Episode 159
What Is The Estate Attorney's Job - EP. 159
This episode dives into why teaming up with a competent attorney is essential for your financial well-being, especially when it comes to estate planning. We’ve got our go-to legal expert, Kristen Luce, Partner at Coughlin and Gerhart LLP, back in studio to share how the right attorney can make all the difference in ensuring your assets are handled according to your wishes.
We chat about the importance of communication, transparency, and doing your homework when choosing legal professionals—because let’s be honest, nobody wants to leave their loved ones tangled in a legal mess. Ask those tough questions and gauge how they respond. The right professionals will be eager to help you navigate your unique situation with ease, not just shove you into a one-size-fits-all plan.
Plus, we tackle the misconception that estate planning is only for the elderly; hint: if you're 18 or have something you care about, it’s time to get your ducks in a row!
Takeaways:
- Understanding the importance of vetting financial advisors and attorneys can significantly impact your financial future.
- Collaborative efforts between attorneys and financial advisors can lead to better outcomes for clients' estate planning needs.
- Don't skip out on estate planning; even young adults need to have their own legal documents in order.
- Beneficiaries can trump what’s in your will, so it's crucial to check your accounts regularly for accuracy.
- Choosing a fee-only financial planner can help eliminate conflicts of interest that might arise with commission-based advisors.
- Always communicate your wishes clearly; ambiguity in estate planning can lead to family disputes down the line.
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About Your Co-Hosts:
Travis Maus has been in financial services for over fifteen years. He is a Senior Wealth Manager and Chief Executive Officer at S.E.E.D. Planning Group. Travis also hosts the Unleashing Leadership Podcast, where he dissects some of his favorite books on leadership and how you can apply it to your business or life.
Steve Campbell has over a decade of industry experience and is a Senior Marketing Director at S.E.E.D. Planning Group. Steve also hosts the One Big Thing Podcast, an interview-style show meant to inspire and encourage 30 and 40-year-olds going through difficult seasons of navigating marriage, raising kids, and growing personally.
Transcript
Foreign.
Speaker B:Welcome to Ditch the Suits podcast where we share insights nobody in the financial services industry wants you to know about.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:So buckle up and welcome to Ditch the Suits.
Speaker B:Hey guys, Steve Campbell from Ditch the Suits with a special announcement.
Speaker B:We've recently transitioned all of our episodes to Patreon.
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Speaker B:Head to patreon.com and join our Ditch to Suits channel and the link is in the show Notes.
Speaker A:So on this podcast we regularly talk about vetting professionals and how to know if you have competent advisors and even if you don't want to have an advisor or maybe you don't like having advisors or you don't want to pay people or you don't think you need them for whatever reason.
Speaker A:As we're talking about attorneys and Kristen Luce has joined us again for episode number two, this little mini series, Attorneys do play a very important role regarding your financial, your family's financial stability.
Speaker A:And I believe that the best situation that you have is when attorneys and advisors, financial advisors are working together because, because there's information that can be shared for the benefit of the client and perspective.
Speaker A:And I like to call it kind of like a liaison with.
Speaker A:Yep, we could definitely do it like that.
Speaker A:But remember you said that this was a big thing in your life and they need to know that that's a big thing in your life.
Speaker A:Otherwise what they're trying to do for you is not going to work type of stuff.
Speaker A:And then we've worked with attorneys a lot of times that'll come back and say, hey, this happens a lot when we're working with like out of state clients where we'll be working.
Speaker A:I think of a case where I was working with an attorney in Iowa and he's like, well, in Iowa, this is kind of how they do it.
Speaker A:Which would be very different than what you're used to.
Speaker A:But this is the best way that we could set that.
Speaker A:And it was a wonderful solution to a problem.
Speaker A:That's a great situation when there's enough professional respect that the attorney comes to the advisor, the advisor goes to the attorney and says, hey, we think that this might be a better way because we happen to know something that you don't not in a confrontational way or I'm trying to do your job way, but in a we're worried about the best interest of the client.
Speaker A:So regardless, we think, you know, of your perspective.
Speaker A:We do believe that attorneys play a really critical role and we don't think you should go to legalzoom.com and so we've brought our friend Kristen on here to help talk about, you know, the perspective from an attorney today.
Speaker A:And so Kristen Luce, our attorney partner at Coughlin and Gerhardt, chair of her firm's Trust in the State practice group, she's joining us for episode two.
Speaker A:Yeah.
Speaker B:And if you missed episode one, we laid the ground with, with Kristen's credentials and experience and how, you know, we work really hard.
Speaker B:Travis and I.
Speaker B:This is Digital Suits podcast.
Speaker B:I am Steve Campbell.
Speaker B:I serve as your senior marketing director at Seed Planning Group.
Speaker B:Travis, the guy that was on the first point, he is our CEO at Seed and Seed is a fee only financial firm.
Speaker B:So this show is all about us bringing our experiences with operating Seed and helping you get the most of your money in life.
Speaker B:And we took the first episode to kind of lay the groundwork for who you are because as we get into this, trust is really important.
Speaker B:Making sure that people know anybody that we bring onto this show, we vetted.
Speaker B:We know this wasn't just us trying to put anybody in front of our listeners, but saying we've done work personally with you as a firm.
Speaker B:We know how you operate, we know how your firm operates.
Speaker B:And so if you want to go back and listen, if you got 41 minutes, that first episode was greatly 20 minutes.
Speaker A:If you listen two times speed, that.
Speaker B:Is a lot of fun with podcasts that you can, you know, get into.
Speaker A:A lot of talk fast.
Speaker B:But we talked about a little bit with estate planning and some of the challenges and where the starting point is and for, you know, those.
Speaker B:So for those that are here to champion you, welcome to Digital Suits.
Speaker B:We're going to have a lot of fun today getting more into, I think, the how to's of estate planning.
Speaker B:Hey, guys, Steve Campbell, one of the co hosts here on Digital Suits, want to take one quick moment to tell you about something that's near and dear to my heart.
