September 15, 2023 ā¢ 27 mins
Jerry talks about the pitfalls of not planning ahead for a small business succession.
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UNKNOWN (00:02):
Thank you.
SPEAKER_00 (00:59):
This is Jerry and welcome to the Pink Money
Podcast where we talk about allthings related to money from a
gay perspective.
I was recently talking to thiswoman.
And she was probably in her, Ithink she said late 60s, early
70s, I believe.
And she was still working in adental office anyway.
(01:22):
But that's beside the point.
What was kind of disturbing tome and a little frightening as
well was the fact that she toldme...
her husband had passed awayrecently and he had stage four
cancer and she said it wasrather sudden in the sense that
(01:43):
he got checked out he wasfeeling poorly and next thing
you know they diagnosed him nextthing you know he's going
downhill and then he passes awayso Obviously, that's tragic and
it's upsetting.
And she said that there wasprobably, I believe, a
10-year-ish age difference aswell.
(02:05):
So what immediately happened wasshe was telling me about the
situation that he passed away,and she was feeling very
overwhelmed by everything thatwas going on, things she had to
take care of, and trying to geteverything settled and get
access to his account.
And as soon as she said that, Istarted thinking what do you
(02:26):
mean access to his accounts andshe started telling me that they
handled their financial affairsseparately and that he was
actually a CPA and that he ranit as a sole proprietorship and
she said that while he was alivehe had mentioned to her well you
know I really should put you onmy accounts in case something
(02:48):
happens and they never gotaround to it she said that he,
at the time they were talkingabout it, she felt like, or I
guess he felt like he didn'thave the energy to go down and
sit in front of the bank and geteverything taken care of.
Because I know how that goes.
When you don't feel well, youdon't feel well, right?
(03:11):
Just period.
You don't want to take care ofanything.
And also when you do go to thebank and you need to get
something like a power ofattorney turned in or you need
to change a registration on yourbank accounts or add a payable
on death, any of those things,you know, it does take a little
time, right?
It just depends on how quicklyyour bank moves.
If they aren't very busy, youcould probably be in and out of
(03:33):
maybe a half hour.
But sometimes it takes quite abit longer.
I know that I sat in one bankfor over an hour until we got to
speak to someone and then Thewoman really couldn't get things
organized and I spoke with oneof the managers there and, you
(04:20):
know, we got things taken careof.
But, you know, it's veryupsetting sometimes when, again,
you think that things are goingto be handled appropriately.
They're not.
And you have to really committhe time and energy to see it
through from A to B.
And I've even had, you know,documents get rejected.
And, again, you have to gothrough the whole rigmarole all
over again.
(04:40):
So the point being here is, isit was a terrible situation for
this woman, and they didn't takecare of it in time.
And that made things extremelydifficult for her, the surviving
spouse.
And so what was also disturbingto me, as she had mentioned,
that she didn't even have the$400 to...
(05:03):
go and file with a probate courtfor a small estate.
A small estate just means thatyour total estate falls under a
certain dollar amount andtherefore doesn't necessarily
have to go through the wholeprobate rigmarole, which is very
time consuming and costs a lotof money.
(05:25):
Typically, you're looking atsomewhere starting around$5,000
and going up from there,depending on the complexity of
your estate.
And I'm saying your estate,meaning the person who's passed
away and how well things wereorganized and how many things
you have to take care of.
And she didn't even have, again,the ability to get into any of
(05:45):
his bank accounts which had themoney in there.
So if you don't even have$400 toyour name and...
we're going down this road thatyou know your husband is
terminal, that's a big problem,right?
And you need to take care ofthose things, period.
I know you don't feel well, butyou're going to have to get up,
(06:05):
get out of bed because youshould have done this when
you're feeling good.
Long, long, long story, butlesson learned.
My point being as well, youknow, some of the things that
you can do to make things easieron your beneficiary or survivor,
whomever it is, you can...
Put a payable on death for yourchecking and savings.
(06:26):
I know I've talked about thisbefore, but it deserves to be
reiterated.
Some of the banks, I know, Ibelieve it's Chase, you can just
print the documents off, youknow, online, sign it, get it
notarized and send it in.
Some I've seen that, you know,you have to go down and speak
(06:46):
with them in person.
It just really depends.
But nevertheless, you know,thinking about it, and doing it
are two different things.
If you're thinking about it,take the next step and do it.
And even when you print out thedocuments and you go through the
whole rigmarole, let's say youhave to get them notarized,
well, that's, you know, again, astep in and of itself, but then
(07:09):
you also have to get thedocument sent in and make sure
that it's approved and thatthere's no hiccups and that, you
know, something's missing.
And you can do all these stepsahead of time, and you can do
them one at a time.
