Episode Transcript
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Speaker 1 (00:05):
Welcome to Life Happens Radio, featuring the attorneys from Pureau,
Counter and Strauss. Tune in every Saturday morning at nine
am for the most in depth discussions that help you
navigate the legal, financial, and health related challenges we all face.
Life Happens. Are you preparing?
Speaker 2 (00:33):
You and I present a formidable team. When we work
with clients, they get a really good service. And when
we sit at consultations and we start asking the hard
questions and we have a little bit of information because
we do a questionnaire. We try to get information in
advance of the meeting, and we sit and we ask, okay,
so tell me about your children. And if they say, oh,
(00:56):
our children are and they start going through their children.
If it's a marriage of you know, fifty years, forty years,
thirty years and they have the same kids, the plan
takes one direction, because you can do things jointly. And
if they say, well, my children and they go into oh,
I have you know, two kids from my first marriage,
(01:18):
one from my second marriage. We have one together, and
then the other may not have any kids or may
have kids from their own prior marriages and relationships, that
takes a very different turn, and you have to have
a different conversation with those folks.
Speaker 3 (01:32):
Yeah, yeah, certainly it does get a little bit more
tricky when they have blended families, and you know, sometimes,
when not always, the blended families won't always get along, so,
you know, figuring out how to structure that can be
a little bit challenging, especially if they have different ideas
of who they want the beneficiaries to be.
Speaker 4 (01:50):
If they agree on who.
Speaker 3 (01:51):
They want the beneficiaries to be, then it, you know,
makes it a lot easier for us. But sometimes they
you know, don't agree. Sometimes they're in conflict with each other,
which makes it pretty tricky, especially if we're trying to,
you know, do a joint trust for example. So maneuvering
that is always interesting.
Speaker 2 (02:08):
It certainly is. And a lot of plans folks, and
listen up, if you have this plan, get it fixed.
If your will or your trust, and we talk a
lot about trusts. We think trusts give us a much
better option in terms of the ultimate administration of an estate.
But if you have a will or a trust, it says, well,
(02:29):
I leave everything to my spouse, but if my spouse
predeceases me, it's all going back to my kids and
the spouse has the same will. I leave everything to
my spouse, but if my spouse predeceases me, it's going
back to my kids. The intent there, clearly, Patty, is
they want that they're assets to be available to the
(02:53):
surviving spouse, but to then revert back to their own family.
But that's not what happens. So when that happens, when
you have an I love you will, and it all
goes to the surviving spouse, who ultimately gets those assets.
Speaker 4 (03:09):
The people that the surviving spouse name in their documents.
Speaker 2 (03:12):
Yeah, so your kids you just disinherited. If you don't
outlive your spouse, you just disinherited your children. And this
happens not only in a will, but if you have
an IRA, if you have a four oh one K,
if you have an annuity, and you name your spouse
as the primary beneficiary, and the spouse then lives longer
(03:35):
than you, so they receive all of those benefits. It
then goes through their estate because it becomes their asset,
their money, their IRA. You do a rollover, and they
named their own children as their own beneficiary. So your
assets all go to the surviving spouse. So when you
have second families, blended families, different situations. We have to
(03:58):
look beyond justin I love you will and kind of
get to the next level. And we're going to talk
about that as we go through the show. How do
you prepare and plan for this? How do you make
sure that your intentions are carried out and not the
intentions of your spouse, even though they're well meaning, but
the understanding that their assets go their direction, your assets
(04:20):
go in your direction, and you don't cross wire them
so that the children of the survivor end up with
a windfall and all of the assets of the couple.
So let's talk about Gene Hackman's estate. And he was married,
and he had a wife, Betsy eric Kwa, and they
(04:41):
were found in their home in New Mexico deceased under
circumstances that were kind of shaky.
Speaker 4 (04:50):
Yep, tell us about it for all.
Speaker 3 (04:52):
From my understanding, they were found disused, both at the
same time, and then after some discovery, some study, it
turned out that she had passed prior to him, and
she had passed from what I think was some kind
of illness, that is, you know that she got from
(05:14):
mice or mouse droppings or something. And then you know
he died, you know, maybe.
Speaker 2 (05:19):
A week or two after she did, but they didn't
know that at first.
Speaker 3 (05:24):
No, No, they obviously weren't sure what happened when they
probably first walked into the home. But they probably you know,
did some task ransom discovery and then figured all that
out afterwards.
Speaker 2 (05:34):
And Gene Hackman was ninety five, she was sixty five,
so they were very different ages. He had dementia at
age ninety five. She was his primary caregiver. And it's
a very sad case because as the primary caregiver, her
not being available to him put him in a situation
(05:55):
where he had no one, which is another thing that
we have to plan for. But just going through the
order of death and how it impacted this plan, how
did their documents play out, and how did this I
think it's still in court.
Speaker 4 (06:11):
I think so too, Yeah, But what what.
Speaker 2 (06:13):
Are the what did the documents say? And how are
they trying to get around that?
Speaker 3 (06:18):
Well, from my understanding, her will had a clause in it,
survivorship clause that said that if anyone died ninety days,
you know, after she died, then it was going to
be that the person who died within the ninety days
would be treated as if they predeceased her. So basically
(06:42):
that distribution would you know, not exist and everything would
go according to what her what her document said.
Speaker 2 (06:52):
Yeah, And in this case they had living trusts, and
the living trust named each other as the primary beneficiaries,
and they had a plan for what happened if they
die together. We call it simultaneous death. Sounds ominous, right,
but when we learn about drafting wills in law school,
(07:15):
simultaneous death clauses are things that should be in your document.
And when you have a case where you in this case,
they ultimately determine the order of death. But if you
die in a common accident and you can't determine the
order of death, and how do assets pass? Whose will controls?
(07:37):
How do those things get done? And we put in
a thirty day clause this was ninety that says, if
the person I name is a beneficiary does not survive
me by thirty days, then I want the assets to
go to the other beneficiaries named in my document, in
my trust. And so you protect yourself. You have a
(07:59):
lot of things in a document and people come in
and they say, well, why is my will thirty pages? Well,
you haven't thought of all things that you may need,
and this will because some of them may never be necessary,
but others are going to pull your estate out of
the fire. And so when we draft, we have all
of these years, four hundred years of experience that come
(08:21):
to bear in drafting documents. So we're going to open
it up and take some questions. We're going to take
a short break, and we're going to come back and
talk about drafting wills and trusts. Looking at all of
these pitfalls and the Hackman estate, where is it? How
is it going to end up? And she had charitable beneficiaries,
(08:42):
I believe, and he had individual beneficiaries, so very different plans.
Is your plan up to date? July nineteenth, summertime, kick back,
have another cup of coffee, listen to Life Happens Radio.
We'll be back after short break and we'll be taking
your calls. I'm going to give it out the phone
(09:02):
number as soon as we come back and we're back.
I am Lou Pirol live in studio. I am here
in studio with our star associate, Patricia Whalen, and she
blushes every time I see that. And we're gonna open
the phone line. So if you have a question, a case,
something you want to talk about. Do you have something
(09:23):
in your own personal plan that you have a question?
