Latest / Buying Local Podcast / S3E23: Estate Planning is for Everyone with Phillip Vacchio

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S3E23: Estate Planning is for Everyone with Phillip Vacchio · Buying Local Podcast

• 0:00
  All right, welcome back everyone to buying local.
• 0:02
  I'm your host Mike Nelson, 555 Tower 5 Towers media.
• 0:08
  Thanks for listening everybody excited today to be joined by
• 0:12
  Phil Phil, my listeners know because I say it every show, but
• 0:16
  I always mess up everyone's name.
• 0:17
  So I'm going to attempt it though that's.
• 0:19
  Good, Mike, come on, You got this.
• 0:21
  I'm here with Phil Vacchio. Vacchio, Vacchio, the chapter.
• 0:24
  Is more. I knew that Italian, yeah.
• 0:26
  You'd be a little more Italian in your life.
• 0:28
  Yeah. Vacchio, vacchio, vacchio.
• 0:30
  Right. Hey, Phil.
• 0:31
  Vacchio, I knew I was going to mess it up.
• 0:32
  Yeah. It's.
• 0:33
  It's it's my shtick. I just do it on purpose.
• 0:35
  That's right, entertainment. That's it.
• 0:38
  Phil's from Herzog Law, Yes, you guys do a lot of things estate
• 0:44
  planning. Would you say planning elder law
• 0:46
  is That's our, that's our niche really.
• 0:49
  State planning elder law, probates, administrations.
• 0:52
  We do some real estate also but focus mostly on on that area.
• 0:56
  On that area. And pretty, pretty niche.
• 0:57
  I mean, there's a huge, a huge need for it, you know,
• 1:01
  population continuing to grow on the elder law side, people
• 1:05
  continuing to get older. You know, that generation, baby
• 1:08
  generation is a huge generation of people, transfers of wealth
• 1:12
  from the, you know, that generation when they pass away,
• 1:15
  all that stuff is kind of interconnected in what we do and
• 1:18
  it, you know, it's helping the clients and their families.
• 1:23
  It's a transactional kind of law for the most part, right?
• 1:27
  I'm not, I'm not on LA suits where I'm pretending to be a
• 1:31
  lawyer and litigating, Right, Right.
• 1:33
  All these crazy scenarios. Not that I don't see a lot of
• 1:35
  crazy scenarios. You're not screaming at people
• 1:37
  in the courtroom. No, no, I don't.
• 1:38
  I'm not. I try not to.
• 1:39
  Yeah. You know, if I don't have to.
• 1:41
  Or in the conference room. I'm screaming my.
• 1:43
  Clients. Yeah, yeah.
• 1:44
  Probably not a great strategy. I don't think so.
• 1:46
  I don't think they'd appreciate. That what do you get?
• 1:49
  Do you find yourself like in courtroom though?
• 1:51
  Yeah. So not that I'm not in court.
• 1:53
  My court exposure is more limited to 1 when people pass
• 1:58
  away, right, Probates and administration handling things
• 2:01
  in courts, which I'll talk a little more about trying to
• 2:04
  avoid that situation people later in the show, but often
• 2:08
  times it's necessary. So I'll be in court for that.
• 2:10
  Sometimes those get contested, as you can imagine, you know,
• 2:14
  son and daughter fighting over the Christmas village and that
• 2:17
  that kind of thing happens somewhat frequently.
• 2:21
  So the after death type stuff, we're in court for that
• 2:23
  frequently. And then guardianships.
• 2:25
  So whether it's for older individuals who have lost
• 2:30
  capacity and didn't plan properly with the appropriate
• 2:33
  documents, right, we might have to have them declared
• 2:35
  incompetent and have someone appointed to be their guardian
• 2:38
  to handle things for them. That's a court, you know,
• 2:40
  that's, it's a formal court hearing in New York Supreme
• 2:44
  Court. And also for kids who are
• 2:46
  disabled rights like intellectual disability,
• 2:48
  developmental disabilities, when those children turn 18, they're
• 2:53
  adults, you know, despite the disability, their parents simply
• 2:57
  don't have the right to continue to make decisions and handle
• 3:00
  things for them even though they're incapacitated, cannot do
• 3:03
  such themselves. So that's another type of
• 3:05
  guardianship we'll go to and that's usually in surrogates
• 3:07
  court. We'll go to surrogates court and
• 3:09
  get, that's called an Article 17, a guardianship for someone
• 3:12
  who's developmentally or intellectually disabled.
• 3:15
  But that's pretty much my exposure to court and that in
• 3:19
  court. Yeah.
• 3:20
  And, and, and those matters are not, I handle plenty of them,
• 3:25
  but more, more my day-to-day stuff is more the transactional
• 3:27
  stuff, the planning side, asset protection side, applying for
• 3:31
  Medicaid for people. That's what I'm spending most of
• 3:33
  my time doing. Yeah, that's what I love doing.
• 3:36
  I don't mind court, but I'd rather be helping families
• 3:40
  navigate their their issues, putting things in place for
• 3:44
  their future. There's a lot of appreciation in
• 3:46
  that area of law. Like you get to have a family
• 3:49
  with an issue come to me, you create a plan, you help the
• 3:52
  issue. They're very thankful, right?
• 3:54
  I'm not, you know, litigating 2 partners over a contract dispute
• 3:58
  and and everyone walks away pissed off despite the results.
• 4:01
  So I find that to be really rewarding.
• 4:03
  I was about to say a little bit more.
• 4:04
  Rewarding than I'd say yeah. So and I should say to you guys
• 4:10
  are a community partner, yes and very grateful for.
• 4:12
  That very happy to be very excited.
• 4:14
  Yeah, Thank you together for everyone at Herzogwa.
• 4:16
  Thank you. And you guys are just recently
• 4:21
  expanding. Yeah.
• 4:23
  So we should talk before we get because I want to get into the
• 4:25
  state stuff. And I'm actually, you know, as
• 4:28
  as I was getting ready for you to come on the show, I was like,
• 4:31
  how do you make a state law exciting?
• 4:33
  Right. Well.
• 4:34
  What do you mean very excited? Well, no, that's what the, I
• 4:38
  mean, I have the benefit, obviously, we're in a weekly
• 4:41
  group, Gold Star in Saratoga Springs.
• 4:43
  So I get to hear about it pretty often and hear some of the
• 4:45
  stories that you tell. And it actually is really
• 4:48
  interesting. Yeah, some of the stories that
• 4:51
  you've told and the situations that arise.
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  And I don't think that people, I think they hear state planning
• 4:58
  and they're like, Oh yeah, I'll get around to it.
• 4:59
  Or, you know, I'm not sure. I don't really have many assets.
• 5:02
  I don't think I really need that or I don't think people
• 5:04
  understand the full breadth of what it means.
• 5:07
  Absolutely. Right.
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  And it and it's one of the easiest things to, you know, put
• 5:11
  your head in the sand about and I'll get back to that.
• 5:13
  I don't want to talk about those heavy topics with my kids, with
• 5:17
  my family, Just let's put it off one more day.
• 5:19
  And, you know, five years later, we haven't done anything still.
• 5:22
  And I hear that every day, like every time I meet with a client,
• 5:24
  they're like, we should have did this five years ago, 10 years
• 5:26
  ago, but we didn't. And I say, well, you know,
• 5:28
  whatever, no harm, no foul. You made it, nothing happened.
• 5:31
  We're OK, let's get it in place now.
• 5:33
  But yeah, a lot of misconceptions about whether
• 5:37
  it's necessary, it's a non necessary different scenarios
• 5:42
  that I'll bring up. Yeah, Yeah.
• 5:43
  I think it'd be a good idea to talk about the firm first, like
• 5:46
  you mentioned. So tell us about the firm.
• 5:49
  So Herzog Law Firm, the firm itself has been around for about
• 5:52
  78 years, so a long time in the Capital Region, which is a
• 5:55
  testament to the quality of services they provided.
• 5:58
  Yeah, I've only been with them for about two years now.
• 6:01
  OK, right. A quick, quick little yes I was.
• 6:06
  The listeners can't. Pick up on it already.
• 6:08
  And you know, Mike, I'm from Long Island, originally escaped
• 6:12
  about four years ago. Now that that flew, it's been
• 6:14
  four years. Was it a movie?