Make yourself a laundry list ofall the different accounts that
you have.
You know, your checking,savings, investments, your
(07:30):
credit cards, et cetera, etcetera, et cetera.
Go down the whole list.
And even if you've gone throughand created a simple will that,
let's say, hey, I leaveeverything to my wife, my
children, my, you know, my wife,boyfriend, husband, whatever.
So that's one thing, right?
And that's helpful.
But when it comes down to it andyou've died, then those assets
(07:56):
have to be settled anddistributed.
And that means that, again,depending on the size of your
estate, It may get tied up inprobate court, and the survivor
may not have the ability toaccess these funds quickly or
easily, because theseinstitutions are going to look
(08:16):
for all the proper documents tomake sure their I's are dotted,
T's are crossed, and are notgiven money or access to the
wrong person for the wrongreasons.
So they're going to want a copyof the death certificate.
They're going to ask you if youhave letters of testamentary
that are issued by the probatecourt, and they're going to make
sure that, again, the Theseaccounts are not supposed to be
(08:38):
delivered to somebody else.
So they're going to be verycautious and conscientious about
getting these right documents.
Believe me, I've seen it many,many, many times that, again,
the spouse is overwhelmed and isjust going through not only the
grief cycle, but they're dealingwith the hassle of settling
(08:58):
these accounts.
To make things, again, easier onthe person, I always recommend
that you put on these devices,these legal devices that help
avoid probate so that accountcan be settled quickly.
Like a checking savings account,you can easily put on a payable
(09:19):
on death.
You can go to your bank, callyour bank, whatever, tell them,
I would like to add a payable ondeath to my account.
Very simple, easy to do for themost part.
Maybe it does take a little bitof time, but it's well worth it.
Maybe not so much for you, butit is definitely going to be
much appreciated when it comesdown to your beneficiary.
(09:41):
Now, in your investmentsaccounts, you can also do the
transfer on death.
Same thing.
It avoids probate.
And even some of your assets,let's say your vehicle assets,
You can easily as well, I knowhere in Texas you can, I think
at least some 20 some odd citiesthat you can also add a, you can
(10:11):
transfer that vehicle on deathas well with a particular form.
And even your real property,your home, you can do that as
well.
You can print out the form.
You can sign it, get itnotarized, and send it off to
the county clerk, and theyregister it.
And then, again, all you have todo is present the death
(10:34):
certificate, et cetera, whateverelse they need, which is, again,
far easier.
Typically, when you go to thecoroner or you go to the funeral
home, they're going to give youabout a dozen death
certificates.
Because often these institutionswant a certified copy of the
death certificate.
They don't want a copy of it.
(10:55):
They want a certified deathcertificate.
So you will usually walk awaywith a bunch of them because
you'll need them.
And again, that depends on howmany things you're going to have
to settle.
But all these things can betaken care of for the most part
ahead of time.
And if there are other thingsthat need to be distributed via
(11:17):
the will, so be it.
But the bigger assets, you know,again, the access to these
accounts takes precedent andshould be the easiest things to
get to the beneficiary or yoursurviving spouse.
And again, the titling,registration, you know, is
paramount.
You know, look at, again, andtalk to the bank if you're
(11:40):
unsure, but they will tell you,you know, these are the
documents that are going to dowhat you want done.
transfer it outside of probatevia transfer on death, payable
on death.
And again, if you never thoughtabout who gets your car, who
gets your house, you probablythought about putting that in
your will, which again is fine.
But if you know who's going toget it ahead of the time, you
(12:02):
don't need to put it necessarilyin your will per se.
Yes, you can put it in yourwill.
Hey, they get all my vehicles orthey get this particular
vehicle.
But if this particular vehicleis going to go to this person,
you could easily put thattransfer on death.
If this home is going to yourspouse, to whomever, and there
could even be maybe an inklingof trouble down the road, or
(12:26):
maybe you just want to avoid anykind of hiccups, do the transfer
on death because it will bypassthe will.
And even, let's say, in yourwill, if you said my home goes
to whomever, let's say youlisted your first spouse, Then
you guys got a divorce.
If that first spouse is in yourwill, you never changed your
(12:48):
will, then guess what?
For the most part, it's going togo to your first spouse.
Now, maybe there's going to be ajudge who makes a different
decision, but that could takesome time.
If you have the transfer ondeath and you put in your
current spouse, It doesn'tmatter what's in that will.
It will bypass that will and godirectly to your spouse.
(13:09):
Much, much easier, more direct.
If you have a trust, it does thesame exact thing.
It bypasses the will.
Whatever devices or whateverassets are in this trust, they
will also go directly towhomever the beneficiary is.
