Latest / Money In Motion with Klaas Financial / Estate Planning is Important for Everyone

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Estate Planning is Important for Everyone · Money In Motion with Klaas Financial

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Speaker 1: This is money in motion right here on thirteen ten
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Speaker 1: WIBA with our retirement planning professionals from Coss Financial, joined
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Speaker 1: this week by CJ Closs and Eric Schwartz. We're going
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Speaker 1: to be talking this week about estate planning. A lot
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Speaker 1: of fantastic information ahead. You're going to want to pay
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Speaker 1: close attention to this week's program. Not only is it
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Speaker 1: going to be some great information, we'll have a chance
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Speaker 1: to win a fantastic prize from a friends at Coss Financial.
0:21
Speaker 1: I'll tell you a bit later about that in just
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Speaker 1: a moment. Some other things to keep in mind as
0:25
Speaker 1: we talk with CJ and Eric. Phone lines here at
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Speaker 1: the station. They are open for you at six oh
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Speaker 1: eight three two one thirteen ten. That's six oh eight
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Speaker 1: three two one thirteen ten. Whether your question is about
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Speaker 1: this week's topic, which is a state planning, or anything
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Speaker 1: retirement related, our retirement planning professionals from Coss Financial are
0:41
Speaker 1: here for you. Speaking of other ways to make connections
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Speaker 1: with Coss Financial, of course, the website cossfinancial dot com.
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Speaker 1: That's Coss Klaas Financial dot com. Toph it up for
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Speaker 1: the office right here in Madison six oh eight four
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Speaker 1: four two five six three seven. No charge for that
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Speaker 1: initial gets know your appointment tech costs financial it will
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Speaker 1: beat complimentary to you and again their number six oh
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Speaker 1: eight four four two five six three seven as mentioned,
1:05
Speaker 1: joined this week by CJ and Eric.
1:07
Speaker 2: CJ. How you doing this morning? I'm doing great, Sean,
1:10
Speaker 2: how have you been, I've.
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Speaker 1: Been doing really well. Great to talk with you, Eric.
1:13
Speaker 1: Great to have you back. How are you doing this week?
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Speaker 3: I am doing great. I'm glad to be back.
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Speaker 1: It is fantastic to have you both the long and
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Speaker 1: I know Eric, anytime I see a state planning I said,
1:23
Speaker 1: I bet you're gonna probably hear it from Eric this week,
1:25
Speaker 1: So I can't wait to hear what you have for
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Speaker 1: us this morning. And of course Eric and CJ are
1:28
Speaker 1: retirement planning professionals from Closs Financial. The telephone number for
1:32
Speaker 1: Class Financial six eight four four two five six three seven.
1:35
Speaker 1: Get on the air this morning with Eric and CJ.
1:37
Speaker 1: Six oh eight three two one thirteen ten. That's six
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Speaker 1: oh eight three two one thirteen ten. Before we get
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Speaker 1: rolling on this week's conversation about estate planning. One of
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Speaker 1: the cool features of the program is the Closs Quiz.
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Speaker 1: Question the week your chance to win a fantastic prize
1:50
Speaker 1: this week is no exception. Our friends from Class Financial
1:52
Speaker 1: I provided a twenty five dollars gift card to Food
1:55
Speaker 1: and Laughs. That's a gift card good for Red Robin
1:57
Speaker 1: or Cheesecake Factory or Red Lobster, a bunch of other
2:00
Speaker 1: places for that gift card. It's a fantastic card. And
2:03
Speaker 1: we'll have to tell you a little bit on the
2:06
Speaker 1: program how you can win. A little tip though, is
2:08
Speaker 1: if you listen closely to the program. Oftentimes both the
2:11
Speaker 1: question and answer to the Class Quiz question week come
2:14
Speaker 1: up during the program, so it pays for a number
2:17
Speaker 1: of ways to listen closely. Again, we'll tell you a
2:19
Speaker 1: little bit later on the show how you can win
2:21
Speaker 1: this week's prize. And before we get to this week's topic,
2:23
Speaker 1: let's actually take a look back at last week's program
2:27
Speaker 1: and get the question and answer there as well.
2:29
Speaker 4: Eric, Yeah, Sean, you're giving away our secrets, but yeah,
2:33
Speaker 4: that's the question and the answer are often in the program.
2:36
Speaker 4: Thank you as always to everyone for listening. Our winner
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Speaker 4: last week was Peter from Cambridge and the question was
2:43
Speaker 4: true or false. According to the Bureau of Labor Statistics,
2:48
Speaker 4: home Costs represents the largest expense for retirees, accounting for
2:52
Speaker 4: thirty six percent of their annual expenses.
2:54
Speaker 3: And the answer to that is true.
2:57
Speaker 1: Wow, And that was that is as we talked. It's
3:00
Speaker 1: about some of those some of those numbers, and it
3:02
Speaker 1: was a really really good program and you can always
3:04
Speaker 1: listen back. Don't forget to this in previous shows. Podcast
3:08
Speaker 1: at class financial dot com. That's class financial dot com.
3:11
Speaker 1: They're telp number six O eight four four two five
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Speaker 1: six three seven to get on the air this morning
3:15
Speaker 1: as well, which gives call out station six oh eight
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Speaker 1: three two one thirteen ten. That's six oh eight three
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Speaker 1: two one thirteen ten. And this week we are going
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Speaker 1: to be talking about and tackling the topic of estate planning.
3:27
Speaker 1: But CJ, can you explain a little bit about why
3:30
Speaker 1: it's important to help clients with financial and retirement planning.