• 6:16
  What escape from Long Island? Possibly.
• 6:19
  Maybe. Or no.
• 6:20
  That was an escape from LA. Sorry.
• 6:22
  That was a snake Liskin with Kurt Russell.
• 6:25
  You ever see that? No.
• 6:26
  Wasn't that an escape from New York City?
• 6:27
  I think there was 2. Or maybe there was 2.
• 6:29
  Of them, I think they did two of them because one of them did so
• 6:30
  well. Stuck in it on the ground like.
• 6:34
  Yeah, something like magical. It was like one of my mom's
• 6:37
  favorite movies, which is. Weird.
• 6:38
  Good old 80 foot. Yeah, yeah.
• 6:39
  Exactly. All right.
• 6:40
  Sorry, a little tangible. So, yeah, I, I, I moved up from
• 6:43
  Long Island about four years ago.
• 6:44
  My wife and I, now three kids, just wanted to change a pace,
• 6:49
  change a life. I was a partner at a firm down
• 6:51
  there doing the same type of law, stay planning, elder law,
• 6:55
  same stuff. I created a, a new branch of
• 6:58
  that firm up here in the Capital Region and I was renting space
• 7:01
  from another firm that didn't do what we do and growing that
• 7:05
  practice up here. And about two years ago or a
• 7:08
  little more than two years ago, I got approached that the, you
• 7:10
  know, my now current partners at Herzog law firm, They had a need
• 7:15
  for, for somebody with my skill set.
• 7:17
  They were growing right place, right time decided to come on
• 7:20
  and it was one of the best professional moves for me.
• 7:23
  It's been fantastic. And again, high quality.
• 7:26
  I vetted them very closely, right.
• 7:28
  I don't want to get in partnership with people that I
• 7:29
  don't I feel practice the same way I do and they certainly do.
• 7:33
  So joined over there and since then we've continued to grow
• 7:37
  exponentially, right. So we have our main offices in
• 7:40
  Albany over in corporate woods or I would call second main
• 7:44
  office is in Saratoga Springs over on division and railroad.
• 7:48
  We have a satellite office down in Kingston, NY that we do a lot
• 7:51
  of work in. And then our newest area we're
• 7:54
  opening up is up in Queensbury, the 719 Bay Rd. in in
• 7:57
  Queensbury. And they're they're building
• 7:59
  that out currently. It's a new space in what's
• 8:02
  called Fowler Square, I think you're familiar with.
• 8:04
  So you know, a mix of high end condos and there's a small
• 8:07
  commercial area that we're going to build into our office.
• 8:10
  So we're actually seeing people there now, but we're using the
• 8:13
  leasing office temporarily to meet clients.
• 8:16
  And then once the space is built out, it can be a nice, beautiful
• 8:19
  office and going to be excited to see lots of people up there.
• 8:23
  Yeah, that's fun. Yeah.
• 8:24
  So and how do you, so do you guys all kind of rotate around
• 8:28
  through the different offices depending on where the clients
• 8:30
  are or how does that or do you have two degree attorneys that
• 8:33
  work in each location or how does that work?
• 8:34
  For you, yeah, 2° right. So we have a scheduling
• 8:36
  coordinator that kind of figures that out for the most part.
• 8:39
  But like me personally, I'm usually Monday, Fridays in the
• 8:42
  Albany office, Wednesday, Thursdays in the Saratoga
• 8:45
  office, Tuesday I'm floating around depending on where the
• 8:48
  business is. And the other attorneys are
• 8:49
  similar. So we'll have days that are set
• 8:52
  that we're in particular office and they can schedule around
• 8:54
  that. But, you know, if the need
• 8:55
  arises is an emergency situation, well, you know, often
• 8:59
  times we're meeting clients in nursing homes, in their home, in
• 9:02
  a facility if they can't come to the office.
• 9:04
  And we'll try to schedule the rest of our day around that so
• 9:08
  we're not just wasting time traveling between offices.
• 9:12
  But yeah, I mean, so it's myself, Dave Kubicki and Jane
• 9:15
  Marie Schaefer are the three partners that handle the estate
• 9:17
  planning and all the low type matters.
• 9:18
  And then we have another partner, Dan Glasser, who does
• 9:21
  all our real estate law. Yeah, I think I know that name.
• 9:24
  Dan Glasser. You've probably met him
• 9:25
  somewhere. You're everywhere, Mike.
• 9:27
  Who don't you know, come? On I just had a lunch
• 9:31
  appointment actually with a client and we were, we were
• 9:34
  having that conversation because he's like, he's like, you seem
• 9:36
  to know everybody around town. He's like, I don't know anybody.
• 9:40
  And I was like, it's just because I have a newspaper and
• 9:43
  a, you know, like I'm constantly harassing.
• 9:45
  People. For interviews.
• 9:47
  And yeah, they're probably like, oh, what's that Mike Nelson guy
• 9:49
  again? Jeez.
• 9:50
  Yeah, look the other way. Run.
• 9:54
  So and you're a partner. At Verza, yeah.
• 9:58
  And I'm always fascinated about how that works.
• 10:00
  Like do do all law firms kind of run the same structure as far as
• 10:04
  like you come on as a as an associate?
• 10:07
  Associate initially. Initially.
• 10:08
  Yeah. And then you become junior
• 10:11
  partner part. Like how does that typically
• 10:12
  work for a law firm? It depends on the the structure
• 10:14
  of the firm, the size of the firm, various factors, right,
• 10:17
  Like the the larger firms that have like, you know, nationwide
• 10:20
  100 partners, that might be a longer track depending you're in
• 10:24
  associate for a longer time. You know, you show your worth,
• 10:28
  you bring work in, you bring revenue in, go up the ranks.
• 10:32
  Yeah, I I'm still somewhat young.
• 10:36
  I just happened to be again, some some stuff, Right place,
• 10:39
  right time. I like to externalize my
• 10:41
  accomplishments. I take credit.
• 10:42
  Yeah, it's not because your hard.
• 10:44
  Work, no, not at all, no. But that was really, I was a
• 10:47
  partner of the other firm that that happened somewhat young and
• 10:50
  then when I moved up here, I, you know, was an associate first
• 10:53
  at Herzog. You can't make me a partner
• 10:55
  right away. You got to feel me out, make
• 10:56
  sure I'm right fit. But I became a partner after
• 10:59
  about a year there. So yeah, I just, you know,
• 11:04
  joining the leadership table, you prove yourself, prove your
• 11:06
  worth, hopefully. Make yourself unfireable, I
• 11:09
  always like to say. That was been my mentality since
• 11:11
  I was, you know, a lifeguard at a local pool.
• 11:14
  Yeah. No matter what you do, make
• 11:15
  yourself invaluable. Do you do you think, and I'm
• 11:18
  going to just pull in some little fun facts here, do you
• 11:20
  think that your wrestling background helped with that at
• 11:23
  all? Yeah.
• 11:24
  Well, work ethic, right? So 2, two things we're the
• 11:27
  foundation of my work ethic. So one, my, my pops is an
• 11:30
  Italian immigrant came over when he was 14 or 15.
• 11:33
  I always forget, but you know, started working right away.
• 11:36
  I'm one of nine kids, Irish American family, 9 kids.
• 11:39
  It's I don't know what my parents were thinking, but
• 11:42
  that's what the life they wanted to live.
• 11:43
  It's good for them. But he, you know, he worked, you
• 11:46
  know, 6-7 days a week. He was a commercial roofer in
• 11:49
  New York City, just worked his butt off.
• 11:52
  And that's, that's what he did. That's what was, you know, what
• 11:55
  I saw was expected of the person providing for their family.
• 11:58
  So, you know, I've been working since I was like 10 years old,
• 12:01
  just doing various jobs. I worked with him some summers
• 12:04
  and winters doing hard, you know, manual labour, commercial
• 12:07
  roofing type stuff. And then yeah, wrestling.
• 12:10
  So high school wrestling. I was, I was, I was good.
• 12:14
  I was the, you know, I was good at wrestling.
• 12:18
  You could say it naturally. And I love doing it.