Much easier, much simpler.
If you have a significant amountof wealth, you typically will go
(13:31):
through a much similar processestate planning process, but you
will probably work with someoneone-on-one who can guide you.
Of course, you can always use anattorney, even no matter what
the amount of your wealth is.
That's probably the best way.
But if, let's say, you're tryingto save some money, you don't
want to spend the$500,$600,000,whatever it is, Okay, fine.
(13:53):
These are the simple documentsthat you can use.
If again, let's say you justhave a small estate, you have
few assets, you have one or twocars, you have a home.
you know, you have your bankaccounts, you know, a couple
investment accounts, okay, youknow, not so many things, then
again, then do these simpletools, use these simple tools to
(14:15):
avoid the whole probate process.
It's just a quick and easy way.
If you again, have significantamount of assets, and you have a
business, or regardless, if youhave a significant amount of
assets, but you have a business,sole proprietorship, LLC, a
partnership, you know, the youreally have to do your planning
(14:35):
ahead of time you have to againhave the right tools in place so
that these assets can godirectly to whom they should and
that means that you have abusiness succession plan in
place if you have a partner andeverything's supposed to go to
your partner then again have theright devices in place to do
(14:58):
that if everything goes to yourspouse the surviving partner is
most likely is not going to wantto go into business with your
husband or your wife, unless,again, they were very involved.
But still, they may not want tocontinue that partnership.
So they may need you to buy youout.
And then that depends on whetherthey have the money to do that.
(15:22):
They can put in place somethinglike a key man policy, and that
would make sure that the moneyis there to pay you off so that
they can have total control ofthat company.
They can also havecross-partnerships agreements
where they each have insuranceon everybody.
Again, you could have,hopefully, an insurance policy
(15:43):
from your spouse that gives you,you know, immediate cash as
well, and that way you have, youknow, you're not trying to find
$400.
You know, you have the cash, theready cash available because the
insurance policy is going to payout to you, barring some, you
know, unexpected weird event,like if you committed a crime or
(16:03):
you murdered your spouse,believe me, the insurance policy
is not going to pay out.
And if your spouse committedsuicide, as long as typically
this is usually in most lifeinsurance policies, if it's
beyond two years, then it willgo ahead and pay out.
If your spouse committed suicidewithin the first two years of
(16:24):
the policy, it's not going topay out.
There's usually a suicide clausein every insurance policy.
So, again, the life insurancecompany, when you contact them
as well, and you say, hey, myspouse is deceased, and they're
going to ask why, and you'regoing to tell them why, and
they're going to get a certifiedcopy of the death certificate,
and on the death certificate,it's going to state the nature
(16:46):
and the cause of death.
If it was an auto accident, itis what it is.
You know, if it was stage fourcancer, it is what it is.
If it was some...
crime that was committed, likeyour spouse was committing a
crime, that's not going to payout.
Again, and if they've killedthemselves within the first two
years of the life insurancepolicy, it's not going to pay
(17:08):
out.
So, barring anything strangelike that, you're going to have
the proceeds that you need, andyou always, in my opinion,
always want to have a lifeinsurance policy on your spouse
that you have total controlover.
Meaning, You're the owner of thepolicy, you pay the premiums,
and you make all the decisionson who the beneficiaries are,
(17:32):
which typically would beyourself.
Your spouse is only the insured,and that's perfect because then
you know that that policy is inplace and remains in place no
matter what happens between youand your spouse.
If you and your spouse get adivorce, Well, that's just one
of those things, right?
But you will always keep thatpolicy.
(17:54):
They can ask you if you wouldsign it back to them, and that's
up to you.
I wouldn't, but that's up toyou.
That's just a valuable thing tohave.
If you have a million-dollarlife insurance policy on someone
that you've had for a number ofyears, you're probably not going
to want to let go of thateasily.
If he wants to get a newinsurance policy for his new
(18:18):
family, husband, wife, whomever,then go ahead and do that.
That's outside of, you know,your business and that's their
business.
And if it costs him more becausehe's a lot older and maybe in
poorer health, too bad.
You know, that's just how itgoes.
So always have a life insurancepolicy that you control and have
the ability to make sure thatthe premiums are paid because
(18:40):
you've paid them.
I know on sometimes some lifeinsurance policies, there's a,
you know, the ability to have aperson notified if the premiums
don't get paid and you can stepup and pay it.
That's nice, right?
You know ahead of time, but it'sbetter to be the owner and that
way you know and have totalcontrol over exactly what
(19:03):
happens to that policy.
Back to this business.
So again, you need to make sureyou have the ability to access
your spouse's accounts, all ofthem.
