Simplifying the Estate Planning Process (39:45)
The good news is that whether you realize it or not, you already have an estate plan. Every state in the union provides a process that will pass on your assets upon your death, unless you’ve planned otherwise. The bad news is that it may not be the one you want.
In our podcast, Simplifying the Estate Planning Process, Brian Leitner and George Fernandez from Mariner Wealth Advisors break down how to make sure your assets are passed on to the right people at the right time and the right way. They take the legal speak out of the discussion and make it simple. This podcast provides information to help ensure your wishes regarding your assets are considered…and simplifies the entire process. If you have questions or topics you would like us to cover, please email us.
Brian Leitner: Welcome to Your Life, Simplified. My name is Brian Leitner, and I’ll be the host of this podcast. In today’s discussion, we’re going to talk a little bit about estate planning, what that means, what’s involved, who’s involved and why it is critical for everyone to have an estate plan. Today I am joined by George Fernandez, the vice president of practice management for Mariner Wealth Advisors. George, thanks for coming on the show. George, just this way of introduction, maybe take 60 seconds or so, a little bit about your background and what you do.
George Fernandez: It’s good to be here, Brian. Well, as vice president for practice management at Mariner Wealth Advisors, one of the things that I do is help our advisors work with their clients and build resources and deliver those training resources to our advisors. But over the years, I’ve spent 15 years in banking. I’ve worked in a retail bank environment but also worked as a financial advisor myself, in a client setting, sitting across the desk from a client, helping them make decisions like the ones we’re talking about today. And then over that time, I’ve learned how to work with clients and have those conversations, and I like helping advisors learn how to do this too. And that’s kind of what got me into the track of working with advisors and practice management.
Brian: That’s great. So, in your conversations with advisors, where does the estate planning, as a topic, fall on the list in terms of conversations they’re having with clients or how important that conversation’s really is?
George: Regardless of whether you realize it or not, everybody has an estate plan. You know, if you don’t make one up yourself, your state’s going to create one for you. It’s really the top of the list, next to how you’re managing your money, how you’re managing your cash flow, for example. But it’s really up there at the top because, if something happens to you, your money’s going to go somewhere, your assets are going to go somewhere. Those things you own are going to go to someone. The question is who do you want that to go to?
Brian: George, that’s a great point, because if you take the default option, the federal government has its estate plan and then the state in which you reside has its own estate plan for you, so the do nothing option is still an option. You’re actively not taking any action, and that’s problematic if you don’t have something in place. So, George, before the show, I was doing a little research, and CNBC has this CNBC Millionaire Survey, and just a couple of years ago they found that less than 40 percent of those with investible assets of over a million dollars have not created even a basic estate plan. This is troubling, obviously, for a lot of reasons, but maybe let’s start at the top. You know, how do you define estate planning to someone?
George: I like to define estate planning is in this simple phrase, it’s the right assets to the right people at the right time in the right way.
Brian: George, that’s a great explanation. That’s a great way of breaking this down. I mean, sometimes within the wealth management business, we’re so focused on getting things right that we can be too technical. And this whole podcast is an opportunity to break it down and truly simplify things. So you broke it down into almost four buckets, right? Assets, people time and way. And just to sort of comment on that, the assets are really everything we own, right? Everything that’s in your house — it could be a baseball card collection, your bank accounts, your brokerage accounts or your cars — all those types of things. Potentially people in your life may ultimately receive some of these assets, either by gift or by some sort of inheritance. It could be it could be your Alma Mater. It could be your church or temple or religious institution, and so forth.
Brian: But other people might be, of course, the people who are around the table helping you craft what’s most important to you and putting a plan together. And then maybe even helping you or helping your descendants and family, when you’re no longer around, with the distribution of those assets. You mentioned time. We talk about passing of wealth, whether that’s done while you’re alive or whether that’s done after your death, depending upon what your goals are and then we talk about the right way to pass assets down. And what I think people get confused about a lot is that they have in their mind on where assets are going to go. And they simply believe that this is the plan that they put in place, but they haven’t documented anything. And what happens there is, those just become sort of a wish unless they are documented and respected by the government. And so when we talk about ways of passing assets, they can pass in a variety different ways.
George: It is just a wish. And so, you do want to make sure that you’ve documented and that you look at, for example, how your assets are titled. You want to look at the instructions that you have and your beneficiary designations on your IRAs and other assets. Or you want to look at, have you declared what that looks like in a will, which would be a document that would essentially explain what you want to have happen, and when.
