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Estate Planning For Nurses · HPK Provident Advisors: The Weekly Bull

• 0:00
  Speaker 1: Welcome back to the nursing your nest egg podcast.
• 0:03
  Speaker 1: A man, brian.
• 0:04
  Speaker 1: Six episodes has flown by.
• 0:06
  Speaker 1: Well, they're fun to do.
• 0:08
  Speaker 1: Well, and when you can't shut up, it's really easy to record content you not me.
• 0:13
  Speaker 1: I'm talking about me, not you, of course.
• 0:15
  Speaker 1: But welcome back, nurses.
• 0:17
  Speaker 1: We're thrilled to have you again here.
• 0:19
  Speaker 1: So, topic of the day we decided to get down and dirty with estate planning.
• 0:25
  Speaker 1: Yeah, don't worry.
• 0:27
  Speaker 1: Don't worry, it's not that bad.
• 0:28
  Speaker 1: We're really gonna focus on the basics of it, just some documents that we recommend.
• 0:32
  Speaker 1: You know pretty much everyone has, but we're not gonna go too far into the weeds.
• 0:39
  Speaker 1: I tell everybody this when we get into estate planning meetings right, because there's a lot of tough decisions you have to make when it comes to estate planning, especially depending on your family dynamics, right, and that plays such a huge role in it, so we won't address too much of that.
• 0:54
  Speaker 2: No, we're gonna well, we're definitely gonna talk about estate planning for everybody.
• 0:57
  Speaker 2: I think this country and I really dislike when people say well, society and the country but the reality is I think most of us, as Americans, have a misconception of estate planning.
• 1:10
  Speaker 2: Most people think it is what really old, really wealthy people contemplate, and that's what we're gonna talk about?
• 1:19
  Speaker 1: Oh, absolutely, and I think that's a great distinction there you made, because when I think of estate planning and in our purposes for today, what is estate planning?
• 1:28
  Speaker 1: I think we should define it.
• 1:29
  Speaker 1: So, in my mind, is a estate planning, are the basic steps that really everyone should be doing in preparation for passing.
• 1:38
  Speaker 1: You know, whatever assets you have, whatever property you have to the next generation, and also make sure to include there you know things during your lifetime too, because there's important steps you need to take to protect things during your lifetime.
• 1:50
  Speaker 1: That kind of fall into the estate planning umbrella as well, and it's for everybody.
• 1:54
  Speaker 1: It is absolutely for everybody, you know, and there are some very simple ways to get this done.
• 1:59
  Speaker 1: Complexity, I mean you can start from super basic into the most complex, painful to understand.
• 2:07
  Speaker 1: I made a, you know we have software that does a lot of this stuff, and I do remember making a flowchart with about 30 bequests.
• 2:16
  Speaker 1: And if you don't know, what a bequest is it's kind of a gift out of you know, the estate or an institution to somebody, and so I remember making a flowchart that had about 30 bequests contained inside of it, and once we're getting into that realm, that's when we get into the complexity and sometimes the very hard to digest side of it.
• 2:33
  Speaker 1: We're gonna steer far away from that today and focus on the very basics.
• 2:38
  Speaker 2: We are.
• 2:38
  Speaker 2: We're gonna focus on the basics and this is very informational, absolutely.
• 2:42
  Speaker 2: We need to be clear that a really good, trusted, qualified estate planning attorney, oh, 100% involved.
• 2:49
  Speaker 2: But there's a lot of documents that we'll talk about that we don't actually execute here in our office.
• 2:54
  Speaker 1: No, we don't execute any documents that come to you know, any legal documents, of course, because we're not, you know, qualified attorneys, anything like that.
• 3:02
  Speaker 1: But definitely these are general ideas.
• 3:04
  Speaker 2: They are things that we discuss with folks in general as more of kind of an educational.
• 3:11
  Speaker 2: The actual writing of it, executing of these documents that we're gonna talk about, really needs to be done with a qualified estate planning attorney.
• 3:19
  Speaker 1: Amen to that, brother.
• 3:20
  Speaker 1: All right, here we go.
• 3:21
  Speaker 1: So I would say the absolute first thing you kind of need to decide, or at least have a rough framework of it, can always be adjusted right.
• 3:27
  Speaker 1: Some people you know not some people, I think a lot of people think that when you make estate planning decisions they're locked in stone.
• 3:35
  Speaker 1: And I think it's really important to understand that those decisions are not locked in stone, as long as you build in some flexibility to your plan, which we always encourage.
• 3:44
  Speaker 1: But it is important to make some initial decisions and it comes down to a couple basic things.
• 3:48
  Speaker 1: Who do you want to control your assets when you're gone or when you're alive?
• 3:54
  Speaker 1: Who do you want to have access to your assets when you're gone or when you're alive, and are there any caveats we need to account for?
• 4:02
  Speaker 1: Or do you have concern about anyone who is inheriting your money?
• 4:05
  Speaker 1: You know how they're going to use those funds?
• 4:09
  Speaker 1: You know or misuse those funds, right?
• 4:12
  Speaker 1: Do we want to put any strings attached?
• 4:15
  Speaker 1: But those are, I mean, that's kind of the real base of it and then it kind of builds from there.
• 4:20
  Speaker 1: But even before that right, let's talk about real.
• 4:22
  Speaker 1: Let's start with you know basic things everyone should have in place when you're alive.
• 4:26
  Speaker 2: Well, let's kind of, you know, establish a visual, if you will, for the nursing community.
• 4:30
  Speaker 2: The nursing community for the most part, many of folks in the nursing profession have seen families interact around health care and how challenging that is, what decisions need to be made.
• 4:47
  Speaker 2: You know the emotions when somebody dies.
• 4:53
  Speaker 2: And in reality we see the next part of it, which is as challenging and as complicated in the sense that once somebody's not here or once somebody cannot make decisions for themselves, that opens up a whole other realm of difficulty for families, absolutely.
