November 11, 2024 • 19 mins
Prepare to uncover the often-overlooked essentials of estate planning with our special guest hosts, Sara Wolf and Jonathan Foster. Together, we unravel the critical importance of planning for both death and potential incapacitation, ensuring your wishes are respected during life’s most challenging moments. Have you ever considered who will make decisions on your behalf if you’re unable to? Discover the necessity of healthcare and durable power of attorney documents through the poignant story of Hisashi Uchi, a nuclear worker who suffered without clear care directives, illustrating the impact of planning—or the lack thereof—on those we leave behind.
In our exploration, we emphasize the foundational elements of estate planning, such as wills and trusts, highlighting how these tools safeguard your assets and intentions. We delve into how a well-crafted will ensures your assets are distributed according to your wishes rather than default state decisions, which might not reflect your desires. Privacy and specific instructions for minor children are prioritized through the strategic use of trusts. We also discuss why regularly updating your estate plan is crucial, taking into account life changes and the inclusion of trusted individuals or charities. Engaging your family or designated parties in these discussions ensures that everyone is prepared and informed, ultimately safeguarding your legacy and your loved ones' futures.
Learn more about Wolf Financial Advisory:
https://www.wolffinancialadvisory.com/
Disclosure: Robert Wolf, James Koenig, Sara Wolf, and Michael Rock are investment advisor representatives of, and securities and advisory services are offered through, USA Financial Securities. Member FINRA/SIPC. Additionally, Amanda Opulskas and Adam Wallace are registered non-solicitors of USA Financial Securities, A registered investment advisor. 6020 E. Fulton St., Ada, MI 49301. Wolf Advisory Services and Wolf Financial Advisory are not affiliated with USA Financial Securities.
The strategies and concepts discussed are for educational purposes only and do not represent specific investment, tax, or estate planning advice. Investing carries an inherent element of risk and it is in everyone’s best interests to consult a tax, legal, or investment professional. The opinions expressed herein are not meant to provide specific investment advice or serve as a prediction for future stock market performance. Past performance does not guarantee future results. Securities and advisory services are offered through USA Financial Securities, member FINRA/SIPC. A registered investment adviser. Wolf Financial Advisory and USA Financial Securities are not affiliated entities.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Voiceover (00:00):
The strategies and concepts discussed are for
educational purposes only and donot represent specific
investment, tax or estateplanning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
(00:22):
Financial Securities memberFINRA SIPC, a registered
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
Wolf Financial Advisory.
When it's important to you,it's important to us.
This is the Wolf FinancialPodcast.
(00:42):
Here's your host, Rob Wolf.
Sara Wolf (00:51):
Hi everybody, this is Sara Wolf with the Wolf
Financial Podcast.
We got a real special episodefor you today regarding estate
planning, and I am here withJonathan Foster.
Hello, Jonathan.
Jonathan Foster (00:57):
How are you doing today?
Sara Wolf (00:58):
I'm doing well, how are you doing?
Jonathan Foster (00:59):
Doing good.
Good to be here.
Sara Wolf (01:01):
Good.
So before I get into a littlebit about what I want to talk
about and a harrowing story, ifyou will really perfect for
Halloween season here, why don'tyou tell a little bit about
what you know about estateplanning?
Jonathan Foster (01:14):
I know that from the time that I've been
here.
It's not talked about enough.
Of course, you always think ofwhat's going to happen when I'm
gone.
You always think of what'sgoing to happen when I'm gone.
Well, that really needs to bewhat's going to happen if, say,
I get in a car accident andcognitively I'm not there.
What's going to happen with mymedical decisions?
What's going to happen with myfinancial decisions?
(01:35):
Of course, when you're gone,you're gone.
You don't really have a say inwhat happens.
Well, when you're here, that's acompletely different story.
I know that I have a select fewpeople that I would want to
handle, not only my monetarythings but my own personal
possessions, and it's somethingthat needs to be talked about
(01:58):
more, not only when someonecomes to meet someone like us,
but amongst a family.
Someone say it's a mom'sgetting everyone to sit down for
maybe a nice dinner and just goover.
Here's what our plan is.
Now, of course, a lot of peopledon't have those in place and
me being one of them, because wejust don't know where to start.
Sara Wolf (02:22):
Yep, absolutely.
Death is one of the hardestthings to talk about.