On your documents? When's the last time you dusted them off,
pulled them out, looked at them, read them? What is
in that will that I did twenty years ago? Make
sure that your documents keep pace with your life and
life happens. Heard that before, So when life happens, you
make sure that everything is up to date. We draft
(09:45):
for a lot of contingencies, and it's important to have
all of those in your thirty page will instead of
a we were in I won't mention where, but somebody
came in with a will that was half a page.
It was the shortest will I've ever seen. And we
see those documents done by a lot of other law
firms patty that just don't have anything in them.
Speaker 4 (10:04):
Yep, yep.
Speaker 3 (10:05):
They're like a one page, two page and they don't
really say much.
Speaker 2 (10:10):
And all of these contingencies, like the gene Hackman case,
what is what is your clause? What does you will
say if someone predeceases you or if you predecease them
or you die simultaneously? How do your assets pass? Do
they get to the people that you want to benefit.
And this is all about you. What are your intentions?
Who are the people that you love that you want
(10:30):
to benefit? How do you make sure that things get
to them? Give us a call. We're alive on the
radio and we'll take your calls at eight hundred WGY.
That's eight hundred eight two five five nine four nine.
Love to hear from you this morning, eight hundred eight
two five fifty nine forty nine. And when we're drafting
these documents, looking at trusts and wills, and you brought
(10:55):
up a great point during the break. So many clients
come to us and they're told by their financial advisor, oh,
you don't need a trust. You can do a transfer
on death, a TOD designation and name the person who
you want to be the beneficiary. But that takes it
(11:16):
out of the trust that we create, and it puts
it into a stream where there may be unintended consequences. Patty,
and walk our listeners through this. When you're looking at
your own assets, what are you looking at? What? What
should you be thinking about in terms of naming beneficiaries.
Speaker 3 (11:33):
I mean, I think one of the things we talk
about a lot. Are you know, contingency plans for beneficiaries.
You know, I think the most common thing people think
about are Okay, who do I want to benefit? Who's
my primary beneficiary? But oftentimes they fail to think past that.
They fail to think about who their you know, first
successor should be, or their second successor should be. And
(11:55):
you know, we always tell our clients that if they
have people to put on, you know, they should put
on as many as they feel comfortable with, or you know,
you know, keep going down the line of people. Otherwise,
if they fail to name someone, you know, it's going
to be up to the law or the judge to
figure out what should happen at that point.
Speaker 2 (12:14):
Looking at my engineer, do we have a caller on
the line, they're off. Okay, So these well meaning financial
advisors and they're trying to take care of their clients
and save them some bucks. But in the long run,
if you name a beneficiary on an account and you
don't have any contingency plan and that beneficiary dies before you,
(12:38):
where does that asset go? And if you have a
beneficiary provision on an IRA, you name a spouse and
then your kids and that spouse survives you what happens
to an IRA when one spouse dies. Typically it's rolled
over into the IRA of the surviving spouse. And once
(13:01):
it's rolled over into the IRA of the surviving spouse,
the beneficiaries of the surviving spouse are going to take
that IRA. And your IRA is gone, and your kids
are sitting there saying, hey, what happened? And then you're
calling mister Aaron Connor and saying, I, you know, my
mom meant that I get that IRA, not that it
(13:22):
goes to her second husband's kids, but that it comes
back to us. But it rolled over into her account
and now it's going to her kids. Do I have
a remedy for that? And the remedy is planning because
once the cat's out of the bag, once that IRA
rolls over and it's in the spouse's name and it
goes to the spouse's kids, you don't control it anymore.
(13:42):
So to bring that back in And when we have
these situations second marriages on traditional families, we use trusts.
And how do the trust save us? Here? Petty?
Speaker 3 (13:53):
The trust save us because in the trust you're able
to be you know, a little bit more descriptive. You're
able to write out exactly how you want.
Speaker 4 (14:01):
You know, those continuency plans to go.
Speaker 3 (14:03):
You can write out exactly what would happen if you
know your first primary beneficiary predeceased you or something like that,
and you don't have that same ability, the same flexibility
to put in language like that when you just have,
you know, beneficiary designations on these accounts.
Speaker 2 (14:20):
So the trusts that we create are in the first
instance for you, but in the second instance for your beneficiaries.
And in this instance we're talking about spousal beneficiaries. And
when you have a case where you maybe know the
order of death, maybe don't know the order of death,
you can have provisions like a simultaneous death clause to
(14:43):
say it only goes if my spouse survives me by
thirty days. But if it happens that they survive you
by thirty days, how do you protect it at that point?
And when it goes into the trust that you create,
you want And this is patty common theme for a
lot of married couples and second marriages. I want my
(15:05):
spouse to have use of this money during their lifetime.
I want them to live in the standard of living
to which we became accustomed during our lifetimes. But when
my spouse passes, I want those assets to come back
to my family and folks. The only way to do
that is to have those assets held in a trust.
(15:29):
Now that means that you have to have some administration,
You have to have a little bit of work done.
And the worst place Patty to do this is in
a will. And what's the difference between the will and
the trust administration?
Speaker 3 (15:43):
So the will administration is a lot more you know, difficult,
a lot more time consuming, you know, a lot more
costly than a trust administration because every will has to
go through court. You know, it has to be monitored
by a judge, and that process, you know, is a
lot more difficult than it is with just a trust administration.
You know, with a trust administration, everything is private. You know,
(16:04):
nothing has to get submitted to the court, nothing becomes
public record, and everything can happen, you know, quickly, and
you know, pretty streamlined after you pass.
Speaker 4 (16:14):
Meanwhile, with the will, you know.
Speaker 3 (16:16):
There's a creditor period of seven months, and you know
that process usually takes a year, sometimes two, sometimes even
longer if you have blended families that are you know,
conflicting with one another. So you know, having a trust
and having a trust administration is a lot quicker and
a lot better than I think having a will.
Speaker 2 (16:33):
Yeah, And in our experience, this is a world of
difference because provid to states, and we know all the
Surgus Court judges and I hope they're listening. They're great.
They work very very hard, but the volume of cases
and the difficulty and the technical nature of a probate
proceeding put a lot of pitfalls in people's way, and
(16:55):
the smooth administration of an estate requires very meticulous care
and filing of numerous documents. I'm closing out a trust
right now that I volunteered to be the trustee of
Shoot me next time I do, Patty. But I'm closing
out this trust, and it's not a huge amount of money,
(17:18):
but it's enough. We have beneficiaries who have special needs,
we have charitable beneficiaries, and it got complicated and we
are now filing to close the estate. And I think
I signed six different documents yesterday just to close this
(17:39):
very simple probated state. And it's only a probate a
state because we had one bank account that they forgot
to put into their trust, so we had to do
all this work for that one account, which brings up
another theme. When you're doing this kind of planning and
you're doing a trust plan, and you want to make
sure that you thread the needle, that you get the
(18:01):
assets to the right beneficiary in the first instance, and
if it's a second marriage or blended family that's your spouse.
In a first marriage, it's a little bit easier. We
typically do joint trusts, so you can have common themes,
common beneficiaries, one trust for both spouses and it's much simpler.
But in second marriages, you want to get that protection
in and you want to thread that needle and make
(18:24):
sure that it gets to your spouse for their use
during their lifetime and then back to your own children.
In order to make that plan work, the assets have
to thread through that needle. And we work very hard
at this, but it's not perfect in all cases because
it's up to the clients to finish this funding process.