• 5:11
  Speaker 2: So you know our audience here, the nurses.
• 5:14
  Speaker 2: They can see what happens leading up to those things, when that cognitive decline begins, when somebody is kind of end of life.
• 5:23
  Speaker 2: But from the financial side, that's only the beginning of the challenges, and so a state planning is all about addressing those ahead of time, absolutely.
• 5:34
  Speaker 1: So where do we even start, right?
• 5:36
  Speaker 1: I think that's a great question.
• 5:38
  Speaker 1: We're going to even start with the state planning.
• 5:39
  Speaker 1: I would say one of the easiest things that you don't have to see an attorney for, you don't have to do anything for is everyone has an investment account out there, a bank account, any sort of account life insurance, retirement account through work.
• 5:54
  Speaker 1: So think of all those different accounts you have lying around, your bank accounts, all that good stuff.
• 5:58
  Speaker 1: One of the most important things you can do is make sure your beneficiaries are updated on those.
• 6:03
  Speaker 1: There's two ways money passes to the next generation.
• 6:07
  Speaker 1: One is by contract, which all of those accounts I just referenced would happen via contract and there's a contractual agreement from the custodian to transfer those monies to the beneficiary.
• 6:21
  Speaker 1: The other would be by law.
• 6:23
  Speaker 1: So those are things that are going to go through your estate.
• 6:25
  Speaker 1: It's going to go through probate and it's generally a bit longer of a process.
• 6:29
  Speaker 1: Now, there are definitely reasons you want things to go through your estate and probate in some cases, but if you can avoid that, it's generally a quicker process.
• 6:36
  Speaker 1: And one of the simplest ways to do that is take an inventory of all your different investment accounts you have lying around, make sure your beneficiaries are who you want them, yeah.
• 6:46
  Speaker 2: So if you're not here, where does the money go automatically without anybody else having to think about it?
• 6:51
  Speaker 1: Yeah, and just so you know, some retirement plans you may have through wherever you work.
• 6:56
  Speaker 1: They'll make a default It'll go to your spouse and then your kids if your spouse isn't there.
• 7:01
  Speaker 1: So some of them build in a default, but always better just to make sure who you want to receive those funds is named in there, and it's super easy to do?
• 7:10
  Speaker 2: You can do that right in your bank.
• 7:11
  Speaker 2: Yep, at a bank they're often called PODs Payable on Death.
• 7:16
  Speaker 2: If you have investment accounts, they're called PODs Transfer on Death.
• 7:21
  Speaker 2: Yep, they function the same way.
• 7:22
  Speaker 2: Super easy to do.
• 7:23
  Speaker 2: If you can go into a bank and say, hey, I want to put a payable on death on my account, which means if I'm not here, who does this automatically go to?
• 7:31
  Speaker 2: There's no haggling.
• 7:32
  Speaker 2: Nobody else gets to haggle and come in and say, nah, you know, brian really wanted me to have that account.
• 7:37
  Speaker 2: Tough luck.
• 7:38
  Speaker 2: Brian said very specifically to us this is who it goes to, so you can do that at a bank.
• 7:44
  Speaker 2: We do that often here.
• 7:45
  Speaker 2: You know you can have a non-retirement designated account and we put on, at our clients wishes, we put on a transfer on death which functions the same as a POD Payable on Death, and then you've got your IRAs.
• 8:03
  Speaker 2: These are the retirement accounts, that's where they're at.
• 8:05
  Speaker 1: And one really important some people end up just you know, or it on default to your estate if you don't list anybody.
• 8:12
  Speaker 1: You want to avoid that at all costs, especially with IRAs, because that opens a whole rabbit hole you really don't want to go down.
• 8:21
  Speaker 1: There's a very, very specific use case where an estate would be named a beneficiary of an IRA, but we're not even going to get into that because it's pretty obscure and it's so unique.
• 8:34
  Speaker 1: But just know that you really don't want your estate listed as the beneficiary.
• 8:38
  Speaker 1: Some people think, oh, it's easy, It'll kind of catch all and it'll revert back to the will, but that's not the most efficient way when it comes to beneficiary designations.
• 8:47
  Speaker 2: And they function.
• 8:48
  Speaker 2: The same right Payable on Death through a bank transfer on death would be a non-retirement account Beneficiaries.
• 8:54
  Speaker 2: This is one of those things we talk about all the time, colin, not only on the podcast, but with our clients.
• 8:59
  Speaker 2: There is so much verbiage in the financial world, oh yeah.
• 9:03
  Speaker 2: The fact of the matter is they function the same?
• 9:04
  Speaker 2: Yeah, definitely, and if you have a retirement plan through work for the 3B 401K, some of you might even have a 457.
• 9:13
  Speaker 2: But whatever, your retirement plan is through work, super, super easy to do.
• 9:17
  Speaker 2: This is not like a project.
• 9:19
  Speaker 1: No, this is like an afternoon.
• 9:21
  Speaker 2: Well, not even I mean it would be, even after the hard parts, deciding who you want, the POD, tod, or that might take you forever.
• 9:28
  Speaker 1: But the actual processing of this is a very pretty straightforward.
• 9:31
  Speaker 2: And Colin how quickly.
• 9:32
  Speaker 1: could you change it Immediately?
• 9:35
  Speaker 1: How often?
• 9:36
  Speaker 1: As much as you want.
• 9:37
  Speaker 2: Just don't call me to do it more than more than like once a week or anything, I'm not gonna you know, we're gonna, we're gonna have some, so we're gonna have some different conversations.
• 9:45
  Speaker 2: We've had this scenario, we have had those, we have had those.
• 9:49
  Speaker 1: And really there's no limit to the beneficiaries you can make.
• 9:51
  Speaker 1: But I mean, I would say that's one of the.