In my experience as a financialadvisor, it's hard to talk
about finances.
For most people which I got totalk about on a daily basis,
politics would be the next one,and death as the last one.
Those are the three big no-nosin conversation, but that's why
(02:42):
it's so important to talk aboutthem, because we're so afraid to
talk about them.
Death is going to happen and wehave to have a plan for it.
You either do or you do not,and I just wanted to share a
little special story.
I heard recently that kind ofties into this whole estate
planning process about whatcould happen if you don't put
(03:06):
together a state plan and fulldisclosure.
I don't know if this man didnot have a state plan.
All I can know is the story I'mabout to share before you.
So back in 1999, there was aman by the name of Hisashi Uchi
and I probably butcher that name, so I really do apologize,
audience Uchi, and I probablybutchered that name, so I really
(03:28):
do apologize, audience.
But the important thing is heworked as a nuclear fuel
processing plant worker inTokamura, japan.
He experienced a huge burst ofradiation after an awful
accident at the plant.
He was soon rushed to thehospital after experiencing
extreme radiation poisoning,where he went on to experience
(03:49):
83 days in the hospital.
Eventually he succumbed tomultiple organ failure, but not
after suffering a great 83 days,while many stood by not knowing
what to do or when to pull theplug.
Now, obviously, that's anextremely harrowing and special
(04:09):
story, but it gets us to thinkabout when do you want these
things to happen?
If you were in his circumstance, would you want your family to
pull the plug?
All of this will need to be inwriting through a power of
attorney.
If you don't have somethinglike that and you're suddenly in
(04:29):
a coma, your family is notgoing to know what your wish is.
You have to outline that tothem beforehand so they can
understand what you want,because it's going to come, and
it's going to come fast, and youmight not have the chance to
express your wishes as towhether you want to be kept
alive as long as possible,hoping there's a chance to save
(04:51):
you, or whether you just want togo peacefully and just cut your
losses while you can.
Jonathan Foster (04:58):
And a big thing about that, too, is it's not
just about what if we're alivestill and in a coma can't
cognitively make those decisionson our own.
It also still comes back to whenwe're eventually gone, and
that's why I do believe it isextremely important to have just
(05:19):
something made up that stateswhat you want to have happen at
that time, made up that stateswhat you want to have happen at
that time, just so it takes thatemotional stress off of whoever
has to end up doing that, ontop of still dealing with your
passing.
Sara Wolf (05:32):
Absolutely, and that's just talking about the
power of attorney for healthcarepurposes.
The other important documentthat you'll definitely want to
have throughout this is thedurable power of attorney for
financial purposes, and whatthat does is that allows someone
to take over your finances andbe able to sign off on financial
documents for you if you're notaround.
(05:53):
Durable essentially means thatit's allowed to act right away,
and the very important thingabout this document is that it
will only work while you'realive.
If you are to pass, then thedocument no longer gives that
person to power make decisionsafter you die, but again being
durable being that they canconcurrently do that while
(06:13):
you're still living.
You got to make sure that youhave a very specific person in
mind that you trust.
Jonathan Foster (06:20):
That's the key word there trust.
You don't want just any randomperson that you might've met two
weeks ago, that you now havedeclared your best friend
forever, to possibly having tomake those decisions without
them really even knowing yourown wishes this story, but there
(06:48):
was once a very powerful figurewho gave yet another very
powerful figure a durable powerof attorney over his estate.
Sara Wolf (06:50):
That second person in question actually abused his
power, wrote all of his assetsinto his own name and got away
with it before the originalperson who gave him that durable
power of attorney ever foundout.
And that's just a little lessonto everybody you need to make
sure that it is someone youtrust with that power of
attorney to handle yourfinancial affairs, because if
(07:12):
it's not someone you trust, theycould get away with some nasty
stuff.
Now, of course they're going to.
They are supposed to act as afiduciary anytime you sign off
on being a durable power ofattorney, but just because
you're supposed to, people breakthe law.
It's going to happen.
That's why you got to make sureyou have someone you trust to
follow that fiduciary code.
Jonathan Foster (07:32):
And I think another very important aspect of
choosing the right person comesdown to you believe that they
can make that decision at thattime, because, of course, just
because that you trust them doesnot mean that you know how
they're going to handle it onthe emotional side.
Sara Wolf (07:50):
Oh, absolutely.