• 12:21
  You know, I did it year round, went to some of the bigger
• 12:24
  summer camps that you know, any wrestlers have heard of Jay
• 12:26
  Robinson out in Minnesota? It's a month long routine based
• 12:30
  off of the Army Ranger routine that the coach of Minnesota.
• 12:33
  Was an Army Ranger himself. Yeah.
• 12:35
  So, you know, super intense, nasty, nasty stuff, you know,
• 12:39
  mental deprivation, all that kind of stuff.
• 12:41
  And that just, you know, instills in you an ethic of hard
• 12:45
  work. And if you want something, you
• 12:47
  work for it and you will achieve it If if, if you want it bad
• 12:50
  enough and you put the work in. And I think that applies to
• 12:52
  every area of life, whether it's being a lawyer or construction
• 12:57
  worker, whatever you're doing, or being a father, doesn't
• 12:59
  matter. Being a father, Yeah.
• 13:00
  Put the work in, Yeah? Put the work in SO.
• 13:02
  Yes, that I think that I do attribute a lot of my at least
• 13:05
  work ethic and whoever come from that experience for sure.
• 13:07
  Yeah, yeah. I want to bring that.
• 13:09
  I mean, we do obviously have a couple of of the jiu jitsu
• 13:13
  people that listen to the podcast pretty regularly.
• 13:15
  So, you know, nice like to fluff up the the grappling community
• 13:18
  whenever we. Love the grappling community and
• 13:19
  I've mentioned to you like my son's in jiu jitsu now he's
• 13:24
  seven years old and I've joined. I haven't had much time to
• 13:28
  actually go, but it's one of those things like you missed
• 13:31
  that aspect of life, the competition, the training.
• 13:33
  So trying to get back into that too in in my abundance of free
• 13:36
  time. Yeah, yeah.
• 13:37
  And all the free time I, I I'd share it.
• 13:39
  I trying to get in for roles and it's hard to hard to get in
• 13:43
  there and, and train. But yeah.
• 13:45
  And now I've got in my head, I want to do some Muay Thai too.
• 13:47
  So I want to do some striking and like that.
• 13:49
  I keep saying I'm going to do that.
• 13:50
  They have that the place I go to also, yeah.
• 13:52
  So, yeah, and you're at, you're at Eddie Fivey.
• 13:55
  Eddie Fivey, yeah, we go most into the Molto one, but he has
• 13:58
  the Niskayuna location. I didn't know that.
• 13:59
  Yeah. Oh.
• 14:00
  Nice Niskayuna place too. Man, there's so much jiu jitsu
• 14:02
  around that. It's crazy.
• 14:03
  It's become a huge thing. I mean, it's always been big,
• 14:06
  but I feel like nowadays it's it's bigger than it's ever been.
• 14:08
  It's huge, Yeah. And every time I talk about jiu
• 14:10
  jitsu, I have to shout out to Chad baby, because he's like the
• 14:13
  OG, like all jiu jitsu. Yeah, in the area, somehow came
• 14:18
  out of Chad. I met him early on when I first
• 14:20
  moved up here through an attorney.
• 14:22
  Tony. Tony Iannello.
• 14:23
  Yeah. Who you know, and because they
• 14:27
  wanted me to write some articles for Sarah.
• 14:30
  So good today. Yeah.
• 14:31
  So there was some articles in the Chad and he had explained to
• 14:34
  me that Eddie bought the gym. Yeah, used to be Spa City jiu
• 14:38
  jitsu, Yeah. Yeah.
• 14:39
  So, yeah, and Chad was legit like 30 years ago.
• 14:43
  He was the only guy up here. It was like that.
• 14:45
  He was telling me stories about it was like him and like four
• 14:47
  other guys that would, like, roll in a guy's basement and do
• 14:49
  jiu jitsu, and then he'd like go down to New York City and train
• 14:52
  with. I don't know if it was it was
• 14:55
  one of the Gracie's I maybe it's.
• 14:56
  One of the 1000. Gracie, Yeah.
• 14:59
  But he he's really big on lineage and he's really, and he
• 15:03
  is, I mean almost all jiu jitsu in the area.
• 15:05
  And you, you can possibly not all, but almost all jiu jitsu in
• 15:09
  the area came out of Chad Beatty in in some form.
• 15:13
  Crazy. Yeah.
• 15:13
  It's crazy and how how underground it was at that time.
• 15:17
  Going around someone's base, five guys doing jiu.
• 15:19
  Jitsu was just hanging out. Well.
• 15:21
  It's changed since then. That's EV.
• 15:23
  Yeah. All right.
• 15:23
  So back to. Lawyering.
• 15:24
  It's lawyering. Estate planning.
• 15:26
  Why are we here? Hi.
• 15:27
  I doubt it. So I you know, one of the things
• 15:30
  now again, and I know that you'll share a couple of
• 15:32
  stories, but one of the things that I thought was really
• 15:34
  interesting about estate planning is, as we said, most
• 15:39
  people dismiss it. Yeah, even though from what I've
• 15:43
  heard so far from you, everybody needs it every.
• 15:45
  Adult person does. Yeah, Every adult person, even
• 15:48
  if you only have a little bit of assets, you should still have
• 15:51
  certain things set up. And the fact that we live in a
• 15:55
  country that has. It's so complicated, Yeah.
• 15:58
  Like the rules around what happens when you die and what
• 16:02
  happens to you, your things, your assets, the people you
• 16:06
  care. Like it's crazy of how.
• 16:08
  You can't get very crazy. Yeah, state specific, you know,
• 16:12
  if you have properties in multiple states, one state might
• 16:15
  not have jurisdiction of the property in the other state.
• 16:17
  Now your family's in court in five different states, right.
• 16:20
  So, yeah, planning properly, you figuring all that stuff out
• 16:23
  while you're alive, putting a little extra work in now for
• 16:26
  yourself is going to pay dividends to your family down
• 16:28
  the road in terms of simplifying things, reducing cost, reducing
• 16:32
  stress. It's it's so important.
• 16:34
  And but you know, you mentioned everyone needs an estate plan.
• 16:37
  I hear all the time I'm too young, I'm too old, I'm too poor
• 16:42
  to I have too much money to, to to protect assets.
• 16:44
  I hear everything and everything in between that as well.
• 16:48
  I do power of attorney in healthcare proxies for 18 year
• 16:52
  olds, right. So you're a parent, Mike,
• 16:55
  Child's going away to college. Maybe that child does a sport or
• 16:59
  whatever that child does. If that child gets hurt while
• 17:02
  they're away, can you call the school or the nurse or whoever
• 17:06
  they're with and get information?
• 17:08
  I'm, I'm, I'm her dad from his dad.
• 17:10
  What happened? They need to talk to the
• 17:12
  insurance company. They're not going to speak to
• 17:13
  you after you're after they're 18 years old.
• 17:15
  They're an adult. So I'll, I'll do power of
• 17:18
  attorney, healthcare proxies for young kids who are 18.
• 17:21
  Well, and adults now who are 1819 years old just in case
• 17:24
  something happens. Their, their mom, their dad,
• 17:26
  whoever has the authority to speak to someone to handle
• 17:29
  things for them. Telling an 18 year old, hey,
• 17:33
  sign this document giving mom or dad permission to, to handle
• 17:35
  stuff for you. Again, sometimes it's like,
• 17:37
  whoa, I just, I just got my freedom.
• 17:39
  Here what are you? Talking about, but when you
• 17:42
  explain it, you know, we can make the document limited in
• 17:44
  scope. They have the authority to
• 17:45
  revoke it as soon as you get back from college or you get
• 17:48
  married, you want to change it to somebody else.
• 17:50
  Don't worry about it. We can do all those things.
• 17:51
  You're not giving up your freedom, but we're planning for
• 17:54
  worst case scenario something happens to you, right?
• 17:56
  So that's like the first part of life where maybe some of these
• 18:00
  documents make sense. And then obviously start to get
• 18:03
  older, graduate college. The most common time of life
• 18:07
  that I have clients come in to do some kind of plan is when
• 18:09
  they have their first kids usually, right.
• 18:11
  Because all of a sudden you are responsible for the life of
• 18:14
  another human being. And if I have kids and something
• 18:18
  happens to, for me, my, my wife and I and my kids are under 18,
• 18:22
  you know one who, who's taking custody of them.