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Speaker 5: Yes, we believe here at Klass Financial that a financial
3:38
Speaker 5: planner should act like a quarterback of your financial team
3:42
Speaker 5: and perhaps fix some areas where your defense line may
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Speaker 5: be weak. Now, we like this football analogy, but some
3:49
Speaker 5: people don't resonate with it. So another way to think
3:52
Speaker 5: about it is like your family doctor. Right, your family
3:56
Speaker 5: doctor works with you maybe coordinates care amongst various different specialists.
4:01
Speaker 5: Your family doctor is very intimately involved with your family
4:04
Speaker 5: and everything with your health. Well, in this case, a
4:07
Speaker 5: quarterback is involved with every play on the football field.
4:10
Speaker 5: So you get the idea your financial planner should be
4:12
Speaker 5: involved with every play in your financial life. So this
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Speaker 5: is where sometimes a state planning can come into play.
4:18
Speaker 5: As many people have perhaps you know, maybe begun this
4:22
Speaker 5: process or at least have been thinking about it, but
4:24
Speaker 5: often don't complete the plan. Now, as we start talking
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Speaker 5: about a state planning today, I would just want a
4:30
Speaker 5: quick disclaimer. We are not attorneys. However, we do work
4:34
Speaker 5: with attorneys to help coordinate plans for our clients. So
4:38
Speaker 5: with that being said, we actually have a network called
4:41
Speaker 5: the Class Professional Network known as KPN for slang because
4:44
Speaker 5: we love our acronyms here. But Class Professional Network is
4:48
Speaker 5: just all about building deep integrated relationships with other financial
4:53
Speaker 5: professionals in your life. And some of you are saying
4:56
Speaker 5: what other for financial professionals, Well, think about it. To
4:59
Speaker 5: have if a comprehensive financial plan, you probably are going
5:02
Speaker 5: to eventually need an accountant. You're probably going to need
5:04
Speaker 5: an insurance agent. Maybe that might be life and health
5:08
Speaker 5: and property and casualty. You're going to probably need a
5:10
Speaker 5: banker at some point for a mortgage, You're going to
5:13
Speaker 5: need a money manager, a financial planner, a state planning attorney.
5:18
Speaker 5: You get the idea, you suddenly go, oh my goodness, gracious,
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Speaker 5: I need all these people.
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Speaker 2: Who's going to build the team.
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Speaker 5: And the answer is that is what your coach, quarterback
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Speaker 5: or aka your financial planners should be doing.
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Speaker 2: So one thing we learn.
5:31
Speaker 5: As financial planners is to expect the unexpected. So what
5:36
Speaker 5: we would say is now is an ideal time for
5:38
Speaker 5: you to review a just or finally complete input into
5:42
Speaker 5: place your basic estate planning documents. Now, when we say
5:45
Speaker 5: a state planning this includes typically wills, revocable trusts, powers
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Speaker 5: of attorney, and healthcare directives known as often living wills.
5:53
Speaker 5: And this is just to ensure that everything is accurate,
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Speaker 5: accurately reflected, and that your wishes are carried out upon
6:02
Speaker 5: a potential life altering situation. Some of those estate planning documents.
6:08
Speaker 2: Exist while you are alive.
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Speaker 5: Other ones really come into play upon your passing. But
6:13
Speaker 5: the idea is that we want to minimize the amount
6:16
Speaker 5: of confusion, and we want to minimize the amount of
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Speaker 5: taxes or fees that kind of get stripped out of
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Speaker 5: your estate upon death.
6:24
Speaker 2: I mean, listen, a lot.
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Speaker 5: Of people try to kind of sell you on the
6:27
Speaker 5: idea of state planning through fear.
6:29
Speaker 2: We don't like that.
6:30
Speaker 5: I would say, don't be afraid of it. Don't go
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Speaker 5: do an estate plan because you're fearful, doing a stay
6:36
Speaker 5: plan because you want clarity. Right, And let me just
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Speaker 5: ask you, if you take a life of accumulating stuff
6:43
Speaker 5: and other human beings through a marriage or birth, do
6:47
Speaker 5: you care what happens to those things if you're not around,
6:50
Speaker 5: And do you think it'll just be easy to settle
6:52
Speaker 5: those things and get them out to the people that
6:53
Speaker 5: you care about. If you have put nothing into writing,
6:57
Speaker 5: you get the idea in order to take a life
7:00
Speaker 5: life time of accumulation or a lifetime of building a family,
7:05
Speaker 5: And to think that just with a snap of a
7:07
Speaker 5: fingers is going to be easy when you die or
7:09
Speaker 5: when something happens to you, it's just not realistic. So
7:13
Speaker 5: if you want to, you know, do do a big
7:15
Speaker 5: gift for your family. The biggest gift you could probably
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Speaker 5: give to your family is getting some basic estate planning
7:21
Speaker 5: documents in place that that will outline your wishes.
7:25
Speaker 1: Talking this morning with CJ. Closs and Eric Schwartz, our
7:28
Speaker 1: retirement planning professionals from Class Financial. You can learn more
7:31
Speaker 1: about Class Financial their website Class financial dot com. That's
7:34
Speaker 1: Class k l aa S financial dot com or telf
7:37
Speaker 1: what number six oh eight four four two five six
7:40
Speaker 1: three seven. No charge for that initial get to know
7:42
Speaker 1: the appointment tech Coss Financial. It will be complimentary to
7:44
Speaker 1: you and if you have questions, love to get you
7:46
Speaker 1: on the other morning. Six so eight three two one
7:48
Speaker 1: thirteen ten. That's six oh eight three two one thirteen
7:51
Speaker 1: ten and CJ talk about kind of putting that that
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Speaker 1: basic those basic estate planning documents together. Is it one
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Speaker 1: of these things where once it's done, it's done or
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Speaker 1: should you be regularly reviewing these things? What's the guidance there?