Speaker B:This is my very own podcast called the One Big Thing.
Speaker B:On the One Big Thing, I welcome guests from all walks of life.
Speaker B:We take about 30 minutes to help share their story and really culminate around this one big thing that they want to let all of you know as a listener.
Speaker B:These are going to be practical ideas and ways of looking at life that you can implement to become the best version of yourself.
Speaker B:On the One Big Thing, we want to help you overcome the challenges that are holding you back.
Speaker B:So if you'd like a good, feel good story that helps you overcome challenges, check out the One Big Thing which is available on all major podcast platforms.
Speaker B:Now let's get back to the show.
Speaker A:Well, Kristen, you didn't leave running and screaming from the first episode.
Speaker C:I did not, no.
Speaker A:Well, welcome back.
Speaker A:I want to jump.
Speaker A:I want to jump right.
Speaker A:In talking about the industry, we were talking a little bit before the episode started.
Speaker A:We really do believe that people should work with fee only planners, not fee based, fee only fee.
Speaker A:And this is.
Speaker A:And I was sharing with you and you know me from when I pretty much started my career, I started in the insurance broker dealer side of the industry, which is all commissions and worked myself all the way around to fee only.
Speaker A:And I from walking that journey from being all commissions to hybrid commissions, fee what they would call fee based to fee only.
Speaker A:I don't believe that people can manage a conflict no matter how good of a person they are if that commission's hanging over their head.
Speaker A:I remember when we decided to close our insurance agency, the reason why we did was because, look, let's say, Kristen, if you sent us a client, we would be like, hey, we think you need to buy this half a million dollars of life insurance.
Speaker A:And you know, we kind of feel obligated to tell you that we're going to make $25,000 to sell this policy to you because we're a fiduciary.
Speaker A:And then if I'm the client, though, on the other side of that, I'm thinking, do I really need this $500,000 policy that they're going to make $25,000 of?
Speaker A:And I really wanted to be in a situation where we could just yell at the client and say, buy the $500,000 insurance.
Speaker A:I don't care who you buy it from, but you need it and not have them thinking, what are you getting out of this?
Speaker A:So that's kind of how we've come full circle.
Speaker A:So when I say so called financial advisors, everybody who's not fee only, they can be a financial advisor, but they certainly can't carry the same fiduciary weight.
Speaker A:I think there's going to be limitations to their fiduciary responsibilities.
Speaker A:But I think the same thing for attorneys and attorneys by nature are in that kind of fiduciary space.
Speaker A:You do have some legal obligations, right?
Speaker A:Could you explain that A little bit for our listeners, because I don't think our listeners know that there is a responsibility of attorneys to their clients.
Speaker C:There's a huge responsibility.
Speaker C:Yeah.
Speaker C:There's a whole code of ethics that we're governed by.
Speaker C:There's some basic ones like confidentiality, but we are supposed to be giving advice to our clients that are.
Speaker C:That is in the client's best interest.
Speaker C:So in nobody else's best interest, per se.
Speaker C:So, yeah, that's a huge obligation on attorneys.
Speaker A:I think that gets also back to the structure, and it seems like a very common basic thing, but attorneys get paid.
Speaker A:So somebody in your situation doing an estate plan, there's probably two ways you're going to potentially get paid, right?
Speaker A:There's a flat fee or there's an hourly or some combination, correct?
Speaker C:Yes.
Speaker C:Yep.
Speaker C:So I personally do a lot of flat fee work and I'll, I'll quote that to the client right up front so they, they know coming into it what the process should look like and how much it should cost.
Speaker A:So a lot of times clients are nervous about an attorney because what's it going to cost right there?
Speaker A:They can get it out of the way.
Speaker A:You can find an attorney that'll charge you a flat fee and a lot of work.
Speaker A:There's going to obviously be some work where you look at and go, I can't.
Speaker A:We have no idea how much work this is going to take.
Speaker A:But the last thing I want, you're going to know.
Speaker C:Yeah, well, the last thing I want is a client to not ask questions because they're worried about time.
Speaker C:You know, how much time is this going to take?
Speaker C:Because they believe that they're being billed by time.
Speaker C:So, you know, we're going to do the right thing by the client for the right reasons, and I don't care how much time it takes.
Speaker B:So, yeah, I do have a question because I'm the first point of contact for seed when people call in and I speak to callers from all over the country.
Speaker B:And sometimes people will say on the call, like, you know, I'm shopping advisors, and I love it because I'm like, great, you should do that.
Speaker B:And I'll give them reasons.
Speaker B:And it almost like throws them off because they're like, what?
Speaker B:I'm like, no, you really should work until you find the right professional with attorneys.
Speaker B:Do people shop attorneys or is that like an industry where you kind of make a decision and you just go like, do people say that to you when they talk with you, Kristen?
Speaker B:Just, you know, we're also looking at other attorney and what has helped you maybe help that conversation?
Speaker B:I, it sounds like there's transparency, the flaffy.
Speaker B:Is there anything else that you just help put people's why they're really saying that is the undercutting.
Speaker B:You know, they don't want to make a bad decision.
Speaker B:They don't want to be insecure.
Speaker B:So like how do you help somebody who says, hey, just so you know, we're, we're vetting attorneys.
Speaker C:Yeah, no, I, I, I think you, number one, you, you want to engage with them, right.
Speaker C:So they can get to know me.
Speaker C:They want, they want to understand how the communication flow is going to happen.
Speaker C:They want to understand the timelines involved.
Speaker C:Usually when people want to do estate planning, they are looking for an actual end product.
Speaker C:How long is it going to take to get that in hand?
Speaker C:They want to know how much it's going to cost and what the process is going to be.
Speaker C:And I think those are very fair questions.
Speaker C:And I would encourage our listeners today they should be asking those questions.
Speaker C:And if a lawyer or a law firm can't answer those basic questions, they probably should continue their search elsewhere.
