Estate Planning

Episode Transcript

Speaker 1 (00:00):
Welcome to the Greg Hicks Show today with Bo and
Wanda joining you today to discuss your money, the markets, life,
which kind of all intertwines. So I hope is we
can be your place for knowledge on this Saturday afternoon
and for some of you listening on Sunday afternoon, as
it pertains your money and your future is what we
want to talk about. We are financial advisors here in

(00:22):
the Raleigh area, but serve clients all across the USA,
especially if we're licensed in those areas.

Speaker 2 (00:29):
Financial license like eight stay stage.

Speaker 1 (00:32):
Yeah. Financial Resource Management is our firm. You can check
us out on FRMNC dot com. You can listen to
previous shows one oh six point one FM Talk or iHeartRadio, Apple, Spotify,
and even on our website again f r m NC
dot com. You can call nine one nine eight five

(00:52):
six nineteen sixty eight, and you have your own tab
to leave a message, or you can press two and
choose someone that you want to leave a message for.
We are here for you, offering a complimentary meeting that
fits your schedule, so give us a call nine one
nine eight five six nineteen sixty eight. So Bo, let's
talk about world economics before we get into Before we

(01:15):
get into our topic of leaving a legacy, We're not
going to explain a wheel probate all of that. We're
gonna make this show interesting today. We're going to talk
about lecture. Right when you die, what happens? Is there
a bright light or is it.

Speaker 2 (01:33):
I talk to somebody who knows exactly?

Speaker 1 (01:35):
And so what's going on in the world. Let's talk
a little bit about I'm hearing bitcoin, bitcoin, bitcoin, what
in the world. I'm not sold on it, but it
is in the news. Bitcoin has joined the banking arena
or whatever. So I'm just.

Speaker 2 (01:50):
I don't know.

Speaker 3 (01:51):
Bitcoin's kind of a tired conversation in my opinion, because
I get I've gotten so many questions about it over
the i mean, shoot past five or six years, and
I've told like, you know, if you can, much like
my advice on any speculative investment, don't put more in
there that you're willing to lose, because I mean, who knows.
Bitcoin has been very volatile over the years. And it's

(02:13):
funny now what they're calling, like Bitcoin and ethereum the
blue chip cryptos. These are the blue chip cryptos, and
then you got your doge coins and your you know,
rabbit coins and whatever else that are the speculative ones,
and it's all kind of the wild West, but some
people have made good money in it, and so I
don't advise against it. I just advise putting too much

(02:33):
in it and getting too excited. And that's another thing
we'll talk about today is just client emotions and investor
emotion and what's been happening to kind of the fabric
of your investment philosophy because of emotion and because of
all the noise it's been cranked up out there.

Speaker 2 (02:48):
I mean, it's.

Speaker 3 (02:49):
Impossible to get through the news without tariff headlines.

Speaker 1 (02:55):
Oh yeah, and t is what I call it?

Speaker 2 (02:57):
What's what's TNT? Trump and Trump and tear griffs? Yeah yeah,
And so it's it's been wild.

Speaker 3 (03:02):
The uh Wall Street Journal had an article this week
called huge stock swings or a new normal for frazzled investors.

Speaker 1 (03:09):
I like that normal?

Speaker 2 (03:11):
Yeah, like that.

Speaker 3 (03:11):
I mean that's where we are, Like out of the
we record this show on Thursday, and the previous ten
trading days, seven of them, so well over half have
had one percent or more up or one percent or
more down Like that typically doesn't happen on such a
frequent basis, and so the market is shooting upwards and

(03:32):
then there's news that's negative and then it falls apart again.
And he got people out there saying, oh, this is
just a false bounce. You know, this is a sucker's rally,
and the market's going to continue to go down another
thirty forty percent. The system's broken. There are always fearmongers
that are going to be spreading this kind of stuff
to get you to act on your emotion and sell

(03:54):
your assets. Panic sell, panic buy, whatever you're doing.

Speaker 1 (03:58):
Well, it's even fearful for me, is as I've been
around a while and I've seen new things come out
of market turmoil, and I'm just so afraid. And I'm
hearing this through Vanguard. Vanguard's coming out with a new
strategy to fight market volatility, some kind of alternative strategy.
Be careful on investing in new strategies because there's almost

(04:24):
nothing new under the sun. So meet with an advisor
and talk about your risk tolerance. Maybe you can't take
the risk you've taken before. You need to talk about that.
We talk about risk tolerance and everything we do with
a client. So instead of going after the new thing
out there, talk to your advisor about how much you

(04:46):
can tolerate, how much can you take? And the market
is volatile, it's emotional, but your portfolio doesn't have.

Speaker 2 (04:53):
To be right, that's exactly right.

Speaker 3 (04:56):
Yeah, And just understand that buying is easy, you know,
there's all is a reason to buy, buying the dip
or you're chasing momentum. Selling is a little trickier, you know,
selling you often do it too soon or too late,
and it's driven more by fear and greed. And that's
what people are feeling right now. Should I sell? Should
I sell? Is this going to get worse?

Speaker 2 (05:15):
The hardest should I go? Say? Should I go?

