Estate Planning Mistakes to Avoid – Episode 320

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[00:01] Welcome to the Prosperity Podcast. Hello, and welcome to another episode of the Prosperity Podcast. Today, we’re going to be talking about estate planning, and we’re going to get through the ins and outs of that. Kim, I’m excited to share this with you and hear what we should be doing with estate planning. Well, I am too, and I just want to alert listeners to hang in there because a lot of times when you hear this, you’re just like, ah, no, no more estate planning. It’s too big, too much, too challenging, too much detail, too big of a picture, too much legal, too much tax, et cetera. And I get that. And yet here’s the bottom line of this, since I am a very quick to bottom line person, and then we’ll fill in the details as we go.

[00:44] And that is that you will want to understand that estate planning is one of those things that you are going to do the work. You are going to do the work for potential parents and grandparents, depending on how they do the work. You’re going to do the work for yourself, depending on how you choose to go about it. And of course, your children are then going to do the work for you also, depending on how you go about it. And the main message that I want people to hear is that there is work involved, and it’s either now or later. And so this is the subject that I want to cover today is the difference between doing the work now and doing the work later. Excellent. And I agree. I think this can be an overwhelming or a dry topic

[01:29] because it ranges from what we hear with basic wills to something that can be complex. So I think let’s first tackle the now and maybe even tackle the first step of now, and then we’ll get to the later. Does that work for you? It does. And I want to preempt it, I think is the right word, with a story. This story is about my mom and my grandmother, who happens to be my mom’s mom. My mom had created a revocable living trust. And I was involved in this creation because I was fairly new into the financial advice space and was sharing with my parents the importance of having a revocable living trust. And they thankfully took my advice and did the work now. And so what that looked like was a trust was created. So there was a little bit of money, a little bit of time,

[02:29] not unreasonable amounts of either money or time, but there was definitely some work that was done, especially in retitling things. So what that means is this document called a trust, which is really just a bucket, if you will, with a whole bunch of instructions, was opened up, and then things were put in the bucket, like the house and various accounts that were in both my mom’s and my dad’s name. And they were put in this trust, again, a revocable meaning changeable living, the words pretty accurate, trust. So a bunch of work got done. And that was all there. And it was fine. And life bumped along for 10 or 15 years. I don’t remember how long and then my mom passed on. And it was so easy to finish up the work because the beginning

[03:25] work had already been done. In other words, the work had been done now. And then when my mom passed on, it was literally just a couple phone calls, a few shifts in clean up and just a little bit of paperwork. And my mom’s estate was closed out, and my dad now had control of everything. And life went on. So that’s the first half of the story. Any questions about that? No, it sounds to make sense. I’m sure there will be questions as we hear more. Yes, because the second half of the story, I guess I feel like Paul Harvey here, the rest of the story is my grandmother. And yes, my mom did pass on before her mom did. Just circumstances. My grandmother had also been recommended to get a revocable living trust.

[04:15] She chose not to. She felt like she was very organized. In fact, she had a green notebook and everything was supposedly in it. And she chose not to do the work now. And whatever I was able to do in terms of recommendations, she was not listening to. So okay, fine. She chose not to do the work now. And then she passed on. And then my sister and I, because remember, my mom’s gone, got to do the work later. And it was more money and more paperwork and an amazing amount of quote, more time. And what was really interesting is that both of these women lived in the same state as in like Oregon. And both of them had the same legal structure of that state to go through upon death. And it was probably

[05:15] three times the amount of money that we had to pay to the attorneys to settle my grandmother’s estate without a trust, because there’s certain things that each state and the state of your residence requires you to go through. And mind you, this is when my grandmother felt like she was organized with her green notebook, right? And I even agreed with her, but there was a lot more money, a lot more paperwork, because even though she didn’t have a lot of accounts, there were still a whole bunch of steps and a whole bunch of things we had to sign and a whole bunch of documents to get notarized, which is royal pain. And my sister and I both had to be involved because Tammy actually still lived in Oregon

[05:52] at the time and I didn’t, so she had even more things to do. So a lot more time, a lot more money, a lot more paperwork when you do the work later. Robert Leonard You know, that just sounds tiring to put it off, doesn’t it? Yes, it really does. And I can’t encourage people enough to really consider the advice that they’re being given, because the attorney that I did check with at the time said, her estate’s reasonable size, small, essentially, it’ll be fine without a trust. And like I said, I even accepted it. Okay, green notebook, we’re organized, it’ll be fine without a trust. Well, we were incorrect. And so this idea of do the work now or do the work later is something that I want all of our listeners to really hear clearly