Brian: Let’s talk about that for a minute, because I think that a lot of people simply say, I have a will. My will says this is the way my assets get distributed. But the reality is the will doesn’t distribute all your assets, right? Assets may go through probate, and we’ll get into that term in just a minute. So how else are assets passed on, and what does that look like?
George: Yeah, so you could have assets. You first look at the way your assets are titled. For example, if you own a home with your spouse, then it’s in your name and your spouse’s name. And if something happens to you, depending upon the state you live in, it will go directly to your spouse, without any division of assets. And that term is joint tenants with rights of survivorship. That’d be like a checking account or savings account or an investment account. It might be a joint tenants with rights of survivorship that automatically would go to your spouse at that point. So it completely bypasses your will. And same can be said for things like an IRA or retirement account where you designate a beneficiary. A beneficiary designation is going to take precedence over your wills. Your will is the list of instructions for anything that doesn’t have somebody already designated to receive it through titling or through beneficiary designation. So that’s a really important part.
Brian: It’s a thing will pass, some will pass by will and others will pass by contract of law. By contract of law, if you have a 401(k) or a 403(b) retirement account, if you’ve seen those documents before, you elect that primary beneficiary, and hopefully a contingent beneficiary. Those have nothing to do with the will. They, in fact, supersede the will. Same thing with a life insurance contract.
Brian: Again, anything by contract is going to pass outside of that will. So some assets will pass outside the will, and then those that pass through the will, will go through the probate process to make it really easy. That probate process is effectively proofing the will and making sure that the assets are being distributed in a way in which the will says they are. And probate is not necessarily a bad thing, but to the extent that you could avoid it, it will avoid assets being tied up for a period of time in the probate system. There are fees involved. So, generally speaking, there’s no reason to go through probate with the right, proper planning.
George: I think a lot of people do have a misconception that probate is always a bad thing, and I think it can add some complexity to an estate planning situation or a state distribution. The other part is it is also public — that’s really important too, but there is a requirement. The executor will have to look at, not only what you own and take an accounting for everything that you want, but he or she also has to look at what you owe. And the probate court, it does require that you publicize that you’ve got a probate going on, and that if you owe any, or if you’re owed any money, then you need to make sure that you stake your claim, so to speak. And so there’s an obligation that the estate should take care of any outstanding bills. And sometimes that’s where the probate really does help out.
Brian: So George, let’s go through some of the basic documents that I think everyone needs regardless of their financial situation. So this could apply to someone who has several thousand dollars. This could apply to somebody who has millions and millions of dollars. And the reality is, these are the fundamentals of estate planning documents. So, it’s not to say that these will cover everything, but as a place to start, you have a living will. You have a health care power of attorney. You may have powers of attorney for your financial situation, as well as HIPAA documents. Let’s talk a little bit about each of those. We talked about the will and how it may not distribute all assets, but the reality is, it is still important. What are some of the reasons that it is still important?
George: Yeah, a will is important because it’s kind of your final set of instructions that catches everything. When any assets perhaps didn’t get a beneficiary designation or don’t have a contingent owner, for example, you’re going to need to have a will to identify what to do with that particular asset. For example, we had a situation, I was working with a client, and they had this property that was family owned property they completely forgot that they inherited. The will was something that they needed to handle the distribution of that particular asset, because it wasn’t covered in a trust, which we’ll talk about. It wasn’t covered with beneficiary designation. So, the probate court had to determine the disposition of that asset and if there was not a will, then the court was going to step in and say, well, here’s what we’re going to do then.
Brian: They are referring to that as our pour-over will. So things that aren’t documented somewhere else, you sort of “pour over” in that sense. And obviously for those who have young children, it’s incredibly important to make sure guardians are actually named. So, I know we were joking about this just the other day — how people will talk about the fact that I have godparents set up for my children and maybe that term was more popular back in the day. And that again, I go back to that was a wish or a desire, but if that’s not documented inside of a will, the state will step in with its own plan, regardless of whether you asked somebody to be godparents or not. It really doesn’t matter if it wasn’t documented in the right legal fashion.