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Speaker 5: Yeah, you know, obviously I'm speaking to an area that
8:05
Speaker 5: I have a lot of competency, and so a lot
8:08
Speaker 5: of people are gonna roll with their eyes as I
8:09
Speaker 5: as I say this, But I've learned that competency matters,
8:13
Speaker 5: special team matters, especially as you accumulate more assets.
8:17
Speaker 2: And so what I'd say.
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Speaker 5: To you is we believe that most people over time,
8:21
Speaker 5: especially as you get later on in life, should end
8:23
Speaker 5: up hiring a financial advisor, right, surprise, surprise. But the
8:27
Speaker 5: reason we believe that is because, listen, building a financial team,
8:31
Speaker 5: who's going to you know, be a good professional in
8:34
Speaker 5: a state, tax in insurance and taxes and investments. The
8:39
Speaker 5: list goes on, it's really difficult to do. And then
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Speaker 5: will they even talk to one another? Will they actually
8:44
Speaker 5: coordinate with one another to make sure that one doesn't
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Speaker 5: hurt the other?
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Speaker 2: YadA, YadA.
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Speaker 5: Well, this is what an advisor quarterback should be doing.
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Speaker 5: Is they should be not only helping you to assemble
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Speaker 5: your team, but then saying, you know, hey, Jim, Hey Susie,
8:56
Speaker 5: we got to meet again because you know, it looks
8:58
Speaker 5: like some things have changed in your life, and I
9:00
Speaker 5: really need you to talk to Rob your attorney to
9:02
Speaker 5: update your documents because you have another kid.
9:05
Speaker 2: Now, right, you get the idea, like your.
9:07
Speaker 5: Advisor is not only helping you to assemble the team,
9:10
Speaker 5: but then reminding you when you need to go make
9:12
Speaker 5: updates to certain documents. Now, Interestingly enough, as we think
9:17
Speaker 5: about this topic, there's some data that sticks out. So
9:21
Speaker 5: according to a recent survey, as of March twenty twenty four,
9:25
Speaker 5: so very recently, and this is from Financial Advisor magazine,
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Speaker 5: only about twenty six percent of American adults have established
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Speaker 5: estate plans. That percentage does rise to fifty percent for
9:37
Speaker 5: those with assets greater than five hundred thousand. But here,
9:41
Speaker 5: interestingly enough, thirty two percent of men have estate plans
9:44
Speaker 5: and only twenty three percent of women. So listen, by
9:49
Speaker 5: the way this data. I've seen a lot of different
9:51
Speaker 5: surveys on this, and some of you are going, wait,
9:53
Speaker 5: I think a year ago you told me slightly different data.
9:55
Speaker 2: It's true, different reports.
9:57
Speaker 5: In different data gathering does slightly different outcomes of this,
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Speaker 5: but all of them say that right around thirty to
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Speaker 5: fifty percent of Americans have estate plans and the rest
10:09
Speaker 5: do not.
10:11
Speaker 2: So if you are one of the people.
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Speaker 5: Listening on this right now, who do not please every
10:16
Speaker 5: American adult, in our humble opinion, every American adult with
10:20
Speaker 5: a couple bucks to their name should be should be
10:22
Speaker 5: considering the basics of estate planning. Now again, how complex
10:28
Speaker 5: is that a state plan? How much are you paying
10:30
Speaker 5: for it? Those are all different questions, and by all means,
10:32
Speaker 5: talk to us if you have questions about that, because
10:34
Speaker 5: we can help you get in touch with very simple
10:36
Speaker 5: and expensive solutions or more comprehensive solutions with a high
10:40
Speaker 5: end lawyer. But every American adult should be thinking about this.
10:44
Speaker 2: And here's the key. Here's why this matters.
10:47
Speaker 5: The biggest wave of wealth transfer in the history of
10:51
Speaker 5: the world is beginning to pass from baby boomers to
10:55
Speaker 5: the next generation. This is known as a great wealth
10:58
Speaker 5: transfer and it's eighty four trillion dollars is poised to
11:02
Speaker 5: move to younger generations and charitable organizations. Listen, y'all, I
11:07
Speaker 5: have actually lived this in my career. We're early on
11:10
Speaker 5: in my career. The number of clients that I worked
11:12
Speaker 5: with whose parents passed and gave a sizeable sum to
11:16
Speaker 5: them was pretty small early in my career. Now it's
11:20
Speaker 5: quite common. We're actually running into hundreds, if not hundreds
11:24
Speaker 5: of thousands, if not millions, of dollars passing from mom
11:27
Speaker 5: and dad. Often when kids don't even know it. Often
11:30
Speaker 5: he goes, gosh, I knew mom and dad did Okay,
11:33
Speaker 5: I knew they had the farm and everything, but I
11:36
Speaker 5: didn't know they had that much money. Well, well, the
11:39
Speaker 5: farm that used to be where you just went out
11:41
Speaker 5: and you know, kind of helped dad with with the
11:43
Speaker 5: crops and with the cows, that land is really really
11:47
Speaker 5: worth a lot of money now, so you get the
11:49
Speaker 5: idea we're seeing huge amounts of wealth transfer and as
11:53
Speaker 5: you can imagine, having a clear estate plan for yourself
11:56
Speaker 5: so that when you add more money to that infrastructure
12:00
Speaker 5: is pretty clear. So long story short, you just you
12:04
Speaker 5: want to get these plans in place because dying without
12:07
Speaker 5: a will, also known as dying in intestacy or dying
12:10
Speaker 5: in test eate, can be quite expensive.