(18:45):
And just when you sit with clients and they're signing
their trust documents, what's the process then to make sure
that this plan does work in their situation, right, So.
Speaker 3 (18:56):
You know, half of the planning we do with them is,
you know, actually create and signing and developing the documents.
But the other half of it, which is you know,
probably if not just as important, you know, the most important,
is what we call the trust funding process. So you know,
this is the process by which we sit with them,
we go over their assets, their values, and we talk
(19:17):
about them in detail. We also advise them on making
sure that if they're supposed to go into the trust,
that they get there. If we just need to update
beneficiaries on them, so like for retirement accounts, because they
don't go into trust, right, we you know, make sure
we walk through with them how we need to update
the beneficiary designations.
Speaker 4 (19:36):
We give them the language.
Speaker 3 (19:37):
But you know, I think we had an interesting meeting
a few days ago with some clients who are a
part of our palms, you know, the client maintenance program,
And as we sat with them and went through all
of their assets, we discovered that the beneficiary designations on
some of their retirement accounts were not exactly what they
needed to be. So I thought that was a good
opportunity for us because we were able to go through
(19:59):
that with them and you know, help them, you know,
ensure that you know, what they needed to fix was
able to get fixed, and without that annual review, we
probably never would have discovered that you know that mistake,
or the fact that you know those beneficiary designations.
Speaker 4 (20:13):
Needed to be updated.
Speaker 2 (20:14):
You bring up a great point, and that is in
our firm, we do a lot of upfront mining of data,
getting information. What are your assets, who are your beneficiaries,
who are your fudciaries, who takes charge, who's your executor,
your trustee. We look at all that in the first
consultation and then we start asking the what if questions,
(20:38):
and we'll go through that in the second half of
the show. But once that plan is mature, we've done
the drafting, we have the documents, we've gone through the assets,
the client walks out the door after having signed. How
do you make sure that that plan stays intact? And
we're going to break for the news, and when we
come back, we're going to talk about how to keep
(20:59):
your plan going. And we're back. You're listening the Life
Happens Radio every Saturday morning here at w g Y
come on at nine am, and we're talking today about
blended families, ensuring the security of your estate plan, and
the Gene Hackman case and Patty we like celebrities and
(21:20):
because they kind of raise awareness, people figure out through
their mistakes what to do. And just again for our
listeners who just joining what happened in the Hackman case.
Speaker 3 (21:32):
In the Hackman case, you know, husband and wife, they
died very close, you know, in line to each other.
And in this case, you know, we are you know,
looking at their wills, looking at their trusts, and you know,
looking at specifically, I think the survivorship presumption that said,
if you know, what would happen if one of them died.
Speaker 4 (21:55):
Lesson you know, ninety days from the other.
Speaker 3 (21:58):
And so, you know, looking at this case raises a
bunch of issues, raises a bunch of you know, thoughts
about lessons that could be learned from this case and
things that we can do in the future to try
and prevent some of these from happening, you know, in
our own estates and our clients estates.
Speaker 2 (22:18):
So it raises several issues. One the one that's been
talked about the most is the simultaneous death issue. We
talked about that in the first half. So you have
to have a provision that says, if my beneficiary doesn't
survive me by a certain period of time, and we
use thirty days. Typically then it will pass to the
(22:38):
second level beneficiaries, so that just avoids a double administration.
And at the break, we were talking about coordinating assets
and making sure that the assets that we have brokerage accounts,
bank accounts, retirement accounts, iras, our real estate, our home,
(22:59):
making sure that all of the assets become part of
the plan. And when you do this, it's a lot
of work. Up front. We do the drafting, we do
the documents, we prepare deeds, we transfer businesses. But when
it comes time to transfer your own brokerage account or
your own bank account, we can't do that. So the process,
(23:23):
patty becomes the client's work at that point, yep.
Speaker 3 (23:27):
I mean we do some of the things upfront for them.
You know, typically we can do the real estate for them,
we can do the deeds, but you know, like you
mentioned with the brokerage accounts or updating the beneficiaries on
their everyday bake accounts or the retirement accounts. You know,
we can only help them with that for you know,
we can only do so much for them to help
them with it. You know, we try our best to
(23:47):
give them as much guidance and as you know, many
resources as they need.
Speaker 4 (23:51):
To be able to do that on their own.
Speaker 3 (23:52):
But you know, at the end of the day, they're
going to be the ones to have to to have
to you know, do that and make it happen.
Speaker 2 (23:59):
And this is one of the big differences I think
in Pierre O'Connor and Strauss versus a lot of other firms.
We take this process, the funding process, putting assets in
the trust, making sure that it all works together, that
every asset is accounted for. We take it very seriously.
We have documents that lay it out for you in
very detailed fashion, and then we have a cheat sheet memo,
(24:22):
Here's how you do a bank account, Here's how you
do a broken account. And we also have personnel, and
I think that differentiates us from a lot of firms.
We dedicate a staff person to just this process and
talk a little bit about that.
Speaker 4 (24:36):
Yeah, so we have a staff person.
Speaker 3 (24:38):
She's what we call the trust funding paaralegal, and her
job is to, you know, follow up with clients after
we have a document signing, and you know, she follows
up with them. She you know, reviews some of the
assets that they have and she gives them some guidance
and help in terms of, you know, making sure that
they know how to update the beneficiaries, they know how
(24:58):
to move the accounts into their trust, and she's there,
you know, to answer any questions and to you know,
give them some guidance along the way, which you know,
I think is great.
Speaker 2 (25:08):
And that's her sole job, folks. And we have one
in our New York City office as well, like Kee
mcgurley who does the same function for our clients down state,
and we operate in Latham and New York City and
several offices around New York Orden City like Placid, Hudson.
So getting this done, making sure that the eyes are dotted,
the teaser crossed, that all the beneficiary designation forms are
(25:31):
in the right place. That is a process that we
have ingrained into our law firm and dedicated staff people
to the trust funding process to make sure that our
client's plans that And let's face it, when when you
do a big trust plan, when you're doing a medicaid
asset protection trust or a revocable living trust, this is
an investment you're putting in place a plan that you
(25:54):
just typically do. Once you build this plan, one time
you may have to tweak it and may have to
make minor modifications to it. But once you build a
trust plan, that's a plan for life, and you want
to make sure that your assets are keeping pace with that.
And you mentioned a program that we're very proud of
that we instituted twenty five years ago at our firm
(26:15):
and we've been fine tuning it and improving it and
increasing the number of clients that are utilizing it. And
it's called our PALMS program. So what is PALMS and
how does that work?
Speaker 3 (26:28):
Palms is our client maintenance program and they have a
few things that get out of this program. The first
is that they all get their own secure online portals
where you know, we transfer all their documents on there,
we you know, list all their assets on there, you
know their estimated values, we talk about you know, things
(26:51):
regarding their assets, the beneficiary designations. And in addition to
getting this online portal, they have an annual meeting and
you two hours of additional attorney time to ask questions
and get guidance throughout the year. But the annual meeting
is something that I brought up, you know, a few
minutes ago, because we just had an interesting one a
few days ago with some clients who are part of
(27:12):
this program, and you know, at this meeting, we sat
with them, We walked through their portal, we went through
all the different tabs, the different sections that they have
on their website, and then we went through, you know,
specifically the beneficiary designations on some of their accounts, which
is where we realized that they didn't quite exactly do
or you know, set up the beneficiary designations the way
(27:34):
they should have. And so I think that was a good,
you know, a good meeting for them, a good meeting
for us because we were able to kind of identify
that issue and you know, figure out how to resolve
that for them.