George: Yeah, that’s a really great point. And if you have a godparent who is non-family for example, and you don’t document it, then the court’s going to decide that, sorry, the designation is not going to go to a non-family member. The court is going to be looking at family first. And unfortunately, in many cases, if you don’t have family members who are willing or able, they’re not going to go to a godparent. They’re going to then go through foster care and determine where they’re going to go from there. With a living will, you think of an advanced directive. You know in the instructions that, if you are no longer able to make medical decisions on your own, who do you want to have make those decisions? That’s where the health care power of attorney will come in. And this is where you’re outlining, do you want to do not resuscitate?
George: Do you want to have a physician determine whether or not you should receive care? You need to have your expectations laid out. If you can’t make decisions from a health perspective for yourself, how do you want your life to be prolonged, if at all? It’s very important that people understand your wishes. You just can’t have a conversation and expect them to necessarily follow that if there’s no direction from you, because it’s a highly emotional period. When you find yourself in that situation, you want to make sure that your wishes are definitely documented.
Brian: Maybe you’re not of a sound mind, and you have to be of sound mind legally for the documents to make sense. But I think we all know you could potentially be under some sort of duress. And so, this is true of all types of planning, but truly critical when you’re talking about documents that are going to either keep you alive or not. And so, put a plan in place when you’re in the right state of mind — do this early, right? It’s almost what a dentist would call preventative care, right? Doing things when it’s appropriate, will save you a great deal of heartache and potentially mistakes down the line. Inside of this living will, you’re effectively stating the fact that you may not want A, B and C should something happen to you. And then you alluded to the fact that you may name someone. That’s where the health care proxy comes in.
George: The health care power of attorney will then come into play, because that’s documentation you’re going to be using with your hospital and your doctor’s office. You’re saying, “Yes, you have the power to be able to exercise what is in my living will.” Now, there’ll also be HIPAA documents that will generally come into play as well, which is sharing of information. So, a little bit different for HIPAA documents, and it depends on the state, but generally they are not looking at that as making decisions as much as sharing information. The health care power is really what gives someone the power to actually make the decisions, generally speaking.
Brian: The HIPAA documents are really interesting, and a lot of people now know about them, right? They’ve been around since I believe the 1990s. This really came to be in instances such as, the husband gets in an accident, and his spouse or significant other comes in and asks the doctor what’s wrong?
And the problem is that, due to HIPAA and privacy, information cannot be shared with that other individual unless they have a HIPAA forms on file. So those documents are really important for everyone to have. And I would specifically tell you that I think something that gets overlooked on a regular basis is that child of yours who is over the age of 18 and goes off to school and something potentially happens. So, they wind up in the hospital, and the parents run up there and they asked the doctor staff, “What’s wrong with my son? What’s wrong with my daughter?” And they say, if there’s not a HIPPA form on file, “I’m sorry, I can’t tell you what’s wrong with them.” Because they’re an adult. So as a tip, if you have kids that are going off to school, make sure again, you have that HIPPA document in place.
George: It’s just one of those critical documents. Yeah, it’s a shame. When all three of my kids turned 18, I said, “Happy birthday, guess what you get to do? You get to go meet the attorney.” We sat down and created a basic will. We created a power of attorney, and we created all the health care power of attorney and HIPPA document. They must’ve been so happy with their dad on their 18th birthday. Who wouldn’t be? We had two times that we were glad that we have those. Our son was hospitalized, and we had that paperwork on file. We went to the hospital, and our daughter needed help at college, and we were able to have access to information. Now the college did have its own HIPAA forms too, by the way. So, you might to ask your college because they may have their own forms they want you to fill out. Brian And the other doctor we were going to talk about in the same sense of documents was powers of attorney, right? And especially as it relates to the financial side. And I know that spouses will likely have that on each other. There’s different types of powers of attorney. One could be a springing power of attorney, which means I don’t really have any power over say my wife’s accounts until it springs into action. Maybe she becomes disabled or something like that — some sort of event where it springs into action. Or there’s a durable power of attorney, which means that I can act on my wife’s behalf with her accounts today.
Brian: She doesn’t have to be disabled or have something that happened to her and vice versa. So I think there are pros and cons of both, and people just need to think through what’s best for them. But those are some of the powers of attorney people need to think about. I know it’s very common for people to have powers of attorney over their parents’ accounts, especially once as they get older and want to have someone help them. Maybe their children help them with some of their finances. I think that’s very common.
