leave things through a revocable trust in a protected manner that protects from all that.

f how you can protect things [: 00:13:00

Well, um, a bit, there's a lot of differences, but there's two different kinds of power of attorneys. First off financial and healthcare. So financial one controls just your finances. Healthcare controls. Just your health care. But I think what you're talking about with health care directive is, um, like a living will.

So what a living will says is you authorize your power of attorney to make end of life decisions for you. So that's a, you're directing them health care directive. Um, so that's the difference. It just says, That they can make end of life decisions for you and what you would want done, but it doesn't name that person because your power of attorney names that person.

re is a HIPAA authorization. [: 00:14:00

Um, What happens if I become incapacitated and don't have a power of attorney? Good question. So that is guardianship. So if you're incapacitated and you have no estate plan, then your heirs or whoever is in charge of you, or wants to be in charge of you, has to take it to the court system and enter a guardianship proceeding.

Um, so that's how that works. So, and always tell clients is if they send the court system, it's out of your control. So they may name someone you love and trust, or they may not. So why not have a power of attorney where you name someone, you know, and you trust to make decisions for you to take all the guesswork out of it.

power of attorney is where I [: 00:15:00

But generally my advice on that is anytime a major life. happens. Um, think death of a beneficiary, of a trustee, of someone that's named in your estate plan in any manner, or maybe you have birth, you add new kids or new grandkids and we want to add them in. Um, those are kind of the main ones. But also in a major change in your assets.

. I'd say most of the time a [: 00:16:00

It's worth a conversation though to keep your, um, estate plan updated. Um, just check in with your attorney regularly and make sure that assets got in the trust. I always say I want to know what's in the trust so when you pass away I can sit there with your spouse or your loved one and say this is what we own, this is what we do now.

So they have someone walking them through the process whenever you pass away. That's the last thing they want to think about when they're, um, mourning your death, is trying to figure out, you know, what all accounts you own, how do we pay these bills, where's everything at, we want to at least take that headache off of their hands.

o, I would assume. So. Well, [: 00:17:00

So you create your own trust and will. And this kind of Um, went on a rant about this, uh, maybe it's last year's Super Bowl. They had a commercial, Matthew Stafford was advertising for trust and will, and I was, I just said, there is no way that he is using trust and will to do his estate plan. And if he is, he's gonna owe a lot of money when he dies.

ay me for is the advice, um, [: 00:18:00

So be very careful with these third party software services. Um, and yeah, there's just no way Matthew Stafford would trust himself with, uh, Um, trust and will, but, um, that's all I got. I'll try to do these every, uh, so often. So if you have some questions. Just email them to info at ljenningslaw. com and we will answer them probably right then through that, um, email, but also we'll answer them on a podcast for everyone else eventually.

And if you have more questions, you know, this is all just general advice, um, but set up a meeting with us and we can talk through your personal situation because none of this will work for you unless I know your exact assets, your family situation. Then I can offer Taylor advice that's. You know, toward you.

believe that everything is a [: 00:19:00

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