12:13
Speaker 2: And it's expensive because nobody knows what you wanted to do.
12:16
Speaker 2: So we've got to hire some people to try to
12:18
Speaker 2: figure it out.
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Speaker 5: Long story short, just just you know, plan to pull
12:21
Speaker 5: together those basic estate plans.
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Speaker 1: Really it's a really a great gift as well to
12:25
Speaker 1: your loved ones after after you pass on, to have
12:27
Speaker 1: that plan in place. We talked this morning with CJ.
12:30
Speaker 1: Closs and Eric Schwartz. They are our retirement planning professionals
12:33
Speaker 1: from Class Financial. You can learn more online the website
12:36
Speaker 1: class financial dot com. That's Coss k l Aasfinancial dot
12:40
Speaker 1: com delph number six oh eight four four two five
12:43
Speaker 1: six three seven No charge for the initial gets no
12:45
Speaker 1: you appointment that Coss Financial it will be complimentary to you.
12:49
Speaker 1: Again their number six so eight four four two five
12:51
Speaker 1: six three seven. What about dying without a will? Why
12:54
Speaker 1: do people avoid? Didn't put that off? Will find out
12:56
Speaker 1: the details next as Money in Motion with COSS Financial
12:58
Speaker 1: continues right here on thirtyeen Ed Wuibi talking with our
13:02
Speaker 1: retirement planning professionals CJ. Closs and Eric Schwartz. Of course
13:05
Speaker 1: they come to us from Class Financial, the website colssfinancial
13:09
Speaker 1: dot com. That's COSS k l aas Financial dot com.
13:12
Speaker 1: Telephon number for the office right here in Madison, six
13:14
Speaker 1: oh eight four four two five six three seven. Don't
13:17
Speaker 1: forget that first appointment, it will be complementary to you.
13:20
Speaker 1: They're telephone number six oh eight four four two five
13:23
Speaker 1: six three seven. Talking about the importance of a state
13:26
Speaker 1: planning and the importance of having these documents squared away
13:28
Speaker 1: and taken care of, and regular reviewing of them as well.
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Speaker 1: And I think there's some questions people have, is like, well,
13:35
Speaker 1: why don't folks take the time and and Eric, let's
13:38
Speaker 1: talk about that. What are some of the reasons why
13:40
Speaker 1: folks may not have a will? And let's also talk
13:43
Speaker 1: about the importance of those power of attorney documents when
13:45
Speaker 1: it comes to a state planning.
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Speaker 3: Well, Sewn, I'm sure you can imagine that.
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Speaker 4: J and I have heard every excuse under the sun
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Speaker 4: as to why people don't have.
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Speaker 3: An estate plan.
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Speaker 4: But let's just talk about a few a few reasons
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Speaker 4: why and kind of look at you know, those are
14:00
Speaker 4: those actually reasonable approaches here. So number one, and this
14:05
Speaker 4: is really obvious. Thinking about death makes people uncomfortable. I
14:08
Speaker 4: think we can all agree with that. However, it does
14:11
Speaker 4: not change to the inevitable. Everyone will need a plan
14:14
Speaker 4: at some point, and preparing ahead of time really really
14:19
Speaker 4: creates a lot. Well, like Sejer said, it's never going
14:22
Speaker 4: to be an easy process when someone passes away, but
14:25
Speaker 4: it makes.
14:25
Speaker 3: It much more manageable.
14:28
Speaker 4: Just general procrastination, you know, they just haven't gotten around
14:31
Speaker 4: to it.
14:33
Speaker 3: I think I look at this as okay.
14:35
Speaker 4: When I meet with a client, generally after the meeting,
14:38
Speaker 4: I have a next meeting reminders list, right, and it's
14:42
Speaker 4: it's hey, check in if they've taken the advice we've
14:45
Speaker 4: given them.
14:46
Speaker 3: And one of those.
14:46
Speaker 4: Things is get your estate plan updated or get an
14:50
Speaker 4: a state plan in place. And let me tell you
14:52
Speaker 4: that one lives on that list for a long time.
14:56
Speaker 4: I'm generally will joke with clients. You know, if I
14:59
Speaker 4: can get you to do this within the next five years,
15:01
Speaker 4: I don't know, though I did well.
15:03
Speaker 3: So procrastination is a big one.
15:06
Speaker 4: Another one is people they just don't know where to start.
15:09
Speaker 4: And this is this is really really understandable. CIJ mentioned
15:12
Speaker 4: it earlier. Reach out to someone, even if they're not
15:16
Speaker 4: an attorney. It's just someone you trust who can connect
15:18
Speaker 4: you with that, whether that's your financial planner, your insurance agent.
15:22
Speaker 3: Your accountant, you know. Working in this industry, we know
15:25
Speaker 3: a lot of people who do this type of work and.
15:28
Speaker 4: We can get you in contact with with someone who
15:30
Speaker 4: can help you with that. This next one is one
15:33
Speaker 4: of I think one of the most important ones. People
15:36
Speaker 4: think they don't have enough asset. They think they're you know, oh,
15:40
Speaker 4: my situation is not very complicated.
15:43
Speaker 3: You know, the kids will figure it out. It'll be fine.
15:46
Speaker 4: Let me tell you the one way to make a
15:49
Speaker 4: simple estate plan or a simple estate not simple, is
15:53
Speaker 4: to do no preparations.
15:55
Speaker 3: You will very quickly make it a complicated estate.