Especially if it's a soleproprietorship, like in this
case, your husband is a CPA,then you need access to those
(19:23):
accounts.
So work with the bank, you know,they have their business
accounts, they have theirpersonal accounts, all of them
should be set up so that youhave the ability to access it
doesn't mean you have to beadded on as a joint owner,
right?
that may or may not be somethingyou want to do.
You could have joint tenantswith rights of survivorship.
(19:44):
You could have tenants incommon.
It all depends, right?
Whether you set that up in thatway or not.
But It just says that you havethe ability to gain immediate
access to that account.
If it's joint tenants withrights of survivorship, then you
are, and it's just the two ofyou, because you could have
multiple ones, but if just thetwo of you, then you know you
(20:07):
automatically have total controlof that account.
Each of you equally can putmoney in, take money out at your
leisure.
If you're the sole survivor, itis what it is.
You submit the documents, yousubmit the ability to
re-register that account in yourname only, and then boom, you go
and decide whatever you're goingto want to do with the account.
Transfer it, liquidate it,whatever.
(20:27):
So I don't mean to go on and onand on about this, but it's just
still surprising to me that atthis day and age, when people
know ahead of time that there issomething that's Something's
going to happen to each andevery one of us, right?
We know we're all going to dieat some point.
It could be tomorrow.
(20:48):
It could be 10 years from today.
We don't know.
Maybe it's even 30 years fromtoday.
You need to take these stepstoday.
Write out a list of everythingthat you have and start making
these changes today.
because it just is the rightthing to do.
It makes things so much easier.
(21:08):
You can do a letter ofinstruction to your spouse and
you can say, hey, you know, atthe time of my death, you need
to contact, you know, maybeFederal Credit Union, you need
to contact Chase for my businessaccount, you need to contact,
you know, E-Trade for, you know,my IRA and go on, you know, go
(21:32):
through that list of everythingyou have credit cards, you know,
your any kind of, you know, ifyou have a loan somewhere, you
know, maybe your spouse doesn'tknow every single thing that you
have, maybe you got a CD outthere through who knows where
they know the Bank of PuertoRico, you know, there could be
all kinds of things that, youknow, maybe you're just not the
(21:53):
best, most organized person,they got to dig through all this
stuff.
Just make it easier on them.
That's all I'm saying.
Because it will really pay offin the end if you really love
your spouse, and they will beeternally grateful for you.
So a letter of instruction isnot legal in the sense that it's
like a will, but it just is astep-by-step, if you will, of
(22:16):
what needs to happen at the timeof your death.
And these are the things thatthey could find and where they
can find them, especially if,let's say, you have a...
What do you call that?
Lost.
In your bank, you have a lockedbox.
I'm at a loss for what that'scalled.
(22:37):
A box where you have a key inthe bank.
It'll come to me in a minute.
Nevertheless, where's that key,right?
Where is this key?
Do you have it, you know, inyour car?
Is it on your key ring?
Is it in your top drawer?
You know, who knows?
Probably doesn't even have anykind of tag on it.
Someone may not even know thatyou have a deposit box
(22:58):
somewhere.
So, again, who knows even what'sin that?
You know, they have to haveaccess to it, and that bank is
not going to let anybody justwilly-nilly get in there.
It is a huge undertaking to getinto a locked box at a bank.
So don't even think that it'sgoing to be easy if you haven't
made it easy on them.
(23:18):
It's not.
So my point, I guess, is made.
I won't go on about it.
Again, estate planning to me is,it's complex, but it takes time.
And the time to do things istoday.
And even if you know you're inthat situation of, let's say,
(23:40):
stage four, you know, you haveyour good days and your bad days
and plan to take care of thingsthe best that you can on your
good days because you knowyou're going to run into the bad
days.
And your days may be numbered.
All of our days are numbered.
But we got to get to this stufftoday.
That's just what makes sense.
And if it's not even your stuffthat you're worried about,
(24:03):
hopefully you have your ownducks in a row.
Look to your spouse.
Make sure their ducks are in arow.
Look to your mom, your dad,whomever that you're taking care
of.
If you're going down the road oftaking care of your parents
because they either havedementia or Alzheimer's or,
again, their own stage fourissues, whatever, Again, you
(24:25):
need to take care of this stuffwith them today.
Today, today, today, while theystill can, they have the mental
capacity to make thesedecisions, and you can make it
easier on yourself.
It just is the smartest thing todo so that you can breeze
through that time when they'renot around and you go through
(24:46):
the whole grief cycle of justdealing with the emotional
aspect of losing your loved one.
But you don't need to compoundit with this huge financial
spider web that's created thatyou're fighting to get through
because you guys didn't take thesteps ahead of time to make it
easier on you.
(25:07):
That's my best advice.