Speaker C:Yeah, no, I think those are prudent consumer based questions.
Speaker A:And let's talk about that for a second because I think there's this idea that everything should be cheap, especially if you could do it.
Speaker A:You see it all the time.
Speaker A:I don't need a financial, there's just stuff, especially when it comes to law.
Speaker A:I've been doing estate planning with clients for a very long time and I learned something new all the time when I'm doing estate planning.
Speaker A:Things that I thought that that's the, I thought this was the way the law was.
Speaker A:And then the law firm we've been working with, I had another law firm that we work with for.
Speaker A:We've been, I've been working with for 17 years.
Speaker A:Like, well, that happens to be that person's opinion at the firm.
Speaker A:But the way the law is like this, so the other attorneys do it that way and it's like, wow, okay, that's news to me that yeah, that's not actually the law.
Speaker A:It's more of the gray area and it's an interpretation issue.
Speaker A:And so it's like one of those things where you learn that you kind of get what you pay for.
Speaker A:But on the flip side of that, I've seen people spend 15, $20,000 on estate plan.
Speaker A:It probably should have cost $1,300.
Speaker A:So it's like you get what you pay for so you have to be cognizant of too cheap, but you also have to be cognizant of too expensive.
Speaker A:So how do you, how do you vet that a little bit?
Speaker A:Do you have any advice?
Speaker A:So if somebody comes in and say, hey, and I'm just making something up, Kristen, you quoted US $1,800 that estate planning, this other guy down the road, he's going to do for 300, you know, what's your spidey sense saying?
Speaker C:Yeah, I mean, I think the clients need to understand what that includes.
Speaker C:Right.
Speaker C:Is it just a will?
Speaker C:Is a will power of attorney and a health care proxy?
Speaker C:Is it for a trust, you know, or are we going to have a discussion about those two things?
Speaker C:Are we maybe dating some real property?
Speaker C:You know, like I just would be very weary if I were a potential client, if it was sounding very cookie cutter, because that is not how the process should be.
Speaker C:It's totally going to be client focused and asset focused.
Speaker A:I've seen that situation before where it's very inexpensive and they come back with this two page will.
Speaker A:And like a lot of people want it simple.
Speaker A:I'm going to tell you, if you have my opinion, if you have a two page will, I don't think you have a complete will.
Speaker A:I know legally you might have a complete will, but from an estate planning, from a financial advisor perspective, I'm going to look at that thing and there's going to be components missing that I think should be there.
Speaker A:The other thing that I've seen before too is that same two page type of will will be structured in a way that the directives are not necessarily clear.
Speaker A:I'm trying to think of like an example I had was I'm going to leave my money to my kids or the survivors of them.
Speaker A:And it's the survivors of the kids or the surviving children, we don't know.
Speaker A:And there's a term called per stirpes which kind of handles most of that anyway.
Speaker A:And we went back to the attorney and said, we need you to define what this paragraph means because that could be a place of contention and we can't necessarily set up some of the beneficiary work that we wanted to do a way that you've written this.
Speaker A:And they said, well, we know what we mean.
Speaker A:And it's like, yeah, but that's not what's going to happen if somebody challenges this thing.
Speaker A:It doesn't matter if you know what you mean.
Speaker A:It matters if it's going to be interpreted correctly.
Speaker A:I've had another attorney tell somebody we'll do the Will and the power of attorney.
Speaker A:But the healthcare proxy thing, that's between you and your doctor.
Speaker A:Do it when you're at the doctors and it's like, no, it's really between you and your family and you can't do it on the way to the doctor if you, after you had a heart attack.
Speaker A:Well.
Speaker B:And within our world as a fee only firm, there's two, two things that we always give new people.
Speaker B:We engage with a form adv, which is the soup to nuts about seed planning group, who we are, the programs we have, the costs, and then you have what's called a form crs.
Speaker B:So when a new person reaches out to seed, I say, hey, these are things you have to have.
Speaker B:And that form CRS is how you operate as a business from being fee only fee.
Speaker B:And there's, there's, there's documentation that we can give them that says, hey, this is who we say we are.
Speaker B:Every person you meet with, you should ask for this.
Speaker B:Is there anything in your world as an attorney or Coughlin and Gerhardt stance that you guys give that helps a consumer?
Speaker B:Is it just transparency?
Speaker B:Is it correspondence?
Speaker B:But is there anything similar to that in your world that somebody should be asking for or like a way to.
Speaker A:Look up the attorney?
Speaker B:Yeah.
Speaker C:Well, I mean, I'm not sure if this is answering your question.
Speaker C:I think it is.
Speaker C:But you know, when a client calls in and they have said, I want to meet with Kristen, often I'm sending out not only that questionnaire that we talked about last episode, but also an engagement letter that, that would spell out, you know, what they should be expecting, how much it's going to cost and what the process is going to look like.
Speaker A:A little bit of professional decorum that you're looking for.
Speaker B:And I got, I gotta imagine that's helpful, right?
Speaker B:Because if you're, if you're on a podcast, you're here seeking information and if you're brave enough to raise your hand and say, look, we need help.
Speaker B:I, I think the biggest thing that stops people is they don't know what to expect, not even moving forward with somebody.
Speaker B:It's just the small steps in between of what is this going to experience be like, what do emails look like?
Speaker B:So I'm sure just having that engagement letter and I'm not sure if that's common for all attorneys or just how you do it, but I would think that on my end, if I knew exactly what to expect, communication, what it was going to cost, that would help you have a leg up.
Speaker B:Because then someone says Okay.
Speaker B:I kind of know what I'm getting into, so.
Speaker A:So let's.
Speaker A:Let's change gears a little bit.
Speaker A:At what age do you think people should be interested in estate planning?
Speaker A:Because a lot of it's for old people.
Speaker C:No.
Speaker C:Yeah, we'll define old people.
Speaker A:Old people are over a hundred.
Speaker C:Yeah.
Speaker A:A lot of people think for old people.
Speaker C:Yeah.