Jonathan Foster (07:51):
Especially when it comes to, say, someone's in
the hospital in a coma.
They sign have someone be theirdurable power of attorney.
Well, are they going to be ableto make that decision when it
comes time You're in a coma andthe doctors don't see any
resolution to it?
Sara Wolf (08:06):
Yep, that's extremely important point.
So let's just say you have twodifferent kids.
Maybe one is the moreresponsible kid.
You know that they're going tohandle all your financial
affairs really well.
They're going to be prudentwith every decision you make,
but in a time of crisis, theyjust freeze, they can't do
anything, they just stop andthey just go into an emotional
(08:28):
panic.
Well, maybe kid number twoyou're not the best at financial
decisions, but in a moment, ina quick moment's notice, they
are going to make the decisionthat you would want them to.
Maybe you split the difference.
You have one kid be the durablepower of attorney for financial
and the other be the power ofattorney for medical.
That is a way you can splitthings and you have to think
(08:50):
about those decisions whenlooking at who in your life is
able to best handle these things, because those are two very
different roles that noteverybody may have both of those
skills to handle.
Jonathan Foster (09:02):
Exactly, and of course we mentioned the kids
being the power of attorneys.
That's not how that has to goeither.
It can be a close friend,another relative, it could be
anyone who you feel, in thattime of need, is going to meet
or exceed your expectations.
Sara Wolf (09:19):
Yep, absolutely.
It just has to be someone youknow you can wholeheartedly
trust.
That is the most importantthing Now when it comes to
durable financial power ofattorneys.
That is the most importantthing Now when it comes to
durable financial power ofattorneys.
If you really do not haveanyone in your life to take care
of you, you can also trust afinancial institution.
There are banks out there whoare willing to take on being a
(09:40):
power of attorney.
So it's important to do yourresearch to know who you're
going to make, or whatorganization you're going to
make, your power of attorney toput that into place Because,
again, these things can happenat any time.
You never know what is going tohappen tomorrow.
So that's why you need to havea plan in place today to prepare
(10:01):
for any event that may happenin the future.
Any plan is better than no planat all.
Jonathan Foster (10:08):
Exactly, and I mean it's down to the basic fact
of you're just starting off.
I mean, for myself included, Ihaven't even started thinking
about this process, and the bestplace to start is, I mean, even
with finances.
It's where you're at now,because you can't get started
unless you take that first stepand, of course, if anyone is
(10:29):
looking to find those referralsor resources, you can always
reach out.
A lot of financial advisors usincluded have those professional
referrals that we always sendour clients to because we know
that they're going to do a greatjob for them.
Sara Wolf (10:45):
Oh, absolutely.
And then also, if you just needsomeone to talk about it, talk
through.
Hey, I think this person mightbe a good fit for this role, but
I'm not sure exactly how thispaperwork would work.
You're always free to talkabout this with a financial
advisor, but just know that theactual paperwork involved should
need to be handled by aattorney, a professional
(11:06):
attorney, by a attorney, aprofessional attorney.
Jonathan Foster (11:08):
Exactly, and I mean the most important thing is
just have something.
I mean, even if it's just awill, just have something,
because if you have something inplace it's going to get
followed by law, it's going toget followed, at least by the
state.
So it's crazy to see just howmany people go through life.
They hear about it.
They may be a little bit, Iguess, worried about starting
(11:33):
these processes because ofcourse it's a tough thing to
talk about.
No one ever wants to talk abouta death of either their self or
anyone in their family.
I mean, it's probably thehardest thing to talk about.
Sara Wolf (11:46):
Oh yeah, I would absolutely agree.
But that's what makes it themost important thing to talk
about, Because, again, if youdie and your family does not
know your wishes, that's onlygoing to cause more burden and
more stress upon them, andideally that would be the last
thing you would want for yourfamily in that type of situation
.
Jonathan Foster (12:04):
Exactly, and I mean we've said it multiple
times throughout this already.
But just start somewhere,because the hardest part of that
process is taking that firststep, and I mean, as soon as you
take that step, it's going toopen a door that you never knew
was possible to where you canand have a sense of ease,
(12:27):
knowing that when I'm gone, Iknow exactly how this is going
to work.
Sara Wolf (12:32):
So, going into that, I also think it's an important
thing to talk about explainingto the audience the difference
between a will and a trust.