Speaker 3 (05:19):
The hardest thing to do, which is the right thing
to do oftentimes, is holding. So holding kind of forces
you to live with the outcomes and emotions of both
buying and selling. Twenty three and twenty four. The past
two years were super easy to hold because markets soared
twenty percent plus each year, But so far this year
not so much. I mean, volatility is spiked, as we

(05:40):
talked about, the noise is cranked up, so even the
most strongly held investment disciplines are being tested. But remember
what's normal market downturns are normal. Five percent drops happened
two to three times a year. Ten percent corrections happen
on average every single year. Twenty percent bear markets occur
every about four years. And we had a twenty percent

(06:01):
plus downturn in twenty twenty two.

Speaker 2 (06:03):
Or here we are again.

Speaker 3 (06:04):
We're off the twenty percent bottom, but the market dropped
top to bottom over twenty percent earlier this year. Warren
Buffett's fourth law of motion, I like this, returns decrease
as motion increases. Basically, what he's saying is overreacting can
hurt performance more than doing nothing. Sometimes the right thing

(06:25):
to do is nothing at all. Stop opening your statements,
stop checking your account balance, because if you're the type
of personality and the type of investor, it just bird
dogs your stuff. Our mind, clients of this. The market
hits new highs seven percent of days of trading days.
Looking at that, inversely, what that means is there's a

(06:45):
ninety three percent chance that when you check your account statement,
it's going to be lower than it once was.

Speaker 2 (06:52):
The highest water mark, and people get attached.

Speaker 3 (06:54):
To that, oh my gosh, my account finally hit a
million bucks. Well it might not be there for the
next eighty trading days because we might we might have dipped,
you might have checked it at the market high, and
so don't make any rash decisions. Also, I want to
mention really quick. I've talked to so many clients recently
that are in these target date funds.

Speaker 1 (07:15):
Oh yes, and.

Speaker 3 (07:16):
They're four oh one K, and they're like, you know,
I'm getting close to retirement and everything's on autopilot.

Speaker 2 (07:21):
I'm good.

Speaker 3 (07:22):
And I just remind them that the Fidelity and the
Vanguard twenty twenty and twenty twenty five funds they both
dropped thirty percent in twenty twenty two thirty percent. So
that means you have a two million dollar portfolio and
you're getting ready to retire, and.

Speaker 2 (07:38):
Oh, we're good.

Speaker 3 (07:39):
You know, we're on autopilot, we're in the we're in
the low risk twenty twenty target date fund. Well, all
of a sudden, that two million dollars four O one
K that you have is going to fund your awesome
retirement lifestyle with your wife and you're gonna go travel
and do all the things. Now, all of a sudden
it's one point four million, And then what do you
think happens to your emotions at that point, do you

(08:00):
think you make some rash decisions and pull your money
out of the market that Fidelity twenty twenty fund and
Vanguard twenty twenty fund and twenty twenty five fund, they're
still down about eighteen percent from their highs back in
twenty twenty one. So take control of your retirement assets
and don't fall victim to these changes in the market,

(08:23):
because not only has the stock market dipped, but the
bond market's also kind of taken it on the chin.
And so you can pull money out of your four
oh one k and through an in service withdrawal if
you're fifty nine and a half and in some cases
fifty five. So take advantage potentially of some of these opportunities.
Open up the world of investments that are available to you.
Get some active management, some risk management on your on

(08:46):
your portfolio. Nine one nine eight five six nine six
eight is our number if you want to take control
of your financial life. If you're getting right there towards
the finish line, this is not the time to make mistakes.

Speaker 2 (08:58):
This is not the.

Speaker 3 (08:59):
Time to put things on autopilot and put too much
faith in a strategy that has been proven unfortunately not
to work the way that a lot of people think.
And so we've got so much to talk about today
on a state planning, what to do, how to leave
the best legacy, to make sure Uncle Sam doesn't get it,
and that you're a state that your people you love

(09:20):
are covered after you pass.

Speaker 2 (09:22):
Y'all stick with us, we'll be right back.

Speaker 1 (09:24):
Welcome back to the second segment of the Greg Hicks Show.
You've just had a little lesson on market termoil and
things like that, because it's real to you. We know that.
So we're glad that you're joining us today. And today
we're going to talk a little bit about all of
that market money that we grow and we build over time,
and our retirement plans and things like that. How do

(09:47):
you leave them to the people that you love. What's
the best way to do that? And so we're going
to talk about that a little bit today and kind
of take the emotion out of that, if you will.
Let's take the emotion out of the market. Let's take
a little bit of the emotion out of your fears
of what might happen once you're gone, and also giving
you some control over what happens after you're gone. You know,

(10:09):
because I for me, for one, I mean, I want
my husband to have everything. But if there's a woman
in the picture deals off, he ain't getting nothing. I mean,
we're gonna fix it. We're gonna fix that. But you know,
and I know there's a lot of people that kind
of laugh and know what I'm talking about. But after
you've been married to someone for over almost fifty years,

(10:29):
you're like, now, we built this together. We're not giving
it to somebody else. We're gonna give it to my
our children, and believe it or not, second marriages is
where this gets a little testy. So so let's talk
about some situations that we've run across in a state
planning that may be important to our listeners.

Speaker 2 (10:49):
Yeah, I think that's a great idea.