• 18:24
  Yeah, I mentioned I'm one of nine kids.
• 18:27
  Out of those nine kids, some I would not want to have.
• 18:30
  My kids. Some I would be OK with, right?
• 18:32
  I want to, I want to decide who that's going to be.
• 18:35
  I don't want them to fight over, oh, Phil would have wanted me.
• 18:38
  So in a in a valid will, we can specify who would be the
• 18:41
  guardian who would take custody until they're 18.
• 18:44
  I don't want an 18 year old inheriting a bunch of money, you
• 18:48
  know? What would you do at 18 if you
• 18:49
  just got Oh? My God.
• 18:51
  The truckload of money, or whatever it may.
• 18:52
  Be spend it in a week. All good decisions, right?
• 18:54
  You'd invest it wisely and let it grow for you, right?
• 18:56
  Yeah. Yeah.
• 18:57
  So often times, you know, you're not financially mature yet at
• 19:00
  18. So we would hate to have an 18
• 19:02
  year old get control of money in in a will and other documents I
• 19:06
  could trust. We can put limitations, right?
• 19:08
  So we can say, and I'm just going to use random arbitrary
• 19:11
  ages and numbers to illustrate it, If I pass away and any of my
• 19:15
  kids are inheriting or even if it's grandkids and they're under
• 19:17
  the age of let's say 25, that grandchild, that child shares
• 19:22
  and go to him, her outright, right?
• 19:24
  It gets held in a further trust account for their benefit.
• 19:27
  They don't get control until they turn 25, until they turn
• 19:30
  25. I'm going to put my, you know,
• 19:32
  my brother Eric as the trustee. He's going to manage it for
• 19:35
  them. If they need money for school,
• 19:38
  for health, for support, they go to Uncle Eric and this is what I
• 19:40
  need money for. Uncle Eric says, yes, Uncle
• 19:42
  Eric, I want to buy a Ferrari. Uncle Eric says, no.
• 19:45
  What's the idea? We're setting parameters,
• 19:47
  repeating people in in control that we trust.
• 19:50
  And then hopefully when that child turns 25 or whatever age
• 19:54
  you pick, he or she's mature enough to then take control,
• 19:58
  right? I mean, you know, you can't plan
• 20:00
  for every. Situation, we don't know how
• 20:02
  they're all going to turn out, but there's there's certain
• 20:04
  things we can account for, use statistics, what not to plan
• 20:06
  for, that kind of stuff. So that's a very common time of
• 20:10
  life to get some documents in order.
• 20:14
  Usually for someone like that, whether it's an individual or a
• 20:17
  couple, what I call the basic estate plan, a foundation estate
• 20:20
  plan is going to be sufficient. Normally that consists of a
• 20:25
  will, but what's actually known as the last will and testament,
• 20:30
  a power of attorney and a healthcare proxy.
• 20:32
  So the will says when I die, who's in charge?
• 20:34
  Where does my stuff go? That's where I can name the
• 20:36
  guardians, I can name the trustees and the ages.
• 20:39
  All that stuff I just discussed goes in my last one Testament,
• 20:43
  power of attorney, healthcare proxy is while I'm alive.
• 20:46
  So those two documents are only valid while I'm living.
• 20:48
  Once I pass away, they're no one void, but they're really for the
• 20:52
  purpose. If I become incapacitated and
• 20:54
  can't handle my medical or non medical matters, who has legal
• 20:59
  authority to step in and handle those matters for me?
• 21:03
  Even if you're married just because you're married, that
• 21:05
  marriage certificate doesn't necessarily give my wife the
• 21:07
  authority to go manage my Iras or talk to my insurance
• 21:10
  companies. She would still need to be my
• 21:12
  primary power of attorney to be able to handle those things for
• 21:14
  me and a. Lot of people think that, yeah.
• 21:16
  Oh. I would say the majority people
• 21:18
  do. We're married.
• 21:19
  What do you mean? I can anything that's that's his
• 21:21
  is mine. Mine is, you know, we can handle
• 21:23
  anything and it's just simply not true.
• 21:25
  So even if you are married, you want to have that spouse as your
• 21:28
  primary person. If, if you want that, not that
• 21:31
  you have to have your spouse as your primary, that's not always
• 21:33
  the case. I've seen everything.
• 21:37
  But yes, you should still have that person as the primary and
• 21:40
  then backups across the board. When you're planning, you are
• 21:44
  planning based on the information that's in front of
• 21:46
  you right now, but you want to make these documents as future
• 21:49
  proof as possible. And I always say to my clients
• 21:51
  during a console, it's my job to be Mr. Morbid.
• 21:53
  Mr. Worst case scenario, I'm going to bring you down a deep,
• 21:56
  dark rabbit hole with me that you've never gotten that before.
• 21:58
  But we're going to go down it together now.
• 22:00
  We're going to think about it. We're going to make decisions,
• 22:02
  we're going to put it in place and then guess what?
• 22:04
  Then you don't have to think about it anymore.
• 22:06
  We want to account for as much as we can.
• 22:08
  That person passes away. Who's the backup?
• 22:10
  Even a second level backup. If these are my beneficiaries,
• 22:13
  one of them passes away, is their share going to their kids?
• 22:16
  Is it going somewhere else? So backups for everything is is
• 22:20
  advisable. Yeah, it's, it's, it didn't
• 22:25
  occur to me until recently you were telling a story at Gold
• 22:28
  Star actually. And, and I'm trying to remember
• 22:31
  the specific story, but it was it just it, what I heard was
• 22:35
  there's so many different eventualities that can happen,
• 22:40
  so many possibilities of what can take place, that the purpose
• 22:43
  of a lot of this is to try to cover as many bases as you can
• 22:46
  think of so that there's a plan so that, like you said, like you
• 22:50
  don't have to think about it. And there's probably not a
• 22:53
  document that will cover every single you know.
• 22:56
  No one single. Potential outcome, but you know
• 22:58
  the idea behind having someone like yourself that's doing it
• 23:01
  and does it every day. Like you have seen a lot of
• 23:04
  different circumstances and it gives you the ability to
• 23:06
  formulate a better plan. Yeah, and then that's one of the
• 23:09
  benefits of using an experienced attorney in this, in this area.
• 23:12
  You know, you can go online and go to, you know, Rocket Lawyer
• 23:16
  or some other sites and pay us, you know, a couple 100 bucks,
• 23:19
  we'll print you out. New York State power of
• 23:21
  attorney, healthcare proxy will and you fill in the blanks and
• 23:24
  you're going to be set. But those documents are not
• 23:27
  going to account for all those situations you mentioned, right?
• 23:30
  The the computer's not asking you.
• 23:32
  Hey, what, what do you, where do you see yourself in 5-10 years?
• 23:35
  What's your plan? What are your goals?
• 23:37
  Are your kids disabled? This and that?
• 23:39
  You know, we're, we're going to have a full discussion during a
• 23:41
  console. I'm going to ask you a lot of
• 23:42
  questions about yourself to get to know you, your situation,
• 23:44
  your goals, and your documents should be specifically tailored
• 23:48
  to reflect all that. It's not a fill in the blank a
• 23:50
  lot of people think it is. OK, it's easy.
• 23:52
  Anyone could do it. I just fill in a few blanks and
• 23:54
  so, you know, chat. GBT might be a bad solution for.
• 23:58
  Right now, I don't know, in 10 years am I gonna be out of work,
• 24:01
  But according to Bill Gates, I may be.
• 24:03
  Yeah, yeah. That's crazy.
• 24:07
  It's nuts. It's just nuts.
• 24:10
  So using professional, obviously there's some weight to that.
• 24:13
  So advisable, I mean, even even just the signing of the
• 24:15
  documents, this formalities and if it's not closely followed
• 24:18
  that document that you thought was valid might be invalid or
• 24:22
  maybe the way it's drafted or the way you executed it doesn't
• 24:25
  actually accomplish what you thought it would.
• 24:28
  Power of attorney document is a great example of that.
• 24:30
  Power of attorney in New York is quite complicated.
• 24:32
  And if you ever look at the document, there is a New York
• 24:35
  State, what they call short form that you could print out.
• 24:37
  But even the short form, when you look at it, there's a bunch
• 24:39
  of different sections and they have, they're optional.