[06:41] in that doing the work now is so much easier. It’s when somebody’s alive, it’s when somebody’s thinking clearly. A very important point, right? Now, my grandmother passed on rather quickly, so we didn’t have the issues that can sometimes go along with mental decline. But holy cow, if somebody’s not thinking clearly, that could be even more difficult. And then of course, work done ahead of time is almost always easier than work done sort of after the fact. Isn’t that the truth? It is the truth. Absolutely. This reminds me because this actually hits home for me. Recently, in fact, it was yesterday, we had a celebration and a visiting family. And every summer, they have what they call decoration. And so the family members gather together at

[07:28] the cemetery and they pay tribute to those that have passed along. And so we’re up visiting family and there’s only a landline at the house, so no cell phones. And I had the phone ring the other day. And so I decided to pick it up because it could have been a relative. And it happened to be the funeral home. And they asked for my grandpa. And I said, sorry, he actually passed away about five years ago. And it was just a glaring example of what happens when you don’t take care of the things that you need to in time. And he’s still receiving mail and things are still not reconciled. And we’re talking years later. And so it’s terrible that one, it’s the emotion that comes up every single time when you don’t take care of this, the time commitment. And then on top of that,

[08:19] you have money. But I think it’s really the emotion and time that is the most frustrating personally. Yes, very true. What ended up finalizing with my grandmother is a similar situation. Three years later, I want to say after her death, even though we all thought the Green Notebook organized everything, we had attorneys contact us because there was an outstanding asset that had been forgotten about. And we actually got a little bit more money after paying the attorney to help us find it and track it down, which was in hindsight, a very good use of money. And that’s always a really tricky thing. But they were legitimate and they truly had found an asset and had identified that she had passed on and kept some of the asset as their fee and gave the rest to us. So

[09:06] yes, this is just so important and it’s so easy to just gloss over or ignore or not want to do and it’s just plain irresponsible. I am aware of another situation where an elderly now passed on person had left their estate in a mess and let their kids deal with it. And now the quote kids who are in their 80s are kind of taking on the same attitude of like, we’ll be gone. Who cares? Let them deal with it. That’s so unfair, so unloving, so inappropriate, so irresponsible. And those are tough words and you can click the off button and stick your tongue out of me, but those are the facts. In the Paul Harvey type of story that we’re going through, we’re getting the rest of the story. How about we add in the next step to the story? So how can we make this the

[10:02] happy fairy tale ending for our listeners? I love it. So the easiest recommendation that I’m going to have is for every single person, no matter what state you live in, and we have listeners from all 50 states, to consider a revocable living trust. Because even if your state has a fairly simple probate process, it is still, and this was the case in Oregon with my grandmother, it is still a lot more work and a lot more money after death, which is what probate means. It’s dealing with assets after death and preempting this with a revocable living trust is so much easier. So we have a favorite attorney that does work nationwide. His name is Rick Randall and his website is the National Network of Estate Planning Attorneys.

[10:54] We address this concept quite thoroughly in our perpetual wealth book. And so those links are both things that we can have in the show notes of this podcast, again, the National Network of Estate Planning Attorneys. And you can work with Rick and or any of his other cohorts that are across the country. You can put your state in and find an attorney. And if you cannot, for whatever reason, please reach out to me. I’m delighted to connect you with Rick specifically. And what I would encourage you as the listener to do is to go to the senior people in your families. And maybe you’re that person or maybe it’s two or three or even one generation ahead of you and really encourage this revocable living trust. It really does make a big,

[11:39] big difference, even if attorneys in your state are telling you that you really don’t need to do that work. And what I like specifically about Rick’s work, and I’m not connected to him in any way other than he’s my own attorney, is they create a real process for this creation of the document and the creation of the funding or the transferring of assets into this document. And it’s so valuable and helpful and can really smooth this transition at a time, like you said, Spencer, that’s already highly emotional. Let’s not make it worse. There’s a funny book on the subject that’s called Click Here When I Die. And so one of the jobs of the Do The Work Now is to pay attention to all the online accounts that

[12:29] people have these days, whereby you’ve got a Facebook account, maybe in LinkedIn and Instagram and Twitter and email times 10 and et cetera, et cetera, et cetera. Somebody needs to make sure to have those usernames and passwords in addition to all of the retitling of assets, which is part of the revocable living trust process that I’m so encouraging everybody to do that falls under the category of Do The Work Now. Absolutely. Doing the work now. So we’ll make sure to put inside of the show notes a link to Rick’s website and also the National Network of Estate Planning Attorneys. I think one of the quotes that comes to my mind to summarize this episode would be from Benjamin Franklin. And it was, an ounce of prevention is worth a pound of

[13:20] cure. How does that work? Very well said. Yep. Thanks to Ben. Yes. So listeners, thank you for joining with us and learning about how you can prepare now for things that will help you in the future. Make sure to take a look at the show notes with links to Rick. And again, if there are any specific questions that you have, if you want to work through those details, feel free to send those in to hello at partnersforprosperity.com. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.