November 1, 2021 • 15 mins
Hey, there Money Movers! This week we are all about estate planning.
Tanya is joined by Lori Anne Douglass, Co-Chair of the Diversity Committee of the Trusts and Estates Section of the New York State Bar Association, to help educate us about estate planning and leaving a legacy.
She covers it all from best times to start estate planning, what counts as an "Asset," the difference between a will and a trust, revocable and irrevocable trust, and so much more.
If you have not thought about estate planning, trust us, you are going to want to start.
Host IG: @itstanyatime
The best way to reach Lori is through her email: lori@drestatecounsel.com
learn more about her services at: drestatecounsel.com/about
Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Lorianne Douglas is the founding partner at Douglas rottomoc Or, LLC,
where she specializes in a state and business succession plan
Ri thank you so much for joining us today. Welcome
to Money Moves. We thank you so much for inviting
(00:23):
you toan It's a pleasure to be here. Well, it's
a pleasure to have you on here. And I'm really
excited to dive into this topic because I feel like
a state planning and understanding how we can plan for
the future is a really important part of how our
communities can really build wealth and understand and take a
three sixty view of what that means. So can we
dive in And I'd love for you to address what
(00:46):
is a state planning and when do we need to
begin to think about it? Well, Tania, Actually, a state planning,
from my perspective, is a little bit of a misnomer
because it seems to imply that you have to have
a big estate, you to be rich to do it.
But what it really is is sitting down and constructing
a plan a whether it consists of just a will
(01:10):
or beneficiary designations how you own your real estate, but
having a plan so that if you become disabled or
when you pass, your assets go not only to who
you want, but the way you want and hopefully saving
you know, cost court costs, taxes, whatever can be saved.
(01:32):
But really to ensure that all of your belongings transfer,
you know, the way you want it, in a way
that's also not only what you want, but in a
way that's helpful and beneficial to your beneficiary. That's one
of the reasons we use trust because trust give protection
to the beneficiaries from creditors and the like. That is
(01:54):
a great point because I feel like, you know, you
started off by saying a state planning that feels like
I need to have multiple homes in different countries. But
really it's a grandiose term for saying, hey, let's take
some time and plan out how we would like our
assets to be provided or distributed through our family members,
(02:14):
loved ones, etcetera. And again, it's just about foresight and planning.
So what are the first steps that we take and
when we're considering starting the process of estate planning, who
do we turn to? Well first, one thing. Another thing
about estate planning is people often started when they're you know,
seventy eighty, I have clients ninety years old. Thing, I
(02:34):
think it's time. I'm like, I think, but the time
to start is when you're young, really, when you start working,
or when you um have a child, or when you
have any assets. And nowadays young people are creating assets
every second of the day. Absolutely, those digital assets really
(02:57):
could have value. Think about how you own things. Put
the title, the title, whether there's a beneficiary when you
get your first job, your four one K or life
insurance through your employer, all of those things. That's how
you're starting your plan. There's a lot of different things
that play here. And if I back out of it,
(03:19):
and you know, I know our audience is going to ask,
is estate planning essentially creating a will? Is that the
same thing? Or is a trust something different? Because now
you've mentioned a lot of different players, But like, how
do is it okay if I just decide to get
a will? Well, yeah, it's okay if you just decide
to get a will, because that will, will, you know,
(03:40):
should determine how your assets will pass on your death.
That will a couple of things with just the will,
one that gives you no disability planning, so if you
become disabled to have a stroke, you suffer from dementia,
you go into a nursing on whatever. There's no planning
for you or for your loved one during your disability.
(04:02):
So that's one reason you need more than just a will,
and a will guarantees that your estate goes through the
court to What probate is is the process of authenticating
a will. Because the person has a will, it's called probate.
If you don't have a will, it's called administration. But
(04:22):
either way you have to go through the court. But
there are other plans like using revocable trust or irrevocable
trust where you don't have to go through the court process. Yeah,
so that's one of the things, especially since COVID and
uh there's just the courts have been shut down and
now they're backlog and there's all kinds of problems. So
(04:45):
one way to plan is instead of just doing a will,
you take your assets and you put them in a
revocable trust. While you're alive, you're the grant tour of
the trust, you're the trustee of the trust, and while
you're alive, you're the benefit the area of the trust. Oh,
those assets are already in the trust, and then they
(05:05):
can be administered privately by your death trustees. As they
say it will take this life upon your death. There
are other vehicles that can start working for you during
your life. On gives you more order. You can have
your kids involved in the process. They can know more
to that upon your death is more structure. So you
(05:28):
mentioned seeking counsel from a bunch of different people, from
accountants to lawyers to this. Who's the first person that
I go to when I want to just start a
basic will? So the only the only thing that I
can do, you will a lawyers. Okay, So I I
get I. I don't promote d I Y wills because
they're very complex and people people do them. I review
(05:52):
them all the time. People come to me, they asked
me to review their will, and then after I do
have so many problems that they weren't even aware of
because they didn't have the expertise that knew a little
bit but not enough to really create an effective document.