• 24:43
  Do I initial here? Do I not initial here?
• 24:45
  And if someone's not explaining to you really what those
• 24:50
  sections mean and how they could be used in certain situations,
• 24:53
  you might be like, I don't need that.
• 24:54
  That's never going to apply to me.
• 24:56
  And then guess what? You don't initial it.
• 24:58
  And 20 years down the road, it does apply to you.
• 25:00
  And now your kids are, you know, their, their options are much
• 25:03
  more limited than they would have been if you didn't initial
• 25:05
  that section. And then also in the power of
• 25:08
  attorney, there's this area called modification section.
• 25:11
  So there's a short storm. It's statutory in New York
• 25:13
  State. It's the same across the board,
• 25:15
  the language, but it is modification section that allows
• 25:18
  us as attorneys to input all these other powers that we see
• 25:21
  quite frequently and that we use quite frequently for our clients
• 25:24
  in different situations. So that section is tailored
• 25:27
  specifically by the law office based on the person situation.
• 25:31
  And again, there's options in there.
• 25:33
  And one of the biggest things, especially as you're aging and
• 25:36
  we start to think about, hey, if I got sick one day and we've
• 25:39
  heard horror stories of someone going into a nursing home and
• 25:42
  losing all of our assets. Nursing homes are right now
• 25:45
  about $18,000 a month, which is astronomical.
• 25:49
  You think about how quickly or your hard earned assets would go
• 25:52
  out the window. So if I have a power of attorney
• 25:55
  and that power of attorney has what we call referred to as
• 25:57
  gifting powers. And, and if me and you met for
• 26:00
  the first time, Mike and I said, hey, do you want to give your
• 26:02
  power of attorney the power to gift?
• 26:03
  You know what? What would you think when I say
• 26:06
  that? The gift.
• 26:07
  What's a gift? Yeah.
• 26:09
  I mean, my first thought is, no, I don't because they're going to
• 26:14
  gift all the stuff away. But also at the same time, just
• 26:17
  having listened to you before, it sounds like that might be
• 26:19
  something that could be used to protect assets that, say, a
• 26:22
  nursing home could take away. That's exactly right.
• 26:24
  Because a gift, legally speaking, is any kind of
• 26:26
  uncompensated transfers. It's not just gifts for
• 26:28
  birthdays and holidays. It's any movement of assets out
• 26:31
  of my name to another person, another entity.
• 26:34
  A lot of times we'll create different kinds of trusts to
• 26:36
  preserve assets, transfer to those trusts, legally speaking,
• 26:40
  or gifts. And if I have a power of
• 26:42
  attorney that does not have that broad of a scope of power for my
• 26:46
  acting agent, their ability to protect assets if I become
• 26:50
  incompetent and need long term care are going to be close to
• 26:53
  null. So those powers become
• 26:55
  incredibly important, even more so as we age.
• 26:58
  You know, a lot, again, a lot of my younger couples when we're
• 27:00
  meeting the first time, we just had kids, maybe that power at
• 27:03
  that time is not necessary, right?
• 27:05
  The likelihood of me going into a nursing home, barring A tragic
• 27:08
  accident is, is very low. But the older you get, the, the
• 27:13
  greater those, those possibilities become.
• 27:14
  And that's when we start to think about it.
• 27:16
  And there's no red line number, but for most of my clients, I
• 27:21
  use the range of 60 to 70 or so, depending on health and
• 27:25
  illnesses and whatnot. But 60 or 70 so or so as a rule
• 27:28
  of thumb, when we start to talk about also asset protection
• 27:32
  planning, and sometimes that's when we have that power of
• 27:35
  attorney discussion. Hey, you did this power of
• 27:36
  attorney 20 years ago. Did you know you didn't give
• 27:39
  these powers and these are what these powers can be used for.
• 27:41
  We should maybe do a new one broadening the scope of those
• 27:44
  powers. That's a good time.
• 27:46
  So these are documents that it's not a one and done.
• 27:49
  You should review them. Oh yeah.
• 27:50
  Like how often should you review that stuff?
• 27:53
  Rule of thumb again, every five years I say at least review
• 27:56
  them, right? So our our firm and some other
• 27:58
  firms give free consultation. So I tell clients when they
• 28:00
  leave, question pops up, situation changes, don't be
• 28:05
  scared to call me. You're not going to get hit with
• 28:06
  a bill. I want to discuss with you
• 28:08
  because of those changes in life, is there a need to adjust
• 28:11
  your documents? Going back to earlier when I
• 28:13
  said we try to make those documents as future proof as
• 28:15
  possible, I do try to account for a lot so I'm not having to
• 28:18
  redo your stuff all the time. But some stuff we can't plan
• 28:23
  for, and that may make it necessary to change those
• 28:26
  documents. But every five years or so, if
• 28:28
  we don't hear from you, we'll reach out.
• 28:31
  That's our rule of thumb from our firm.
• 28:33
  But again, no bright line rule. Major life changes, a death in
• 28:36
  the family, death of a spouse. I hit the Lotto.
• 28:39
  I sell a business. You know, when full of money
• 28:41
  comes in. Those are all good reasons to
• 28:44
  review. At least review your estate plan
• 28:45
  and see new changes have to be made because sometimes they do.
• 28:48
  It's not a static document, they should change with you.
• 28:52
  Do you have? I don't know what the rules are.
• 28:54
  So if you if you can't share, you obviously don't have to.
• 28:57
  Trade secrets or do. You know, Well, no, Yeah.
• 28:58
  Now, now I'm just wondering like, like, do you have like an
• 29:02
  example of where having either or let's say power of attorney,
• 29:07
  Yeah, not an overall estate plan yet, but let's say power of
• 29:09
  attorney. Like do you have like a story of
• 29:13
  when someone had it like save their bacon that you can share
• 29:16
  or are you able to share that stuff?
• 29:17
  I know that's I figured. You had a lot of let's think of
• 29:19
  a recent one, right? So a couple weeks ago I had with
• 29:21
  a client and this is, this is not a happy one.
• 29:26
  This is a -1 right? So the, the client, I believe it
• 29:30
  was either the son or the daughter who came to me and mom
• 29:33
  or dad was in a hospital having to go into a nursing home.
• 29:37
  Very common scenario. Mom or dad had done this day
• 29:42
  planning. It wasn't with our firm, but
• 29:44
  they had, you know, willpower, maternity healthcare proxy in
• 29:47
  place, the basic type stuff that everyone should have and was now
• 29:51
  incompetent, meaning that if we wanted to change those
• 29:54
  documents, we no longer can because the person isn't
• 29:57
  competent enough to sign new versions.
• 29:59
  So we were stuck with what they had done in the past.
• 30:02
  And they came to me and they said, hey, this is a scenario
• 30:06
  Dad still has, you know, $200,000 or so in these
• 30:10
  financial accounts, brokerage accounts and bank accounts,
• 30:13
  etcetera, is going into a nursing home where we're told
• 30:16
  it's 18,000 a month. It's crazy.
• 30:18
  He worked really hard for those assets.
• 30:19
  What can we do here to protect some of that?
• 30:22
  And 1st question I asked, can I see the power of attorney that
• 30:26
  he prepared? I take a look at it.
• 30:28
  Lo and behold, that gifting power not initial those
• 30:31
  modifications blank, right? So our that power of attorney is
• 30:35
  bare bones power of attorney. They can pay bills on his
• 30:37
  behalf. They can sign applications for
• 30:39
  government benefits. They can deal with insurance
• 30:42
  companies. What they can't do is move
• 30:45
  money. And there was no loopholes here.
• 30:48
  I won't get into the loopholes too much, but there was no
• 30:50
  loopholes here to take advantage of.
• 30:51
  And I said, unfortunately there's not much we could do
• 30:54
  here if this power of attorney was broader and we have those
• 30:56
  gifting powers we could have in this.
• 31:00
  I call that financially speaking, the worst case
• 31:02
  scenario because it's a five year look back for nursing home
• 31:05
  care if we want Medicaid to pay, right.