George: Yeah, they’re very common. I think one of the really important pieces that you want to focus your attention on too, is, if you name someone as a power of attorney, so you mentioned you and your wife, for example, but if something happened to either one of you or both of you, then who steps in? So you need a power of attorney and, in that particular case, you want to make sure you have a conversation with that person before you do that. That person’s reaction may give you a little hint into whether you want to make it springing or not, right? But you do want to make sure that the individual is comfortable with the idea of having to do that.
Brian: It’s a great point. We always think about who the primary beneficiary is on something or who’s the person we’re going to name, who’s going to do A, B and C. But the reality is that person may not be around, the primary beneficiary. So, it’s important to always have some sort of successor, whether it be on the beneficiary side or on some of these documents. So one thing that we didn’t discuss in some of those basic documents was the idea of a trust, right? And there’s so many different types of trusts out there. There are revocable living trusts. There are irrevocable trusts. Let’s talk a little bit about revocable trusts to give people an understanding of how they’re different.
George: Right. And I think the important thing to remember about a trust is that it’s similar to a will. When you think of a will, it’s a list of instructions. It’s directions as to what you want to have happen when, but it’s actually also allows you to title things in the names of the trust. You don’t title things the name of a will, right? So a trust actually becomes the entity that owns those particular assets that you have titled under it. And the nice thing about that is that they continue on, even when you’re not able or you’re not around. Revocable living trusts I think are great tools that allow you to specify where we send an asset from the beginning. It’s the right assets to the right people at the right time in the right way. A trust is specifically designed to do exactly that. You identify what assets by titling them in the name of the trust. You identify in the trust, who the people are that are going to receive it. You identify in the trust at what point in time they’re going to receive it. So you can be very, very specific as to what the rules are related to when they’re going to get it and the way they’re going to receive it, whether it’s an outright distribution or whether it’s going to be an income distribution, for example.
George: So you can create the trust to be very, very specific in terms of how you want those assets distributed over your lifetime or even beyond your lifetime, which is really a powerful thing. The other part of that too, is that it’s not public knowledge. We’re not posting like we would a will through probate that says, “Hey, this person is now deceased. Let everybody know that if you have a claim, then you need to let us know kind of thing.” This is all private, and so it just continues on. It’s as if you are still living in that sense and being revocable you can change your mind, and so you and your wife might be the trustees of that particular trust and over time if things change, life events happen, you can go back and amend that trust later.
Brian: Yeah, so for all intents and purposes, outside of what happens at death, if you create a living trust, and you take the assets that you have — I would take my brokerage account, for example, or other assets of mine. They would now be owned by the trust, so effectively it’s just a re-titling issue. I still have full control over that. I have not given that right away to anybody, but what I’m ultimately doing is, I’m setting myself up for success because if something should happen to me — we mentioned disability earlier — inside of that living trust, I’m naming somebody else to come in and be able to take over my assets and so forth and follow the rules I set forth inside of that trust document. And in my situation, I am married, my wife Melissa, would then take over those assets. They would still be in the name of the trust, and she would have full access to those, to manage them in the way in which we deemed fit prior to my becoming disabled.
George: For example, my wife and I did the same thing. In fact, we had a special circumstance where we had to pay for a house that we own, and my mother-in-law lived with us. We had to have a special trust to allow the house to continue to be for her if something happened to us. But then when she passed away, then we had to update that trust because it was no longer an issue. So that revocable trust allowed us that flexibility of managing if we weren’t there managing for somebody else and then we were able to change it easily afterward.
Brian: Yeah. George has an excellent example of the flexibility that trust can provide and, everyone’s situation is a bit different. I know that there are different advertisements that you hear on the radio, “We’ll do a trust for you. We’ll do a will for you. Act now. It’s with this exclusive TV offer,” something like that. And because everyone’s situation’s different, you really need to take the time and work with the appropriate wealth advisory team to make sure that your wishes are carried out based upon your unique circumstances. And so, we talked about these revocable living trusts and ultimately, when couples die or when individuals die, those trusts can become testamentary trusts, right? So now they become effectively irrevocable after that death, depending upon what’s named inside of the entire estate plan, or you can set up a trust from the get-go. It can be irrevocable starting with an I, which is different than revocable.
George: With an irrevocable trust from the start, you want to identify per particular group of assets, which ones need to be separated from your estate today and know that you’re not going to change your mind essentially. And there are variety of reasons why you might do that. But effectively what you’re doing is saying, “I’m taking these assets, I’m earmarking them for this particular purpose, and I’m not going to be able to change my mind.” And it’s set in stone at that point in time and that becomes an irrevocable trust at that point.