Speaker C:No, I.
Speaker C:The reality is, if you do not do your own estate planning, as soon as you turn 18, New York or whatever state you live in, they have a default plan for you.
Speaker C:So, you know.
Speaker C:Right, yeah.
Speaker C:If you're not comfortable with the default plan, you.
Speaker C:You need to have your own.
Speaker A:And who knows what the default plan is?
Speaker A:I've never had a client that could tell me what the default come in and say.
Speaker A:We say, do you have your estate planning done?
Speaker A:But my.
Speaker A:My, you know, so and so knows what to do is like.
Speaker A:But so and so may not have any choices.
Speaker A:That's not how it works.
Speaker C:No, no.
Speaker C:I mean, there.
Speaker C:There are intestacy statutes in all 50 states that would determine who has priority to act, and sometimes that could lead to a real mess if you have people with equal priority trying to be in charge.
Speaker C:Um, you would never.
Speaker A:Family, though, fighting over this stuff, right?
Speaker C:Oh, yeah, yeah, yeah.
Speaker C:Never.
Speaker C:Yeah.
Speaker C:And then there's also statutes that say who inherit in how they inherit.
Speaker C:So honestly, I think as soon as someone turns 18, they probably should be looking at a power of attorney and a health care proxy.
Speaker C:And then probably once people start acquiring assets for themselves, you know, they're gonna want to think about some sort of estate plan at that point in time, especially with big life events like marriage, additional children.
Speaker C:Children are huge.
Speaker C:A lot of people assume, you know, that everything would just go to their spouse if they pass away.
Speaker C:That's not true.
Speaker C:Kids usually inherit as well.
Speaker C:So.
Speaker C:Yeah.
Speaker A:Yeah.
Speaker A:In New York, we had that happen one time.
Speaker A:We had somebody came to us after their dad had passed away, and mom, who still needed to live, didn't inherit everything.
Speaker A:Each of the kids inherited a portion of the assets, and it really kind of mucked things up for mom.
Speaker A:It really kind of made a mess.
Speaker A:Well, and I.
Speaker B:And I would just say, too, not from a morbid standpoint, but we've seen how much the world has changed in the last few years, with world events and people losing their lives too soon.
Speaker B:I think we always assume estate planning is for those that get sick or something happens, but, I mean, you turn on the nightly news and there's accidents and there's things.
Speaker B:So a lot of Our listeners.
Speaker B:Kristen ditched the suits.
Speaker B:We had a lot in their 30s, 40s, 50s.
Speaker B:So your ears are hopefully pinging.
Speaker B:If you don't have anything in place that maybe it's a good time to start the conversation.
Speaker A:You also have states.
Speaker A:I know New York is in this case.
Speaker A:I don't remember the exact Christian.
Speaker A:Maybe you can fill us in.
Speaker A:But you also can't necessarily, and I think it's probably state by state, disinherit your spouse.
Speaker A:We had somebody one time who's like, I don't want to give any money to my spouse.
Speaker A:And that's what they were trying to set up.
Speaker A:And we're like, no, that's.
Speaker A:You can do that.
Speaker A:But.
Speaker A:But she.
Speaker A:She has the right to claw back.
Speaker C:Yeah.
Speaker C:The right of election.
Speaker C:Yeah.
Speaker C:Yep.
Speaker A:So New York, what is it?
Speaker A:Is it a third or.
Speaker A:Or something like that?
Speaker C:There's actually.
Speaker C:It's kind of a complicated statute there.
Speaker C:There's a statute that.
Speaker C:Yeah.
Speaker C:Certain assets, though, what it would be applicable to, and some can be excluded, but.
Speaker A:Gotcha.
Speaker A:But yeah, just say, well, I don't like my spouse.
Speaker A:I'm going to get a divorce if I ever get around to it.
Speaker A:But in the meantime, I go meet with my financial person and change all the benefic to your.
Speaker A:Your new significant other someplace.
Speaker A:Just do that spouse have a right to that stuff?
Speaker C:You.
Speaker C:You can change it, but if you pass away, your spouse has the right to pull it, you know, a certain amount back for their benefit.
Speaker A:Yeah.
Speaker A:Which is.
Speaker B:It's.
Speaker A:That seems like it could be a little bit of a messy process.
Speaker C:It's a terribly messy process.
Speaker C:Yeah.
Speaker A:Let's go to the other end of it.
Speaker A:So you should get started.
Speaker A:I always say, as soon as you have something you care about, so you have a house, you have kids, you have a spouse, you have a parent, a sibling that you care about.
Speaker A:Why do you want to be a burden on somebody else?
Speaker A:Try to get things set up.
Speaker A:But especially with kids with guardianship and that stuff.
Speaker A:But what about if you wait too long?
Speaker A:So the person says, okay, you know, I'm never gonna die.
Speaker A:And then we get.
Speaker A:And we just wait too long.
Speaker A:They're no longer.
Speaker A:They're at the point where somebody needs to use a power of attorney to be able to manage their finances for them.
Speaker A:What happens then?
Speaker C:Yeah.
Speaker C:If they don't have a power of attorney, we're looking at a guardianship.
Speaker A:Guardianship.
Speaker A:We were talking about that in our last episode.
Speaker C:Yeah.
Speaker C:It's a whole court process.
Speaker C:There are lots of attorneys that get involved in A guardianship, you often have someone who's representing the petitioner.
Speaker C:Then the court will appoint someone to represent an incapacitated person.
Speaker C:And then other people, you know, your closest family members, set out by statute, they have the right to be involved.
Speaker C:And sometimes they will get representation too.
Speaker C:And it's kind of a two pronged analysis.
Speaker C:One is, is the person incapacitated?
Speaker C:You have to prove that to the satisfaction of the court.
Speaker C:And then two, you structure the guardianship in what they call the least restrictive means possible.
Speaker C:So a guardianship is supposed to be tailored to the person's incapacity.
Speaker C:They're supposed to be given as much independence as they can handle.