• 9:53
  Speaker 1: Anybody listening to this podcast can go out and do that tomorrow.
• 9:56
  Speaker 1: That's.
• 9:57
  Speaker 1: There's no barrier or entry there, right?
• 9:58
  Speaker 1: You don't have to find an attorney like to work with, there's nothing there.
• 10:01
  Speaker 1: So, yeah, no, no, no, do that.
• 10:06
  Speaker 2: Where do we go next from here?
• 10:07
  Speaker 2: Well, I would say next, you have a will, a basic will, I would agree.
• 10:11
  Speaker 2: And so what is that?
• 10:14
  Speaker 2: People talk about it all the time and everybody's heard about it, but a will is essentially a document that says this is these are my wishes when I'm not here Now.
• 10:24
  Speaker 2: We did these things in this order because beneficiary POD TOD actually supersede, as they say, the will.
• 10:34
  Speaker 1: And how many times have you had it.
• 10:35
  Speaker 1: Somebody said, well, it's fine, they're listed in my will.
• 10:37
  Speaker 1: And that's where we have that important conversation.
• 10:40
  Speaker 1: The law does not care who's listed in your will, Because, remember when I talked at the beginning of the podcast, there's two ways either that assets pass, either by contract or by law.
• 10:52
  Speaker 1: That contract is the beneficiaries we were just talking about and, like Brian said, supersedes the will every time.
• 10:58
  Speaker 1: So that's why it is so important that and we'll talk about this a lot it's called alignment Whenever you get any estate planning documents done, oftentimes you're going to name those same people in your will that you want your investment accounts going to, and it is crucial that those match up.
• 11:17
  Speaker 1: If you go down the road and things get a bit more complex and maybe your will is doing something like kicking off a testamentary trust and all a testamentary trust is is a trust that gets created upon your passing Sometimes that will actually become the beneficiary of your accounts, but if it's not aligned properly, all that hard work you did with the attorney is for not.
• 11:38
  Speaker 1: So that's one of the you know.
• 11:39
  Speaker 1: I'll probably mention that a few times, Because I can't tell you how many times of I mean I lost count.
• 11:45
  Speaker 1: How many times have somebody come into our office and said, well, I have a trust, we're good.
• 11:49
  Speaker 1: And Brian and I were like, oh, awesome, Perfect, Well, tell us about what's in your trust?
• 11:52
  Speaker 1: And they say what do you mean?
• 11:53
  Speaker 1: And I'm like, what money or assets or property is in your trust?
• 11:58
  Speaker 1: And they're like, well, I have a trust.
• 12:00
  Speaker 1: I'm like, well, that's fantastic, but there's nothing in that trust.
• 12:03
  Speaker 1: You've created the bucket, but you didn't fill it up.
• 12:05
  Speaker 1: Yeah, and we're all about filling up buckets over here.
• 12:08
  Speaker 1: So that's just kind of a side note, but something really important Anytime you get legal work done, make sure you're coordinating with.
• 12:14
  Speaker 1: You know you're coordinating with the rest of your financial plan, and that's why estate planning really becomes a financial planning topic, Because there's you know, we're going to hit on all these moving parts and they need to all work together.
• 12:25
  Speaker 2: So you want to have a will, which is, I think it'd be done online.
• 12:30
  Speaker 1: Yeah, you know, again, we're not attorneys, but Our, you know, default is always recommend you work with the professionals.
• 12:38
  Speaker 2: Yes, and there have been cases where handwritten documents were accepted.
• 12:44
  Speaker 2: But I don't recommend that.
• 12:46
  Speaker 2: I don't recommend grabbing out a yellow legal pad and saying, hey, if anything happens to me, go into the safe and find a yellow legal pad.
• 12:54
  Speaker 2: This is what I want to happen.
• 12:55
  Speaker 2: It may or may not stand up in a court, but why even?
• 12:58
  Speaker 1: Spending a few dollars is going to save your beneficiaries Well, a lot of times you can be done for free online too.
• 13:04
  Speaker 2: That's true too, but yeah, so either do that online or have an attorney, and so you know why have a will.
• 13:10
  Speaker 2: Well, if you don't, then the state has a will for you.
• 13:15
  Speaker 2: There is a process that if somebody dies and has not indicated to the world what they want to happen with their stuff, then the government steps in.
• 13:26
  Speaker 1: Everybody loves it when the government steps in.
• 13:28
  Speaker 2: What's wrong with this picture, Brian I?
• 13:30
  Speaker 1: think we're on the right track here.
• 13:32
  Speaker 1: Nurses would appreciate that.
• 13:33
  Speaker 2: I mean, you know, if left unattended, do you want the state to come in and make decisions for your patients?
• 13:41
  Speaker 2: That's effectively what happens if you don't have a will, and that's the state the government has a will for you.
• 13:49
  Speaker 1: Oh yeah, and that's a perfect segue into kind of the next documents you want to get, which are power of attorneys.
• 13:54
  Speaker 1: Oh yeah, right, so we talk about, you know, financial power of attorneys, medical power of attorneys who's able to act for you if you're unable to act for yourself and oftentimes those are hard decisions to make too, but having somebody is better than having nobody, right, just having somebody there is better than having nobody.
• 14:11
  Speaker 1: Also, you know I hope this isn't the case for anyone listening but you may not have somebody who you feel is adequate to serve in that role for you.
• 14:20
  Speaker 1: There are other options out there for you, right?
• 14:23
  Speaker 1: You know there's.
• 14:26
  Speaker 1: If you find yourself in that position, there are other options.
• 14:28
  Speaker 1: There are people could act as your trustee for lack of a better word and serve out your wishes if you're incapacitated.
• 14:37
  Speaker 1: So don't think just because maybe you're listening and you're kind of feeling down and out that you don't have anybody in your life that you want or feel comfortable serving that role.