• 31:08
  So if we say, hey, this person is going into a nursing home,
• 31:11
  we're going to apply for Medicaid to pay for that nursing
• 31:13
  home. The application process involves
• 31:15
  looking back five years over every financial transaction that
• 31:18
  person has made. So we can't just now give
• 31:20
  everything away to protect it because they would say, hey,
• 31:22
  that those transfers within the past five years, it's going to
• 31:25
  make him Medicaid ineligible. But even in that example, I can
• 31:28
  use a technique that we call crisis planning where we do a
• 31:31
  series of gifts and loans, right?
• 31:33
  So in that scenario, I would have the son or daughter open an
• 31:36
  account in his or her name is what I call a holding account.
• 31:39
  And we would apply these complicated formulas and we
• 31:42
  transfer assets in a series of gifts and loans from dad's
• 31:44
  accounts to this account now in the son's name.
• 31:47
  And at the end of the day, I would have been able to protect
• 31:49
  at least half of that money. That option is not available
• 31:54
  because that power of attorney was too limited in scope.
• 31:57
  So I had to be the bearer of bad news there.
• 31:59
  Hey, you know, we could have did this.
• 32:01
  Unfortunately, in that situation, we can't do this.
• 32:04
  So that situation, basically, the nursing home's going to
• 32:07
  drain those accounts, Yeah. Yeah, they're going to.
• 32:09
  And then Medicaid's going to pick up the bill.
• 32:11
  Is that how that works? Yeah.
• 32:12
  So they're going to have to privately pay.
• 32:14
  I mean, maybe there's some things that they can spend the
• 32:15
  money down on, right? We can do things like prepaid
• 32:17
  for someone's funeral. That's an allowable expense.
• 32:20
  So look at some of that stuff. How can we spend this money on
• 32:22
  other stuff that's necessary? But ultimately, after all that,
• 32:26
  he's going to have to continue to pay the nursing home bill
• 32:28
  till the funds are below the appropriate Medicaid limit.
• 32:31
  So the Medicaid limit right now is about $32,000 for a person.
• 32:35
  So they're going to get down to 32,000 before they can apply.
• 32:39
  I don't think anyone thinks to themselves I'm gonna sock all
• 32:42
  this money away so the nursing home can have it.
• 32:45
  Yeah, right. They're gonna work.
• 32:46
  Really hard and make sacrifices to give it all to.
• 32:49
  Right to give it. That's my plan home.
• 32:50
  Nothing against you nursing homes out there.
• 32:52
  I'm sure you're doing great. Everyone's gonna make a living,
• 32:54
  but, you know, let's have the government.
• 32:56
  Pay. Yeah, yeah, that's crazy.
• 32:58
  And again, fascinating that you have these.
• 33:01
  I, I just don't think that stuff's always kind of cool
• 33:03
  where you have like these. I don't want to say tricky, but
• 33:05
  it's like sophisticated ways of being able to do things so that
• 33:10
  you can protect the assets. Legal loopholes, right?
• 33:12
  So people say, well, are you telling me to do something
• 33:14
  that's not legal? I'm going to risk my law degree
• 33:18
  to tell you that what we're doing is legal.
• 33:20
  Medicaid has these rules. If we navigate those rules
• 33:22
  appropriately, we can protect some of the assets.
• 33:25
  And, and that was, you know, what I mentioned there, worst
• 33:27
  case scenario or even if they had the power of attorney, we
• 33:31
  could protect about half the assets.
• 33:33
  Let's, let's go back in time for that person, you know, 5-10
• 33:37
  years and say we had met and we discussed creating what we call
• 33:40
  a Medicaid asset protection trust.
• 33:42
  On the flip side, right? That is a vehicle, right?
• 33:45
  A trust is basically a document with a set of rules that we
• 33:49
  create and it becomes its entity.
• 33:50
  And that entity can own assets the same as UR is individuals
• 33:53
  can. And we're going to, we're going
• 33:55
  to put some of that person's assets in his trust, again, very
• 33:59
  personal, specific to the person because there are certain
• 34:02
  limitations on what we can do with the assets we put into the
• 34:04
  trust. So we want to balance protecting
• 34:06
  assets versus still living our lives.
• 34:08
  But we go through that whole conversation, we stick a bunch
• 34:11
  of assets. Maybe that person owned a family
• 34:13
  home or maybe they owned a family camp that they want to
• 34:15
  keep in the family. Stick it in this trust.
• 34:18
  If it's in there for at least five years before if it's a
• 34:22
  individual or if it's a husband and wife or spouse and spouse
• 34:24
  before either needs nursing home care, guess what?
• 34:26
  Those assets are free and clear, totally protected 100%, and it's
• 34:31
  going to one day go to your heirs, whoever you want that to
• 34:33
  be. So advanced planning is even
• 34:35
  better. We can protect more of the
• 34:37
  assets and then whatever we leave in the person's name to
• 34:40
  live off of, That's where we use that crisis plan for to protect
• 34:43
  about half of that on top of everything else.
• 34:46
  So advanced planning is incredibly important.
• 34:48
  And when you say advanced planning, what you're saying is
• 34:50
  the younger you get in there and get the plan together and then
• 34:53
  revisit that plan on a pretty frequent basis.
• 34:56
  That's that's advanced planning that instead of.
• 34:59
  Not crisis planning, not I'm sick, the situation, just.
• 35:02
  Happened and now I've got to take action.
• 35:04
  Yeah, be proactive, not reactive in that sense.
• 35:07
  Yeah, for sure. And yeah, revisiting the plan,
• 35:10
  like I said, you might not be comfortable with certain aspects
• 35:12
  or doing this kind of a trust when you're in your 30s forties,
• 35:15
  but then you're 50 or 60, you're retiring.
• 35:18
  The idea of it might be more appealing to you.
• 35:20
  A lot of times we'll meet clients who went through
• 35:23
  something with their parents, good or bad, right?
• 35:26
  It's meaning that maybe their parents failed to plan properly
• 35:29
  and they see the negative of it and they're like, oh man, I
• 35:31
  don't want my family to ever go through that.
• 35:33
  What do I have to do to avoid that?
• 35:35
  Or mom or dad plan perfectly and they see the benefit of it.
• 35:40
  Oh my God. But what they did, we protected
• 35:41
  all these assets when when they passed away, we didn't have to
• 35:44
  go to court. I want the same for my family.
• 35:46
  So that's learning from experience.
• 35:48
  And that's, you know, unfortunately, sometimes the
• 35:50
  best way to learn, not that you want to learn with the negative
• 35:53
  experiences, but it, it's an eye opener for a lot of people
• 35:55
  because when you're living your life, you're busy taking care of
• 35:58
  your kids, you have your own, you know, running your business
• 36:01
  or, or working hard. You're not thinking about this
• 36:03
  stuff every day, nor should you. It's pretty depressing to think
• 36:06
  about this stuff every day. I like to learn lessons the hard
• 36:09
  way. Do you?
• 36:09
  I do. Everything 3 or 4 times, Yeah, I
• 36:11
  really like to make sure that lesson sinks in.
• 36:15
  Unfortunately, I guess I probably can't go into can't die
• 36:18
  three or four times to. No, yeah, that's a one time
• 36:21
  thing I think. That's for now.
• 36:22
  The word on the street is, yeah, yeah.
• 36:25
  So, OK, so we've got, I want to make sure I've got the pieces
• 36:28
  here. We've got power of attorney.
• 36:30
  Yeah, we've got. And now, so when, well, let me
• 36:33
  back up. I'm interrupting myself when I
• 36:35
  say, or when you say estate plan, like this is a whole
• 36:40
  encompassing term of a bunch of pieces, right.
• 36:43
  So power of attorney, healthcare proxy, healthcare proxy.
• 36:48
  A will having maybe a trust for different purposes.
• 36:52
  One of those purposes is protecting assets.
• 36:54
  You say maybe a trust. I feel like I left Gold Star one
• 36:57
  day after you doing a commercial on trust, thinking that like
• 37:00
  everybody on the planet needs a trust.
• 37:03
  It's it's, it's when you're very young, it's a risk benefit
• 37:07
  analysis, right, Because trusts are a little bit more expensive
• 37:09
  than your basic doing a willpower during healthcare
• 37:11
  proxy, probably not as expensive as most people think, but more
• 37:15
  expensive. And, you know, when you're young
• 37:18
  and you just had kids, is it very likely that you and your
• 37:20
  spouse are going to both pass away in a common accident?