So do you happen to know thedifference or do you want me to
go ahead and explain?
Jonathan Foster (12:43):
You know, I hear about it just about every
day.
I know a will is really asbasic as you want to get as far
as estate planning, and I meanmy own personal opinion on that
is everyone should have a will.
I mean, they have all theelectronic sites you can go to
just create one online.
But as far as the deep divingdetails, I think you're probably
(13:07):
be better to talk about those.
Sara Wolf (13:08):
All right, let me go into it a little bit.
So the main thing that you needto know about a will is you are
precisely right.
It's the most basic documentyou can get, and I strongly
encourage that everybody shouldhave a will at the very least.
What a will will do is it willdesignate who you want your
assets to go to and kind of justvary out your estate, how you
(13:35):
would want it distributed afteryou die.
Now, the most important thingthat someone needs to realize
about a will is that it willstill go through probate unless
there are beneficiarydesignations involved with a
will.
A very good example of this isMichael Jackson and Aretha
Franklin.
They both died without trustand unless you have a trust in
(14:00):
place, then all of your assetsare still going to go through
the probate court.
So Michael Jackson, arethaFranklin they had very public
estates.
Anyone could find out what theywanted to about their estates.
If you want to keep yourinformation private, a trust
might be the better route foryou.
It's a little bit more expensive, but again, it keeps all of
(14:22):
your information private.
You do not need to go throughprobate court and you can also
go into a little bit morespecific language of how you
want to divvy out your assets.
One of the things I see mostoften in a trust is if you have,
let's say, two children andthey are both 15 and nine when
(14:44):
the trust is set up, you can sayokay, if I were to die today, I
want to make sure that the15-year-old only gets a third of
the money when she turns 20years old.
A third of the money maybe at25, and a third of the money at
30.
It's those types ofdecision-making and steps that
(15:05):
are just a little bit moreprecise that can go into the
making of a trust versus a will.
So if that's something you'reinterested in having a little
bit more of an advanced stateplan where you keep things
private and you really designatehow you want your money to flow
a trust may be better for youmay be better for you.
Jonathan Foster (15:31):
And I think another thing too is and I hear
this a lot is people don't knowthat they should revise their
trusts and estate plans Because,I mean, you get it set up and
you believe everything isexactly how you want it at that
time.
But as life changes which itchanges for all of us maybe that
plan adjusts.
Sara Wolf (15:46):
Because people are born all the time.
You may have even more kids,you may have grandkids that you
want to include in your estatefor powers attorney.
Especially, you'll want torenew those at least once per
decade to make sure that adoctor would always know oh,
this is the newest copy.
There's not.
You're not using an older copyand giving it to the doctor.
(16:08):
You want to have it at leastdone once per decade so you can
verify yes, this is the mostrecent document.
Jonathan Foster (16:15):
Exactly, and it goes back to the power of
attorneys too, where it doesn'thave to be your kids or your
family in that estate plan orthe trust or the will If you've,
maybe just you're a singleperson and that's how you're
happy.
If you've got a very, veryclose friend that you would
trust anything with, you can putthem in those plans.
Sara Wolf (16:37):
Oh, absolutely.
And that's even more of areason to write a will, because
if you were to die and youwanted everything to go to your
best friend, if you died withouta will, the state isn't going
to know that they're going togive it to your best friend.
If you died without a will, thestate isn't going to know that
they're going to give it to yournext of kin.
If you don't have children thatcould go to your parents Maybe
you don't have a goodrelationship with your parents.
(16:58):
The state is not going to knowthat and that's why you need to
have that in writing.
Jonathan Foster (17:04):
Exactly, and on the topic of that too, with
having someone else be appointedin there, it's a big factor to
also make sure that they notonly know that this is happening
, but have them maybe come insome meetings with the estate
planning attorney, or whoever itis that you're talking about
this stuff, so they really knowwhat's going to happen if
(17:27):
something were to happen to you.
Sara Wolf (17:29):
Oh, absolutely.
Here at Wolf Financial, one ofthe things we like to do is we
like to have family meetingswith people.
So we'll have a client come inand they can bring their kids,
they can bring their parents,but eventually it's a meeting so
that you can sit down withthose you love and say this is
the plan I have in place and saythis is the plan I have in
(17:51):
place.
I want you to know this planahead of time so that way, when
the time comes and I do passaway, you're already prepared
with the knowledge and not justreading it for the first time
after I die.