16:00
Speaker 4: The other another one here is you know, they don't
16:02
Speaker 4: know how to make a will or living trust on
16:04
Speaker 4: their own and I think I think most of us
16:07
Speaker 4: would say we don't know how to do that, and
16:08
Speaker 4: that is why there are professionals in this space. So again,
16:12
Speaker 4: reach out to someone that you trust and they can
16:15
Speaker 4: refer you to someone who who specialized in it, specializes
16:19
Speaker 4: in this area and can can help you out.
16:21
Speaker 1: Talking this morning with.
16:23
Speaker 4: No I was going to say the last one here
16:25
Speaker 4: is people often think it's too expensive to set up
16:28
Speaker 4: in a state plan. Okay, and there's no doubt there's
16:30
Speaker 4: a there's definitely a cost on the front end, and
16:32
Speaker 4: we'll we'll talk about that here in a moment. But
16:36
Speaker 4: TJ was just talking about the the unnecessary you know,
16:40
Speaker 4: uh fees and and and costs related with not preparing
16:46
Speaker 4: for your estate plan. And those costs can very very
16:51
Speaker 4: quickly outweigh the front end costs of putting together in
16:54
Speaker 4: a state plan. You know right now it varies a lot,
16:57
Speaker 4: but a simple will can cost somewhere betwe I mean,
17:00
Speaker 4: you know, three inner bucks and a thousand bucks not
17:03
Speaker 4: being a more comprehensive plan maybe need of trust, that
17:06
Speaker 4: can cost more like two thousand to five thousand dollars,
17:09
Speaker 4: But very very quickly, the unnecessary costeed fase for dying
17:14
Speaker 4: without an estate plan will outweigh these these numbers.
17:17
Speaker 1: Talking this morning with Eric Schwartz and CJ. Coss. They
17:20
Speaker 1: are our retirement finding professionals from Class Financial the website
17:23
Speaker 1: class financial dot com. That's Coss k l a A
17:26
Speaker 1: s Financial dot com. Great website to learn more about
17:28
Speaker 1: Class Financial the team their separate divisions. Also sign up
17:31
Speaker 1: for the weekly market Pulse newsletter that available to you
17:34
Speaker 1: at classfinancial dot com. They're tough number six o eight
17:37
Speaker 1: four four two five six three seven. No charge for
17:39
Speaker 1: that initial get to know your appointment at co loss Financial.
17:41
Speaker 1: It will be complimentary to you again their number six
17:44
Speaker 1: oh eight four four two five six three seven. So Eric,
17:47
Speaker 1: what about that that other part that that power of
17:50
Speaker 1: attorney documents and the importance of those.
17:53
Speaker 4: Yeah, these are these are I think lesser discussed in society,
17:58
Speaker 4: but generally, as part of a comprehensive estate plan, you're
18:01
Speaker 4: going to have things beyond just a will or a trust,
18:05
Speaker 4: you know, the things that direct how your assets and your.
18:08
Speaker 3: Instruction should be carried out after your death.
18:11
Speaker 4: But you're also, as part of that plan, going to
18:12
Speaker 4: have what are called power of attorney documents, and these
18:16
Speaker 4: documents really are coming into play not after you've passed away,
18:20
Speaker 4: but while you're still alive. The power of attorney documents
18:23
Speaker 4: allow a person, sometimes called a principle, to decide in
18:27
Speaker 4: advance who they trust and who they want to act
18:31
Speaker 4: on their behalf if they become incapable of making decisions
18:34
Speaker 4: for themselves. A person who acts on your behalf is
18:37
Speaker 4: often called the agent. So we have the principle, the
18:40
Speaker 4: person who's who is giving power to the agent to
18:44
Speaker 4: then make decisions for them.
18:47
Speaker 3: Now we have two general types of powers of attorney.
18:51
Speaker 3: We have a.
18:51
Speaker 4: Medical power of attorney and a financial power of attorney.
18:54
Speaker 4: The medical poa also known as a healthcare POA that
18:59
Speaker 4: gives some on the ability to make decisions about the
19:02
Speaker 4: care that the principle receives if they're incapacitated. So if
19:07
Speaker 4: you're in a car accident, or you you know you
19:10
Speaker 4: have some long term illness that makes you unable to
19:13
Speaker 4: make decisions, these are.
19:15
Speaker 3: The people who are working with your medical.
19:18
Speaker 4: Care team to determine what care you actually actually get. Now,
19:23
Speaker 4: a financial power of attorney that gives an agent the
19:26
Speaker 4: ability to make financial decisions on behalf of the principle.
19:30
Speaker 4: So If we think about that same situation with someone's
19:33
Speaker 4: in a car accident and they're they're not able to
19:35
Speaker 4: make their own medical decisions, they're likely also not able
19:39
Speaker 4: to make their own financial decisions. People don't often think
19:43
Speaker 4: about this, but just because someone is in the hospital,
19:47
Speaker 4: that doesn't mean their.
19:47
Speaker 3: Mortgage doesn't need to be paid.
19:49
Speaker 4: That doesn't mean that the credit card bill doesn't have
19:52
Speaker 4: to be paid, doesn't mean that the utilities are no
19:55
Speaker 4: longer no longer cost money.
19:57
Speaker 3: Right, someone needs to make these decisions.
20:00
Speaker 4: Make sure that your your life is continuing on even
20:04
Speaker 4: if you.
20:04
Speaker 3: Can't make decisions.