Speaker C:But.
Speaker C:But even in a slam dunk, this person is definitely incapacitated.
Speaker C:It's a court proceeding, it's actual litigation, and it can be very expensive.
Speaker A:And I know just from experience, you get towards the end of life and not all kids get along.
Speaker A:And when there's money involved, that's a very easy place for the kids.
Speaker A:If you leave it up to the kids to have to sue for guardianship, you can just set off a firestorm.
Speaker A:I think this seems like it can be very expensive and time consuming if.
Speaker C:You have people feuding over who should be in charge.
Speaker C:It's very possible to spend 30, 40, $50,000 on a guardianship, which all could be avoided with the power of attorney.
Speaker A:And you have to get a power of attorney before you're incapacitated.
Speaker A:Right.
Speaker A:Because you have to be of sound mind.
Speaker A:I think all attorneys require you to sign some kind of affidavit.
Speaker A:Right.
Speaker A:I forget what the right legally is, but it's like I'm of sound mind and I'm entering into this agreement with the acknowledgment of what I'm trying to do or something like that.
Speaker C:Yeah, yeah.
Speaker C:So in New York, and a power of attorney is witnessed by two witnesses and then it's notarized.
Speaker C:And yeah, as an attorney, I can't have someone sign a document that they cannot comprehend.
Speaker A:Gotcha.
Speaker A:So you have to be at a point where you.
Speaker A:So, so if you've already had a stroke and you're on, on your way, you know, from the hospital to the nursing home.
Speaker C:Yeah.
Speaker A:You're not going to be able to likely sign your power of attorney at that point.
Speaker A:And even if, even if you could, like, even if they came in and Kristen, you went to the nursing home and you said, okay, this person is with it.
Speaker A:They're just physically not there, but they're mentally there.
Speaker C:Yep.
Speaker A:If the person can't sign their name.
Speaker A:A lot of financial institutions right now will actually reject that power of attorney because they want their affidavit signed saying that.
Speaker A:That.
Speaker A:Because they're worried about elder fraud.
Speaker C:Sure.
Speaker A:So if you don't have that power of attorney on file at a lot of the investment firms, the investment firms are really going to give you a very hard time accept.
Speaker A:If they'll accept it at all.
Speaker A:I thought there was a law that was passed saying that they had to, but they will.
Speaker A:I can just tell you currently, they will fight it like crazy if you haven't followed their process to establish on file when the person could still sign where they said, yes, this is my power of attorney, and here's a copy of the document.
Speaker C:Yeah.
Speaker C:And, you know, as an attorney, I do not enjoy the situations where I have to make a trip to a nursing home or a hospital to get documents signed because someone's already in a compromised situation.
Speaker C:Right.
Speaker C:You know what I mean?
Speaker C:It's ideal to do it when you're fully competent.
Speaker C:There's just less possibility for those documents to be challenged later on by anybody else.
Speaker A:And the challenge part is a good point.
Speaker A:I've seen this.
Speaker A:You can.
Speaker A:So let's say that you take, you know, mom and dad have maybe not updated their estate plan for 50 years.
Speaker A:And then, you know, mom passes away, and all of a sudden Johnny comes in and says, you know what, dad?
Speaker A:We're going to go get your estate planning done.
Speaker A:And the whole.
Speaker A:As far as anybody knows, mom and Dad's money was gonna be split equally between the three kids.
Speaker A:And then somehow dad decides 50% is gonna go to kid one, and then the other 50% is gonna be split between the other two kids.
Speaker A:That.
Speaker A:Which happens, frankly, fairly.
Speaker A:I think it happens often.
Speaker A:I've seen it happen multiple times in my practice.
Speaker A:That's a place where you may have legally done it.
Speaker A:You know, this planning with dad and.
Speaker A:And even if you have the power of attorney, you were given the rights to do it if you wanted to do it.
Speaker A:And maybe dad told you he wanted you to do it, but now all of a sudden, you're doing this at the end of life.
Speaker C:Yeah, yeah.
Speaker A:These things got a.
Speaker A:Was a probate court that they're going to go to.
Speaker A:Like, how does.
Speaker A:Like, what happens?
Speaker C:Yeah, typically the estate gets opened, and then you're going to have some sort of object and try to pull those assets back into the estate to have them divided in.
Speaker C:Divided in an equitable way.
Speaker C:Typically.
Speaker C:And so the person's competency is the Key to all, how you are able to walk those back.
Speaker C:So, yeah, signing documents towards the end of life is not ideal.
Speaker C:And especially from the legal standpoint.
Speaker A:And litigation is expensive.
Speaker A:And I mean, yes, it's heartbreaking.
Speaker A:It's a horrible process to go through.
Speaker A:I mean, I don't know.
Speaker A:Attorneys probably like, because that's what you do.
Speaker A:Like, I know there's attorneys that are not me, but I think it's, it's like if you want to, if you want to have an anxiety attack, make a habit of going through litigation.
Speaker C:Well, I mean, people have worked their whole lives, right.
Speaker C:And we're going to go ahead and give it, turn it all over to a bunch of lawyers because we're going to fight.
Speaker C:And you know, that's estate planning is like the, the opposite, opposite goals.
Speaker A:So that's the power of attorney.
Speaker A:But I think we answered the other part of the question.
Speaker A:You can't get your will done if you've waited too long.
Speaker C:No.
Speaker A:Right.
Speaker A:So if you, if, if you are Mr.
Speaker A:Or Mrs.
Speaker A:Independence and you just don't want to do it or you don't like attorneys, and then your health declines and the kids are coming and try to help you get this stuff done so that they don't have to go to court and I think it referred to as suing for guardianship.
Speaker C:Yeah, right.
Speaker A:They don't have to go to court and sue for guardianship.
Speaker A:You know, if you've waited too long, they can't even get your will set up.
Speaker A:Right?
Speaker C:They cannot.
Speaker C:No.
Speaker C:Even with a guardianship in New York, you can't do someone's.