• 14:45
  Speaker 1: There are other options out there.
• 14:46
  Speaker 1: But those are super important documents as well.
• 14:49
  Speaker 1: We want to make sure that there's not an interruption in anything you need if you're incapable acting for yourself.
• 14:55
  Speaker 2: Well, along those lines, we have had people say to us geez, I wouldn't want to burden so and so with this who in your life do you want to burden with making either your healthcare decisions?
• 15:06
  Speaker 1: if you're not able to, or your financial decisions If it is a burden Well and then kind of along with the healthcare power of attorney and you're living well as well.
• 15:15
  Speaker 1: One of the most important reasons for having that and my wife and I had a long discussion when we were doing our documents is that I don't want her to have the burden of having to make any of those decisions, because it is no matter who you are, whenever your face was something and any serious end of life decisions, it's gonna be so difficult, I don't care who you are.
• 15:34
  Speaker 1: So having a guideline or at least a frame of reference to work off of makes that process for your loved ones much more bearable.
• 15:44
  Speaker 1: And it's just, you know, it's making the best of a terrible situation.
• 15:48
  Speaker 1: You hope you never have to use these things, but they really do serve a very, very strong, important purpose in the estate planning process.
• 15:55
  Speaker 2: Well, they serve a wonderful purpose of making decisions.
• 15:59
  Speaker 2: Have you been able to make decisions for you ahead of these events?
• 16:02
  Speaker 2: That's one Many nurses most nurses, I might dare to say, probably have come across a situation where they're working with a patient where the patient may not be able to make decisions on their own at this point and then it becomes very gray.
• 16:23
  Speaker 2: Right, joe the neighbor comes in and says no, I talked to Bill the other day.
• 16:26
  Speaker 2: He said if anything happens to him he wants me to tell everybody to pull the plug.
• 16:30
  Speaker 2: Is there a document for that?
• 16:32
  Speaker 2: Has that been executed?
• 16:33
  Speaker 2: Is that formalized?
• 16:34
  Speaker 2: How much easier for the healthcare professionals if you know.
• 16:38
  Speaker 2: Bill walks in and says no.
• 16:39
  Speaker 2: I talked to Joe, we went to an attorney and I was given very clear directions that I have the capacity at this point, but based on this legal document, and so I think nurses can really see the value of having it from their side as a professional.
• 17:00
  Speaker 2: We're just encouraging you to do that on your personal side as well, definitely.
• 17:05
  Speaker 1: So that's those are-.
• 17:07
  Speaker 2: Beneficiaries wills power of attorney.
• 17:10
  Speaker 1: Healthcare power of attorney financial power and I would say most you know, if you go to a Healthcare directors, if you go to an estate planning attorney, most of that document package we just referenced is kind of is all gonna be created at the same time.
• 17:22
  Speaker 1: You're not gonna go do a will and then come back and do your power of attorney, that kind of foundational packet.
• 17:28
  Speaker 1: All really happens right around the same time.
• 17:30
  Speaker 2: How often can you change your will?
• 17:31
  Speaker 2: As much as you want.
• 17:31
  Speaker 2: How about power of attorneys?
• 17:33
  Speaker 2: As much as you want, healthcare directors?
• 17:35
  Speaker 2: As much as you want, right, so your decisions are not final, right In regards to this Should be very thoughtful each time you do them, but just recognize that as life changes, as your personal dynamics change, you can change those documents as well.
• 17:51
  Speaker 1: Now I will address the elephant in the room, and that's the old Italian family I come from.
• 17:56
  Speaker 2: As soon as you get your estate planning documents done, something's gonna happen to you and well If you contemplate it.
• 18:02
  Speaker 1: It will happen.
• 18:02
  Speaker 1: And now, now I can say that the week after I finally got everything aligned and finished all my estate planning documents, I was in a pretty substantial wreck.
• 18:11
  Speaker 1: Everybody was fine.
• 18:12
  Speaker 1: But so there's.
• 18:15
  Speaker 1: I can personally say there's no truth to it, but but I'll leave that decision up to you ultimately.
• 18:21
  Speaker 1: So don't let the fear of something happening put this off for you.
• 18:25
  Speaker 2: Now I mean you really need to.
• 18:27
  Speaker 2: This exercise is a wonderful gift to the people you care about, absolutely.
• 18:35
  Speaker 1: You know, I've been on both ends of the process and we work with executors and executrixes frequently, you know, unfortunately, in our line of work, and it's very easy to see the difference between somebody who's playing this out and somebody who hasn't.
• 18:49
  Speaker 1: And you know, I would argue that you have a responsibility to your family and your loved ones to make this terrible event as smooth as possible.
• 18:58
  Speaker 1: No doubt I would say the next thing.
• 19:01
  Speaker 1: So once those foundational documents are done, you're in a great spot.
• 19:06
  Speaker 1: A lot of people can stop there, truthfully.
• 19:08
  Speaker 1: But I'll kind of address the next question we get.
• 19:11
  Speaker 1: I went to a seminar.
• 19:13
  Speaker 1: Should I get a trust?
• 19:14
  Speaker 2: Right, that's kind of the next thing.
• 19:16
  Speaker 1: I heard I need a trust.
• 19:17
  Speaker 1: Should I get a trust?
• 19:18
  Speaker 1: You know well.
• 19:19
  Speaker 1: Let's start with some basic types of trust, what they're used for and does it make sense for most folks to have a trust?
• 19:29
  Speaker 1: I would say, like everything in financial planning, it depends.
• 19:33
  Speaker 1: But let's talk about real basic forms of trust.
• 19:36
  Speaker 1: We have a revocable trust and irrevocable trust.
• 19:40
  Speaker 1: Revocable trust can be changed at any point.
• 19:44
  Speaker 1: You, as the you know grantor, the person who's gifting funds or property or whatever into the trust, Maintain control of everything that's in that revocable trust.