Anyway, I hope you're having agreat day, and I will talk to
you later.
Thank you.
SPEAKER_00 (00:59):
This is Jerry and welcome to the Pink Money
Podcast where we talk about allthings related to money from a
gay perspective.
I was recently talking to thiswoman.
And she was probably in her, Ithink she said late 60s, early
70s, I believe.
And she was still working in adental office anyway.
(01:22):
But that's beside the point.
What was kind of disturbing tome and a little frightening as
well was the fact that she toldme...
her husband had passed awayrecently and he had stage four
cancer and she said it wasrather sudden in the sense that
(01:43):
he got checked out he wasfeeling poorly and next thing
you know they diagnosed him nextthing you know he's going
downhill and then he passes awayso Obviously, that's tragic and
it's upsetting.
And she said that there wasprobably, I believe, a
10-year-ish age difference aswell.
(02:05):
So what immediately happened wasshe was telling me about the
situation that he passed away,and she was feeling very
overwhelmed by everything thatwas going on, things she had to
take care of, and trying to geteverything settled and get
access to his account.
And as soon as she said that, Istarted thinking what do you
(02:26):
mean access to his accounts andshe started telling me that they
handled their financial affairsseparately and that he was
actually a CPA and that he ranit as a sole proprietorship and
she said that while he was alivehe had mentioned to her well you
know I really should put you onmy accounts in case something
(02:48):
happens and they never gotaround to it she said that he,
at the time they were talkingabout it, she felt like, or I
guess he felt like he didn'thave the energy to go down and
sit in front of the bank and geteverything taken care of.
Because I know how that goes.
When you don't feel well, youdon't feel well, right?
(03:11):
Just period.
You don't want to take care ofanything.
And also when you do go to thebank and you need to get
something like a power ofattorney turned in or you need
to change a registration on yourbank accounts or add a payable
on death, any of those things,you know, it does take a little
time, right?
It just depends on how quicklyyour bank moves.
If they aren't very busy, youcould probably be in and out of
(03:33):
maybe a half hour.
But sometimes it takes quite abit longer.
I know that I sat in one bankfor over an hour until we got to
speak to someone and then Thewoman really couldn't get things
organized and I spoke with oneof the managers there and, you
(04:20):
know, we got things taken careof.
But, you know, it's veryupsetting sometimes when, again,
you think that things are goingto be handled appropriately.
They're not.
And you have to really committhe time and energy to see it
through from A to B.
And I've even had, you know,documents get rejected.
And, again, you have to gothrough the whole rigmarole all
over again.
(04:40):
So the point being here is, isit was a terrible situation for
this woman, and they didn't takecare of it in time.
And that made things extremelydifficult for her, the surviving
spouse.
And so what was also disturbingto me, as she had mentioned,
that she didn't even have the$400 to...
(05:03):
go and file with a probate courtfor a small estate.
A small estate just means thatyour total estate falls under a
certain dollar amount andtherefore doesn't necessarily
have to go through the wholeprobate rigmarole, which is very
time consuming and costs a lotof money.
(05:25):
Typically, you're looking atsomewhere starting around$5,000
and going up from there,depending on the complexity of
your estate.
And I'm saying your estate,meaning the person who's passed
away and how well things wereorganized and how many things
you have to take care of.
And she didn't even have, again,the ability to get into any of
(05:45):
his bank accounts which had themoney in there.
So if you don't even have$400 toyour name and...
we're going down this road thatyou know your husband is
terminal, that's a big problem,right?
And you need to take care ofthose things, period.
I know you don't feel well, butyou're going to have to get up,
(06:05):
get out of bed because youshould have done this when
you're feeling good.
Long, long, long story, butlesson learned.
My point being as well, youknow, some of the things that
you can do to make things easieron your beneficiary or survivor,
whomever it is, you can...
Put a payable on death for yourchecking and savings.
(06:26):
I know I've talked about thisbefore, but it deserves to be
reiterated.
Some of the banks, I know, Ibelieve it's Chase, you can just
print the documents off, youknow, online, sign it, get it
notarized and send it in.
Some I've seen that, you know,you have to go down and speak
(06:46):
with them in person.
It just really depends.
But nevertheless, you know,thinking about it, and doing it
are two different things.
If you're thinking about it,take the next step and do it.
And even when you print out thedocuments and you go through the
whole rigmarole, let's say youhave to get them notarized,
well, that's, you know, again, astep in and of itself, but then
(07:09):
you also have to get thedocument sent in and make sure
that it's approved and thatthere's no hiccups and that, you
know, something's missing.
And you can do all these stepsahead of time, and you can do
them one at a time.
Make yourself a laundry list ofall the different accounts that
you have.