Speaker A:Oh my goodness for them.
Speaker C:No.
Speaker A:Okay, so it's, it's, it's, it's done.
Speaker A:You're, you're gonna follow the rules of New York.
Speaker B:That default pan, the default plan.
Speaker A:Yeah.
Speaker A:Well.
Speaker B:And Kristen, I think about, okay, we got a listener in the car driving and they're like, shoot, I don't, I don't have anything.
Speaker B:There's some low hanging fruit that you can go do today.
Speaker B:Right.
Speaker B:People that just have assets checking beneficiaries on file.
Speaker B:Can't tell you the number of times I've spoken to corporations and businesses of people of all ages.
Speaker B:And you just have people that have never put their spouse as a beneficiary or taken an ex spouse off as a beneficiary.
Speaker B:And so log into your account tonight.
Speaker B:Do yourself a favor, listen to, ditch the suits, log into your computer, check your beneficiaries.
Speaker B:Because I think that the estate side is still so overwhelming with people that they're just not even doing the small things that they can do.
Speaker B:And then a lot of people don't even realize too, the importance of beneficiaries and how they can supersede what's in your will.
Speaker C:And so, yeah, I'm so glad you brought that up because if, if the listeners are talking with an attorney that is not asking about beneficiary designations run, that should be a warning sign as well, because so many people have assets that do pass by beneficiary designation.
Speaker C:And I, and you're right, those supersede.
Speaker B:I've talked to people on the phone that while I'm talking and I'm talking about their assets, they go, oh, wait, I forgot, I got half a million dollars in an old 401K.
Speaker B:It's like, what do you mean, wait?
Speaker B:Like people, when it comes to financial tools, just sometimes life is overwhelming.
Speaker B:And so one of the things is you have all these accounts go in and just check your beneficiaries.
Speaker B:That's a very simple thing that you can do.
Speaker A:That brings up a good point though, too.
Speaker A:What Kristen is going to do in a will when she drafts a will.
Speaker A:Let's say that you have children or grandchildren and you want money to go to the children, to grandchildren, but you want to make sure that if there's a special needs, it goes in a special kind of trust or if they're not of age, you don't want to give a 21 year old a million dollars.
Speaker A:So you might say put it in Trust for a 21 year old that actually cannot get captured on a traditional beneficiary form.
Speaker A:So what has to happen is, and I have never run into another financial advisor who's actually doing this.
Speaker A:And that's just maybe the size of the sandbox that I'm playing in because I'm certain that there's other really good firms out there who are, who are closing the loop on this.
Speaker A:But what happens is Kristin does her job and she does her job really well.
Speaker A:But then the planners never come back and update the beneficiaries.
Speaker A:And we call them complex beneficiaries.
Speaker A:They don't draft the beneficiary language.
Speaker A:And somebody will say, well, that's legal.
Speaker A:It's not legal work.
Speaker A:The will was legal work.
Speaker A:We're just saying, go, follow the will, right?
Speaker A:And what it is, is it's saying, look, you wanted money to go to your child unless your child was under the age of 35, in which case it's supposed to go to their trustee.
Speaker A:And it's spelled out in the will, but the trust isn't created yet because it's only going to be created if you die before the child's 35 and the child is in fact going to inherit something.
Speaker A:So follow this paragraph of the will.
Speaker A:Basically, investment company.
Speaker A:And so you have to create that beneficiary designation in a way that the financial company is actually going to accept it, which is very different.
Speaker A:Kristen can list out all different kinds of.
Speaker A:She can carve up a will and assets in any thinkable way.
Speaker A:But it doesn't mean the financial company is going to do what you're trying to do unless you push everything through probate.
Speaker A:And that a lot of times is not the right idea.
Speaker A:Or we have to create an expensive trust and put things into a trust sometimes, and I know not all trusts are expensive, but some assets can't go in a trust, right?
Speaker A:Or it's not appropriate.
Speaker A:So the advisor has to come back on the back end and work with the attorney.
Speaker A:Actually, I mean, we learned how to do this because we would go to Kristen and we would go to other attorneys that we've worked with and the law firms and the attorneys taught us why it was important to reference certain things so that it actually happened the way that you wanted it to happen.
Speaker A:And it actually reduces the cost and the complications of the estate administration.
Speaker A:But you have to do it on the front end.
Speaker A:You know, like when somebody passes away.
Speaker A:Whatever those beneficiaries say, that's what happens.
Speaker A:So like you said, if the little for one kids going to your ex spouse, guess what?
Speaker A:It's going to the ex spouse.
Speaker A:It doesn't matter what you put in.
Speaker B:The will, but you're talking about you have, you have fidelity, you have, wherever you have your 401k, you have your beneficiary form.
Speaker B:You're talking about writing it in such a way with complex beneficiaries that people.
Speaker A:Will say, leave my money in my 401k plan because it's the cheapest investments ever.
Speaker A:Right?
Speaker A:And you know, it's all indexes and nobody can do anything better.
Speaker A:I have yet to find a 401 that can do complex beneficiaries.
Speaker A:So you also need to understand that there's certain things you will not be able to achieve depending on how your estate documents are written with where your investments actually are.
Speaker A:And the other thing that you have to realize, a 401K is a corporate account.
Speaker A:It's the organization's account.
Speaker A:They control it.
Speaker A:They allow you to have a sub account in it.
Speaker A:Which has your money in it, but it follows the rules of the corporate account, basically.
Speaker A:And so whatever their rules are about beneficiary designations is going to be what you could put on there.
Speaker A:And if you screw that up, that's a nightmare too all by itself.
Speaker A:I'm on a tangent.
Speaker A:This is supposed to be about Kristen.
Speaker A:So let's get back to Kristen.
Speaker A:Let's, let's talk about.
Speaker A:Because you mentioned it and I just, I, I really want to hit this part.
Speaker A:People's lives change a lot.
Speaker A:Like who you were 20 years ago or even five years ago, especially when you get into your 50s and 60s, tends to change very fast because of grandkids.