So the first person you have to you see a
lawyers to do your will. But often times the first
(06:12):
person in that process will be your financial planner, your
life insurance person, god a. Even if you buy a home,
your mortgage broker. These are people that see your money
and see you might need help. Those are the people
that typically refer to the lawyer and say you need
to get everything organized. Florie, We've seen a lot in
(06:35):
the media with you know, big celebrities who have passed
on prematurely and have not left a will or proof
of how they want things distributed amongst their family members.
What happens to a person's estate if they don't have
a will, it does Your estate just goes by state law.
Now that's one thing about a state planning. It's state specific.
(06:59):
So where are a person is domiciled when they die,
it's the law of that state that governs what happens
to their assets if there's no will or beneficiary designations,
joint ownership, that kind of thing. And in most states
the despositive scheme. If a person is single with no children,
(07:20):
it goes in equal shares to their parents. And that
alone is contrary to what most single people want to do.
Most single people, especially if they have siblings, nieces and nephews.
Most single people want to leave their estates to their
nieces and nephew. Then it never gets to them because
(07:41):
mom and dad and all your brothers, they so it
cuts them out. So it's it's goes by the state.
And then not only do you not get to say
how you wanted to go to whom, but there are
always additional costs if you don't pick the fiduciary for
your estate in a will or in some plan and
the court appoints someone, the court often requires a bomb
(08:04):
to be posted because they don't know if your brother
who comes up to administer your state is a crook
or or a good guy. The reality of it is
is like you know, losing a loved one prematurely or
even if it's expected is difficult for any family. But
you know, once you're throwing these nuances and the complications
(08:25):
of dividing up in a state or assets, it is
really hard for any family to weather. So pre planning
and understanding and making your wishes clear before you pass
saves a lot of grief um for a lot of
family members in a really difficult time. Yes, and when
you say nuances, nuances is a very good term for messy,
(08:50):
and so I mean a lot of people. You know,
we are blended family. Lots of people have lots of
children in and out of wedlock and it's really quite
One of the messy situations you see regularly is a
surviving spouse who is not the mother of the surviving children,
(09:12):
and there is often conflict. And if a person dies
without a will, have your estate those to your spouse,
but the other half those to your children and equal shares,
So that means you know, and who are all those children?
Some people have quite a lot. It used to be
back in the day if a if a if a
man died and there had not been proof of fraternity,
(09:34):
well there he goes out away with it. But nowadays
there is all all kinds of DNA testing and you
don't need the body, You just need the other siblings,
or you just need the decedents mother or brother and sister.
Now they can take the DNA test and they can
just swab family members. Just a very random question. So
(09:56):
what happens if someone passes away and they don't have
a will but they have all these assets, like, is
it just then a state decision on how to distribute it? Yeah?
So yeah, basically, what happens if you die without a will?
The first you know, first your family, if you have family,
they have to go to the court where you live.
In the county where you live and and ask to
(10:18):
be appointed a fiduciary. And there's a sortain certain order
as to who has priority. So a person who's single,
for example, with adult children, those adult children have priority
to go and become the administrator of the estate. And
then what happens is once someone is appointed, they have
to administer the estate in accordance with state statute tells
(10:42):
you you collect the assets, you have to pay the debts,
You have to pay the debts in certain order, you
have to do the final income tax returns, you have
to pay any estate tax, all of those things. And
then once you've marshaled the assets, paid all the decedents debt,
and that includes credit card debt and medical bills and
all all times of debt. Your debt doesn't die with you.
(11:03):
So once all of those deaths have been paid, then
the estate would be distributed out in equal shares to
the next of ken. If there is no next of ken,
what actually happens is the money everything will eventually escheat
to the state if no family members come up to
claim it, and if no family members in New York,
(11:25):
for example, if there are no family members closer than
first cousin the on both sides, the public administrator that
is the government agency that administers the state for people
who don't have family members to do it. So, LORI
last question for you, how much should people expect to
pay for estate planning? Well, estate planning is gonna the
(11:49):
cost is really gonna vary depending on you know where
you are in the country. Obviously, everything costs more in
New York to do anything than it costs in other places.