• 19:54
  Speaker 1: You're also, you know, maintain ownership of all that.
• 19:57
  Speaker 1: So revocable trust.
• 19:59
  Speaker 1: You maintain full control and ownership until you know, you know whatever event Makes that trust you know irrevocable and at that point then that ownership usually at the death, usually at death.
• 20:12
  Speaker 2: Yeah.
• 20:13
  Speaker 1: So irrevocable trust Once you gift property or funds or assets to an irrevocable trust, you forfeit Ownership or direct ownership.
• 20:23
  Speaker 1: You know there are ways where you can maintain Some access to things that go in there, but for the most part you are forfeiting ownership and control of those assets and for some folks that makes a lot of sense.
• 20:35
  Speaker 1: Depending on your scenario, I would say irrevocable trust get used much more frequently if we're trying to Avoid taxes down the road.
• 20:44
  Speaker 2: I think they get used a lot for that, because if you're not in the irrevocable trust you, you don't own those things anymore.
• 20:51
  Speaker 1: essentially so it won't go through your estate at death, pending the look-back period, of course.
• 20:56
  Speaker 1: So you know that that's generally what irrevocable trusts are used for.
• 21:01
  Speaker 1: Now, where is one of the best uses of trust, or when does it make sense to start exploring, you know, trust if you have very specific Goals and wishes and you want to put any sort of parameters around how your beneficiaries Receive access to their inheritance.
• 21:19
  Speaker 1: That's where I think trust play a very, very important role.
• 21:24
  Speaker 1: If I have, say, one, I have two daughters, say one of them turns out to be a complete delinquent, I need to go rewrite my estate planning documents.
• 21:32
  Speaker 2: Well, you know, based on the numbers, one of them will be yeah.
• 21:35
  Speaker 1: So it's unfortunate, but it's true.
• 21:38
  Speaker 2: Just statistically speaking.
• 21:39
  Speaker 2: That's why you gotta go for three, right.
• 21:43
  Speaker 1: So say you know, you know we go through life and unfortunately, one of my daughters is, you know, maybe she's doing okay, but she's not great with money and I'm and she happens to be very young at this triggering event I don't, I wouldn't hand a 20 year old a large sum of money, no matter who they are, even if they were a great kid, because that's a lot of burden and a lot of responsibility that they're probably not ready for.
• 22:03
  Speaker 1: And also younger children don't have a legal exactly to accept a lot of things and and so once we, once we finish this trust discussion, I will get into planning for young kids.
• 22:13
  Speaker 1: That's something I'm very familiar with, going through the process Recently, and then talk about how that kind of transitions through your life.
• 22:19
  Speaker 1: But on the trust side of things, say, you know, something happens to me and my wife and and our daughters are in their early 20s.
• 22:27
  Speaker 1: I'm gonna want to put some parameters around that right and I'm gonna want some spend, thrift provisions and how they can have access To the money.
• 22:35
  Speaker 1: I obviously want that to be there to care and support them, but I also want to make sure they continue to better their career and they're just not sitting there doing nothing.
• 22:43
  Speaker 1: So that is a perfect use for a trust.
• 22:46
  Speaker 1: You know we want to limit access or make some.
• 22:49
  Speaker 1: I mean you can get as specific as on the third Thursday of August, if it happens to be a full moon, my kid gets money right.
• 22:58
  Speaker 1: You can.
• 22:59
  Speaker 1: You can dial it in and you can do.
• 23:01
  Speaker 1: I mean I wouldn't suggest that, obviously, but Trust really are very, very cool tools and you can create your exact wishes Inside of that.
• 23:11
  Speaker 2: It's an additional level of Certainly as the way things are gonna happen.
• 23:16
  Speaker 2: It trust is essentially You're creating an entity and telling that entity how you want things to play out.
• 23:24
  Speaker 2: Yes, that's what it is, and it because you're creating it.
• 23:28
  Speaker 2: There it took.
• 23:30
  Speaker 2: Collins point about the specificity is because you create it and you tell it what to do.
• 23:35
  Speaker 1: You can be as specific as you'd like absolutely and and you know, kind of building on that Not only can be as specific as you like, but it's it's just a fantastic planning tool.
• 23:46
  Speaker 1: So a trust certainly makes sense for a lot of people.
• 23:49
  Speaker 1: Now If you, if your kids are older, you're in the later stages of life, you feel very comfortable about how they would handle any inheritance going their way.
• 23:58
  Speaker 1: You've already had a chat with them about what you want to do with the sale of your house, things like that, then we get maybe a little bit less need for a trust and you might not necessarily need one because realistically, you know, depending on your family dynamic, all your assets can pass to the next generation.
• 24:15
  Speaker 1: You can split it however you want.
• 24:16
  Speaker 1: Whatever if somebody gets more or less so, so realistically you don't need a trust to accomplish your goals.
• 24:23
  Speaker 1: But if there's any question in your mind of how that money gets passed and you want to make sure that everybody gets treated fairly in your eyes and you want it spelled out in a document, so there's no question, no contesting I trust is the way to go for that passing money to the next generation.
• 24:40
  Speaker 2: You know, talk a little bit about what we had referenced before, the challenges that families face when somebody's incapacitated or they pass away.
• 24:49
  Speaker 2: Yeah, you know that that that's either the Near conclusion or the conclusion of their health care, but it starts the financial dynamic.
• 25:00
  Speaker 2: You know and I'll go back to a wonderful 80 song from Iconic Cindy Lauper.
• 25:07
  Speaker 2: Oh, everybody remembers this one.
• 25:09
  Speaker 2: The song was money changes everything.
• 25:11
  Speaker 2: Mm-hmm if you want to avoid Children fighting over what mom or dad really wanted to happen, then spell it out ahead of time.
• 25:21
  Speaker 2: Yep, that could be done.