Speaker 2 (27:45):
And I went back through my notes and saw, okay,
it's going to the spouse and then we had specific
contingencies within that plan. And that was how it was
originally designed, but that's not how it got carried out.
So the Palms meeting each year we go through it
(28:05):
and we use a program called Inherlink, and it's a
technology platform that allows you to track all of your information.
You have an online virtual document vault, so all of
your documents are available to you twenty four to seven
through the online and herowink vault We track every account,
every asset, every life insurance policy, who are the beneficiaries?
(28:29):
Every retirement account you're four oh one k, who is
the beneficiary? These things are how we thread the needle
and make sure that every asset when the time comes,
and let's face it, I said it earlier, when a
person dies who has created this plan, that's when all
of the good planning comes out and all the bad
(28:50):
planning comes out if you don't have it done properly.
And so this annual program has given our clients an
ability to have pure oconor and strains else. Andre Tayner,
we are their counsel throughout the years. We have clients
that have been in this program for over twenty five years.
I have one of my favorite clients who now lives
(29:12):
out in the state of Oregon, and she and her husband,
who was an attorney locally here, started planning with us
twenty five years ago and they got into the Palms program.
And it's the technology that she has been tracking herself
and goes online and reviews her data and inputs and
updates her data herself in her in her Palms in
(29:34):
heroink site. And when her husband passed away and they
flew back from Oregon. She flew back from Oregon. We
sat down with her. We had every document, we had
every asset, we had every beneficiary designation, and we had
the entire administration of her husband's estate laid out on
(29:57):
the table. And we were able to carry out that
administration in about two days because we had everything done.
And that's the value of having a law firm that
not only says, Okay, your will's done, you know, see
it when you die, but that works with you throughout
your lifetime to make sure, Okay, I have grandkids now,
(30:18):
I want to make sure that I get education accounts
set up. My son's getting a divorce, I want to
make sure that we do asset protection planning for him
because now we have a different set of circumstances. All
of life's changes and life happens. Is not just the
theme of this show, it's the theme of our practice
because we are asking those questions, what if the situation changes.
(30:41):
And one of the things that good documents have that
a lot of other documents don't is contingency planning, looking
at again the experience that we can bring to the table,
and looking at how to put together a plan and
we ask these what if questions, and the clients sit
there and stay blankly at us, since, wow, I never
(31:03):
thought of that. And so one of the things that
we ask for is as many names as we can
get to put on as alternates. And how important is that?
Speaker 4 (31:16):
I mean, I think it's hugely important.
Speaker 3 (31:18):
I mean, I mean, looking at the hack in case,
one of the things that kind of failed in their case,
or actually I guess worked, but so you know, typically
spouse's there, each other's primary you know, executor, primary trustee
on the documents, and you know, we always recommend appointing successors.
In their case, the second successor they appointed apparently had
(31:40):
died as well, so it was the third successor at
that point that had to step in and help manage
manage the wills, which you know, I find kind of
interesting because you know, what if they didn't have that
third person listed, what if they only had you know,
a primary and secondary person listed. Without having that third
person there, you know, they would have had to appoint someone.
(32:01):
You know, the court would have had to point someone
to take that over.
Speaker 2 (32:04):
Yeah, and I'm serving as trustee in a file right now, clients,
I drafted a trust for twenty some years ago, and
I got this letter in the mail from another attorney
saying that this person had passed away and I hadn't
heard from the client in twenty years that they had
passed away. And here's the trust document and there were
(32:25):
four trustees named. You were the fourth. The other three
are now deceased.
Speaker 5 (32:30):
Wow.
Speaker 2 (32:31):
So I'm now administering that trust and they put us
in as kind of the backstop if all else fails,
and all their other individual trustees had passed in that
twenty year time period, and now I'm serving as trustee
to make sure that the trust gets administered properly. And
so planning is going that extra step making sure that
(32:53):
you have in your will the right number of executors
and as many as we can string on there who
would be now in line. What if this person is
unavailable and it isn't always death that takes them out
of the picture. Somebody could have a disability and incapacitating
event that they can't serve as executor. Somebody could have
(33:13):
just a change in life circumstances where they don't want
to do it and they pass it on to the
next person in line. So there are a lot of
contingencies that you may not think about that we do
to make sure that you have enough people. And then
when it comes to beneficiaries, we want to do the
same thing to make sure that there are enough contingent
beneficiaries that if what if happens, we're.
Speaker 4 (33:35):
Covered, yep, yep.
Speaker 3 (33:37):
And I think that's one of the hardest conversations sometimes
we have to have with clients. Some clients may not
be married, some clarents, you know, may not have children,
they may not have close friends or you know, other
family that might be able to fit some of these
roles for them. You know, we had a conversation with
someone recently who came to see us for some estate planning,
and you know, some of the harder questions we had
(33:58):
to address with him, or who would you want your
trustee to be if you couldn't who would you want
your ultimate beneficiaries, you know, to be? And he really
really didn't have any straightforward answers with us, and he,
you know, wasn't sure who he wanted to put in
those in those spaces.
Speaker 2 (34:13):
And depending upon the circumstances, we sometimes use professionals as trustees, executors,
agents under the power of attorney and that's a situation
where you have to think about it carefully, but you
may want to have a professional trustee. We work with
a lot of local banks that have trust companies and
they do a great job administering trusts for clients. We
(34:34):
have a trust situation right now that we're dealing with NYSARC,
which is a group that runs a pool trust and
they're taking over a trust for a couple of beneficiaries
and we think, you know, that became a great solution
for them. So as you're contemplating your documents and you're
looking at your estate plan, look at your assets, look
(34:57):
at your income, look at your financial planning, but then
start looking at the people. Who am I going to
name as my healthcare agent, who's going to make the
best healthcare decisions for me? Who am I going to
name as my executor to take care of the estate
if I have to go through probate? Who could handle
a probate proceeding? Hire a law firm, work with a
law firm. In a trust administration, you have to have
a trustee that can act independently with a law firm
(35:20):
and administer a trust and make sure that the assets
get to the appropriate beneficiaries at the appropriate time. So
having the right people, having the right plan, having the
right provisions is all well and good, but making sure
that plan works year over year, Patty, is so important
because things change over time. And when we revisit these
(35:43):
documents at our annual Palms meetings, you see the light
bulb go off. Aha, Oh, oh my goodness, I can't.
I forgot we had that. I forgot we put that
provision in. We need to change that. And meeting with
clients year over year, you got to get to know them,
to know their lives, get to know their kids. And
there's a continuity to it. So we're going to be
(36:07):
continuous and take a short break and be back. So
when we come back, we're going to talk about how
to construct the plan, how to make it right. We're
gonna take a question if you have it. I'll give
the number out one more time. If you're out there
thinking about this eight hundred eight two five five nine
four nine eight hundred talk. WGY would love to hear
from you, and we're going to be right back for
(36:30):
this short break. Welcome back the Life Happens Radio. I
want to tell you about some upcoming workshops we do
a lot of education and we do workshops on a
number of different topics. We have a trust administration workshop
(36:50):
that we do every quarter for clients and others interested
in trusts that looks at how trusts get administered, tax filings,
income tax, looking at the different provisions and a trust
as a trustee which you have to be aware of,
how do you fulfill your duties as a trustee, how
do you make sure that trust days current. We talk
about our Palms program at that and it's going to
(37:12):
be the next one is going to be in September
September thirtieth, I believe, and upcoming. However, we have two
new seminars, your home or the nursing Home. So we
do a lot of work as you know in aging
elder law, and we look at two different aspects of aging.