Jonathan Foster (18:02):
Exactly, and I think another point on this too
is a lot of people just don'tit's either.
Maybe their children are doingreally great for themselves and
they don't see them ever needingthe money or same to be said
with that extremely close familyfriend.
A lot of people are charitabletoo, and you can designate those
charities as the beneficiaries.
Sara Wolf (18:24):
Yeah, absolutely, and in many cases that could be a
really great tool to do some taxplanning with as well, because
you got to remember, if you givemoney to a charity as an
inheritance, they get all thatdollar tax free, so you may want
to allocate some of yourpre-tax dollars to go to a
charity.
These are some of the thingsthat you need to be thinking
about.
Voiceover (18:46):
Thank you for listening to the Wolf Financial
Podcast.
For additional informationabout our firm, please visit our
website wolfadvisoryservices.
wolfadvisorieservicescom.
The strategies and conceptsdiscussed are for educational
(19:07):
purposes only and do notrepresent specific investment,
tax or estate planning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
Financial Securities member,FINRA/ SIPC, a registered
(19:27):
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
The strategies and concepts discussed are for
educational purposes only and donot represent specific
investment, tax or estateplanning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
(00:22):
Financial Securities memberFINRA SIPC, a registered
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
Wolf Financial Advisory.
When it's important to you,it's important to us.
This is the Wolf FinancialPodcast.
(00:42):
Here's your host, Rob Wolf.
Sara Wolf (00:51):
Hi everybody, this is Sara Wolf with the Wolf
Financial Podcast.
We got a real special episodefor you today regarding estate
planning, and I am here withJonathan Foster.
Hello, Jonathan.
Jonathan Foster (00:57):
How are you doing today?
Sara Wolf (00:58):
I'm doing well, how are you doing?
Jonathan Foster (00:59):
Doing good.
Good to be here.
Sara Wolf (01:01):
Good.
So before I get into a littlebit about what I want to talk
about and a harrowing story, ifyou will really perfect for
Halloween season here, why don'tyou tell a little bit about
what you know about estateplanning?
Jonathan Foster (01:14):
I know that from the time that I've been
here.
It's not talked about enough.
Of course, you always think ofwhat's going to happen when I'm
gone.
You always think of what'sgoing to happen when I'm gone.
Well, that really needs to bewhat's going to happen if, say,
I get in a car accident andcognitively I'm not there.
What's going to happen with mymedical decisions?
What's going to happen with myfinancial decisions?
(01:35):
Of course, when you're gone,you're gone.
You don't really have a say inwhat happens.
Well, when you're here, that's acompletely different story.
I know that I have a select fewpeople that I would want to
handle, not only my monetarythings but my own personal
possessions, and it's somethingthat needs to be talked about
(01:58):
more, not only when someonecomes to meet someone like us,
but amongst a family.
Someone say it's a mom'sgetting everyone to sit down for
maybe a nice dinner and just goover.
Here's what our plan is.
Now, of course, a lot of peopledon't have those in place and
me being one of them, because wejust don't know where to start.
Sara Wolf (02:22):
Yep, absolutely.
Death is one of the hardestthings to talk about.
In my experience as a financialadvisor, it's hard to talk
about finances.
For most people which I got totalk about on a daily basis,
politics would be the next one,and death as the last one.
Those are the three big no-nosin conversation, but that's why
(02:42):
it's so important to talk aboutthem, because we're so afraid to
talk about them.
Death is going to happen and wehave to have a plan for it.
You either do or you do not,and I just wanted to share a
little special story.
I heard recently that kind ofties into this whole estate
planning process about whatcould happen if you don't put
(03:06):
together a state plan and fulldisclosure.
I don't know if this man didnot have a state plan.
All I can know is the story I'mabout to share before you.
So back in 1999, there was aman by the name of Hisashi Uchi
and I probably butcher that name, so I really do apologize,
audience Uchi, and I probablybutchered that name, so I really
(03:28):
do apologize, audience.
But the important thing is heworked as a nuclear fuel
processing plant worker inTokamura, japan.
He experienced a huge burst ofradiation after an awful
accident at the plant.
He was soon rushed to thehospital after experiencing
extreme radiation poisoning,where he went on to experience
(03:49):
83 days in the hospital.