But it's it's the cost is not it's insignificant related
to the value. I mean, it's it's it's nominal because
(12:09):
what what you're gonna do is take care of yourself
while you're living, if you become disabled, you're going to
have documents for that, as well as really going to
protect your family, make sure that they're protective from creditors
in the future, make sure that your your state's bills
can all be paid, make sure that there are trust
(12:32):
or that there's the guardians for children. All of those
things are gonna be in that plan. And so even
if they cost you a few thousand dollars, it is
worth the money that is going to be saved in
the administration of your state be much easier. It is
always easier and more cost effective across the board, want
(12:57):
a hundred percent. You know, I really appreciate you coming
here today and joining us because I know this is
a topic that's obviously incredibly sensitive for many of us.
We don't like to think about, you know, the tough times,
the bad times, and especially grief topics can be incredibly painful.
But you know, I'm grateful to you for sharing this
and opening up this conversation because it will really help
(13:19):
many of us as we look towards planning for the
future and estate planning and keeping our wealth in our families.
So LORI thank you so much for being here today,
and can you please tell us um are on our
Money Moves audience where they can find you if they
would like to follow up or ask more questions. Sure, well,
the best way to reach me is actually to email
(13:41):
me right at the office. My email addresses LORI L
O R I at d R A State Council d
R E S P A P E C O U
N s C L dot com. We also are on LinkedIn,
and I think we have a firm Facebook page, but
I am often too busy to check my social media.
(14:03):
I can imagine email Laurie, thank you so much. I
know we've only begun to scratch the service on this,
but don't worry. Money Mover friends, Laurenne Douglas will be
back with us later on to really give us a
deeper dive and that advanced course on estate planning. Stay
tuned tomorrow and every day this week for more from
our expert. Can you give us some other outlying ideas
(14:26):
on things that we should actually consider when we're creating
our wills and the states that you have to look
at everything and very special money versus moves At this point,
I believe she's starting to lose the capacity to make
sound decisions about her life, health and finances. What everyone
wants in this lifetime is to be validated. They want
to feel theme heard and understood, and a celebrity guest
(14:49):
you won't want to miss. Drummer Boy is so great
to have you here. The trap was a location. This
is what we call o trap. This is where we
hustle make our money. This is our form of exchange.
Money Moves is an i Heart Radio podcast powered by
Greenwood Executive produced by Sunwise Media, Inc. For more podcasts
on i Heart Radio visit the I heart Radio app,
(15:11):
Apple Podcasts, or wherever you get your podcasts from.
Lorianne Douglas is the founding partner at Douglas rottomoc Or, LLC,
where she specializes in a state and business succession plan
Ri thank you so much for joining us today. Welcome
to Money Moves. We thank you so much for inviting
(00:23):
you toan It's a pleasure to be here. Well, it's
a pleasure to have you on here. And I'm really
excited to dive into this topic because I feel like
a state planning and understanding how we can plan for
the future is a really important part of how our
communities can really build wealth and understand and take a
three sixty view of what that means. So can we
dive in And I'd love for you to address what
(00:46):
is a state planning and when do we need to
begin to think about it? Well, Tania, Actually, a state planning,
from my perspective, is a little bit of a misnomer
because it seems to imply that you have to have
a big estate, you to be rich to do it.
But what it really is is sitting down and constructing
a plan a whether it consists of just a will
(01:10):
or beneficiary designations how you own your real estate, but
having a plan so that if you become disabled or
when you pass, your assets go not only to who
you want, but the way you want and hopefully saving
you know, cost court costs, taxes, whatever can be saved.
(01:32):
But really to ensure that all of your belongings transfer,
you know, the way you want it, in a way
that's also not only what you want, but in a
way that's helpful and beneficial to your beneficiary. That's one
of the reasons we use trust because trust give protection
to the beneficiaries from creditors and the like. That is
(01:54):
a great point because I feel like, you know, you
started off by saying a state planning that feels like
I need to have multiple homes in different countries. But
really it's a grandiose term for saying, hey, let's take
some time and plan out how we would like our
assets to be provided or distributed through our family members,
(02:14):
loved ones, etcetera. And again, it's just about foresight and planning.