If you want to have a plan in place that
if you need to change living arrangements. And I'm working
(37:34):
with some clients right now that have a beautiful home,
but one of the spouses has a diagnosis that's got
them thinking they may not want to maintain that home
forever and they want to make a change now, so
they're looking at different living arrangements met with a client
the other day the same thing, looking at selling her
home and going into a beautiful community. And we've had
(37:57):
people from the Eddyon here, We've had different people that
provide housing, beautiful places like the Beverwick and the Avala
that are here in Albany independent Living Arrangements. We're going
to talk about how to do your legal plan, financial plan,
and a adding on and layering on a care plan.
It's myself, my partner, Frank Hemming, and Diane Mikkel Gottabiowski
(38:18):
of ever Home Care Advisors and these are going to
be coming up. One in East Greenbush and that's Wednesday,
August sixth at twelve noon, and that's at the East
Greenbush Community Library, So again East Greenbush, August sixth at noon.
The other is at the Guilderland Y and that's Wednesday,
August thirteenth, twelve thirty to two pm in Guilderland. Again
(38:41):
August thirteenth in Guilderland. And as always you can find
out about our educational programs and these two seminars coming
up August sixth and thirteenth at Pierro Law dot com.
Go to our website. It's p I E. R r
L a W. Go to the events tab and you'll
see all of the upcoming program with regard to webinar
(39:01):
seminars and the education that we are very happy to
provide to our clients and perspective clients. So, Patty back
to the Gene Hackman case. One of the issues that
I see written about here is that his will did
not even mention the three kids from his first marriage.
Speaker 4 (39:20):
Oh really, not in any sort of capacity.
Speaker 2 (39:23):
In any form. And so if that will had no
spouse as a beneficiary, and there was no contingent beneficiary,
then we would end up in something called intestacy. So
it would have ended up going to those same three
kids that didn't get mentioned, who would have been his
(39:45):
natural heirs. So we talked a lot about naming contingent trustees,
contingent agents under a power attorney, contingent healthcare agents, but
naming contingent beneficiaries is equally as important. So when you're
looking at contingent beneficiaries in the in the documents that
(40:07):
we create, just go through the structure. How property passes.
You have tangible property, you have real property, you have
financial assets. How do they pass? And how does that
we call it a cascading beneficiary scheme. How does that work?
Speaker 4 (40:22):
So you know, that happens in a couple of ways.
Speaker 3 (40:24):
So usually what our language says is that if a
beneficiary is deceased, it would pass per sturpees to their children,
and so that you know, looks to see if you know,
the person the beneficiary, if they have any children, and
it would you know, kind of include them in the
planning if.
Speaker 4 (40:43):
Something were to happen to them.
Speaker 3 (40:45):
So this is pretty common when we have you know,
a husband and wife who have children and then they
have children, so it you know, it looks out for
their grandchildren. Some people sometimes don't want that language in there.
Sometimes they would prefer, you know, just to go to
the other beneficiary if they're surviving. And that's usually what
we call pro rata distribution. And so instead of it
(41:05):
going down to any children that might be existing of
the primary beneficiary, it would go back to the other
named beneficiary if they were living. But then you know,
in the circumstances that you know, no one else is around,
no other eligible beneficiaries are then living, we fall back
into you know, our remote contingent clause, and this article,
(41:27):
you know, outlines what would happen if there were no
other living name beneficiaries who could receive.
Speaker 2 (41:33):
And it's again drilling down to the what ifs. What
if this name beneficiary isn't there, who then takes? What
if they have kids? Do their kids take? If they
don't have kids, who's the next beneficiary in line? And
in some cases they the people don't like our remote
(41:54):
contingency claws yep, And so we get down to that.
And so you have, Okay, all of my stuff goes
to different people, you know, my jewelry, my household contents,
my art collection, that painting that I love so much
I want to go to X. We can take care
of that and a trust very easily by naming people
(42:15):
in a document that we call a tangible property memorandum,
so you can list and this doesn't have to be
done with us, even it can be done over time
your own memo. When we give you the document, fill
it in what item do I want to go to,
whom and when? And so that's a way to handle
your personal property. And then your financial assets. We want
(42:37):
to make sure again we thread the needle, get those
assets into the appropriate documents and trusts. And then if
the beneficiaries that we have that are primary, secondary, tertiary,
they don't exist at the time. We have what we
call a remote contingency article, and that's at the end
of the scheme, the beneficiary scheme, and and that typically
(43:01):
how do we how do you plan for that?
Speaker 3 (43:04):
So it takes a couple of different forms, but you know,
the default language that we use and I think works
for probably like sixty percent of the clients, you know,
the people that we work with, it says that if
you know there's no one else around, no one else
living to receive, then it would go you know, to
their errors at law and accordance to you know, whatever
the state law is. And so it looks to see,
(43:26):
you know, the closest living relatives that are still alive.
So if there's no children or grandchildren to take, you know,
would look up to see if you have any living
parents who have no living parents, it would go out
to siblings, and then if no siblings, then it would
look to theces and nephews until it finds someone that's
you know, someone who's still living that's close to you.
Underneath that statutory scheme.
Speaker 2 (43:49):
And it's important to think about this. We had one
case where it ended up going to heirs at law,
and there were like ten people in Czechoslovakia that were
the next akin who we had to track down and
serve with process and find and get distributions to them,
and it was terribly cumbersome. It took years and was
very very expensive. So when you look at the fact that, okay,
(44:13):
I don't want things to go to these relatives, and
a lot of times we put something called a negative
bequestion or an interarum clause which says I'm disinheriting these people,
and we say that right up front. Then you say, well,
it goes to my heirs at law, and they may
be your heirs at law. So you want to make
sure that you have a provision that says, okay, if
(44:34):
I don't, if nothing is the same and I don't
have beneficiaries that I've named, I want it to go
to charities. And a lot of times people will say, well,
I'd rather have it to go to what we call
laughing airs, relatives that I don't even know. I'd rather
see it benefit my community. And in some cases we
(44:55):
will substitute in the charities there for the remote contingent
beneficiary in the event that the family isn't there at
the time that these assets are due to pass on,
and so I just want to touch base. We have
a couple of minutes left on one more topic, and
that is when we get through with all this planning,
we thread the needle. We have the second marriage clauses,
(45:17):
we have all the things that we need. Getting assets
to the beneficiaries in the right way. To me is
very important and we do a lot of planning for
next generations. I'm going to set this up for my children,
my grandchildren. We have something at the tail end of
that beneficiary scheme called a beneficiary control trust. And see
if you can do this in one minute.
Speaker 3 (45:37):
All right, So, a beneficiary control trust is a type
of trust that we set up, typically under a living
trust or a will, that you know, allows the beneficiary
to receive their inheritance, you know, anything you leave to
them in this trust that's completely asset protected. So if
they you know, get divorced, so they go bankrupt, or
they get sued, everything that go to them in this
(45:59):
trust is protected for those purposes and more. It's also
a special type of trust because it allows them to
be their own trustee, so you know, It's a type
of trust that you can't create for yourself, but you
could create for others.