Brian: An example of an irrevocable trust might be an irrevocable life insurance trust, where effectively the trust is buying a policy on someone and ultimately when that someone passes, that insurance policy will be paid out to a trust for the benefit of whomever is named or those who are named inside of that irrevocable life insurance trust. We’ve talked about some of these legal documents, and I think we alluded to some of the folks who are named in these documents. I think it might help if we just go through who are the people who we’re actually naming in these documents and some of the terms that are referred to in our business. We talked about the will itself. We talked about an executor. So, who’s the executor?
George: It’s your personal representative whom you have named to handle your affairs at your death. And this individual will be responsible for collecting all the information that you have that you own. Anything that you owe, putting it all together, notifying the appropriate authorities, whether it be the government or whether it be Social Security, for example, or the lenders that you have or bank accounts. It could be family members. In addition to that, it’s also working with the probate court, because they’re going to have to take this will, and they’re going to need to take it and admit it, submit it to the probate court for it to be reviewed and determined to be valid, which will allow you to then take the instructions within that document and exercise those instructions.
Brian: After you go through that list of all of the responsibilities, what people need to really understand is, when you name an executor — I think a lot of times people named that person off the cuff, if you will, and aren’t truly thinking through — is this person going to be able to handle all this? Are they responsible enough? And what does that look like. It’s a really important piece of the puzzle, and I think that individual really needs to understand what he or she is taking on. No different than a guardian, to some degree. I think we were saying earlier that, with power of attorney, we want to have a conversation before you name the power of attorney, with an executor. And then we talked about trustees. And that’s similar. I mean you have a lot of responsibilities. So as a trustee, what were some of those responsibilities?
George: Very similar in, in fact, I would say that the trustee’s responsibilities are even greater and can last a lifetime depending upon the trust itself. So you have an executor for example, who is just going to be through the probate process and once it’s done, it’s done. There’s not much you’re going to do. if anything, after that. A trustee, however, you pretty much have said, guess what? It’s for life.
George: You get to be the trustee for my kids or my family or whomever for perhaps the rest of your life, depending on how much is in this particular trust. Some of those examples are going to be the things that we just talked about. It’s going to be the organization of assets. It’s going to be a distribution of those assets. Whatever the dictates of that trust are, is what that person is going to be responsible for, which means he or she needs to understand how the trust works. So, the individual has to be able to read the trust and understand it. That’s a critical piece. He or she needs to know how it fits within the state the trustee lives in. And by the way, the trustee is going to be dealing with all the beneficiaries who are going to come knocking on the door.
Brian: To your point, it’s a lot of responsibility. In addition to some of the things you talked about, but the taxes themselves — the trustee is ultimately going to be accountable for this, and a lot of folks have day jobs. They have families, and that’s where we see a great deal of family conflict. So, I think when you’re thinking about who should that trustee be? You want to think about who’s competent. You want to think about the inner workings of that family relationship and dynamics. You also want to think about, does it make sense to have an impartial party?
George: Corporate trustees, they do these all the time. They do thousands of these things, and they know exactly how to handle those delicate situations when you’re working with conflict within family as well. Another great person to have in your corner is a wealth advisor who will know your whole situation and can coordinate, quarterback all of the professionals that you need to have and also work with whomever you happen to name as a trustee and executor as well. They’re really a couple of others that might be really, really important to touch on. One is a personal property memorandum, which is an attachment that you generally have to your legal documents that identifies pretty much everything that you own. And I think that’s a really important thing, because if you have certain heirlooms, certain things that you want to go to specific family members, you want to be very clear who they’re going to go to. You need to create this personal memorandum in order to attach to your will and you need to update it because you might give stuff away before you die, which I would encourage if you want to go to somebody, give it to them now. Enjoy it now. So I think that’s really important.
Brian: George, as it relates to the personal property memorandum, we talked about how a lot of estate planning is timing and conversations, and so forth. I think it’s a really good idea to have those conversations about where you want those assets to go while you’re still alive to reduce some of that family conflict that may take place later. And I know this may sound funny, maybe even silly to some, but I will tell you, I’ve worked with clients who will literally have a note under certain assets around the house, whether it’s grandma’s dining table, it’s exactly a sticky note. They’ll have those. They’ll keep them updated. We use colored dots, but that’s just another way to communicate. Whether you’re doing that or not, again, whether you think that’s the right thing to do or not, it’s all about having that conversation well in advance of something happening. And as we think about timing, no one knows when we’re going to ultimately pass. So having the conversations earlier than later, just makes a lot of sense.