So what are the first steps that we take and
when we're considering starting the process of estate planning, who
do we turn to? Well first, one thing. Another thing
about estate planning is people often started when they're you know,
seventy eighty, I have clients ninety years old. Thing, I
(02:34):
think it's time. I'm like, I think, but the time
to start is when you're young, really, when you start working,
or when you um have a child, or when you
have any assets. And nowadays young people are creating assets
every second of the day. Absolutely, those digital assets really
(02:57):
could have value. Think about how you own things. Put
the title, the title, whether there's a beneficiary when you
get your first job, your four one K or life
insurance through your employer, all of those things. That's how
you're starting your plan. There's a lot of different things
that play here. And if I back out of it,
(03:19):
and you know, I know our audience is going to ask,
is estate planning essentially creating a will? Is that the
same thing? Or is a trust something different? Because now
you've mentioned a lot of different players, But like, how
do is it okay if I just decide to get
a will? Well, yeah, it's okay if you just decide
to get a will, because that will, will, you know,
(03:40):
should determine how your assets will pass on your death.
That will a couple of things with just the will,
one that gives you no disability planning, so if you
become disabled to have a stroke, you suffer from dementia,
you go into a nursing on whatever. There's no planning
for you or for your loved one during your disability.
(04:02):
So that's one reason you need more than just a will,
and a will guarantees that your estate goes through the
court to What probate is is the process of authenticating
a will. Because the person has a will, it's called probate.
If you don't have a will, it's called administration. But
(04:22):
either way you have to go through the court. But
there are other plans like using revocable trust or irrevocable
trust where you don't have to go through the court process. Yeah,
so that's one of the things, especially since COVID and
uh there's just the courts have been shut down and
now they're backlog and there's all kinds of problems. So
(04:45):
one way to plan is instead of just doing a will,
you take your assets and you put them in a
revocable trust. While you're alive, you're the grant tour of
the trust, you're the trustee of the trust, and while
you're alive, you're the benefit the area of the trust. Oh,
those assets are already in the trust, and then they
(05:05):
can be administered privately by your death trustees. As they
say it will take this life upon your death. There
are other vehicles that can start working for you during
your life. On gives you more order. You can have
your kids involved in the process. They can know more
to that upon your death is more structure. So you
(05:28):
mentioned seeking counsel from a bunch of different people, from
accountants to lawyers to this. Who's the first person that
I go to when I want to just start a
basic will? So the only the only thing that I
can do, you will a lawyers. Okay, So I I
get I. I don't promote d I Y wills because
they're very complex and people people do them. I review
(05:52):
them all the time. People come to me, they asked
me to review their will, and then after I do
have so many problems that they weren't even aware of
because they didn't have the expertise that knew a little
bit but not enough to really create an effective document.
So the first person you have to you see a
lawyers to do your will. But often times the first
(06:12):
person in that process will be your financial planner, your
life insurance person, god a. Even if you buy a home,
your mortgage broker. These are people that see your money
and see you might need help. Those are the people
that typically refer to the lawyer and say you need
to get everything organized. Florie, We've seen a lot in
(06:35):
the media with you know, big celebrities who have passed
on prematurely and have not left a will or proof
of how they want things distributed amongst their family members.
What happens to a person's estate if they don't have
a will, it does Your estate just goes by state law.
Now that's one thing about a state planning. It's state specific.
(06:59):
So where are a person is domiciled when they die,
it's the law of that state that governs what happens
to their assets if there's no will or beneficiary designations,
joint ownership, that kind of thing. And in most states
the despositive scheme. If a person is single with no children,
(07:20):
it goes in equal shares to their parents. And that
alone is contrary to what most single people want to do.
Most single people, especially if they have siblings, nieces and nephews.
Most single people want to leave their estates to their
nieces and nephew. Then it never gets to them because
(07:41):
mom and dad and all your brothers, they so it
cuts them out. So it's it's goes by the state.
And then not only do you not get to say
how you wanted to go to whom, but there are
always additional costs if you don't pick the fiduciary for
your estate in a will or in some plan and
the court appoints someone, the court often requires a bomb
(08:04):
to be posted because they don't know if your brother
who comes up to administer your state is a crook
or or a good guy. The reality of it is
is like you know, losing a loved one prematurely or
even if it's expected is difficult for any family. But
you know, once you're throwing these nuances and the complications
(08:25):
of dividing up in a state or assets, it is
really hard for any family to weather. So pre planning
and understanding and making your wishes clear before you pass
saves a lot of grief um for a lot of
family members in a really difficult time. Yes, and when
you say nuances, nuances is a very good term for messy,
(08:50):
and so I mean a lot of people. You know,
we are blended family. Lots of people have lots of
children in and out of wedlock and it's really quite
One of the messy situations you see regularly is a
surviving spouse who is not the mother of the surviving children,
(09:12):
and there is often conflict. And if a person dies
without a will, have your estate those to your spouse,
but the other half those to your children and equal shares,
So that means you know, and who are all those children?