Speaker 2 (46:11):
And the BCT is something that I'm a big believer in.
My kids are getting their inheritance in a PCT because
it gives them the ability to own it, control it,
use it, but not have it threatened by creditors, predators,
or anyone else. So we think that is the greatest
capstone to a plan to take care of your next generations.
(46:33):
We are out of time. Thank you for joining us
on this beautiful, bright sunny Saturday morning. We'll be back
next week on Life Happens Radio.
Speaker 5 (46:42):
You've been listening to Life Happens Radio, brought to you
by the law firm of Piro Connor and Stress. For
more information or it's a contact and attorney at the firm,
visit Piro Law dot com or call five eight one hundred.
Please join us again next Saturday at nine am for
Life Happens Radio on News Radio eight ten and one
(47:02):
oh three point one WGY, and you will be prepared
Welcome to Life Happens Radio, featuring the attorneys from Pureau,
Counter and Strauss. Tune in every Saturday morning at nine
am for the most in depth discussions that help you
navigate the legal, financial, and health related challenges we all face.
Life Happens. Are you preparing?
Speaker 2 (00:33):
You and I present a formidable team. When we work
with clients, they get a really good service. And when
we sit at consultations and we start asking the hard
questions and we have a little bit of information because
we do a questionnaire. We try to get information in
advance of the meeting, and we sit and we ask, okay,
so tell me about your children. And if they say, oh,
(00:56):
our children are and they start going through their children.
If it's a marriage of you know, fifty years, forty years,
thirty years and they have the same kids, the plan
takes one direction, because you can do things jointly. And
if they say, well, my children and they go into oh,
I have you know, two kids from my first marriage,
(01:18):
one from my second marriage. We have one together, and
then the other may not have any kids or may
have kids from their own prior marriages and relationships, that
takes a very different turn, and you have to have
a different conversation with those folks.
Speaker 3 (01:32):
Yeah, yeah, certainly it does get a little bit more
tricky when they have blended families, and you know, sometimes,
when not always, the blended families won't always get along, so,
you know, figuring out how to structure that can be
a little bit challenging, especially if they have different ideas
of who they want the beneficiaries to be.
Speaker 4 (01:50):
If they agree on who.
Speaker 3 (01:51):
They want the beneficiaries to be, then it, you know,
makes it a lot easier for us. But sometimes they
you know, don't agree. Sometimes they're in conflict with each other,
which makes it pretty tricky, especially if we're trying to,
you know, do a joint trust for example. So maneuvering
that is always interesting.
Speaker 2 (02:08):
It certainly is. And a lot of plans folks, and
listen up, if you have this plan, get it fixed.
If your will or your trust, and we talk a
lot about trusts. We think trusts give us a much
better option in terms of the ultimate administration of an estate.
But if you have a will or a trust, it says, well,
(02:29):
I leave everything to my spouse, but if my spouse
predeceases me, it's all going back to my kids and
the spouse has the same will. I leave everything to
my spouse, but if my spouse predeceases me, it's going
back to my kids. The intent there, clearly, Patty, is
they want that they're assets to be available to the
(02:53):
surviving spouse, but to then revert back to their own family.
But that's not what happens. So when that happens, when
you have an I love you will, and it all
goes to the surviving spouse, who ultimately gets those assets.
Speaker 4 (03:09):
The people that the surviving spouse name in their documents.
Speaker 2 (03:12):
Yeah, so your kids you just disinherited. If you don't
outlive your spouse, you just disinherited your children. And this
happens not only in a will, but if you have
an IRA, if you have a four oh one K,
if you have an annuity, and you name your spouse
as the primary beneficiary, and the spouse then lives longer
(03:35):
than you, so they receive all of those benefits. It
then goes through their estate because it becomes their asset,
their money, their IRA. You do a rollover, and they
named their own children as their own beneficiary. So your
assets all go to the surviving spouse. So when you
have second families, blended families, different situations. We have to
(03:58):
look beyond justin I love you will and kind of
get to the next level. And we're going to talk
about that as we go through the show. How do
you prepare and plan for this? How do you make
sure that your intentions are carried out and not the
intentions of your spouse, even though they're well meaning, but
the understanding that their assets go their direction, your assets
(04:20):
go in your direction, and you don't cross wire them
so that the children of the survivor end up with
a windfall and all of the assets of the couple.
So let's talk about Gene Hackman's estate. And he was married,
and he had a wife, Betsy eric Kwa, and they
(04:41):
were found in their home in New Mexico deceased under
circumstances that were kind of shaky.
Speaker 4 (04:50):
Yep, tell us about it for all.
Speaker 3 (04:52):
From my understanding, they were found disused, both at the
same time, and then after some discovery, some study, it
turned out that she had passed prior to him, and
she had passed from what I think was some kind
of illness, that is, you know that she got from
(05:14):
mice or mouse droppings or something. And then you know
he died, you know, maybe.
Speaker 2 (05:19):
A week or two after she did, but they didn't
know that at first.
Speaker 3 (05:24):
No, No, they obviously weren't sure what happened when they
probably first walked into the home. But they probably you know,
did some task ransom discovery and then figured all that
out afterwards.
Speaker 2 (05:34):
And Gene Hackman was ninety five, she was sixty five,
so they were very different ages. He had dementia at
age ninety five. She was his primary caregiver. And it's
a very sad case because as the primary caregiver, her
not being available to him put him in a situation
(05:55):
where he had no one, which is another thing that
we have to plan for. But just going through the
order of death and how it impacted this plan, how
did their documents play out, and how did this I
think it's still in court.
Speaker 4 (06:11):
I think so too, Yeah, But what what.
Speaker 2 (06:13):
Are the what did the documents say? And how are
they trying to get around that?
Speaker 3 (06:18):
Well, from my understanding, her will had a clause in it,
survivorship clause that said that if anyone died ninety days,
you know, after she died, then it was going to
be that the person who died within the ninety days
would be treated as if they predeceased her. So basically
(06:42):
that distribution would you know, not exist and everything would
go according to what her what her document said.
Speaker 2 (06:52):
Yeah, And in this case they had living trusts, and
the living trust named each other as the primary beneficiaries,
and they had a plan for what happened if they
die together. We call it simultaneous death. Sounds ominous, right,
but when we learn about drafting wills in law school,
(07:15):
simultaneous death clauses are things that should be in your document.
And when you have a case where you in this case,
they ultimately determine the order of death. But if you
die in a common accident and you can't determine the
order of death, and how do assets pass? Whose will controls?
(07:37):
How do those things get done? And we put in
a thirty day clause this was ninety that says, if
the person I name is a beneficiary does not survive
me by thirty days, then I want the assets to
go to the other beneficiaries named in my document, in
my trust. And so you protect yourself. You have a
(07:59):
lot of things in a document and people come in
and they say, well, why is my will thirty pages? Well,
you haven't thought of all things that you may need,
and this will because some of them may never be necessary,
but others are going to pull your estate out of
the fire. And so when we draft, we have all
of these years, four hundred years of experience that come
(08:21):
to bear in drafting documents. So we're going to open
it up and take some questions. We're going to take
a short break, and we're going to come back and
talk about drafting wills and trusts. Looking at all of
these pitfalls and the Hackman estate, where is it? How
is it going to end up? And she had charitable beneficiaries,
(08:42):
I believe, and he had individual beneficiaries, so very different plans.