20:06
Speaker 4: It's often common to to appoint one person to be
20:09
Speaker 4: both a financial financial POA and a medical POA, but
20:13
Speaker 4: that doesn't necessarily have to be the case, and it
20:15
Speaker 4: may actually be it may actually be a good idea
20:18
Speaker 4: to separate those two because if you think about either
20:22
Speaker 4: of these medical power of attorney or a financial power
20:25
Speaker 4: of attorney, that is a lot of responsibility on one person,
20:29
Speaker 4: and to put both of those together, your you know,
20:33
Speaker 4: double the double the responsibility. So it's really it's really
20:37
Speaker 4: not a bad idea to think about, Hey, you know,
20:39
Speaker 4: who in my life is really financially savvy or understands
20:43
Speaker 4: kind of what I value and who in my life
20:46
Speaker 4: is you know, maybe has a stronger medical background.
20:49
Speaker 3: So really think about who who you.
20:51
Speaker 4: Want to be making these decisions for you, and just
20:53
Speaker 4: remember it doesn't have to be the same person. The
20:57
Speaker 4: last thing I want to pause on here that again
21:00
Speaker 4: the state planning is sometimes not the most fun thing
21:03
Speaker 4: to talk about, and probably the least fun part of
21:06
Speaker 4: it is something we call advanced directives or healthcare directives.
21:10
Speaker 4: So these are basically your directions regarding end of life care.
21:16
Speaker 4: So this is something that you're basically what you would
21:21
Speaker 4: want to happen if you become mentally incapacitated or unable
21:24
Speaker 4: to communicate later in life. They're very important to have
21:27
Speaker 4: in place as they're designed to take effect during a
21:29
Speaker 4: person's life, not after you pass. And this directive takes
21:33
Speaker 4: the pressure of making difficult decisions away from your family members,
21:37
Speaker 4: away from your medical POA. Because you have said, you know,
21:41
Speaker 4: if I am in this you know, persistent state, I
21:44
Speaker 4: don't want to be kept alive or I don't want
21:46
Speaker 4: to be you know, on a feeding tube or.
21:48
Speaker 3: Whatever it might be.
21:49
Speaker 4: Right, you're taking that really really difficult decision away from
21:53
Speaker 4: the medical POA and just saying, hey, follow my instructions
21:56
Speaker 4: that I put in place when I could make decisions.
21:58
Speaker 1: Really fascinating stuff this morning, as we talk with Eric
22:01
Speaker 1: Schwartz and CJ. Closs, they are our retirement planning professionals
22:04
Speaker 1: from Class Financial the website coss financial dot com. That's
22:08
Speaker 1: Class k l a A s Financial dot com. Great
22:11
Speaker 1: website and resource. Also an opportunity there to subscribe and
22:14
Speaker 1: listen back to this week's podcast and previous shows podcasts
22:17
Speaker 1: as well, that all available to you at class financial
22:19
Speaker 1: dot com. They're telephon number six so eight four four
22:22
Speaker 1: two five six three seven, No charge for the ininanitial
22:24
Speaker 1: gets to know you apployment at Coss Financial. It will
22:27
Speaker 1: be complementary to you again their number six oh eight
22:29
Speaker 1: four four two five six three seven. You may be
22:32
Speaker 1: saying I don't think I need it will You may
22:34
Speaker 1: be wrong. We'll find out the details next as Money
22:37
Speaker 1: in Motion with Coss Financial continues right here at thirteen
22:39
Speaker 1: ten wib I talking with our retirement planning professionals CJ.
22:44
Speaker 1: Closs at Eric Swartz. Of course they do come to
22:46
Speaker 1: us from COSS Financial online Cossfinancial dot com. That's coss
22:50
Speaker 1: k l A A S Financial dot com teleph number
22:52
Speaker 1: six oh eight four four two five six three seven
22:55
Speaker 1: talking this week about estate planning and uh, you know,
22:59
Speaker 1: people hear this stuff. I don't know, do I really
23:01
Speaker 1: need a will? Let's talk about will CJ and also probate?
23:05
Speaker 1: What exactly is probate?
23:08
Speaker 2: Yeah, you're right, Sean.
23:09
Speaker 5: I mean people often say a state that I mean,
23:13
Speaker 5: I've seen pictures online of an a state that's like
23:16
Speaker 5: a big property and you know, people are.
23:18
Speaker 2: Drinking wine out on the lawn. I don't have a state.
23:21
Speaker 5: Well, unfortunately that word has been misedused so often people
23:26
Speaker 5: miscategorize that so and a state plan is just basically
23:30
Speaker 5: this idea of advanced directives of what should happen if
23:34
Speaker 5: you become incapacitated, and then what should happen to your
23:36
Speaker 5: stuff when you die. Just keep it simple, right, That's
23:39
Speaker 5: really what this is.
23:40
Speaker 2: Now.
23:40
Speaker 5: Any good lawyer will tell you, well, it's a little
23:42
Speaker 5: bit more than that. That's true, there's more things that
23:45
Speaker 5: can come into play, but keeping it simple at a
23:47
Speaker 5: high level is just the settlement of your stuff or
23:49
Speaker 5: the things or people you care about are in charge
23:52
Speaker 5: of whether you're alive or dead. So estate planning is
23:56
Speaker 5: only for for well. People often think it's only for
24:00
Speaker 5: people of the sizeable amounts, and then they often think
24:03
Speaker 5: estate planning is only about wills and trusts, And as
24:06
Speaker 5: Eric just talked about there in terms of powers of attorney,
24:08
Speaker 5: it can include other things besides just wills and trust
24:13
Speaker 5: Now we already mentioned previously, but almost everyone upon their
24:17
Speaker 5: death who's an American adult will have something to pass on,
24:21
Speaker 5: whether that be a minor child who needs care, or
24:25
Speaker 5: whether that whether that be investments, real estate, or other
24:28
Speaker 5: real property. Other real property we're talking about, by the way,
24:31
Speaker 5: be a car, jewelry, clothes, furniture, whatever it might be.