Speaker 3 (10:51):
And picking up on the second marriage thing, prenaps have
this negative connotation. You know, you get a prenap and
it's like a gosh, my wife or my husband doesn't
love me because they're holding their assets from me. We
see pre nups oftentimes in second marriages with blended families.
You know, two established individuals come into the relationship and
they have kids, and they have assets, and they want

(11:13):
their kids kind of their silo, of the family tree,
to be taken care of in the event of their
untimely passing, because oftentimes, without a prenup, you come into
a marriage, you've got young kids, and something happens to you, well,
all of a sudden, your spouse, your new spouse, gets
your assets, and it kind of leaves your kids in

(11:34):
the lurch, or it can without proper planning, And so
pre nuts can be good in that capacity. And I
think a lot of people know that prenups are also
common when there's a discrepancy between wealth of two different parties. Oftentimes,
you know, if someone comes from generational wealth, maybe the
wife does and then the husband comes from more modest means.
Oftentimes the family of the wife in that situation would

(11:58):
like a pre nups signed just in case things get messy.
There's no uh, you know, there's no real access and
issues and risk to their family finances, and you want to.

Speaker 1 (12:09):
Provide for the person. I mean, when you lose a
spouse and you remarry, I mean you remarried for love
and companionship and all that. So you do want to
plan for them. But there's ways to do it. You
can do the prenup You can also segment your assets.
I've seen I've seen my clients go, well, got this
annuity over here, and I want my current wife to

(12:32):
get that, I want my children to get this, and
I want my grandchildren to get that. So you can
do that, but you know how, you won't do it
if you don't plan. You've got to set those things
in motion, and you've got to plan them out by
meeting within a state attorney, your financial advisor, and have
all the proper documentation. I don't want a beneficiary coming

(12:53):
to me later. When my dad told me that Ira
was mine, Well, he might have told you that, but
he didn't. You see your name anywhere? I mean, it's
not your name is Your name is on this one,
but not on this one.

Speaker 3 (13:05):
And that's a very good point. And let's expand on
that a little bit. And a lot of people don't
understand this. First off, seven out of ten people in
the US do not have an estate plan. They have
not done a will, and you know that's shameful. Everybody
needs a will. If you have assets and or people
that you care about in your life, you need a will.

(13:28):
It can be extremely simple. It doesn't have to cost
you hardly any money at all. A lot of banks
have a department that they can set you up with
an estate planning attorney and you can get a pretty
simple will done.

Speaker 2 (13:40):
But just do one.

Speaker 3 (13:40):
But understand this to expand on what WANTA said. When
you do your will and you put everything together, all
of your documents, there are still some assets that are
not governed by what that will says. And this includes
beneficiary driven assets. So this is insurance policies, annuities, all
of your retire accounts, your four one K, your IRA,

(14:01):
you're wroth, you're simple, whatever it is, transfer on death
and payable on death accounts at the bank. So anything
that's driven by beneficiary designation also has to be reviewed
if you have a second marriage or you have a
major catalyst event in your life, because we have seen
one to talk about real life examples. Unfortunately, we have

(14:22):
seen ex spouses get some of these leftover assets that
you know, you had a husband that redid their will
and they redid a lot of the accounts, but they
had pass away unexpectedly. They had that one four to
oh one K that was still sitting out there, maybe
their active four to one K at work. They never
took the steps to go in and change that beneficiary
to the new spouse or the old spouse had a

(14:44):
pretty good Monday or Tuesday. You know, here you go,
you get two hundred and fifty thousand dollars out of nowhere.

Speaker 1 (14:49):
Well, you know, we all think that when someone dies,
the spouse gets everything if there's no will, and that's
not true. In North Carolina, they do go down the line. Now,
eventually it will happen, but if there's children or parents.
We had a situation a client that was married, they
had no children, but they had no will, and so

(15:12):
what happened was the North Carolina went down to his
parents and his parents got some of his assets instead
of his wife. Yeah, so if you don't have a will,
there will be a process and you and the spouse
may not get it if there's existing adult children, you know,
or things like that. So it's real testy when there's

(15:34):
no will in place to spell out what happens. And
even if there is and you didn't update it, I've
seen it, like you said, where they didn't update it
and maybe there was a child on there that had passed,
you know, or incapacitated, and you've left a house to
four children and one is incapacitated or deceased, Well, guess what,

(15:56):
you can't sell that house unless somebody say for that
child or the deceased child, the incapacitated. So you have
to go through the court system and wait for all
that and then guess what happens with that. You may
it may take your year more to get all that settled.

Speaker 2 (16:11):
And it's not free either, no, and then the.

Speaker 1 (16:13):
House goes up in value what you would have been
able to sell with no taxes now house of capital gains.
So you better make sure your ducks.

Speaker 3 (16:22):
In a row right and if you have no beneficiary
driven assets. We've seen this before. Client passes away and
there's a big family farm and there is there's the
house and all of these real assets that are not liquid.
You know, there's no immediate money when they pass away. Well,

(16:43):
the parents pass away and the kids are left to
deal with probate and deal with the court costs for
sometimes eighteen months until it all gets settled, and then
they get access to the house, the family farm or
business or whatever it is, and they can look at
potentially selling it at raising some of that money to
give them their inheritance. But without proper planning one is

(17:05):
exactly right, things can get messy. And what is probate. Well,
we'll just tell you real quick. Probate is just the
process of proving your will, and so you can you
can set your assets up so that they run outside
of probate, which is what we would recommend as much
as you can. Probate has a negative connotation for a
reason because it takes a while and it can be expensive.