Speaker A:Work, not work, health issues.
Speaker A:With financial planning, a lot of things happens around age 70 because what happens is you get retired, you're worried about having enough money, you figured out you had enough money, you're coming up on RMD ages and you're getting a little bit older and you're like, okay, I'm not going to outlive this money.
Speaker A:Maybe I want to start giving money to the kids or charities.
Speaker A:So talk about a little bit about how people maybe change a little bit in your experience with their estate planning, you know, kind of as they go through the stages of life.
Speaker C:Absolutely.
Speaker C:Well, and I also think like at those different stages of life, there's different legal concerns on the horizons per se, you know, someone in their 40s, early 50s, you're just looking to have your estate plan put in place, you know, just, just because what if.
Speaker C:Right.
Speaker C:And then from there on they're going to want to pull it out.
Speaker C:As life changes, you have deaths in the family or you know, new family members enter or leave the family for whatever reason.
Speaker C:But then we start wading into the waters of worrying about asset protection, especially against costs, you know, like of skilled nursing home costs.
Speaker C:And that's a whole different level of planning that we'll engage in with our clients sometimes.
Speaker C:And sometimes we're not even touching the will, the power of attorneys or healthcare proxies that they'll stay.
Speaker C:But you know, there's that next level of planning.
Speaker C:So yeah, as life develops, there's, there's definitely different concerns.
Speaker A:So people are going to go through phases.
Speaker A:So, so then one of the last phases that, you know, time, time's up, right.
Speaker A:And we were checking out what client, somebody's passed away.
Speaker A:You as the attorney getting the phone call, just give us the bullet pointed kind of what happens from that point on for a typical, you know, in New York, a typical kind of Estate process.
Speaker C:Yep.
Speaker C:Well, when people pass away, they have two different types of assets.
Speaker C:They either have what we call a probate asset, and that is going to be something in, in that person's name that the only way we're going to get it out of their name is to go through the.
Speaker C:The estate administration process, which your state's law would govern.
Speaker C:If you have a will, the will is going to be how your assets would be divided.
Speaker C:If you don't have a will, again, we're looking at those intestacy laws, and that is a process.
Speaker C:You have to get the estate open.
Speaker C:You have to petition the court.
Speaker C:There are certain people by statute that need to be notified that your estate's being opened.
Speaker C:They're asked to consent to that.
Speaker C:If they don't consent, then we have another process that we go through to get the estate opened.
Speaker C:And then in New York, once the estate is open, it has to stay open for a minimum of seven months.
Speaker C:So it's a process that we work through.
Speaker C:The other type of assets that people have when they pass away are what we call non probate assets.
Speaker C:And those are assets because of the way they are owned, they automatically vest in someone or belong to someone immediately.
Speaker C:And so often with death certificates, we're able to pretty quickly process those.
Speaker C:So, you know, accounts may be jointly owned.
Speaker C:It would go to the surviving owner or if there's beneficiary designations, A trust is a non probate type of vehicle.
Speaker C:So when someone passes away, and I get that call based on what I just told you about probate and non probate assets, often I am quickly trying to figure out what process we need to do, which is very asset driven.
Speaker C:So someone passes away.
Speaker C:That would be the type of question you should expect to be getting, like, what are we dealing with?
Speaker C:And then in the world of probate, you know, in New York, we have something called a small estate, and you could use that for, you know, assets less than $50,000, but it can't be real property.
Speaker C:You know, do we fit into that or, you know, what's the most efficient way to move those assets through the probate process.
Speaker A:So I know Steve's got a final question for you, but before we get to that, that whole process right there, you've passed away.
Speaker A:And can somebody, can somebody do the probate process without an attorney?
Speaker C:It's possible.
Speaker C:Yeah.
Speaker A:Okay.
Speaker C:I mean, it's not often that I see that, but it is possible.
Speaker A:I can imagine there's a lot of pitfalls and a lot of issues there.
Speaker A:I guess where I'm going with this too.
Speaker A:From a advisory standpoint.
Speaker A:Sometimes people want to know, like, okay, what's the return gonna be if I come?
Speaker A:If I go to the attorney and have the attorney help me draft up documents, I'm gonna have to pay them $2,000 and what's the point?
Speaker A:You know, they can just deal with it after I'm gone.
Speaker A:Dealing with it after you're gone can be much more expensive if it's not set up right.
Speaker A:Often it is.
Speaker A:You might be very comfortable saying, I don't care.
Speaker A:I don't need a professional.
Speaker A:But the people left over are probably going to have to engage with a professional to clean it up, because most people have not administered a probate if they're not an attorney.
Speaker A:And if the first time that they're trying to do it themselves is on your stuff.
Speaker A:You know, I mean, come on, let's be realistic.
Speaker A:That's going to be messy.
Speaker A:But the same thing goes with the advisor.
Speaker A:Somebody says, you know, I don't want to work with an advisor.
Speaker A:I don't need anybody to manage my money for me.
Speaker A:That's not the only thing that a financial planner does.
Speaker A:In fact, they don't even have to manage your money for you, but helping you, like, we'll get a phone call somebody.
Speaker A:We had somebody pass away over the weekend.
Speaker A:And I get, you know, I got the email.
Speaker A:Mom passed away.
Speaker A:Here's when she passed away.
Speaker A:Okay, there's no panic, right?
Speaker A:There's no, like, like, look, there's nothing, you know, what's there.
Speaker A:We know everything is, there's nothing you have to do today.
Speaker A:Go be with family.
Speaker A:And so that triggers, okay, let's start working on the paperwork to transition the paperwork because we've already double checked all the beneficiaries.
Speaker A:The second thing is, is let the attorney know this is what happens.
Speaker A:So the attorney can get ready, but let the attorney know what's actually coming through.
Speaker A:So the attorney right off the bat knows if they're dealing with a small estate in New York, if they're dealing with preventable assets, or if they're just dealing with the, you know, things that are going to pass directly through along with any issues.
