Creating and Updating Wills, Trusts, and Power of Attorney – Episode 065

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[00:00] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, my co-host and bestselling financial author, Kim Butler is with us. Welcome, Kim. Hello, Todd. Thank you. Happy to be here today and we’re going to have a fun discussion on documentation. Now that sounds a little boring, but we’ll make it fun, won’t we? We’ll try. And we’re going to be talking about signing and not sign language, but the documents that you sign.

[00:47] And recently we were just talking about student loans and student loans, debts, and just sort of the automatic things that we put, that are put in front of us. I know, I can’t tell you how many mortgage closings I’ve personally been through both on both sides of the table and I can’t honestly say I’ve ever actually read a mortgage. So think of how many things that we sign. And I think you brought up a good topic today to saying, hey, we don’t have to automatically sign or we don’t automatically have to accept the terms that everybody else accepts. Absolutely. And whether it’s student loans or the will and trust environment, I want to talk about that for a minute. You know, at this time of year, end of calendar year, beginning of next fiscal year,

[01:40] whatever you want to call it, people often will look at documents like a will or a trust or maybe a healthcare power of attorney or a medical or durable power of attorney. And again, those things can be overwhelming. People sometimes just sign them to move on. But it’s so important to have an updated will and presumably in most places, a living trust, there’s some states that a living trust is an unnecessary extra step. But in most states, a living trust can help us avoid probate. And that’s a very, very valuable thing. And so I know one of the podcasts that we’ll have available to you is from an attorney that runs an entire group of attorneys called the National Network of State Planning Attorneys.

[02:29] And he has a wonderful process that makes getting your will and creating a way to update it automatically, all included in the same price, just absolutely painless. And it’s a fun process and one that they do a really good job of. They have attorneys in almost all 50 states that they can work with. And that website is it’s NEPA, standing for National Network of State Planning Attorneys. So N as in Nancy, N as in Nancy, EPA.com. And you can put in your state and they’ll find an attorney for you to help you get those documents and get them updated and keep them current, because once you’ve signed them, they are stuck. And you absolutely want to make sure that that document still reflects what you

[03:23] want to have happen. It’s oftentimes it’s not until someone is disabled or very near the end of their life that changes need to be made. And often they’re not in a capacity to make those changes legally anymore. And it can create a real mess. Absolutely. So anytime you’re signing things, S-I-G-N, just dig a little deeper, take a little time. Sometimes even a second opinion might be helpful. Get your family involved. One of the other things I’m really looking forward to in the next month or so is a list that we’re going to come up with of all the little ancillary items that are necessary to have a family’s life organized, not just on the financial front, but on the legal front, on the technical front, because

[04:15] so much of our information is online these days. You can’t just have somebody become disabled or pass on and start going through their mail for the next 30 days to figure out what’s up. You have this whole host of online accounts, their electric bill, their mortgage payment, their car payment, their car insurance, et cetera, et cetera, et cetera. That’s often all going to be online. And so we’re going to have a fun little list that has been compiled by a lot of different brains, attorney brains, accountant brains, and just good organizers that will help you go through and check it off so that your family can be organized, prepared, ready to go. You can have signed documents that are in the right place.

[05:01] You can have the healthcare powers of attorney, the living wills, all of those things. And whether you use this system or just use the system as a prompt to go get it done with your own attorney, that’s totally fine, or just as a checklist for your own family, hand it to your kids, share it with your friends. Let’s really get this out there so that we can all be more organized. And there’s so much good mental peace that comes with having all those things in place. Well, we got an interesting question that just came in on that. And is there a minimum age or a target age where you start worrying about these documents? Oh, that’s a great question. Really, as soon as you start to build assets, you want to have at least a

[05:47] will, if not also the living trust. So that could be at age 18 for somebody, and it could be at age 30 for somebody else, but anytime there’s real estate or any other asset other than life insurance, because of course, life insurance has a beneficiary, so it doesn’t technically need a will to go anywhere. But anytime you have an asset, then you want to have a will so that if an accident occurred, that asset would go where it was supposed to go. Super. And then of course, in the subject of life insurance, keeping our policies updated and our beneficiaries updated is often another subject. Absolutely. That’ll be on our little checklist. So we’ve got an annual review checklist that we’re going to be