(17:27):
There's no need to do it because there are some workarounds.
And workarounds include making your accounts beneficiary driven or using
what's called a revocable will I'm sorry, a revocable trust.
So beneficiary driven accounts. What this means we talked about
them earlier, the retirement accounts, the insurance, the annuities, that
kind of stuff. And then the pod TOD. This is

(17:49):
going to your banker or going to your investment advisor
and saying, hey, I heard these guys on the radio.
They sound pretty smart talking about these pods and TODs.
What does that mean. Why haven't you told me about
it yet? Well, what that is is it takes your
big brokerage account and it adds beneficiaries to it. So
if you pass away, even though it's in your name, well,
your spouse gets it immediately. And then if you both

(18:11):
pass away, well your kids are named as contingents, they
get it immediately. All they have to do is present
a death certificate and sign a couple documents, and that
money is theres much like it is when someone dies
and they have insurance, doesn't have to go to probate.
That way, it's free. It's literally one page or two
pages to add it to your accounts, so there's no
real reason not to do it unless you're very unsure

(18:33):
of who you want your beneficiaries to be, and then
my advice would be figured that out and then call us.
So anyways, if any of this is striking a nerve
with you listeners out there, please give us a phone
call nine one nine eight five six one nine six eight.
We'd love to sit down and talk to you. And
I'd be remiss if I didn't mention the fact that
we have done this show several times in the past,
and we oftentimes have one of our estate planning partners

(18:55):
on here. We have several estate planning partners that we
work with. But the point and me telling you that
is we have set our office up to be much
like a family office, and so we want the clients
to have a full service experience when they call us.
There's a lot of things that we may not be
able to do within the confines of our office. And
if that's the case, whether it's a state planning, tax filing,

(19:18):
whatever else, medicare planning. We have professionals that we have
kind of vetted for ability and integrity, and they're part
of our extended team, and so we can make one
phone call and set you up with a state planning attorney,
tax advisor, divorce attorney if that's something you need. We
have all of these people kind of on our extended

(19:38):
team because we want you to be served in every capacity.

Speaker 2 (19:41):
And so if that.

Speaker 3 (19:41):
Sounds like an experience that you want with your advisory
team that you're maybe not getting now, we'd love to
hear from you. We'd love to meet you nine one
nine eight five six one nine six eight.

Speaker 1 (19:51):
The beauty of that is we stay involved and knowing
what's going on, so there's no guess work for us,
you know, as far as the family dynamics and all
of that, and it's important for your advisor to know
that because sometimes you might need to invest a certain
way with certain things because you're planning on leaving this

(20:11):
long term so you can take more risk. Or maybe
you need short term because you've got to spread out
some money or donate some money or whatever, and you
need that money safe. So there's just all kinds of
reasons that we stay involved in that situation. Now, we're
not necessarily in the meeting with the attorney unless you
want us to be. So they do meet with you

(20:32):
without us being there. There's no reciprocation of any funds
for us with that, yeah.

Speaker 2 (20:37):
So, but with any of our partners, with any of our.

Speaker 1 (20:40):
Partners, So we just know the importance as both said
very well, that the importance of having a team approach
so that we have where to send you. We can
even send you to a mortgage person if you're buying
a house or refinancing, which may be hard to believe
now in these.

Speaker 2 (20:55):
In tell you do not refine it, tell you to wait.

Speaker 1 (20:59):
But anyway by you let them know what we're doing now.
And in the number they need to call on.

Speaker 3 (21:04):
All of that, yeah, nine one nine eight five six
one nine sixty eight is the number to call. You
call now, I leave a message we'll get back in
touch with you on Monday. And with that we got
to take our second break. We'll be back with the
second half of the Bow and Wanda Greg Hicks Show.

Speaker 1 (21:19):
Welcome back to the third segment of The Greg Hicks
Show with Bo and Wanda today joining you to discuss
all things money, all things markets, all things your life,
which they all intertwine. So again, our hope is that
we can be your place for knowledge. You can email
us or you can call us. But the call kind
of helps because I like talking to people, you know.

(21:42):
I don't like the emailing back and forth. I'd rather
get to know you, but certainly email if you'd like
for us to answer a question or whatever. But you
can give us a call at nine one nine eight
five six nineteen sixty eight. Schedule a complimentary meeting that
works for your schedule again, and there's no paperwork. We're
just getting to know you. You getting to know us. And

(22:05):
I've never heard a radio listener leave a meeting that
said this was a waste of my time. I've never
heard that. I've always heard this is helpful. Thank you
very much, So please give us a call nine one
nine a five six, nineteen sixty eight. There's nothing better
that any of us like to do than meeting new
people and getting to know your life story. But again

(22:25):
nine one nine A five six, nineteen sixty eight. Today
we're talking about leaving a legacy, what happens beyond the grave,
and it's very important that you take control of that
now because you know, a lot of things happen in
families as family dynamics are real interesting, and you know,
I hear the story of you know, my mom was

(22:48):
this way, I want to leave everything equal. Well, what
that did for me as the oldest was made it
very very hard because I have two troubling siblings. And
so if you have a situation, don't necessarily believe as
a mom or dad that you've got to make everything equal,
because sometimes it could be a situation that you've got

(23:12):
an addiction or something like that going on with one
and so you have to plan for that person. So
you can do that and still be fair. It's more
fair for you to do that than it is fair
for the other children that you know did life okay
and they're doing well and all of that, So be
fair by doing the proper planning would be my advice.