Eventually he succumbed tomultiple organ failure, but not
after suffering a great 83 days,while many stood by not knowing
what to do or when to pull theplug.
Now, obviously, that's anextremely harrowing and special
(04:09):
story, but it gets us to thinkabout when do you want these
things to happen?
If you were in his circumstance, would you want your family to
pull the plug?
All of this will need to be inwriting through a power of
attorney.
If you don't have somethinglike that and you're suddenly in
(04:29):
a coma, your family is notgoing to know what your wish is.
You have to outline that tothem beforehand so they can
understand what you want,because it's going to come, and
it's going to come fast, and youmight not have the chance to
express your wishes as towhether you want to be kept
alive as long as possible,hoping there's a chance to save
(04:51):
you, or whether you just want togo peacefully and just cut your
losses while you can.
Jonathan Foster (04:58):
And a big thing about that, too, is it's not
just about what if we're alivestill and in a coma can't
cognitively make those decisionson our own.
It also still comes back to whenwe're eventually gone, and
that's why I do believe it isextremely important to have just
(05:19):
something made up that stateswhat you want to have happen at
that time, made up that stateswhat you want to have happen at
that time, just so it takes thatemotional stress off of whoever
has to end up doing that, ontop of still dealing with your
passing.
Sara Wolf (05:32):
Absolutely, and that's just talking about the
power of attorney for healthcarepurposes.
The other important documentthat you'll definitely want to
have throughout this is thedurable power of attorney for
financial purposes, and whatthat does is that allows someone
to take over your finances andbe able to sign off on financial
documents for you if you're notaround.
(05:53):
Durable essentially means thatit's allowed to act right away,
and the very important thingabout this document is that it
will only work while you'realive.
If you are to pass, then thedocument no longer gives that
person to power make decisionsafter you die, but again being
durable being that they canconcurrently do that while
(06:13):
you're still living.
You got to make sure that youhave a very specific person in
mind that you trust.
Jonathan Foster (06:20):
That's the key word there trust.
You don't want just any randomperson that you might've met two
weeks ago, that you now havedeclared your best friend
forever, to possibly having tomake those decisions without
them really even knowing yourown wishes this story, but there
(06:48):
was once a very powerful figurewho gave yet another very
powerful figure a durable powerof attorney over his estate.
Sara Wolf (06:50):
That second person in question actually abused his
power, wrote all of his assetsinto his own name and got away
with it before the originalperson who gave him that durable
power of attorney ever foundout.
And that's just a little lessonto everybody you need to make
sure that it is someone youtrust with that power of
attorney to handle yourfinancial affairs, because if
(07:12):
it's not someone you trust, theycould get away with some nasty
stuff.
Now, of course they're going to.
They are supposed to act as afiduciary anytime you sign off
on being a durable power ofattorney, but just because
you're supposed to, people breakthe law.
It's going to happen.
That's why you got to make sureyou have someone you trust to
follow that fiduciary code.
Jonathan Foster (07:32):
And I think another very important aspect of
choosing the right person comesdown to you believe that they
can make that decision at thattime, because, of course, just
because that you trust them doesnot mean that you know how
they're going to handle it onthe emotional side.
Sara Wolf (07:50):
Oh, absolutely.
Jonathan Foster (07:51):
Especially when it comes to, say, someone's in
the hospital in a coma.
They sign have someone be theirdurable power of attorney.
Well, are they going to be ableto make that decision when it
comes time You're in a coma andthe doctors don't see any
resolution to it?
Sara Wolf (08:06):
Yep, that's extremely important point.
So let's just say you have twodifferent kids.
Maybe one is the moreresponsible kid.
You know that they're going tohandle all your financial
affairs really well.
They're going to be prudentwith every decision you make,
but in a time of crisis, theyjust freeze, they can't do
anything, they just stop andthey just go into an emotional
(08:28):
panic.
Well, maybe kid number twoyou're not the best at financial
decisions, but in a moment, ina quick moment's notice, they
are going to make the decisionthat you would want them to.
Maybe you split the difference.
You have one kid be the durablepower of attorney for financial
and the other be the power ofattorney for medical.
That is a way you can splitthings and you have to think
(08:50):
about those decisions whenlooking at who in your life is
able to best handle these things, because those are two very
different roles that noteverybody may have both of those
skills to handle.