Is your plan up to date? July nineteenth, summertime, kick back,
have another cup of coffee, listen to Life Happens Radio.
We'll be back after short break and we'll be taking
your calls. I'm going to give it out the phone
(09:02):
number as soon as we come back and we're back.
I am Lou Pirol live in studio. I am here
in studio with our star associate, Patricia Whalen, and she
blushes every time I see that. And we're gonna open
the phone line. So if you have a question, a case,
something you want to talk about. Do you have something
(09:23):
in your own personal plan that you have a question?
On your documents? When's the last time you dusted them off,
pulled them out, looked at them, read them? What is
in that will that I did twenty years ago? Make
sure that your documents keep pace with your life and
life happens. Heard that before, So when life happens, you
make sure that everything is up to date. We draft
(09:45):
for a lot of contingencies, and it's important to have
all of those in your thirty page will instead of
a we were in I won't mention where, but somebody
came in with a will that was half a page.
It was the shortest will I've ever seen. And we
see those documents done by a lot of other law
firms patty that just don't have anything in them.
Speaker 4 (10:04):
Yep, yep.
Speaker 3 (10:05):
They're like a one page, two page and they don't
really say much.
Speaker 2 (10:10):
And all of these contingencies, like the gene Hackman case,
what is what is your clause? What does you will
say if someone predeceases you or if you predecease them
or you die simultaneously? How do your assets pass? Do
they get to the people that you want to benefit.
And this is all about you. What are your intentions?
Who are the people that you love that you want
(10:30):
to benefit? How do you make sure that things get
to them? Give us a call. We're alive on the
radio and we'll take your calls at eight hundred WGY.
That's eight hundred eight two five five nine four nine.
Love to hear from you this morning, eight hundred eight
two five fifty nine forty nine. And when we're drafting
these documents, looking at trusts and wills, and you brought
(10:55):
up a great point during the break. So many clients
come to us and they're told by their financial advisor, oh,
you don't need a trust. You can do a transfer
on death, a TOD designation and name the person who
you want to be the beneficiary. But that takes it
(11:16):
out of the trust that we create, and it puts
it into a stream where there may be unintended consequences. Patty,
and walk our listeners through this. When you're looking at
your own assets, what are you looking at? What? What
should you be thinking about in terms of naming beneficiaries.
Speaker 3 (11:33):
I mean, I think one of the things we talk
about a lot. Are you know, contingency plans for beneficiaries.
You know, I think the most common thing people think
about are Okay, who do I want to benefit? Who's
my primary beneficiary? But oftentimes they fail to think past that.
They fail to think about who their you know, first
successor should be, or their second successor should be. And
(11:55):
you know, we always tell our clients that if they
have people to put on, you know, they should put
on as many as they feel comfortable with, or you know,
you know, keep going down the line of people. Otherwise,
if they fail to name someone, you know, it's going
to be up to the law or the judge to
figure out what should happen at that point.
Speaker 2 (12:14):
Looking at my engineer, do we have a caller on
the line, they're off. Okay, So these well meaning financial
advisors and they're trying to take care of their clients
and save them some bucks. But in the long run,
if you name a beneficiary on an account and you
don't have any contingency plan and that beneficiary dies before you,
(12:38):
where does that asset go? And if you have a
beneficiary provision on an IRA, you name a spouse and
then your kids and that spouse survives you what happens
to an IRA when one spouse dies. Typically it's rolled
over into the IRA of the surviving spouse. And once
(13:01):
it's rolled over into the IRA of the surviving spouse,
the beneficiaries of the surviving spouse are going to take
that IRA. And your IRA is gone, and your kids
are sitting there saying, hey, what happened? And then you're
calling mister Aaron Connor and saying, I, you know, my
mom meant that I get that IRA, not that it
(13:22):
goes to her second husband's kids, but that it comes
back to us. But it rolled over into her account
and now it's going to her kids. Do I have
a remedy for that? And the remedy is planning because
once the cat's out of the bag, once that IRA
rolls over and it's in the spouse's name and it
goes to the spouse's kids, you don't control it anymore.
(13:42):
So to bring that back in And when we have
these situations second marriages on traditional families, we use trusts.
And how do the trust save us? Here? Petty?
Speaker 3 (13:53):
The trust save us because in the trust you're able
to be you know, a little bit more descriptive. You're
able to write out exactly how you want.
Speaker 4 (14:01):
You know, those continuency plans to go.
Speaker 3 (14:03):
You can write out exactly what would happen if you
know your first primary beneficiary predeceased you or something like that,
and you don't have that same ability, the same flexibility
to put in language like that when you just have,
you know, beneficiary designations on these accounts.
Speaker 2 (14:20):
So the trusts that we create are in the first
instance for you, but in the second instance for your beneficiaries.
And in this instance we're talking about spousal beneficiaries. And
when you have a case where you maybe know the
order of death, maybe don't know the order of death,
you can have provisions like a simultaneous death clause to
(14:43):
say it only goes if my spouse survives me by
thirty days. But if it happens that they survive you
by thirty days, how do you protect it at that point?
And when it goes into the trust that you create,
you want And this is patty common theme for a
lot of married couples and second marriages. I want my
(15:05):
spouse to have use of this money during their lifetime.
I want them to live in the standard of living
to which we became accustomed during our lifetimes. But when
my spouse passes, I want those assets to come back
to my family and folks. The only way to do
that is to have those assets held in a trust.
(15:29):
Now that means that you have to have some administration,
You have to have a little bit of work done.
And the worst place Patty to do this is in
a will. And what's the difference between the will and
the trust administration?
Speaker 3 (15:43):
So the will administration is a lot more you know, difficult,
a lot more time consuming, you know, a lot more
costly than a trust administration because every will has to
go through court. You know, it has to be monitored
by a judge, and that process, you know, is a
lot more difficult than it is with just a trust administration.
You know, with a trust administration, everything is private. You know,
(16:04):
nothing has to get submitted to the court, nothing becomes
public record, and everything can happen, you know, quickly, and
you know, pretty streamlined after you pass.
Speaker 4 (16:14):
Meanwhile, with the will, you know.
Speaker 3 (16:16):
There's a creditor period of seven months, and you know
that process usually takes a year, sometimes two, sometimes even
longer if you have blended families that are you know,
conflicting with one another. So you know, having a trust
and having a trust administration is a lot quicker and
a lot better than I think having a will.
Speaker 2 (16:33):
Yeah, And in our experience, this is a world of
difference because provid to states, and we know all the
Surgus Court judges and I hope they're listening. They're great.