Speaker 2 (23:35):
A good point.

Speaker 3 (23:36):
And you love your kids equally, you like them different
levels at different times. You know, I'm kind of experiencing
this now with my own kids and I won't get
into that.

Speaker 2 (23:47):
But you love them to death, always equally, but you
might like them differently. And so.

Speaker 3 (23:53):
Talking about the maybe the drug addicted child who has
had long struggled with with addiction, and you want them
to be taken care of after you pass away, but
you understand that leaving them a million bucks their share
the inheritance as a lump sum with full access is

(24:14):
probably a death sentence. And so instead what you can
do is you can set up a structured special needs
trust and it can have provisions such that they can
access the money for living and you know, housing and
day to day expenses and anything medical that they need.
But it's not just going to unleash everything all at once.

(24:34):
And so that just goes to the definition of what
a state planning is. At its core, it is controlling
your assets after you pass away. You know how you
have all these complexities within your financial life and in
the next generation. And it's morbid, yes, and this is
probably why seventy percent of Americans do not have a
will because they don't want to think about this kind

(24:55):
of stuff. And I get that, but everybody's going to die.
Everybod what do you know is gonna die. Hate to
be the bearer of bad news, and that's, you know,
incredibly pessimistic, but it's the truth, you know, right, Yeah,
Happy Saturday. The key here is taking the appropriate action
in advance of that day coming so that the people

(25:16):
that you love are not left with a mess.

Speaker 2 (25:20):
And so you can do that. Now, give us a call.

Speaker 3 (25:22):
We can give you Chess Griffin's number, or Megan Knight's number,
or any one of our fabulous estate planning attorneys that
we need nine one nine eighty five six one nine
six eight. If you don't need financial advice and you
just need a state planning done, call us. We'd be
happy to kind of pass the hot potato onto to
the next next person. And so it's it's something you

(25:45):
need to do. Nobody knows when their time is gonna come.
Nobody knows when that beer truck's going to come out
of nowhere and just smack into the side of them.
And oh man, I was on the way to go
do my will. Yeah, sure, you were go ahead and
go ahead and do it sooner than later. Yeah.

Speaker 1 (25:59):
Well, and everybody needs a plan for after living. I mean,
after you're gone, you need a plan. But I tell
you something that happened that was interesting. I learned something
new every day and maybe I should know this, but
there are things in life that you kind of learned
by being thrown into it. I did have a client
that you know, I've had these clients for a while

(26:22):
and they're very dear to me, and I had noticed
for quite some time when I talked to the wife
that there was some some diminished reasoning there, if you will,
and sometimes you notice it. A financial advisor can notice it,
but especially with long term relationships because finances is where

(26:42):
it shows up first. So you know, I would talk
to her husband, and you know, he would know I
think everything's okay. And I said, well, just you know,
keep an eye on your finances and things like that,
because sometimes when there's diminished capacity that there'd be no reasoning,
you know, and people could call and take advantag and
all of that. So anyway, not too long ago we

(27:03):
met and and and right in front of her, he said,
we have a very hard topic to talk about I
kind of knew it was coming because I've seen it,
you know, for a few years. And he said, she's
she's having some memory issues and we've talked about it.
She's very much aware that I'm gonna talk to you today.
And she smiled the whole time, and she just you know,
it was okay. And so what he had done, very

(27:26):
well thought out, is they did a power of attorney
for her to put him in charge okay for her now,
but also put a line item in there, and I
call it line items. There's another word. I'm sure that
if he cannot serve i e. Death or the munici
capacity of his own, then it would move to the daughter.

Speaker 2 (27:50):
Oh so it's like a beneficiary on the po A.

Speaker 1 (27:53):
Yeah, they planned to. I mean that was smart because
what's gonna happen now is if something happens to him,
you know, her stuff, by way of the daughter now
being in charge, can move everything into the trust which
they have a trust which has not been set up
but is directed to be set up at death.

Speaker 2 (28:15):
Nice.

Speaker 1 (28:15):
I love that idea. I'm like, we always talk about
how of attorneys go away at death. Well, yeah, in
a lot of cases they do, but in this case,
since it's on her and his worry is when he's gone.
He did some very thoughtful, very thoughtful planning. But now
you want to make sure when you do something like
that that you've had the conversations and you're putting the

(28:39):
right child in charge. So you do have to talk
as a family. But it was a beautiful experience that day.
I mean, she knew what was going on, she knew
it needed to be done, and she was not sad
about it. And they worked with me forever and trusted
that they were telling the right person and that I
would take care of her and I will, you know,

(29:00):
So what a thoughtful thing to.

Speaker 2 (29:01):
Do for her.

Speaker 1 (29:03):
So if you're out there and you're in diminished capacity
and dementia is out there, it happens totally. And sometimes
people with diminished capacity live a long time because they
don't stress about anything. You know, they're being taken care
of and will taken care of a lot of times
by family, So they live a long time. So you've
got to plan for that. And it's and this gentleman,

(29:26):
what an act of love.