• 25:23
  Speaker 2: You know, with a lot of these documents, a Trust is like an additional level in my mind, yep, of specificity.
• 25:32
  Speaker 2: You could certainly do that through Through the beneficiaries to you, the POD, as we had talked about.
• 25:38
  Speaker 2: Mm-hmm.
• 25:38
  Speaker 2: You know, think about if something happens to you.
• 25:40
  Speaker 2: I've got three kids as well.
• 25:41
  Speaker 2: One of them might come and say there's no way dad wanted you to have 40%.
• 25:45
  Speaker 2: Well, it's kind of in the document.
• 25:47
  Speaker 2: It's already been done.
• 25:48
  Speaker 1: Yeah definitely.
• 25:49
  Speaker 2: And then Obviously you want that to align with your will and but you really need to.
• 25:54
  Speaker 2: You know we're gonna punt this one as well On the idea of do you need a trust and the type of trust.
• 26:01
  Speaker 2: We certainly work with folks on some Education around that, but ultimately we would Be honored to sit with your attorney, yeah, to really align these things and ultimately have the attorney Make the kind of final decision on if that's appropriate for you or not that makes perfect sense.
• 26:22
  Speaker 1: I just wanted to play this out in a specific example.
• 26:24
  Speaker 1: I'll talk about my situation specifically, because I've got two young kids at home.
• 26:28
  Speaker 1: It's my wife and I and we've got two daughters.
• 26:30
  Speaker 1: We want to make sure dog and dog.
• 26:33
  Speaker 1: He's kind of useless though, but you know, you take the good with the bad.
• 26:37
  Speaker 2: But how many people are putting the, the animals in their wills and trusts and all these other?
• 26:41
  Speaker 2: That's honestly a great question, because I can't remember.
• 26:46
  Speaker 1: I honestly think I think somewhere Half ingest foolin' earnest we put.
• 26:51
  Speaker 1: If something happens to us, our friend gets the dog, or something like that.
• 26:54
  Speaker 2: When we first did our estate planning documents, when we had it all, he was in there.
• 26:57
  Speaker 1: I think he's in there.
• 26:58
  Speaker 1: I think Calvin, bless his heart, is in there.
• 27:00
  Speaker 1: But honestly, at that point, whoever wants them, just take him.
• 27:04
  Speaker 1: We love him, but he's a handful.
• 27:07
  Speaker 1: So in my example specifically, two young daughters at home.
• 27:12
  Speaker 1: If something happens to my wife and I, my daughters are obviously not old enough to care for themselves or anything like that.
• 27:21
  Speaker 1: So what happens is our wills kick off a testamentary trust, which is that trust I mentioned before.
• 27:27
  Speaker 1: All our assets basically get funneled into that.
• 27:30
  Speaker 1: And then we have family members appointed as custodians for our daughters and they will have access to those funds for any care our daughters would need.
• 27:39
  Speaker 1: And additionally to that, as our daughters get older, there's kind of a we'll call it a vesting schedule where, as they get older, they can have access to more of it.
• 27:48
  Speaker 1: It can be used for specific thing housing, education.
• 27:52
  Speaker 2: So the trust is created.
• 27:53
  Speaker 2: That's kicked off.
• 27:56
  Speaker 2: It starts in your will.
• 27:58
  Speaker 2: All right, let's play this out.
• 27:59
  Speaker 2: It starts in your will.
• 28:00
  Speaker 2: Something happens to you and Kristen simultaneously and then a trust is created.
• 28:04
  Speaker 2: Correct yep, it's automatically created.
• 28:06
  Speaker 1: Nobody has to go to the attorney and say I think Colin and Crystal, it's already done, it's already done.
• 28:11
  Speaker 2: Now, then you've got trusted folks in your life that would oversee that trust.
• 28:16
  Speaker 2: Can they go in there and take a vacation on it?
• 28:19
  Speaker 1: No, no very specific language, in the trust of what the funds can be used for, and it can really only be used for the care of our daughters.
• 28:27
  Speaker 2: So you're not turning over everything you have to brother, sister or anything like that.
• 28:33
  Speaker 1: No, I can tell you for sure my brother.
• 28:34
  Speaker 1: I can tell you my brother and sister-in-law they aren't gonna be driving the kids around in a G-wagon.
• 28:40
  Speaker 1: We've got provision for minivans, not G-wagons in there.
• 28:45
  Speaker 1: So any reasonable expense that my daughters would need for their upkeep is, of course, included in there.
• 28:51
  Speaker 1: And then any educational expenses, right, college expenses, things like that.
• 28:54
  Speaker 1: And there's language in there that as they get older we put some stuff in there like they have to be fully employed to take money out before a certain age, things along those lines.
• 29:05
  Speaker 1: So just some basic catch-all spend-thrift provisions.
• 29:08
  Speaker 1: But obviously this is gonna be something I need to go update probably every five years as things change and family dynamics evolve and change and hopefully my brother and sister-in-law still like me enough to take my kids if something happens to me.
• 29:21
  Speaker 2: But you never know.
• 29:23
  Speaker 1: So these are things that, just like financial planning, your state plan is not one and done.
• 29:27
  Speaker 1: You need to get documents done and at least have something in place instead of nothing.
• 29:32
  Speaker 1: But it's something that needs updated periodically, I would say, probably at least every five years.
• 29:38
  Speaker 1: At least revisit it, make sure your goals and wishes are still being accounted for.
• 29:42
  Speaker 2: Yeah, and there's often discussion and we're you know.
• 29:47
  Speaker 2: We'll give you a caveat on this as well.
• 29:49
  Speaker 2: You really need to work with qualified and trusted tax preparer, cpa on these topics as well.
• 29:58
  Speaker 2: That's kind of the triumvirate, if you will.
• 30:00
  Speaker 2: It's your financial planner, your attorney and your tax preparer.