24:36
Speaker 5: So it's important that upon your death you leave detailed
24:38
Speaker 5: instructions as to how you wish the remaining assets be distributed,
24:42
Speaker 5: and of course to whom those instructions ideally will be
24:46
Speaker 5: specified in either a will or a trust. Hence, the
24:50
Speaker 5: state planning is for just about everyone, everyone who owns
24:54
Speaker 5: something or has somebody they care for. And remember, if
24:57
Speaker 5: you don't have instructions, the state does. The state that
25:01
Speaker 5: you live in, and as I mentioned earlier, it's called
25:04
Speaker 5: dying intest state, which means that you have died without directions.
25:08
Speaker 5: Hence the state will dictate how your property will be
25:12
Speaker 5: divided and distributed, which may not be how you wish
25:16
Speaker 5: it to be done. You notice I emphasize some words there,
25:19
Speaker 5: dictate and may not. I actually don't like the term
25:22
Speaker 5: may not, will not. It's probably a better term, because listen,
25:26
Speaker 5: no judge, no like. Default provisions in the state are
25:30
Speaker 5: going to actually line up with everything you would want
25:33
Speaker 5: to have. I mean, please, don't misunderstand me. It's not
25:35
Speaker 5: like you've got some you know governor saying oh, when
25:38
Speaker 5: these people die without in a state, I'm going to
25:40
Speaker 5: take all their money.
25:40
Speaker 2: I promise you.
25:41
Speaker 5: That is not what governors are doing these days, nor
25:45
Speaker 5: anybody in the state. What they're trying to do is say, well,
25:48
Speaker 5: since Johnny didn't have a plan for himself, and like
25:52
Speaker 5: fifty percent of the people who die in our state
25:54
Speaker 5: have no plans for themselves, we need to create a
25:58
Speaker 5: set of default provisions. Which is very nice of the
26:02
Speaker 5: state to do this, but you get the point. What
26:05
Speaker 5: a terrible, terrible way to take care of your minor children,
26:08
Speaker 5: or to take care of the stuff that you've accumulated
26:11
Speaker 5: over time. Now, some differences here basic differences between trusts
26:14
Speaker 5: and wills. Both of these are useful estate planning devices
26:18
Speaker 5: that will serve different purposes and can work together or
26:22
Speaker 5: separately to create a complete estate plan. A will goes
26:26
Speaker 5: into effect only after you die, whereas a trust takes
26:30
Speaker 5: effect as soon as you create it. This is one
26:32
Speaker 5: of the reasons why when people create trust there's also
26:35
Speaker 5: funding instructions because you often have to put stuff into
26:38
Speaker 5: the trust because it takes effect when you're alive. So
26:42
Speaker 5: it directs who your property, who you know where your
26:46
Speaker 5: property will go at death, and it points a legal
26:48
Speaker 5: representative to carry out your wishes. A trust can be
26:52
Speaker 5: used to begin distributing distributing property before death, at death,
26:56
Speaker 5: or afterwards. A trust is a legal arrangement through it
27:00
Speaker 5: to one person or an institution such as a banker
27:02
Speaker 5: law firm called a trustee, holds legal title to property
27:06
Speaker 5: for another person called a beneficiary. And trust often one
27:11
Speaker 5: of the main reasons people get them is to avoid probate. So,
27:14
Speaker 5: and you have assets that will go through your will.
27:16
Speaker 5: So just think of I die, you know what's going
27:19
Speaker 5: to go through a will. Your home, you're checking account,
27:22
Speaker 5: your savings account, your furniture, your jewelry, all the stuff
27:25
Speaker 5: that doesn't have a beneficiary designation on it.
27:27
Speaker 2: Just think of it that way.
27:28
Speaker 5: So a lot of stuff, right that will go through
27:30
Speaker 5: a will, and that will has to go through probate.
27:33
Speaker 5: Probate is just the court ordered legal process for settling
27:36
Speaker 5: your estate. There's nothing wrong with it, but it just
27:39
Speaker 5: can be lengthy, and there's filing fees, and there's filing
27:43
Speaker 5: notice requirements and all this stuff that goes into it,
27:46
Speaker 5: and it can just take a little while. Well, a
27:48
Speaker 5: trust avoids probate. So if I create a trust and
27:52
Speaker 5: I put all of my non beneficiary designation assets into
27:57
Speaker 5: that trust. So think I own a home and I
27:59
Speaker 5: actually have the home owned by my revocable trust. Well
28:03
Speaker 5: upon my death, now think about that, what goes through probate?
28:09
Speaker 5: And the answer is hopefully nothing. Hopefully just my successor
28:13
Speaker 5: trustee steps up and just starts settling things. You get
28:18
Speaker 5: the idea. So one of the big reasons that people
28:21
Speaker 5: go the trust route is to avoid probate. Now, I
28:24
Speaker 5: want to make a shout out here though the State
28:26
Speaker 5: of Wisconsin does a pretty good job with us. They
28:28
Speaker 5: try to make the process smooth when you do go
28:31
Speaker 5: through probate. It's not a terrible process. In some ways,
28:34
Speaker 5: it forces you to be accountable to the process, whereas
28:37
Speaker 5: a trust can. Sometimes trust can take longer because there's
28:39
Speaker 5: nobody pushing the trustee to actually get stuff done. So
28:43
Speaker 5: there's nothing wrong with probate. It's just if you want
28:46
Speaker 5: to avoid the filing fees, the notices, everything that goes
28:49
Speaker 5: into it, you want it to be more of a
28:51
Speaker 5: private process, then a trust can help to facilitate that.