Speaker 3 (29:28):
And there's two things I kind of want to expand
on there. One is the estate planning package. And so
when you go see an estate planning attorney and you're like, yeah,
I listen to that radio show and Bo and Wanda
were kind of beating me up about going to get
my estate planned done. So here I am, first of all,
good for you, thanks for listening. Your family will thank you.
You're going to get a will, obviously, but you're also

(29:49):
going to get what Wanda's talking about. You're going to
get these powers of attorney, these springing powers of attorney,
healthcare directives, everything else. And what is that and what's
the importance of it? Well, want to just hit the
nail on the head. Diminished capacity, that's one way. Well,
I'm not old yet. Unfortunately, we've had clients that have
been involved in car X who are also not old,
and they've had a traumatic brain injury, and so they

(30:12):
have diminished capacity. If there is a springing power of
attorney in place, that power of attorney does not take
effect until something happens, in this case a car wreck
or you know, just old age catching up with you,
whatever it is. That's when that power of attorney springs
into effect. If you're married, you give your spouse healthcare

(30:33):
directive and basically what that is, if you're on life support,
who decides what happens next? You know, if you cannot
answer the medical questions for yourself on what your care
is going to be, Is he going to be okay
with this or this or this blood transfusion? Whatever healthcare
directive can do that you just put somebody in charge
of you, who you obviously trust, who can take care

(30:55):
of you when you're potentially incapacitated. And the other thing
I want to expand on is we have a whole
show on this, so I won't take too much time,
but long term care. You know, Wanda mention that there's
a lot of people that have diminished capacity that continue
on living. That's great, I guess, but what does it mean. Well,
it's pretty taxing on the people that they love, first

(31:17):
of all, seeing mom, dad, grandma, whoever slowly fade away.
It's also incredibly expensive if they need help. It can
be upwards of two hundred thousand dollars a year, particularly
if they want to age in place and stay in
their house and have a team come out and help
them get dressed and help them cook food and go
get groceries because they can't really walk or drive anymore.

(31:38):
You love your mom and dad, you want them to
be taken care of. Or if you're on the flip
side of that, you love your kids, you don't want
to be a burden on them, consider positioning some of
your assets for long term care. Oftentimes, what we do
here is we take old insurance policies that people don't
need anymore. You know, your insurance needs have likely changed

(31:58):
since you got that policy, So what do you do
with that old life insurance policy? Or you could surrender it,
but that's oftentimes the worst idea because there's value there.
You could sell it, which is like a life settlement.
So you could take that insurance policy and if it's
a hundred or it's a million dollar death benefit priace,
sell it for three hundred thousand dollars. Go ahead and
get some cash now. Or you can ten thirty five

(32:21):
at or convert it over into something that has to
do with long term care. And now you are taking
care of a need that you didn't previously have. When
you got the life insurance, you were raising a family,
you had a mortgage, you were picturing your family without you.
What would that look like financially? Now they had this
huge death benefit, and so they can pay off the

(32:42):
house to something where to put where to happen to you. Well,
now you're getting older, your house is paid off, your
kids are out of the house, they're well to do,
and you still have this huge whole life life insurance
policy with a lot of cash value. Move it over
into long term care, do something else with it. You
can donate it to charity. You could make what's called
an in pay policy. We've done this for clients just

(33:03):
this past week. And what they do is you make
it an in pay policy. You say this, the dividends
here and the cash value can pay the premiums in
the future. I no longer have to pay out of pocket.
I don't want to surrender the policy.

Speaker 2 (33:14):
But whatever.

Speaker 3 (33:16):
We are a full service insurance brokerage too. We can
help you review all that kind of stuff. Sorry, I
got a little excited about insurance. We are running over
on time, so we will be right back with the
final segment of the show. We got a little bit
more to talk about on estate planning. Please stick with us,
We'll be right back.

Speaker 1 (33:31):
Welcome back to the final segment of the Greg Kicks
Show today with Bo and Wanda coming to you to
talk about all things money and money matters, it really does.
So we want to talk about money in your future.
And we've got other shows that are coming up. I
think one on inheritance coming up soon, and it's interesting.
We talked about legacy today. Next week, I think we're

(33:52):
talking about inheritance, so you do want to tune in
for that, but you can give us a call at
nine one nine A five six nineteen sixty eight to
carry this conversation forward and talk about your situation. Any
one of the advisors in our office are happy to
meet with you, so call us at nine one nine
A five six, nineteen sixty eight for complementary meeting. Now,

(34:14):
we want to talk about some last final points about
you know, legacy and estate planning and all of that.
The thing that I run into a lot of times,
bo is, especially with my generation and older generation and
your parents' generation, we're like, we want to give assets now,
we want to give them a stock now, or you know,

(34:36):
an annuitdio or whatever. But there's a problem with that,
so let's talk about that a little bit.