Some people have quite a lot. It used to be
back in the day if a if a if a
man died and there had not been proof of fraternity,
(09:34):
well there he goes out away with it. But nowadays
there is all all kinds of DNA testing and you
don't need the body, You just need the other siblings,
or you just need the decedents mother or brother and sister.
Now they can take the DNA test and they can
just swab family members. Just a very random question. So
(09:56):
what happens if someone passes away and they don't have
a will but they have all these assets, like, is
it just then a state decision on how to distribute it? Yeah?
So yeah, basically, what happens if you die without a will?
The first you know, first your family, if you have family,
they have to go to the court where you live.
In the county where you live and and ask to
(10:18):
be appointed a fiduciary. And there's a sortain certain order
as to who has priority. So a person who's single,
for example, with adult children, those adult children have priority
to go and become the administrator of the estate. And
then what happens is once someone is appointed, they have
to administer the estate in accordance with state statute tells
(10:42):
you you collect the assets, you have to pay the debts,
You have to pay the debts in certain order, you
have to do the final income tax returns, you have
to pay any estate tax, all of those things. And
then once you've marshaled the assets, paid all the decedents debt,
and that includes credit card debt and medical bills and
all all times of debt. Your debt doesn't die with you.
(11:03):
So once all of those deaths have been paid, then
the estate would be distributed out in equal shares to
the next of ken. If there is no next of ken,
what actually happens is the money everything will eventually escheat
to the state if no family members come up to
claim it, and if no family members in New York,
(11:25):
for example, if there are no family members closer than
first cousin the on both sides, the public administrator that
is the government agency that administers the state for people
who don't have family members to do it. So, LORI
last question for you, how much should people expect to
pay for estate planning? Well, estate planning is gonna the
(11:49):
cost is really gonna vary depending on you know where
you are in the country. Obviously, everything costs more in
New York to do anything than it costs in other places.
But it's it's the cost is not it's insignificant related
to the value. I mean, it's it's it's nominal because
(12:09):
what what you're gonna do is take care of yourself
while you're living, if you become disabled, you're going to
have documents for that, as well as really going to
protect your family, make sure that they're protective from creditors
in the future, make sure that your your state's bills
can all be paid, make sure that there are trust
(12:32):
or that there's the guardians for children. All of those
things are gonna be in that plan. And so even
if they cost you a few thousand dollars, it is
worth the money that is going to be saved in
the administration of your state be much easier. It is
always easier and more cost effective across the board, want
(12:57):
a hundred percent. You know, I really appreciate you coming
here today and joining us because I know this is
a topic that's obviously incredibly sensitive for many of us.
We don't like to think about, you know, the tough times,
the bad times, and especially grief topics can be incredibly painful.
But you know, I'm grateful to you for sharing this
and opening up this conversation because it will really help
(13:19):
many of us as we look towards planning for the
future and estate planning and keeping our wealth in our families.
So LORI thank you so much for being here today,
and can you please tell us um are on our
Money Moves audience where they can find you if they
would like to follow up or ask more questions. Sure, well,
the best way to reach me is actually to email
(13:41):
me right at the office. My email addresses LORI L
O R I at d R A State Council d
R E S P A P E C O U
N s C L dot com. We also are on LinkedIn,
and I think we have a firm Facebook page, but
I am often too busy to check my social media.
(14:03):
I can imagine email Laurie, thank you so much. I
know we've only begun to scratch the service on this,
but don't worry. Money Mover friends, Laurenne Douglas will be
back with us later on to really give us a
deeper dive and that advanced course on estate planning. Stay
tuned tomorrow and every day this week for more from
our expert. Can you give us some other outlying ideas
(14:26):
on things that we should actually consider when we're creating
our wills and the states that you have to look
at everything and very special money versus moves At this point,
I believe she's starting to lose the capacity to make
sound decisions about her life, health and finances. What everyone
wants in this lifetime is to be validated. They want
to feel theme heard and understood, and a celebrity guest
(14:49):
you won't want to miss. Drummer Boy is so great
to have you here. The trap was a location. This
is what we call o trap. This is where we
hustle make our money. This is our form of exchange.
Money Moves is an i Heart Radio podcast powered by
Greenwood Executive produced by Sunwise Media, Inc. For more podcasts
on i Heart Radio visit the I heart Radio app,
(15:11):
Apple Podcasts, or wherever you get your podcasts from.
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