• 37:23
  No, I mean, it's not obviously anything is possible.
• 37:26
  So I don't want to say no, but when we're doing a, you know,
• 37:28
  risk benefit analysis, it doesn't make sense to create a
• 37:31
  trust at that time. Now, sometimes it does, right,
• 37:34
  say that that young couple, one of them owns a business and if
• 37:37
  that person died and we had to go through probate, a formal
• 37:41
  court proceeding before that someone could take over the
• 37:43
  business, that's going to have business interruption.
• 37:45
  That could affect the workflow. That could affect revenue.
• 37:48
  So as you're saying that I was like, I was like, well, I want a
• 37:51
  business. You do.
• 37:52
  I'm talking directly to you. Directly to me, I know I'm like,
• 37:54
  I don't have the power of return.
• 37:56
  I don't have any of that stuff to be.
• 37:57
  Fair and and you know, in your defense, it's not uncommon,
• 38:01
  unfortunately. Unfortunately, unfortunately,
• 38:02
  I'm rethinking my strategy as you speak here.
• 38:05
  Phil. What the hell am I doing?
• 38:06
  Yeah. I know.
• 38:08
  Wake up, phone. I know.
• 38:09
  Yeah. All right.
• 38:09
  Well, we're going to make another appointment, I guess.
• 38:12
  But yeah, I've seen that. I've, I've been involved in
• 38:15
  helping families with too many untimely deaths, right?
• 38:17
  So they're, they're a reality. Anyone who watches the news
• 38:19
  knows that to be true. And when I have no estate plan
• 38:24
  at all that that's the worst case scenario.
• 38:26
  Now all of a sudden, let me ask you if I if I was to tell you or
• 38:29
  I was to ask you, and you might already know this because you've
• 38:32
  listened to me, but maybe not. I don't know.
• 38:34
  You have a spouse and you have children.
• 38:37
  Let's say you don't have a will you pass away?
• 38:40
  Some of the assets are in just Mike Nelson's name.
• 38:43
  Whether it's not just the houses in my name or I have certain
• 38:45
  accounts, they're just in my name.
• 38:46
  You pass away, right? No will survive by a spouse and
• 38:50
  kids. Everything goes to your wife
• 38:53
  automatically, right? That's what I would assume.
• 38:55
  That's what you would assume. That's what most people would
• 38:57
  assume. That's not the case.
• 38:59
  So let's say that the house, let's use the house as an
• 39:01
  example because that's a good one and this has happened to me
• 39:03
  before. All of a sudden you pass away.
• 39:06
  The house isn't just your name. Your wife would get the 1st
• 39:10
  50,000 of the value of the house and then half of the remainder
• 39:15
  of the value and your kids would inherit the other half.
• 39:20
  Now, if you have a minor child like you do, now, you have a
• 39:23
  minor child who is owner of her house.
• 39:27
  So if we want to change that, we want your wife to own it, you're
• 39:29
  actually going to have to buy them out, maybe refinance it.
• 39:33
  There's going to be a guardian at litem appointed by the court
• 39:35
  to look over that child's interest because he or she
• 39:37
  doesn't have, you know, the capacity to make their own
• 39:40
  decisions. They're not an adult.
• 39:43
  That could be really messy. So even there, even a basic will
• 39:46
  on that example would have helped because most likely you
• 39:49
  would say everything goes to my spouse or that means the house
• 39:51
  goes to my spouse first. Whatever the case is, we would
• 39:52
  avoid that situation. So stories like that happen
• 39:56
  every day, you know, and it gets more complicated.
• 39:59
  The more stuff you have, the more complicated your situation
• 40:02
  is. Owning a business, right?
• 40:05
  I have an LLC or an S Corp who has the right to continue
• 40:08
  operating that or even just to wind it down and collect the
• 40:10
  outstanding. Payments and whatnot.
• 40:13
  I was actually thinking about that the other day.
• 40:15
  I'm like, what would happen if I got hit by a bus or something?
• 40:17
  Like who is gonna make do payroll?
• 40:21
  And yeah, what's gonna happen to the money in the accounts and.
• 40:23
  Those are valid concerns to my. Employees like, you know, my
• 40:26
  first thoughts to my employees and then my second thought is to
• 40:29
  the work that we have already gotten paid to do for, you know,
• 40:31
  like what? How does it all shake out?
• 40:32
  Right, who finishes those jobs? All the.
• 40:34
  And then if no one does, obviously problems arise.
• 40:37
  Who, who deals with those problems and who, Yeah, who's
• 40:40
  the onus on to for the financial liability or the legal
• 40:44
  liability? Sure, and that can that could
• 40:46
  result in deaths against your estate, which means less goes to
• 40:49
  your family a lot of times. I'm I'm broke feeling it then.
• 40:52
  Nothing there. OK.
• 40:53
  Yeah, that's fair enough. They're not getting anything.
• 40:56
  They might owe money, actually. But in a situation like that, so
• 40:59
  I say I own a business, let's just use an LLC as an example
• 41:02
  of, you know, common business ownership entity.
• 41:05
  In a situation like that, I would advise the client to
• 41:07
  consider what we call a revocable trust.
• 41:09
  So a revocable trust is an entity I form.
• 41:12
  I can be the trustee. So while I'm alive, it's mostly
• 41:15
  a formality. I'm the trustee, I'm the sole
• 41:17
  beneficiary. So all my rights to any assets
• 41:20
  the revocable trust owns are the same as if I was the individual
• 41:24
  owner. It has no negative tax
• 41:25
  consequence. If I want to sell the business,
• 41:29
  buy another business, whatever the case is, I can do all those
• 41:32
  things. But we make the trust the owner
• 41:35
  of the corporate entity. So right, we assign the
• 41:38
  corporate entity to that trust. Again, you're the primary
• 41:41
  trustee. As long as you're alive and
• 41:42
  well, you're, you're doing your thing, nothing changes.
• 41:44
  But we're going to have a backup trustee and we're also going to
• 41:46
  have a distribution structure of trust owned assets.
• 41:50
  The day you pass away, something happened to you, that backup
• 41:53
  trustee can take over immediately and continue running
• 41:56
  the business, collecting the the payables, winding it down if
• 41:59
  necessary, if it was not in place.
• 42:02
  And if you have a just a will or if you don't have a will,
• 42:04
  they're going to have to go through a formal court
• 42:06
  proceeding called probate, which that full process takes at least
• 42:10
  a year in New York. And the person whose name is
• 42:13
  your executor or what not likely can't start acting until a few
• 42:16
  months because of the court has to process paperwork and whatnot
• 42:20
  before they're officially appointed as the executor.
• 42:22
  So that could be a huge delay in in a business.
• 42:26
  Just a few months. Right.
• 42:27
  Yeah, I mean. I mean, and it's New York, so,
• 42:30
  and it's New York. I think you're being generous of
• 42:32
  the. Probably depends on the county,
• 42:34
  but, you know, but those are considerations we look at.
• 42:37
  So when I say that, you know, you said shouldn't everybody
• 42:40
  have a trust? Not necessarily.
• 42:41
  But there are many, many situations where, yeah, trust
• 42:43
  would make a lot of sense. You have never been through
• 42:48
  probate yourself, right? For a long.
• 42:49
  I have never known, luckily. Most people don't enjoy the
• 42:53
  experience, those who have been through it, because it's a
• 42:55
  formal court proceeding and there's expenses, it takes time,
• 42:59
  there's delays, there's paperwork, and it's fairly easy
• 43:03
  to avoid for the most part, right?
• 43:05
  Financial accounts, if I have beneficiaries on those or joint
• 43:07
  owners and I die, that goes to those people automatically.
• 43:11
  That's outside of probate, my will, that doesn't control that.
• 43:14
  That's all automatic. You know, real estate's a bit
• 43:18
  different. That's a lot of times we're
• 43:19
  putting real estate or businesses into these trusts to
• 43:20
  avoid probate for those. But a lot of times that is
• 43:23
  preferable for somebody when I, when I talk to them about, hey,
• 43:26
  this is what probate is. Do you want your family to go
• 43:28
  through it, or do you want to do a little more work now, spend a
• 43:31
  little bit more money now to avoid it?