[06:31] providing at the end of the year, but then we have a more thorough checklist that deals with all of these legal documents and all of the other ancillary things that will be helpful. And you know, that question that came in reminded me of another one that I think is good, and that’s at what dollar figure. You know, there’s a lot of misinformation out there. Oh my gosh, I have to have a $5 million estate to have a living trust or something like that. And that’s not accurate at all. There is under today’s estate tax law, some things that occur over 5 million versus under. But for the most part, a living trust can be done at, you know, really very minimal asset base, like 50 or a hundred thousand.

[07:12] So again, depending on the county that you live in, because that’s where your probate would occur. If your county, and most of them are, is slow in probate, you want to have a living trust to avoid probate, even if your estate is 50 or a hundred thousand dollars. Super. That is fantastic information and something that not a lot of financial planners are saying that. I think a lot of them are more and more saying that because that federal cap is so high that you can pretty much ignore that now. Yeah, I, I personally know my grandmother had about a maybe two or $300,000 estate and she did not have a living trust. And we tried to get her to get one, just never got it done. And so we had to take her through probate.

[07:59] It costs $4,000. It took six months. So during that six months, nobody’s getting the use of her money. And it was $4,000. It was wasted. If that had been, if a half of that, probably more even like a third of that had been spent on a living trust prior to her death, then there wouldn’t have been the probate and there wouldn’t have been the delay. So not only cost of money for the four grand, but the six month delays. So yes, without a doubt, smaller estates can benefit from the living trust. And again, I want to give you this website as a resource, NEPA NN two ends like Nancy Nancy, EPA.com. And you can go on there and find an attorney in your area and get help in this realm and then Todd, I know you’ll be actually doing a podcast

[08:46] with Rick Randall, the head of that organization and talk about his process in helping people not only get these living wills and living trusts done, but keep them current. Yes. I think that’s probably the, so many people work so hard to get that done one time and then, you know, there’s a divorce in the family or, you know, with one of their children or something in the documents never get updated. And then, you know, next thing, you know, the, you know, one of your children has gotten remarried and your ex previous spouse is receiving money, um, it’s, it can be a real mess. So I wouldn’t encourage anybody. Even if you’ve had one done already, how often do you think you should have it reviewed?

[09:32] I think every couple of years, it’s worth looking at and you may not make any changes, but if you just got in a habit of every other year to review that document. And that’s the neat thing about these NEPA attorneys is they include that in their price. They give you a new set of documents, whether you need it or not. And that just forces that currency to always be there and have it be relevant to your family and have you take the time to revisit it. Super. And then the other thing too, is so many times we think that our finances are private and to some extent they should be, but when you’re not in a situation where you can communicate or perhaps maybe you’ve even passed on, that’s not the time for somebody

[10:17] to try to figure out your finances. So you do need to share some of that information ahead of time, don’t you? Absolutely. And it is funny how our society is so against having these conversations, but my gosh, they’re so much easier had upfront when people are healthy and capable, and if you just make it a habit once a year to run through the family tree and make sure that everybody knows at least the minimum things that people need to know, then it sure makes life a lot easier for those left behind. Super. Well, anything else you want to add to our, to our listeners before we wrap up for today? Well, just keep an eye out in the blog posts at partners number four, prosperity.com for our annual review checklist.

[11:02] And then shortly following that, a more thorough checklist for all of the things that you should have around your legal documents. Super. Well, again, this was fun. This is No BS Money Guy Todd Strobel for the Prosperity Podcast. Once again, special thanks to Kim Butler and take care everybody. Thank you for listening to the Prosperity Podcast to take control of your money and have it work for you. Visit us at partners for prosperity.com. If you liked this episode, make sure you subscribe and leave a review.