Jonathan Foster (09:02):
Exactly, and of course we mentioned the kids
being the power of attorneys.
That's not how that has to goeither.
It can be a close friend,another relative, it could be
anyone who you feel, in thattime of need, is going to meet
or exceed your expectations.
Sara Wolf (09:19):
Yep, absolutely.
It just has to be someone youknow you can wholeheartedly
trust.
That is the most importantthing Now when it comes to
durable financial power ofattorneys.
That is the most importantthing Now when it comes to
durable financial power ofattorneys.
If you really do not haveanyone in your life to take care
of you, you can also trust afinancial institution.
There are banks out there whoare willing to take on being a
(09:40):
power of attorney.
So it's important to do yourresearch to know who you're
going to make, or whatorganization you're going to
make, your power of attorney toput that into place Because,
again, these things can happenat any time.
You never know what is going tohappen tomorrow.
So that's why you need to havea plan in place today to prepare
(10:01):
for any event that may happenin the future.
Any plan is better than no planat all.
Jonathan Foster (10:08):
Exactly, and I mean it's down to the basic fact
of you're just starting off.
I mean, for myself included, Ihaven't even started thinking
about this process, and the bestplace to start is, I mean, even
with finances.
It's where you're at now,because you can't get started
unless you take that first stepand, of course, if anyone is
(10:29):
looking to find those referralsor resources, you can always
reach out.
A lot of financial advisors usincluded have those professional
referrals that we always sendour clients to because we know
that they're going to do a greatjob for them.
Sara Wolf (10:45):
Oh, absolutely.
And then also, if you just needsomeone to talk about it, talk
through.
Hey, I think this person mightbe a good fit for this role, but
I'm not sure exactly how thispaperwork would work.
You're always free to talkabout this with a financial
advisor, but just know that theactual paperwork involved should
need to be handled by aattorney, a professional
(11:06):
attorney, by a attorney, aprofessional attorney.
Jonathan Foster (11:08):
Exactly, and I mean the most important thing is
just have something.
I mean, even if it's just awill, just have something,
because if you have something inplace it's going to get
followed by law, it's going toget followed, at least by the
state.
So it's crazy to see just howmany people go through life.
They hear about it.
They may be a little bit, Iguess, worried about starting
(11:33):
these processes because ofcourse it's a tough thing to
talk about.
No one ever wants to talk abouta death of either their self or
anyone in their family.
I mean, it's probably thehardest thing to talk about.
Sara Wolf (11:46):
Oh yeah, I would absolutely agree.
But that's what makes it themost important thing to talk
about, Because, again, if youdie and your family does not
know your wishes, that's onlygoing to cause more burden and
more stress upon them, andideally that would be the last
thing you would want for yourfamily in that type of situation
.
Jonathan Foster (12:04):
Exactly, and I mean we've said it multiple
times throughout this already.
But just start somewhere,because the hardest part of that
process is taking that firststep, and I mean, as soon as you
take that step, it's going toopen a door that you never knew
was possible to where you canand have a sense of ease,
(12:27):
knowing that when I'm gone, Iknow exactly how this is going
to work.
Sara Wolf (12:32):
So, going into that, I also think it's an important
thing to talk about explainingto the audience the difference
between a will and a trust.
So do you happen to know thedifference or do you want me to
go ahead and explain?
Jonathan Foster (12:43):
You know, I hear about it just about every
day.
I know a will is really asbasic as you want to get as far
as estate planning, and I meanmy own personal opinion on that
is everyone should have a will.
I mean, they have all theelectronic sites you can go to
just create one online.
But as far as the deep divingdetails, I think you're probably
(13:07):
be better to talk about those.
Sara Wolf (13:08):
All right, let me go into it a little bit.
So the main thing that you needto know about a will is you are
precisely right.
It's the most basic documentyou can get, and I strongly
encourage that everybody shouldhave a will at the very least.
What a will will do is it willdesignate who you want your
assets to go to and kind of justvary out your estate, how you
(13:35):
would want it distributed afteryou die.
Now, the most important thingthat someone needs to realize
about a will is that it willstill go through probate unless
there are beneficiarydesignations involved with a
will.
A very good example of this isMichael Jackson and Aretha
Franklin.
They both died without trustand unless you have a trust in
(14:00):
place, then all of your assetsare still going to go through
the probate court.
So Michael Jackson, arethaFranklin they had very public
estates.