You know, your checking,savings, investments, your
(07:30):
credit cards, et cetera, etcetera, et cetera.
Go down the whole list.
And even if you've gone throughand created a simple will that,
let's say, hey, I leaveeverything to my wife, my
children, my, you know, my wife,boyfriend, husband, whatever.
So that's one thing, right?
And that's helpful.
But when it comes down to it andyou've died, then those assets
(07:56):
have to be settled anddistributed.
And that means that, again,depending on the size of your
estate, It may get tied up inprobate court, and the survivor
may not have the ability toaccess these funds quickly or
easily, because theseinstitutions are going to look
(08:16):
for all the proper documents tomake sure their I's are dotted,
T's are crossed, and are notgiven money or access to the
wrong person for the wrongreasons.
So they're going to want a copyof the death certificate.
They're going to ask you if youhave letters of testamentary
that are issued by the probatecourt, and they're going to make
sure that, again, the Theseaccounts are not supposed to be
(08:38):
delivered to somebody else.
So they're going to be verycautious and conscientious about
getting these right documents.
Believe me, I've seen it many,many, many times that, again,
the spouse is overwhelmed and isjust going through not only the
grief cycle, but they're dealingwith the hassle of settling
(08:58):
these accounts.
To make things, again, easier onthe person, I always recommend
that you put on these devices,these legal devices that help
avoid probate so that accountcan be settled quickly.
Like a checking savings account,you can easily put on a payable
(09:19):
on death.
You can go to your bank, callyour bank, whatever, tell them,
I would like to add a payable ondeath to my account.
Very simple, easy to do for themost part.
Maybe it does take a little bitof time, but it's well worth it.
Maybe not so much for you, butit is definitely going to be
much appreciated when it comesdown to your beneficiary.
(09:41):
Now, in your investmentsaccounts, you can also do the
transfer on death.
Same thing.
It avoids probate.
And even some of your assets,let's say your vehicle assets,
You can easily as well, I knowhere in Texas you can, I think
at least some 20 some odd citiesthat you can also add a, you can
(10:11):
transfer that vehicle on deathas well with a particular form.
And even your real property,your home, you can do that as
well.
You can print out the form.
You can sign it, get itnotarized, and send it off to
the county clerk, and theyregister it.
And then, again, all you have todo is present the death
(10:34):
certificate, et cetera, whateverelse they need, which is, again,
far easier.
Typically, when you go to thecoroner or you go to the funeral
home, they're going to give youabout a dozen death
certificates.
Because often these institutionswant a certified copy of the
death certificate.
They don't want a copy of it.
(10:55):
They want a certified deathcertificate.
So you will usually walk awaywith a bunch of them because
you'll need them.
And again, that depends on howmany things you're going to have
to settle.
But all these things can betaken care of for the most part
ahead of time.
And if there are other thingsthat need to be distributed via
(11:17):
the will, so be it.
But the bigger assets, you know,again, the access to these
accounts takes precedent andshould be the easiest things to
get to the beneficiary or yoursurviving spouse.
And again, the titling,registration, you know, is
paramount.
You know, look at, again, andtalk to the bank if you're
(11:40):
unsure, but they will tell you,you know, these are the
documents that are going to dowhat you want done.
transfer it outside of probatevia transfer on death, payable
on death.
And again, if you never thoughtabout who gets your car, who
gets your house, you probablythought about putting that in
your will, which again is fine.
But if you know who's going toget it ahead of the time, you
(12:02):
don't need to put it necessarilyin your will per se.
Yes, you can put it in yourwill.
Hey, they get all my vehicles orthey get this particular
vehicle.
But if this particular vehicleis going to go to this person,
you could easily put thattransfer on death.
If this home is going to yourspouse, to whomever, and there
could even be maybe an inklingof trouble down the road, or
(12:26):
maybe you just want to avoid anykind of hiccups, do the transfer
on death because it will bypassthe will.
And even, let's say, in yourwill, if you said my home goes
to whomever, let's say youlisted your first spouse, Then
you guys got a divorce.
If that first spouse is in yourwill, you never changed your
(12:48):
will, then guess what?
For the most part, it's going togo to your first spouse.
Now, maybe there's going to be ajudge who makes a different
decision, but that could takesome time.
If you have the transfer ondeath and you put in your
current spouse, It doesn'tmatter what's in that will.
It will bypass that will and godirectly to your spouse.
(13:09):
Much, much easier, more direct.
If you have a trust, it does thesame exact thing.
It bypasses the will.
Whatever devices or whateverassets are in this trust, they
will also go directly towhomever the beneficiary is.
Much easier, much simpler.