• 30:07
  Speaker 2: All of those folks should be aligned, whether you wanna align those things or if you're so inclined to have them all get together, which is kind of ideal.
• 30:16
  Speaker 2: But there's so much discussion about, there's so many misconceptions that I hear about trusts yes, definitely, I got no taxes in my trust right, I put something in a trust and I never pay taxes again.
• 30:28
  Speaker 2: That's absolutely not true.
• 30:30
  Speaker 1: Well, trusts are actually taxed at the highest marginal rate.
• 30:33
  Speaker 2: So, if you have a revocable trust, everything you just taxed, do you?
• 30:35
  Speaker 2: Yeah, or the revocable just gets flowed through to you.
• 30:38
  Speaker 2: So we're not gonna get too deep into the weeds on that.
• 30:41
  Speaker 2: But if you hear somebody at work oh, my neighbor set up a trust they're never gonna pay taxes again you know that's probably not exactly true, as stated.
• 30:55
  Speaker 1: Well, the golden rule of financial planning is you can't keep Uncle Sam out of your pocket, but you can limit what he takes out.
• 31:01
  Speaker 1: So there are definitely some strategies and tools and resources.
• 31:06
  Speaker 1: We have to reduce taxes, but you're never gonna fully avoid taxation.
• 31:11
  Speaker 2: Well, you can move.
• 31:12
  Speaker 1: You can move.
• 31:12
  Speaker 1: Yeah, you can move.
• 31:13
  Speaker 1: You can renounce your citizen as a champion.
• 31:15
  Speaker 1: Yeah, I mean, if you don't like America, there's some great options out there, but yeah.
• 31:20
  Speaker 2: We have yet to write that in a financial plan, but we're just saying it'll be, where there are certainly tax considerations on all of these things.
• 31:31
  Speaker 2: But let's not let, for the most part, let's not let the tax tail wag at the dog.
• 31:38
  Speaker 2: Yeah, I think that's perfect.
• 31:40
  Speaker 1: You know there's also some strategies out there that involve for elderly folks gifting away all their assets, hoping that basically the government will step in and provide care for them, because on paper it looks to the government like those elderly folks have no assets because they've gifted everything away to an irrevocable trust pending that look-back period.
• 32:02
  Speaker 1: You know that's a strategy that's out there and that's very case dependent as well.
• 32:06
  Speaker 1: You know, sometimes it works great but obviously if you die within that look-back period it's all gonna get clawed back.
• 32:12
  Speaker 1: You know our biased opinion on this is if we can dictate our care or our clients can dictate their own care, we're always gonna err on that side because I don't wanna leave the government responsible for anything that has to do with, you know, my ongoing care, but that's definitely a strategy, I don't think they'd be more responsible for the roads and to fix potholes.
• 32:34
  Speaker 1: I would like less potholes, so I will move that to that.
• 32:37
  Speaker 2: And for contacts.
• 32:38
  Speaker 1: If you're listening, we're in Western Pennsylvania so we have plenty of potholes, plenty of potholes.
• 32:44
  Speaker 1: Just keep the bridges from falling down, we'll be okay.
• 32:49
  Speaker 2: Yeah, you know the basis of what Colin is mentioning there is Medicare does not pay for long-term care.
• 32:55
  Speaker 2: Medicare pays for a lot of type of care.
• 32:57
  Speaker 2: We had a podcast and probably multiple podcasts on that topic and something our nurse community would be more you know as familiar with.
• 33:07
  Speaker 2: But Medicaid does.
• 33:09
  Speaker 2: Medicaid does pay for long-term care.
• 33:11
  Speaker 2: So the ideas around that and you're gonna hear this kind of stuff all the time through friends and coworkers oh yeah, put mom in a nursing home.
• 33:21
  Speaker 2: She didn't pay a nickel.
• 33:22
  Speaker 2: Well, somehow, through either planning or through unfortunate circumstances, mom didn't have a lot of money.
• 33:30
  Speaker 2: I mean like not a lot at all.
• 33:32
  Speaker 2: And Medicaid came in Now for, you know, the vast majority of retirees that are on Medicare that in and of itself does not pay for long-term care.
• 33:42
  Speaker 2: Yeah, that's a great distinction so perfect.
• 33:44
  Speaker 2: So Well, it wasn't much there.
• 33:47
  Speaker 2: I mean, that was just we were trying to keep it light there.
• 33:50
  Speaker 2: We were trying to keep it light and air, yeah.
• 33:52
  Speaker 1: It got a little dark at times, but we tried to steer away from that.
• 33:54
  Speaker 1: Well, hey, you know it's.
• 33:56
  Speaker 1: It's an uncomfortable conversation to have.
• 33:59
  Speaker 2: It's a gift you're giving your family.
• 34:00
  Speaker 1: Absolutely, and look at it that way.
• 34:01
  Speaker 2: Look at what a wonderful thing you are doing to pre-plan and again, the nursing your nest egg community has seen the challenges of how families can get when their loved ones are not able to make decisions for themselves, either because of health, mental reasons or because they're no longer with us.
• 34:22
  Speaker 2: You're just avoiding all of that.
• 34:24
  Speaker 2: Talk about it.
• 34:25
  Speaker 2: We say this all the time.
• 34:26
  Speaker 2: We're gonna continue to say it's so much we do in financial planning is about short-term sacrifice, long-term gain.
• 34:31
  Speaker 2: Take the short-term sacrifice to think about these things, get these documents completed and then revisit them.
• 34:41
  Speaker 1: Absolutely Perfect, it's easy.
• 34:44
  Speaker 1: It's a lot easier talking about it than getting it done.
• 34:48
  Speaker 1: I can tell you that because there's a number of folks we work with.
• 34:51
  Speaker 1: We make it a point to bring this up in all of our review meetings, especially folks who haven't done it, people that have.