Speaker A:And the other component that we actually tie in there that a lot of times people miss when you're working with a good advisor, especially if, let's say that the kids aren't that close as far as intimate with all the details and everything that mom and dad have been doing, sometimes the reasoning that's baked into there, the attorney or the advisor can actually explain it to the kids in a way that's going to help from a perspective standpoint.
Speaker A:And I think that that's a pretty significant thing that a lot of times people take for granted is somebody's got to unpack what you've already done, you know, and number one, did you do it in a way that a professional is going to understand what the heck you did so that they can help deal with whatever you've done?
Speaker A:But number two, you know, is anybody going to be able to figure out what you've done?
Speaker A:I'm done.
Speaker A:Steve.
Speaker B:My turn.
Speaker B:Kristen, Because I deal so much with, with new people at Seed, you know, you.
Speaker B:I'm in a lot of those first meetings.
Speaker B:And you have within spouses many times a driver of the finances of the decision making when it comes to spouses.
Speaker B:I'm just curious, how often do you feel like spouses are on the same page when it comes to estate planning, meeting with you not only on the front side?
Speaker B:I think a lot of times when we think about estate planning, it's children that are taking over from mom and dad's estate, but you also have surviving spouses.
Speaker B:How prepared are people if they lose a spouse?
Speaker B:Because you have the emotional side, Is there anything just in your world that you know, especially if there was a decision maker?
Speaker B:Because that's one thing that I always ask when I sit with a couple is how prepared would your wife be or your husband be if something happened to you?
Speaker B:And it's, oh, they know where the Excel sheets are, they know where the accounts are.
Speaker B:And it's like, okay, but, like, are they going to be okay?
Speaker B:How prepared do you feel couples really are when it comes to estate planning?
Speaker B:And is there anything that you think could, could help somebody who says, gosh, this has raised our awareness.
Speaker B:Where do we go from here?
Speaker C:Yeah, it's funny, I often find that there's usually some sort of assumption between the couple as to who's going to pass first, which I find entertaining.
Speaker C:But you're right, you know, in some couple situations, there definitely is the driver, if you will.
Speaker C:I think in going through the estate planning process, they should expect, like, for example, if I had a couple and they, they've given me all their asset information and I notice, like, some of the, like, the house might be in one spouse's name or there's a whole bunch of accounts in the other spouse's name.
Speaker C:At that point in time, I'm having a conversation with them about, like, is there a reason we have it set up this Way, like should we be looking at making it, you know, so they pass in that non probate way, which is easier for the spouse, especially in light of the fact that they just lost their spouse and especially if it's, you know, the spouse who is in control.
Speaker C:Also, I think it's, it's appropriate to kind of think through if we have the spouse who's the non driver spouse, just to use, you know, your phrase, do we need that spouse to have help in some way?
Speaker C:Not too long ago I was sitting down with a business owner who said, you know, I've taken care of my business my entire life.
Speaker C:My wife has taken care of home.
Speaker C:She I don't have to worry about things at home, you know, the personal finances.
Speaker C:If I go down, there's no way my wife wants to get involved with my business.
Speaker C:So, you know, we're talking through, well, maybe, maybe, you know, their oldest son who's also in business would be appropriate to be a co executor or a co agent in that scenario.
Speaker C:So those are often questions that we're probably talking our way through during the pandemic planning process.
Speaker A:Yeah.
Speaker B:Well, this is our last one.
Speaker B:This we're going to throw out to you.
Speaker B:Kristen Loose, what would you want our ditch the suits listeners to know about estate planning?
Speaker C:I, I think a good estate planning attorney is going to make it an easy process for you.
Speaker C:So I think if you've got listeners out there that are overwhelmed with it, I think they should make some inquiries and, and find themselves an attorney who's going to make it easy for themselves.
Speaker C:And I think with those initial interview questions that we've already talked about, I think your, your listeners will be well equipped to go ahead and do that.
Speaker B:Yeah.
Speaker B:So it doesn't have to be scary if you don't want it to.
Speaker B:No, but you want to work with a good attorney who lets you know the options you have.
Speaker B:Because I, I hear that all the time as I let you go with people.
Speaker B:I need a trust.
Speaker B:And it's like, well, why, why do you need a trust?
Speaker B:And they're like, my neighbor has one or I went to an event or whatever.
Speaker A:Yeah.
Speaker B:And so there's a lot of misconceptions and so we, I think you' really nice job over these last two episodes of understanding that estate planning is essential if you're 18 years old or you have people you care about, as Travis said.
Speaker B:But I think you need to understand your options.
Speaker B:You have to know what you're paying for because cheaper always isn't better.
Speaker B:So if you work with somebody like Kristen who's transparent in their process and communicates well and sends you organizers and lets you know what it's going to cost, it doesn't have to be intimidating.
Speaker B:And I think not just communication but disposition is huge.
Speaker B:You want somebody who's not just going to communicate but also be the one that when life does fall apart, because it will at some point, are they the right person that you want to be helping you and your family?
Speaker B:So we'll put information in the show notes for anybody that wants to get in touch.
Speaker B:But as always, if you have questions for Travis and I, topics or people, hey, we're opening up this platform to talk with people like Kristen.
Speaker B:If you got individuals that you would want us to talk with, don't be a stranger.
Speaker B:Head over to ditchthesuits.com but Kristen Luce, thank you for being on as a guest.
Speaker B:Thank you for being a friend sharing what you know about the world of estate planning.
Speaker C:Very good.
Speaker C:This has been fun.
Speaker C:Thank you.
Speaker B:Thanks for checking out Ditch the Suits.
Speaker B:Be sure to write a review or drop a comment about this episode.
Speaker B:And if you want more like this, head over to ditchesuits.com you can send us a message and get in touch.
Speaker B:Let us know how we can help and be sure to share any topics you'd be interested in having us cover on the show.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:Thanks for being our guest and checking out Ditch the.