• 43:33
  And a lot of times the answer is, yeah, why?
• 43:35
  Why? Why wouldn't I want to avoid
• 43:36
  that, Right. So again, specific to the
• 43:39
  person, I'm not going to say that everyone needs a trust.
• 43:41
  That's simply not true. But it is a very useful tool we
• 43:44
  use. Yeah.
• 43:45
  Yeah, a lot of these things sound like very useful tools
• 43:47
  about things that you never would think about in a million.
• 43:50
  Years so, and that's one of my favorite parts of being an
• 43:52
  attorney in this, in this area of law is it's such practical
• 43:55
  information that everybody needs, right?
• 43:57
  It's not obscure maritime law and stuff like that.
• 44:00
  Like, I talk to anybody and I have information that could be
• 44:03
  useful. Yeah, and that's nice.
• 44:06
  I know that we're getting short on time, but I, I one of the
• 44:08
  questions I had as you were talking is what, what do people
• 44:11
  that are like, let's just say it's just like, I got no kids,
• 44:15
  no living family. I own a business I own, I have
• 44:19
  assets like what? What do those?
• 44:21
  People do. That's a great question.
• 44:23
  I'm going to give you extreme. You're welcome, because I'm
• 44:26
  going to give you probably my most extreme example of a
• 44:29
  scenario like that, right. So this is back when I was
• 44:32
  practicing on Long Island. A woman came to me and said my
• 44:37
  best friend just died and she had a will.
• 44:40
  The will said everything that that this best that deceased
• 44:43
  person owns goes to her best friend.
• 44:45
  She had no family to speak of, parents were deceased, never
• 44:48
  married, no kids, no siblings. Even so, the will said
• 44:52
  everything goes to my best friend and my best friend is the
• 44:54
  executor. And the friend assumed, hey, she
• 44:57
  had that will. I'm just going to bring it to
• 45:00
  the bank and sell the house and do what I got to do.
• 45:02
  So in that scenario, we have, we have to go through probate,
• 45:05
  right? So before she can start acting
• 45:06
  as the executor, she has to have that will probated by the court
• 45:08
  and just to be formally appointed.
• 45:11
  But guess what? One of the first steps for the
• 45:13
  court to accept the will and appoint her is that we have to
• 45:17
  find the class of closest living heirs that would inherit if a
• 45:21
  will didn't exist. So if a will doesn't exist in
• 45:24
  New York, there's something called the law of intestacy and
• 45:26
  that says when there's no will, these are the people who would
• 45:30
  inherit. And it goes to find the class of
• 45:33
  closest living heirs. So if I have a spouse and kids,
• 45:37
  it's my spouse and kids. If I don't have a spouse or
• 45:39
  kids, it's my parents. If I don't have parents, if my
• 45:41
  it's my siblings or the children of priests, deceased siblings.
• 45:44
  So as you can see, it keeps getting broader and broader in
• 45:47
  scope. So in this example, this, this
• 45:49
  woman's closest living relatives were first cousins once removed.
• 45:53
  If I remember correctly, she had about 25 of them.
• 45:56
  They were located in England, Thailand, Italy, Spain, like
• 46:03
  literally all over the world. When I asked the the friend
• 46:07
  who's the executor and the beneficiary that will you know,
• 46:10
  who is your closest living family, she's like I had, she
• 46:12
  had no family. I have no idea.
• 46:14
  I couldn't even begin to tell you.
• 46:16
  So we had to hire a private investigator.
• 46:18
  We had to hire a genealogist. This whole process took I think
• 46:22
  like 2 years to even locate everybody.
• 46:25
  Then we had to send them notices to sign waivers saying they're
• 46:28
  not contesting. Some of them wouldn't sign
• 46:30
  waivers. So when all is said and done,
• 46:32
  you know, three to four years in and you know, couple $100,000 in
• 46:37
  in fees and whatnot later between all this stuff, finally
• 46:40
  get the person appointed as the executor and there was like
• 46:42
  nothing left to even distribute at that point.
• 46:44
  That's terrible. How awful is that?
• 46:46
  And you think in that woman's mind when she did the will,
• 46:49
  she's probably like, I'm doing the right thing by my friend.
• 46:52
  She's the closest person to me. She's going to get what I have
• 46:54
  when I die. Not realizing she just put her
• 46:57
  friend into a nightmare scenario that she really didn't even
• 46:59
  benefit from much. And the system just chewed it
• 47:01
  all up. Shoot it up.
• 47:02
  And you know those laws are there for good purpose, right?
• 47:05
  So as you can imagine, surprise, surprise, people take advantage
• 47:08
  of other people as they get older.
• 47:10
  So if, if my mom or my dad was older and they met a, you know,
• 47:16
  person who was younger who decided to take advantage of
• 47:18
  them and they all of a sudden they did a new will I, I do want
• 47:21
  to have a chance to contest that because maybe they were taken
• 47:23
  advantage of. And that's where the law is the
• 47:25
  way it is and it has it right. But often times it's more of an
• 47:29
  inconvenience because people don't realize hey like I I don't
• 47:31
  even know who my first cousins once removed are if you ask me.
• 47:34
  Yeah, in that scenario, she probably never even knew those
• 47:36
  people. Existing.
• 47:37
  I don't think any of them knew who they were even receiving a
• 47:40
  notice about. Yeah, yeah.
• 47:41
  So. Wild.
• 47:43
  That's a very extreme example, but it's a good illustration of
• 47:45
  how it could get really messy, yeah.
• 47:47
  Yeah, so the moral of the story is.
• 47:49
  Plan. Plan advanced planning.
• 47:51
  Plan now, but just as you go. Very important.
• 47:56
  Sounds important. Yeah, you.
• 47:58
  Want to schedule your console? Normally, yeah.
• 48:00
  No. Get the calendar out.
• 48:02
  If people want to learn more about you, about Herzog, about
• 48:05
  the work that you do, where can they find you guys?
• 48:07
  So we have a great website, herzoglaw.com.
• 48:10
  You can call in for reader, free consultations.
• 48:12
  So free our consults if you come, even if it's a learning
• 48:14
  experience, take advantage of it.
• 48:17
  Phone numbers 518-465-7581. Come into any of our offices.
• 48:22
  If for offices, like I mentioned, we can do a Zoom
• 48:24
  call, we can do a phone call, whatever is convenient for you.
• 48:29
  We try to make ourselves accessible so.
• 48:31
  Yeah, let me also just commend you on knowing your phone
• 48:34
  number. I'm lucky.
• 48:36
  So we do a radio show Saturday mornings.
• 48:39
  Yeah, at 8:00 AM. Magic.
• 48:41
  Damn it. 105.1 I think. OK, but I have to say it during
• 48:49
  the radio show. So I have to practice all right
• 48:50
  A. Little bit of practice.
• 48:52
  I don't even know my kids phone numbers right now.
• 48:54
  With that, I couldn't tell you no.
• 48:56
  I know, I know my wife's. Yeah, I know.
• 48:58
  Maybe 3 phone numbers, Yeah. That's about it.
• 49:00
  I can tell you all the phone numbers from when I was growing
• 49:02
  up. I think I know like still some
• 49:03
  of my friends phone numbers were growing up.
• 49:05
  I used to call all the time. Phil, thanks again for coming
• 49:09
  on. Appreciate.
• 49:10
  You for having on my farm. Always a much better experience
• 49:12
  than Zoom, so thank you very much and happy to be here.
• 49:15
  Thank you and the team for being a community partner and helping
• 49:17
  by buying local happen. Absolutely looking together,
• 49:20
  working for a long time. Together.
• 49:21
  Yes, Sir. Yes, Sir.
• 49:23
  Thanks everybody for listening. Of course, you can find us on on
• 49:26
  the new rebranded website of buying local dot USI know that
• 49:30
  you used to be able to find us on glensfallsreport.com and
• 49:33
  Saratoga businessreport.com. If you're not in the know, we've
• 49:36
  recently brought it all under 1 banner so we can distribute and
• 49:39
  increase our exposure in Warren, Washington and Saratoga counties
• 49:43
  place we call home. Thanks everybody for listening
• 49:45
  and you'll hear from us next week.