28:55
Speaker 5: And this becomes really important when you have property in
28:58
Speaker 5: multiple states because remember if you have no non beneficiary
29:02
Speaker 5: designation assets in multiple states, well now you have to
29:05
Speaker 5: open up probate in every single state where you have property.
29:10
Speaker 5: So just something to be aware of and final thought
29:12
Speaker 5: on this. Remember this, just because you go get a
29:16
Speaker 5: will done or a trust done with a lawyer, it
29:18
Speaker 5: doesn't do anything to your beneficiary designation assets. Think four
29:24
Speaker 5: to oh one k ira, you know taxable investment account
29:28
Speaker 5: It does nothing to those, So you know, I'll take
29:32
Speaker 5: an example, say a family has a million dollar estate
29:35
Speaker 5: and their home is worth three hundred grand, and let's
29:38
Speaker 5: say everything else the other seven hundred thousand dollars is
29:40
Speaker 5: in a four toh one k ira and some investment accounts. Well,
29:44
Speaker 5: when you go get your will done with your local attorney,
29:47
Speaker 5: you have built a plan for three hundred thousand dollars.
29:51
Speaker 5: The other seven hundred thousand dollars have not been changed
29:54
Speaker 5: at all. You would need to go change your beneficiary
29:58
Speaker 5: designations to coordinate with your will. That it doesn't happen automatically.
30:03
Speaker 5: So we have this term where we say beneficiary designations
30:07
Speaker 5: trump or supersede whatever your will or trust says. So
30:11
Speaker 5: just make sure you're you're accounting for both vital information.
30:14
Speaker 1: They're great stuff. As always. In one final thing before
30:17
Speaker 1: we get to the class quiz question week, Eric, bring
30:19
Speaker 1: you in on this real quick. How often should you
30:21
Speaker 1: be updating these changes and how often is that necessary?
30:26
Speaker 4: Yeah, it's a good question, and I tend to approach
30:30
Speaker 4: this with folks saying, you know, think about big events
30:33
Speaker 4: in your life, birth of a child, death of a
30:36
Speaker 4: spouse or parent, or you know, divorce, that's another big one, right,
30:41
Speaker 4: These are big topics and big impactful times in our
30:45
Speaker 4: lives that really may actually impact where we want assets
30:49
Speaker 4: to go. More than once, I've met with clients who
30:54
Speaker 4: new clients who will take a look at their beneficiary
30:56
Speaker 4: designations and I'll ask why their former spouse is still
30:59
Speaker 4: listed on their retirement account. And that's usually a big
31:02
Speaker 4: surprise for folks and not a happy one. So I mean,
31:07
Speaker 4: upon big milestones in life, we want to look at
31:10
Speaker 4: the estate plan and you know, if you're sitting there saying, hey,
31:13
Speaker 4: we set up a will when when the kids are born,
31:15
Speaker 4: but the kids are you know, twenty one, now, that
31:18
Speaker 4: is definitely a eight room or a big scient to
31:22
Speaker 4: go back and review that.
31:24
Speaker 3: We definitely want to be doing it more than.
31:26
Speaker 1: Just every twenty Really good guidance and really important stuff
31:29
Speaker 1: to know us. We talk with Eric Schwartz and Cjkloss,
31:31
Speaker 1: our retirement planning professionals from Class Financial. Learn more online
31:34
Speaker 1: cossfinancial dot com to tell for whatever. Six oh eight
31:37
Speaker 1: four four two five six three seven. Speaking of that number,
31:40
Speaker 1: hold onto it now because it's time for the class
31:42
Speaker 1: quiz Question of the week. Works like this, In just
31:43
Speaker 1: a moment, I'll ask you the class quiz question the week.
31:46
Speaker 1: We will then have thirty minutes from the today's program
31:48
Speaker 1: to call the Clause Financial Office right here in Madison
31:50
Speaker 1: at six oh eight four four to two five six
31:53
Speaker 1: three seven first squat correct answer. We'll when that's twenty
31:55
Speaker 1: five dollars gift card to food and laughs, which is
31:57
Speaker 1: good at Red Robin Cheesecake Factory, Red Life, Robster and
32:00
Speaker 1: a bunch of fantastic places. This week's class Quiz question
32:03
Speaker 1: week is this. There are two types of primary powers
32:07
Speaker 1: of attorney documents. There is one for medical. What is
32:10
Speaker 1: the second type? Telephone number six oh eight four four
32:13
Speaker 1: two five, six three seven first goalt correct answer one
32:16
Speaker 1: that twenty five dollars gift card to food and laughst
32:19
Speaker 1: for good as well. It's Class Financial's office right here
32:21
Speaker 1: in Madison. That number six oh eight four four two
32:23
Speaker 1: five six three seven. Eric CJ. It's always great chatting
32:27
Speaker 1: with both of you guys. You have a fantastic day.
32:29
Speaker 2: Thanks Sean.
32:30
Speaker 3: Thanks Sean.
32:32
Speaker 2: This is Money in.
32:32
Speaker 1: Motion with Coss Financial Asset Advisors, LLC, a registered investment
32:37
Speaker 1: advisor registered with the SEC. The contents of this show
32:41
Speaker 1: are for informational purposes only and should not be considered
32:44
Speaker 1: individual investment advice. Class Financial does not offer tax or
32:48
Speaker 1: legal advice. Any opinion offered during the course of this
32:51
Speaker 1: show is the opinion of that particular investment advisor representative
32:55
Speaker 1: and not necessarily the opinion of COSS. Financial News comes
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33:02
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