Speaker 3 (34:43):
Yeah, so one of the benefits in inheriting flashing forward
to next week's show, excuse me is when you inherit money,
I'm sorry. When you inherit an asset, whether it's a
stock or the family beach house or family farm business, whatever,
you get what's called a step up in cost basis.
And what this means is Mom bought Procter and Gamble

(35:05):
back in nineteen seventy two, and she put fifteen thousand
dollars in it, and now it's worth two million bucks. Well,
mom can't do a whole lot with that in terms
of selling it, because there's a tax trap there. If
she sells it, she's going to owe capital gains tax
on every single bit of it other than the fifteen
thousand she put in. She can donate it to charity,
and she could do some other things there, which we'll

(35:26):
talk about it a little bit. But if she passes
away and she leaves it to you, which is her
intention all along, you all of a sudden, your cost
basis is two million bucks. Same example with a beach house,
same example with a family business. Whatever your cost basis
becomes the fair market value on the date of the
owner's passing. So the day that your mom passed, they

(35:48):
look at it and they say, okay, this is what
Brocter and Gamble's trading at today, Well, that makes a
whole lot more sense for you than that day on
nineteen in nineteen seventy two, and MoMA bought it. So
you can turnund and sell it for effectively no taxes
because your cost basis is the fair market value. You're
selling it for the fair market value. So if you
inherit something stepped up cost bases, no taxes. Well, this

(36:13):
is where it gets messy because oftentimes mom wants to
go ahead and bless the kids while she's alive, you know,
see the joy in their eyes, whatever it is, and
we'll gift them the assets, gift them the beach house,
or add them to the deed whatever. What that does
is it just messes up the situation and it removes
all or some of that tax advantage that I just described.

(36:36):
And so it's a huge advantage for inherited assets, and
we want to make sure that we keep it in place,
because what do we not like to do? Pay taxes,
especially after death, pay taxes after death, pay taxes before death.
We don't want to pay Uncle Sam any unnecessary money.
I don't think any listeners out there do. And so
this is a good way to ensure that you're taking

(36:57):
full advantage of some of these rules that are in place.

Speaker 1 (37:00):
And you know, one of the things that I've used,
and there are two, I don't know what you want
to call them strategies that you can use, but I've
used this one time in my career was a charitable
remainder trust. And in this situation, I think it was
Coca cola stock. I might have been pepsi I can't
really remember, but he had like a million dollars worth

(37:22):
of pepsi stock. And the basis was about that. It
was about fifteen thousand, and he and his wife wanted
to retire and travel and they wanted income. And their
children have been well cared for. They were like doctors
and lawyers, and the way they felt was, this is
our time, you know, not saying they didn't want their
children to get anything, but they were like, this is

(37:42):
our time. We want to travel and do some things.
So they actually placed the stock in a charitable remainder trust,
which gave them he and his wife income for life
or till they die. Then there is a formula. I
don't get into all of that because the attorney has
to help set that up. There's a formula, so you

(38:05):
make sure there's going to be some assets remaining to
leave the charity. Sure, so that you're not you know
that you get.

Speaker 2 (38:12):
A big tax deduction you do day one, you do.

Speaker 1 (38:15):
So that's and I would say, I don't hear from
them anymore. They're living the life because they've got.

Speaker 2 (38:21):
This good.

Speaker 1 (38:23):
And and you know, and actually annuities are a good
strategy to use within that tool. Yeah, you know, because
of that lifetime income situation. But there's also the charitable
lead trust. Now we've had Gregg's had one client I
know do that where you know, some the income payments
go to the charity I think for ten years there's
some kind of time limit and then after that the

(38:44):
asset goes to the beneficiaries. So it's kind of or
the income or whatever the value. But those are two
strategies that are high level, of course, but it's not
unlikely to happen in North Carolina because you've got people
that on farmland. Sure, you've got people to own old stocks,
you got people that own beach properties, you got people
that own businesses. So that's not an unlikely thing to

(39:06):
want to do.

Speaker 2 (39:07):
Yeah.

Speaker 3 (39:08):
Yeah, and people that own farmland. We talked earlier about
the liquid versus liquid assets. A lot of people that
have a lot of land are oftentimes surprised or rather
their beneficiaries or surprised at their passing with how much
that farm was actually worth, how much that land was
actually worth, because the government's going to come in and say, oh, man,
you know this is this is a sweet piece of property,

(39:30):
and you got a lot of it and it's worth
whatever it is forty million dollars.

Speaker 2 (39:35):
So it's important to get.

Speaker 3 (39:37):
A valuation on all of the property, potentially, especially real
property that you have, because what you don't want to
do is find yourself in a position where you're surprising
yourself that you're over the estate tax exemption. And right now,
the estate tax exemption is like what thirteen and a
half million none or something like that, basically fourteen million

(39:57):
per person. If you're married, it's almost thirty million dollars.
I'll be like, well, I'm probably not over that.

Speaker 2 (40:02):
A lot of people aren't.