If you have a significant amountof wealth, you typically will go
(13:31):
through a much similar processestate planning process, but you
will probably work with someoneone-on-one who can guide you.
Of course, you can always use anattorney, even no matter what
the amount of your wealth is.
That's probably the best way.
But if, let's say, you're tryingto save some money, you don't
want to spend the$500,$600,000,whatever it is, Okay, fine.
(13:53):
These are the simple documentsthat you can use.
If again, let's say you justhave a small estate, you have
few assets, you have one or twocars, you have a home.
you know, you have your bankaccounts, you know, a couple
investment accounts, okay, youknow, not so many things, then
again, then do these simpletools, use these simple tools to
(14:15):
avoid the whole probate process.
It's just a quick and easy way.
If you again, have significantamount of assets, and you have a
business, or regardless, if youhave a significant amount of
assets, but you have a business,sole proprietorship, LLC, a
partnership, you know, the youreally have to do your planning
(14:35):
ahead of time you have to againhave the right tools in place so
that these assets can godirectly to whom they should and
that means that you have abusiness succession plan in
place if you have a partner andeverything's supposed to go to
your partner then again have theright devices in place to do
(14:58):
that if everything goes to yourspouse the surviving partner is
most likely is not going to wantto go into business with your
husband or your wife, unless,again, they were very involved.
But still, they may not want tocontinue that partnership.
So they may need you to buy youout.
And then that depends on whetherthey have the money to do that.
(15:22):
They can put in place somethinglike a key man policy, and that
would make sure that the moneyis there to pay you off so that
they can have total control ofthat company.
They can also havecross-partnerships agreements
where they each have insuranceon everybody.
Again, you could have,hopefully, an insurance policy
(15:43):
from your spouse that gives you,you know, immediate cash as
well, and that way you have, youknow, you're not trying to find
$400.
You know, you have the cash, theready cash available because the
insurance policy is going to payout to you, barring some, you
know, unexpected weird event,like if you committed a crime or
(16:03):
you murdered your spouse,believe me, the insurance policy
is not going to pay out.
And if your spouse committedsuicide, as long as typically
this is usually in most lifeinsurance policies, if it's
beyond two years, then it willgo ahead and pay out.
If your spouse committed suicidewithin the first two years of
(16:24):
the policy, it's not going topay out.
There's usually a suicide clausein every insurance policy.
So, again, the life insurancecompany, when you contact them
as well, and you say, hey, myspouse is deceased, and they're
going to ask why, and you'regoing to tell them why, and
they're going to get a certifiedcopy of the death certificate,
and on the death certificate,it's going to state the nature
(16:46):
and the cause of death.
If it was an auto accident, itis what it is.
You know, if it was stage fourcancer, it is what it is.
If it was some...
crime that was committed, likeyour spouse was committing a
crime, that's not going to payout.
Again, and if they've killedthemselves within the first two
years of the life insurancepolicy, it's not going to pay
(17:08):
out.
So, barring anything strangelike that, you're going to have
the proceeds that you need, andyou always, in my opinion,
always want to have a lifeinsurance policy on your spouse
that you have total controlover.
Meaning, You're the owner of thepolicy, you pay the premiums,
and you make all the decisionson who the beneficiaries are,
(17:32):
which typically would beyourself.
Your spouse is only the insured,and that's perfect because then
you know that that policy is inplace and remains in place no
matter what happens between youand your spouse.
If you and your spouse get adivorce, Well, that's just one
of those things, right?
But you will always keep thatpolicy.
(17:54):
They can ask you if you wouldsign it back to them, and that's
up to you.
I wouldn't, but that's up toyou.
That's just a valuable thing tohave.
If you have a million-dollarlife insurance policy on someone
that you've had for a number ofyears, you're probably not going
to want to let go of thateasily.
If he wants to get a newinsurance policy for his new
(18:18):
family, husband, wife, whomever,then go ahead and do that.
That's outside of, you know,your business and that's their
business.
And if it costs him more becausehe's a lot older and maybe in
poorer health, too bad.
You know, that's just how itgoes.
So always have a life insurancepolicy that you control and have
the ability to make sure thatthe premiums are paid because
(18:40):
you've paid them.
I know on sometimes some lifeinsurance policies, there's a,
you know, the ability to have aperson notified if the premiums
don't get paid and you can stepup and pay it.
That's nice, right?
You know ahead of time, but it'sbetter to be the owner and that
way you know and have totalcontrol over exactly what
(19:03):
happens to that policy.
Back to this business.
So again, you need to make sureyou have the ability to access
your spouse's accounts, all ofthem.
Especially if it's a soleproprietorship, like in this
case, your husband is a CPA,then you need access to those
(19:23):
accounts.