Anyone could find out what theywanted to about their estates.
If you want to keep yourinformation private, a trust
might be the better route foryou.
It's a little bit more expensive, but again, it keeps all of
(14:22):
your information private.
You do not need to go throughprobate court and you can also
go into a little bit morespecific language of how you
want to divvy out your assets.
One of the things I see mostoften in a trust is if you have,
let's say, two children andthey are both 15 and nine when
(14:44):
the trust is set up, you can sayokay, if I were to die today, I
want to make sure that the15-year-old only gets a third of
the money when she turns 20years old.
A third of the money maybe at25, and a third of the money at
30.
It's those types ofdecision-making and steps that
(15:05):
are just a little bit moreprecise that can go into the
making of a trust versus a will.
So if that's something you'reinterested in having a little
bit more of an advanced stateplan where you keep things
private and you really designatehow you want your money to flow
a trust may be better for youmay be better for you.
Jonathan Foster (15:31):
And I think another thing too is and I hear
this a lot is people don't knowthat they should revise their
trusts and estate plans Because,I mean, you get it set up and
you believe everything isexactly how you want it at that
time.
But as life changes which itchanges for all of us maybe that
plan adjusts.
Sara Wolf (15:46):
Because people are born all the time.
You may have even more kids,you may have grandkids that you
want to include in your estatefor powers attorney.
Especially, you'll want torenew those at least once per
decade to make sure that adoctor would always know oh,
this is the newest copy.
There's not.
You're not using an older copyand giving it to the doctor.
(16:08):
You want to have it at leastdone once per decade so you can
verify yes, this is the mostrecent document.
Jonathan Foster (16:15):
Exactly, and it goes back to the power of
attorneys too, where it doesn'thave to be your kids or your
family in that estate plan orthe trust or the will If you've,
maybe just you're a singleperson and that's how you're
happy.
If you've got a very, veryclose friend that you would
trust anything with, you can putthem in those plans.
Sara Wolf (16:37):
Oh, absolutely.
And that's even more of areason to write a will, because
if you were to die and youwanted everything to go to your
best friend, if you died withouta will, the state isn't going
to know that they're going togive it to your best friend.
If you died without a will, thestate isn't going to know that
they're going to give it to yournext of kin.
If you don't have children thatcould go to your parents Maybe
you don't have a goodrelationship with your parents.
(16:58):
The state is not going to knowthat and that's why you need to
have that in writing.
Jonathan Foster (17:04):
Exactly, and on the topic of that too, with
having someone else be appointedin there, it's a big factor to
also make sure that they notonly know that this is happening
, but have them maybe come insome meetings with the estate
planning attorney, or whoever itis that you're talking about
this stuff, so they really knowwhat's going to happen if
(17:27):
something were to happen to you.
Sara Wolf (17:29):
Oh, absolutely.
Here at Wolf Financial, one ofthe things we like to do is we
like to have family meetingswith people.
So we'll have a client come inand they can bring their kids,
they can bring their parents,but eventually it's a meeting so
that you can sit down withthose you love and say this is
the plan I have in place and saythis is the plan I have in
(17:51):
place.
I want you to know this planahead of time so that way, when
the time comes and I do passaway, you're already prepared
with the knowledge and not justreading it for the first time
after I die.
Jonathan Foster (18:02):
Exactly, and I think another point on this too
is a lot of people just don'tit's either.
Maybe their children are doingreally great for themselves and
they don't see them ever needingthe money or same to be said
with that extremely close familyfriend.
A lot of people are charitabletoo, and you can designate those
charities as the beneficiaries.
Sara Wolf (18:24):
Yeah, absolutely, and in many cases that could be a
really great tool to do some taxplanning with as well, because
you got to remember, if you givemoney to a charity as an
inheritance, they get all thatdollar tax free, so you may want
to allocate some of yourpre-tax dollars to go to a
charity.
These are some of the thingsthat you need to be thinking
about.
Voiceover (18:46):
Thank you for listening to the Wolf Financial
Podcast.
For additional informationabout our firm, please visit our
website wolfadvisoryservices.
wolfadvisorieservicescom.
The strategies and conceptsdiscussed are for educational
(19:07):
purposes only and do notrepresent specific investment,
tax or estate planning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
Financial Securities member,FINRA/ SIPC, a registered
(19:27):
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
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