• 34:57
  Speaker 1: We wanna make sure nothing's changed, it's on track.
• 34:59
  Speaker 1: But we make it a point in all our client review meetings to bring this up, say, hey, we talked about this last time, is it done yet?
• 35:06
  Speaker 1: And I know it's hard to do right, there's no getting around it.
• 35:10
  Speaker 1: It takes effort, it takes time, it takes commitment, but the gift, like Brian said, the gift you're giving your family, is so worth it at the end and it can take a very, very painful time for your family and make it so much better.
• 35:21
  Speaker 1: I mean it can make it infinitely better for the folks that you love and your wife.
• 35:26
  Speaker 2: How did you feel once you got your documents done?
• 35:28
  Speaker 2: I mean, you're well, it's a little bit of a car wreck.
• 35:30
  Speaker 2: Oh, I'm serious, once you got all that done.
• 35:33
  Speaker 1: No, I mean, it felt, really it felt great once it was done, honestly Like it's something I'd been putting off for forever, like everybody else.
• 35:38
  Speaker 1: But I'm like you know what this is really important, and even folks that sit in our seat, you know a lot of people haven't done succession planning for their practice or and that's a whole different ball game.
• 35:49
  Speaker 1: But Well it kind of builds into the estate planning too right it does.
• 35:53
  Speaker 1: And so I felt great once it was done, just because I knew that if something happens to me like, my daughters are gonna be fine.
• 36:01
  Speaker 1: You know it's not gonna be ideal, but everybody's gonna be fine.
• 36:06
  Speaker 1: My brother-in-law and sister-in-law they're good folks.
• 36:09
  Speaker 1: They'll be all right.
• 36:10
  Speaker 1: You know, unfortunately God forbid I think my daughters might have to become Bangles fans because they'll be moving to Cincinnati.
• 36:17
  Speaker 2: But Whoa hey.
• 36:17
  Speaker 1: I know, so you could have wrote that.
• 36:19
  Speaker 1: I could have I should have probably written I must maintain loyal Steelers fans to receive any inheritance.
• 36:25
  Speaker 1: Yeah, you could, but that could have been right in there.
• 36:26
  Speaker 1: I think that might be amendment number one.
• 36:28
  Speaker 1: Yeah, yeah, no Bangles jerseys in the house.
• 36:30
  Speaker 1: But joking aside, no, there is a really big sense of relief once this gets done, and I think it's a really similar sense of relief to once we go through the financial planning process of somebody and incorporate this into the financial plan and not just viewing it kind of as a one-off, but really incorporating it and say, hey, all these things are working together and even projecting out.
• 36:53
  Speaker 1: You know, here's what the flow chart looks like.
• 36:55
  Speaker 1: Here's where your you know your inheritance going.
• 36:58
  Speaker 1: Here's what the tax situation looks like.
• 37:00
  Speaker 1: Hey, maybe if we do this we can reduce that tax burden a bit.
• 37:03
  Speaker 1: But there's so many different buttons and dials to play with and you know, I would say, like everything else in life, there's so much noise around estate planning and financial planning.
• 37:13
  Speaker 2: Oh my goodness.
• 37:14
  Speaker 1: So I would encourage you, find some trusted professionals that can help you wade through that noise and make this simple, because this is not the science behind it is can get complex.
• 37:25
  Speaker 1: You know, I like to call it the alphabet soup of estate planning.
• 37:28
  Speaker 1: There's so many different letters for trust, you know eyelets, grits, grits, all sorts of stuff.
• 37:35
  Speaker 1: Don't worry about the alphabet soup of estate planning.
• 37:38
  Speaker 1: Find somebody that you feel like understands your goals and wishes, and they should be more than capable of helping you create whatever documents or plans are required to fulfill those wishes.
• 37:49
  Speaker 1: And that's where we start.
• 37:50
  Speaker 1: We start at what are your goals, what are your desires?
• 37:52
  Speaker 1: And okay, that's easy, here's how we're gonna get there, and that's where the estate planning and the actual documents come in right, and so focus on what you wanna happen.
• 38:03
  Speaker 1: Everything else will take care of itself, as long as you're working with the right folks, no doubt.
• 38:09
  Speaker 2: And you know, chip away at it.
• 38:11
  Speaker 2: Do the easy stuff first, yeah do your beneficiaries.
• 38:14
  Speaker 2: Get your will done.
• 38:16
  Speaker 2: In conjunction with that, do your power return to healthcare, financial healthcare directives.
• 38:21
  Speaker 2: Get those things done Now you were talking about it.
• 38:26
  Speaker 2: It took you a long time, you know, hey, my dad used to say all the time, the cobbler's kids always have holes in their shoes, right?
• 38:32
  Speaker 1: that's true.
• 38:34
  Speaker 2: I think nurses will recognize that right.
• 38:36
  Speaker 2: I mean, they're healthcare professionals and they probably sit back and say, geez, I'm not always making the healthiest choices I should.
• 38:42
  Speaker 2: People look at me and say this is my profession, this is my education and I should be, you know, super healthy.
• 38:48
  Speaker 2: But that's just kind of the way it goes Sometimes it's hard to take your own advice.
• 38:53
  Speaker 1: It really is it really is.
• 38:57
  Speaker 2: So don't take your own advice.
• 38:58
  Speaker 2: Take our advice.
• 38:59
  Speaker 2: Check out your beneficiaries.
• 39:00
  Speaker 2: Get your wills done.
• 39:02
  Speaker 1: Love it Well, BP, thanks for another great episode.
• 39:05
  Speaker 1: Nurses, thank you so much for joining us.
• 39:07
  Speaker 1: God bless you if you made it this far.
• 39:09
  Speaker 2: Can't wait to, can't wait for you to catch the next ones coming up.
• 39:12
  Speaker 2: All right, everybody be safe.