So work with the bank, you know,they have their business
accounts, they have theirpersonal accounts, all of them
should be set up so that youhave the ability to access it
doesn't mean you have to beadded on as a joint owner,
right?
that may or may not be somethingyou want to do.
You could have joint tenantswith rights of survivorship.
(19:44):
You could have tenants incommon.
It all depends, right?
Whether you set that up in thatway or not.
But It just says that you havethe ability to gain immediate
access to that account.
If it's joint tenants withrights of survivorship, then you
are, and it's just the two ofyou, because you could have
multiple ones, but if just thetwo of you, then you know you
(20:07):
automatically have total controlof that account.
Each of you equally can putmoney in, take money out at your
leisure.
If you're the sole survivor, itis what it is.
You submit the documents, yousubmit the ability to
re-register that account in yourname only, and then boom, you go
and decide whatever you're goingto want to do with the account.
Transfer it, liquidate it,whatever.
(20:27):
So I don't mean to go on and onand on about this, but it's just
still surprising to me that atthis day and age, when people
know ahead of time that there issomething that's Something's
going to happen to each andevery one of us, right?
We know we're all going to dieat some point.
It could be tomorrow.
(20:48):
It could be 10 years from today.
We don't know.
Maybe it's even 30 years fromtoday.
You need to take these stepstoday.
Write out a list of everythingthat you have and start making
these changes today.
because it just is the rightthing to do.
It makes things so much easier.
(21:08):
You can do a letter ofinstruction to your spouse and
you can say, hey, you know, atthe time of my death, you need
to contact, you know, maybeFederal Credit Union, you need
to contact Chase for my businessaccount, you need to contact,
you know, E-Trade for, you know,my IRA and go on, you know, go
(21:32):
through that list of everythingyou have credit cards, you know,
your any kind of, you know, ifyou have a loan somewhere, you
know, maybe your spouse doesn'tknow every single thing that you
have, maybe you got a CD outthere through who knows where
they know the Bank of PuertoRico, you know, there could be
all kinds of things that, youknow, maybe you're just not the
(21:53):
best, most organized person,they got to dig through all this
stuff.
Just make it easier on them.
That's all I'm saying.
Because it will really pay offin the end if you really love
your spouse, and they will beeternally grateful for you.
So a letter of instruction isnot legal in the sense that it's
like a will, but it just is astep-by-step, if you will, of
(22:16):
what needs to happen at the timeof your death.
And these are the things thatthey could find and where they
can find them, especially if,let's say, you have a...
What do you call that?
Lost.
In your bank, you have a lockedbox.
I'm at a loss for what that'scalled.
(22:37):
A box where you have a key inthe bank.
It'll come to me in a minute.
Nevertheless, where's that key,right?
Where is this key?
Do you have it, you know, inyour car?
Is it on your key ring?
Is it in your top drawer?
You know, who knows?
Probably doesn't even have anykind of tag on it.
Someone may not even know thatyou have a deposit box
(22:58):
somewhere.
So, again, who knows even what'sin that?
You know, they have to haveaccess to it, and that bank is
not going to let anybody justwilly-nilly get in there.
It is a huge undertaking to getinto a locked box at a bank.
So don't even think that it'sgoing to be easy if you haven't
made it easy on them.
(23:18):
It's not.
So my point, I guess, is made.
I won't go on about it.
Again, estate planning to me is,it's complex, but it takes time.
And the time to do things istoday.
And even if you know you're inthat situation of, let's say,
(23:40):
stage four, you know, you haveyour good days and your bad days
and plan to take care of thingsthe best that you can on your
good days because you knowyou're going to run into the bad
days.
And your days may be numbered.
All of our days are numbered.
But we got to get to this stufftoday.
That's just what makes sense.
And if it's not even your stuffthat you're worried about,
(24:03):
hopefully you have your ownducks in a row.
Look to your spouse.
Make sure their ducks are in arow.
Look to your mom, your dad,whomever that you're taking care
of.
If you're going down the road oftaking care of your parents
because they either havedementia or Alzheimer's or,
again, their own stage fourissues, whatever, Again, you
(24:25):
need to take care of this stuffwith them today.
Today, today, today, while theystill can, they have the mental
capacity to make thesedecisions, and you can make it
easier on yourself.
It just is the smartest thing todo so that you can breeze
through that time when they'renot around and you go through
(24:46):
the whole grief cycle of justdealing with the emotional
aspect of losing your loved one.
But you don't need to compoundit with this huge financial
spider web that's created thatyou're fighting to get through
because you guys didn't take thesteps ahead of time to make it
easier on you.
(25:07):
That's my best advice.
Anyway, I hope you're having agreat day, and I will talk to
you later.
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