George: It really does. And I’ve been through this personally, and I’ve seen the ramifications of not having things specified and the riff that it causes. But I’ve also seen the joy that it creates when mom is able to give away certain things now and then saying, “Okay, at my death this goes to so-and-so.” I’ve seen that power, too.
Brian: It’s what I’ve seen more times than not. Most people don’t fight over the cash, but they do fight over those heirlooms.
George: Absolutely. Sentimental value. The other one is a letter of instruction. And the reason I bring this one up is because this was really powerful for myself and my family. When my mom passed away of an aneurysm at age 62 unexpectedly, I talked to her on Wednesday, and she was gone by Saturday. What we didn’t know was that she had created a little booklet, a little folder in her file cabinets, that if anything ever happens to me, go to the file cabinet, grab this green folder. And when we looked in there, there was a letter of instruction. It had everything outlined, who to call. It was the final burial arrangements, what she wanted or who she wanted to speak at mass. I mean it was very, very specific as to who was going to do what and when. And so that was a gift, because we didn’t have to make all those decisions. It was already done. And that was just a simple letter of instruction that said, “Here’s all the things that I want to make sure that you take care of. I’ve already done it for you.
Brian: And when you’re in a time of grief, the last thing you want to do is start looking for where those assets are or trying to understand what their issues were.
George: It was an incredible experience for us. We never considered her an organized person. So, when this happened, it was out the blue. So, it was quite amazing.
Brian: As we think about the process of getting started, for those who haven’t done anything, it really depends on where you’re starting. Obviously, we encourage individuals to work with the wealth advisory team who can surround them with the experts that are required to put a plan together to make sure it’s done the right way. You’re talking about potentially passing on assets, whether they’re significant or not, you’re talking about making sure that young kids are taken care of with guardians, and so forth. Doing it right the first time. It makes a lot of sense to work with the right professionals. So where do people go from here? When you think about the process you’re talking about, providing for your children, whether that’s from a wealth perspective or inheritance or guardianships, whether it’s making sure that your goals are ultimately accomplished, whether it is passing assets along in a tax efficient way. There’s a lot here, and it’s important to do it right the first time. So we recommend working with a wealth advisory team who can not only explain this process to you in more detail based upon your situation, but make sure it gets done right the first time and surround you with the experts whom you need.
George: From your perspective, if you’re listening today and thinking through this, there are a couple of things I would share. And that is, first, you want to be able to answer two questions that are going sound a little strange, but the first one is: “What’s important to me about money?” Now the reason I put it that way is because I want you to be able to look back and see, well, here is everything I own. Here is the money I have, here are the assets I have.
George: What’s important about those things? To me, the first thing you’re probably going to think about are things like, money pays the bills, covers all my expenses and gives me my lifestyle. But as you start to think about it, I challenge you to dig just a little bit deeper into that and find out why those things are important to you. And ultimately what happens when you start digging a little bit deeper, why all of those things are important to you. You discovered there’s a second question and the second question is this, “What’s most important to me?” And as you build to the estate plan, you’re really covering both of those things. It’s the combination, intersection or convergence of those two questions that come together to create your wealth plan. And when you’re working with a wealth advisor, that’s one of the things that happens. We automatically go through that conversation to discover what’s important about money to you, as well as what’s most important to you. And then making sure that those actions that you have are aligning with what your intentions are. I think that’s really important. And working with a wealth advisor, that’s where they help you bring those two things together to ensure that your actions and your intentions are aligned. Now you might be thinking, “Okay, well if I’m going to hire somebody, if I’m going to have somebody help me or create this team of people, how do I know who the right people are?” Well, we’ve identified a few people, but the wealth advisor is really key in all of this because they can help you quarterback that.
Brian: George, that’s profound, a lot of what you said there. I think people dread the process sometimes of doing something right, or especially estate planning. I know that your kids at the age of 18 were super excited to meet with their attorney, and so forth.
Brian: Yeah. But for most it’s almost, I just want to get this over with and they just want to sit down and get it done in a short period of time. This truly is a journey. This takes time, not to execute documents, but it takes time to really think through what is important, what’s not just on the surface, but what’s that need maybe behind that need. What really drives you to determine what is truly most important? So, I thought that was a really interesting comment. The other I’d make is, who are the right people to have on my team? Where are the right assets to go to, whether it be from a tax perspective or not. And so, one of the things we always talk to clients about is really stress testing.