Speaker 3 (40:03):
But if you have a business, or if you have
a lot of land or a big family farm or
whatever it is, you could easily be over that. And
it's important to do some high level of state tax
planning again with one of our partners kind of in
tandem with us, to make sure that your investment plan
is working alongside of that before it's too late. Because

(40:25):
when you pass away whatever is over that number, that
twenty eight thirty million dollars, you owe forty percent taxes
on it, and the government wants it quickly. And if
a lot of that is in real assets like a
farm or a business, guess what you're gonna have to
do a fire sale and there's gonna be public record
of the fact that mom and dad just died. And
why are they selling this property? Oh, because they need

(40:47):
the tax money in ninety days. Okay, well we can
make them a low ball off or fire sales never
work out that well, So do the planning now. I mean,
you got all the reasons in the world that we've
been kind of hammering you on for the last hour
about why estate planning is so important and why you
should go ahead and do it. Now we have a
whole show on the dangers of procrastination, and this is
one of them. Dying unexpectedly and the people that you

(41:09):
leave behind, the people you care about the most, your
family are left with a mess where they could you
could have taken an hour's time and met with a
professional to make sure if that didn't happen, that they
were well taken care of our number again nine one
nine eighty five six one nine six eight, do not wait,
Go ahead and give us a call and we can
help you in any direction you want to go. Nine
one nine eight five six one nine sixty eight.

Speaker 1 (41:31):
In real estate to caveat on that, it is where
it gets messy because I saw a situation this has
been a few years ago, that the gentleman had rental
property and he died without a will, so and he
didn't have children. So what happened is they went way
down the line to niece's, nephew's great nieces grit and

(41:52):
I mean it was like twenty some people, and then
you had to go in and factor in depreciation all
this stuff, this rental income. It was a mess. It
was a mess. So if you have rental property, you
definitely want to have some plans in place, because this
situation got real testy and real messy, and you don't

(42:14):
want that. I mean, you really don't look.

Speaker 2 (42:16):
Good for those nieces and nephews, right, They didn't.

Speaker 1 (42:18):
Even know when. Probably, and they ended up getting something.
I'm not sure when they got it because it was
such a mess and it's just going to take a while.

Speaker 3 (42:25):
If my dear old uncle that I've never met is
out there listening, yeah, maybe you just don't do a
plan exactly exactly.

Speaker 1 (42:31):
Yeah. If you don't do a plan, there's a plan,
trust me.

Speaker 2 (42:35):
Yeah.

Speaker 3 (42:35):
And the government's in charge. And again we've kind of
been bashing on the government a little bit, but you
don't want them in charge of what happens to all
your money when you pass away. To take control, you
can do that now.

Speaker 1 (42:44):
And one of the other assets that kind of can
be kind of testy, especially for non spouses is iras,
you know, because what people are failing to remember is
this year. I mean, you have a ten year time
window if you are a non spouse getting an IRA,
you have to have that emptied. And this is the

(43:05):
year they don't forgive. The distribution is not going out.
This is the last. This is the year. So if
you haven't taken a distribution from a non spouse IRA,
you better do that because they're not going to forgive
that anymore. And I think the tax penalty is upwards
of what fifty percent or something.

Speaker 2 (43:21):
It's a lot.

Speaker 1 (43:23):
So you don't want to do that. And I've dealt
with a lot of non spouse iras this year. I
don't know what that, what's up with that, but but
a lot of that. So you do, you do want
to make sure that you know you're you've got you know,
the plan in place to empty that in year ten.
The thing that I have a problem with that on
is why aren't those people allowed to do a wroth

(43:43):
conversion with that? Because you got to pay taxes conversion,
and it would help them set themselves up for later,
you know, especially those people that maybe are in a
tax packer. They can't do a wroth because now they've
got this inherited IRA, they got to compound income on
stuff like that. I just sink the government hasn't thought
about it, and they're going to get their taxes. Yeah,

(44:04):
so now why not let them do a wroth conversion?

Speaker 3 (44:06):
Speaking of roths, to go off subject real quick, A
good strategy in a down market is a wroth conversion.

Speaker 1 (44:12):
Yeah.

Speaker 3 (44:12):
You can take you know, in video or whatever it
is that's really beat up and slide it over into
a wroth account. From your IRA, go ahead and pay
taxes on it in coin. So you're moving the stock
or mutual fund or ETF, whatever it is, over into
the tax free account. And now what happens is when
that company bounces back, assuming it does, it's bouncing back,

(44:33):
and you're getting that growth in a tax free account.
You've gone ahead and you've paid taxes. I love roths,
I mean I have I have a Yes, I love
Wroth for one ks wroth four one k's wroth. IRA's
simple roths are new on the scene, and I think
only American Funds really has them available right now. But
we have a simple plan at FRM, and I'm really

(44:53):
scouring the UH the opportunity to add the Wroth component
to it, because there is, in my opinion, know nothing
better because back to the government, back to backs in
the government.

Speaker 2 (45:04):
It's hands off.

Speaker 3 (45:05):
You go ahead and you pay taxes on day one,
you get the growth after tax. It's all tax free.
There's nobody at the back door. So we ended our
our show on a classic Nicholson add track on raw
right like, but yeah, if any of this is striking
a nerve with you, you know our number nine one nine

(45:25):
eight five six one nine six eight was one to say,
we love meeting radio listeners. We'd love to hear your
story see how we can help you out nine one
nine eight five six one nine six eight. Thank you
so much for sticking with us on this beautiful Saturday Sunday.
And remember this, it's your money, it's your future, don't
blow it.

Speaker 2 (45:42):
Advisory services through Capital Investment Advisory Services LLC.

Speaker 3 (45:45):
Security is offered through Capital Investment Group bing Remember Finra
and SIPIC one thousand and six Forks Road, Raleigh, North
Carolina nine one nine eight three one twenty three seventy.

Speaker 2 (45:52):
Ho's performance is not indicative of future results.