Brian: Who is named in your current documents now? I was in a meeting just a few weeks ago where we’re looking at the trustee, and I’m asking questions about the trustee and the husband and wife look at me and say, “That’s Uncle Joe.” I said, “Tell me about Uncle Joe.” And Uncle Joe died two years ago. And so those people are no longer around, or I am going to name my daughter as the executor versus my son for these reasons. Well let me ask you a couple of questions about your daughter–if she is really qualified to do that. Or if you’re going to be that individual that’s acting as an agent regarding a health care power of attorney, is that person named stubborn enough to potentially have to fight and argue to accomplish your wishes, whereas maybe the hospital and doctor want to go in a different direction? So those are all things to think about as we stress test the people who are named in these documents. One thing we should probably discuss is, I have an estate plan. How often should it be reviewed?
George: I would say every three to five years or when the laws change or if a life event happens. And you know, that kind of happened to me last year. My mother-in-law passed away a year before. And so we, because of our estate plan, needed to change our documents. Our kids were older too. We told our kids no longer do you have to go to Uncle Tom.
Brian: The estate plan is really important. I read something in The Wall Street Journal not too long ago that said, one of the number one issues for those of you who have created wills and estate plans is finding them. And so it’s really important to make sure that they’re kept in a safe place. I know some people will think of safety deposit box or maybe even a fireproof safe. There are fireproof safes are fireproof that aren’t smoke proof or who has the code and so forth. A lot of things of that nature. Having something I think on file with a wealth advisor, with an attorney. And obviously, for clients of Mariner Wealth Advisors, we use our Mariner GPS system, everything’s digitally stored in the cloud, and we make sure that the beneficiaries and other loved ones have access to that information at all times. But again, something really important. So George, we talked about a lot today. I want to thank you for coming in. I hope our listeners really take action, and I hope our listeners have learned something about estate planning — how critical it is or how important it is and take action if appropriate.
George: And if I can just paint a real quick picture of what this looks like, when my wife and I were in our twenties and her father passed away after battling cancer, when he died, there was a team of people who came to our assistance. It was the trust advisor. It was the broker for wealth advisor. It was the attorney, the CPA, the banker, an insurance professional, so forth. They came in, they stepped right in and said, “Here’s everything you have to do.” Here’s how everything’s laid out. You guys don’t need to do anything except morn his loss.” And that was huge. In fact, that was probably the seed that was planted in me that day that brought me to where I am today. I’ve been trying to recreate that with my clients for the last 30 years. Helping them understand this is the way it can work for you. And when you have a team of people who come to your side in these kinds of situation, it’s powerful, and it simplifies things more than you can ever imagine. It’s incredibly valuable at the right time. Right?
Brian: So George, thanks again for coming in. I’m going to ask you the question that we ask all of our guests. What is the worst financial decision you’ve ever made?
George: Brian, you’re really making me vulnerable here and putting me on the spot. I was a do-it-yourself, or I had a planner for a long time, but she just kind of let me go with things, too. And when I came into this business, so to speak, I decided that I knew enough, and I fired her. That was my biggest mistake. So I still know this person very well. I do have a client whom I work with on a regular basis. Now a friend of mine, we collaborate, since that’s what I do today. But the biggest mistake is, I realized that planners need planners too. And it was something that I should not have done, because I made some mistakes managing my own affairs when I became a financial advisor, doing things I probably shouldn’t have done. That was probably the biggest mistake, firing my planner.
Brian: It’s interesting. Planners need planners, just like a psychiatrist’s needs psychiatrists. George, thanks again for coming in. We have a series of articles regarding estate planning on our website at marinerwealthadvisors.com. If any of our listeners want to go peruse some of those and become more informed, that might be helpful and, again, if you have questions about what you’ve heard today or want to request the topic, please feel free to email us at [email protected]. If you enjoyed listening to this podcast, please leave your comments. That helps us a great deal.
Brian: We know that your time is incredibly valuable and we hope you find this podcast a worthwhile investment of your time. Thank you for listening.
The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. It is not intended to be personal legal or investment advice or a solicitation to buy or sell any security or engage in a particular investment strategy.
The views expressed are for commentary purposes only and do not take into account any individual personal, financial, legal or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. The opinions are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information that this opinion and forecast is based upon.
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