They work very very hard, but the volume of cases
and the difficulty and the technical nature of a probate
proceeding put a lot of pitfalls in people's way, and
(16:55):
the smooth administration of an estate requires very meticulous care
and filing of numerous documents. I'm closing out a trust
right now that I volunteered to be the trustee of
Shoot me next time I do, Patty. But I'm closing
out this trust, and it's not a huge amount of money,
(17:18):
but it's enough. We have beneficiaries who have special needs,
we have charitable beneficiaries, and it got complicated and we
are now filing to close the estate. And I think
I signed six different documents yesterday just to close this
(17:39):
very simple probated state. And it's only a probate a
state because we had one bank account that they forgot
to put into their trust, so we had to do
all this work for that one account, which brings up
another theme. When you're doing this kind of planning and
you're doing a trust plan, and you want to make
sure that you thread the needle, that you get the
(18:01):
assets to the right beneficiary in the first instance, and
if it's a second marriage or blended family that's your spouse.
In a first marriage, it's a little bit easier. We
typically do joint trusts, so you can have common themes,
common beneficiaries, one trust for both spouses and it's much simpler.
But in second marriages, you want to get that protection
in and you want to thread that needle and make
(18:24):
sure that it gets to your spouse for their use
during their lifetime and then back to your own children.
In order to make that plan work, the assets have
to thread through that needle. And we work very hard
at this, but it's not perfect in all cases because
it's up to the clients to finish this funding process.
(18:45):
And just when you sit with clients and they're signing
their trust documents, what's the process then to make sure
that this plan does work in their situation, right, So.
Speaker 3 (18:56):
You know, half of the planning we do with them is,
you know, actually create and signing and developing the documents.
But the other half of it, which is you know,
probably if not just as important, you know, the most important,
is what we call the trust funding process. So you know,
this is the process by which we sit with them,
we go over their assets, their values, and we talk
(19:17):
about them in detail. We also advise them on making
sure that if they're supposed to go into the trust,
that they get there. If we just need to update
beneficiaries on them, so like for retirement accounts, because they
don't go into trust, right, we you know, make sure
we walk through with them how we need to update
the beneficiary designations.
Speaker 4 (19:36):
We give them the language.
Speaker 3 (19:37):
But you know, I think we had an interesting meeting
a few days ago with some clients who are a
part of our palms, you know, the client maintenance program,
And as we sat with them and went through all
of their assets, we discovered that the beneficiary designations on
some of their retirement accounts were not exactly what they
needed to be. So I thought that was a good
opportunity for us because we were able to go through
(19:59):
that with them and you know, help them, you know,
ensure that you know, what they needed to fix was
able to get fixed, and without that annual review, we
probably never would have discovered that you know that mistake,
or the fact that you know those beneficiary designations.
Speaker 4 (20:13):
Needed to be updated.
Speaker 2 (20:14):
You bring up a great point, and that is in
our firm, we do a lot of upfront mining of data,
getting information. What are your assets, who are your beneficiaries,
who are your fudciaries, who takes charge, who's your executor,
your trustee. We look at all that in the first
consultation and then we start asking the what if questions,
(20:38):
and we'll go through that in the second half of
the show. But once that plan is mature, we've done
the drafting, we have the documents, we've gone through the assets,
the client walks out the door after having signed. How
do you make sure that that plan stays intact? And
we're going to break for the news, and when we
come back, we're going to talk about how to keep
(20:59):
your plan going. And we're back. You're listening the Life
Happens Radio every Saturday morning here at w g Y
come on at nine am, and we're talking today about
blended families, ensuring the security of your estate plan, and
the Gene Hackman case and Patty we like celebrities and
(21:20):
because they kind of raise awareness, people figure out through
their mistakes what to do. And just again for our
listeners who just joining what happened in the Hackman case.
Speaker 3 (21:32):
In the Hackman case, you know, husband and wife, they
died very close, you know, in line to each other.
And in this case, you know, we are you know,
looking at their wills, looking at their trusts, and you know,
looking at specifically, I think the survivorship presumption that said,
if you know, what would happen if one of them died.
Speaker 4 (21:55):
Lesson you know, ninety days from the other.
Speaker 3 (21:58):
And so, you know, looking at this case raises a
bunch of issues, raises a bunch of you know, thoughts
about lessons that could be learned from this case and
things that we can do in the future to try
and prevent some of these from happening, you know, in
our own estates and our clients estates.
Speaker 2 (22:18):
So it raises several issues. One the one that's been
talked about the most is the simultaneous death issue. We
talked about that in the first half. So you have
to have a provision that says, if my beneficiary doesn't
survive me by a certain period of time, and we
use thirty days. Typically then it will pass to the
(22:38):
second level beneficiaries, so that just avoids a double administration.
And at the break, we were talking about coordinating assets
and making sure that the assets that we have brokerage accounts,
bank accounts, retirement accounts, iras, our real estate, our home,
(22:59):
making sure that all of the assets become part of
the plan. And when you do this, it's a lot
of work. Up front. We do the drafting, we do
the documents, we prepare deeds, we transfer businesses. But when
it comes time to transfer your own brokerage account or
your own bank account, we can't do that. So the process,
(23:23):
patty becomes the client's work at that point, yep.
Speaker 3 (23:27):
I mean we do some of the things upfront for them.
You know, typically we can do the real estate for them,
we can do the deeds, but you know, like you
mentioned with the brokerage accounts or updating the beneficiaries on
their everyday bake accounts or the retirement accounts. You know,
we can only help them with that for you know,
we can only do so much for them to help
them with it. You know, we try our best to
(23:47):
give them as much guidance and as you know, many
resources as they need.
Speaker 4 (23:51):
To be able to do that on their own.
Speaker 3 (23:52):
But you know, at the end of the day, they're
going to be the ones to have to to have
to you know, do that and make it happen.
Speaker 2 (23:59):
And this is one of the big differences I think
in Pierre O'Connor and Strauss versus a lot of other firms.
We take this process, the funding process, putting assets in
the trust, making sure that it all works together, that
every asset is accounted for. We take it very seriously.
We have documents that lay it out for you in
very detailed fashion, and then we have a cheat sheet memo,
(24:22):
Here's how you do a bank account, Here's how you
do a broken account. And we also have personnel, and
I think that differentiates us from a lot of firms.
We dedicate a staff person to just this process and
talk a little bit about that.
Speaker 4 (24:36):
Yeah, so we have a staff person.
Speaker 3 (24:38):
She's what we call the trust funding paaralegal, and her
job is to, you know, follow up with clients after
we have a document signing, and you know, she follows
up with them. She you know, reviews some of the
assets that they have and she gives them some guidance
and help in terms of, you know, making sure that
they know how to update the beneficiaries, they know how
(24:58):
to move the accounts into their trust, and she's there,
you know, to answer any questions and to you know,
give them some guidance along the way, which you know,
I think is great.
Speaker 2 (25:08):
And that's her sole job, folks. And we have one
in our New York City office as well, like Kee
mcgurley who does the same function for our clients down state,
and we operate in Latham and New York City and
several offices around New York Orden City like Placid, Hudson.
So getting this done, making sure that the eyes are dotted,
the teaser crossed, that all the beneficiary designation forms are
(25:31):
in the right place. That is a process that we
have ingrained into our law firm and dedicated staff people
to the trust funding process to make sure that our
client's plans that And let's face it, when when you
do a big trust plan, when you're doing a medicaid
asset protection trust or a revocable living trust, this is
an investment you're putting in place a plan that you
(25:54):
just typically do. Once you build this plan, one time
you may have to tweak it and may have to
make minor modifications to it. But once you build a
trust plan, that's a plan for life, and you want
to make sure that your assets are keeping pace with that.
And you mentioned a program that we're very proud of
that we instituted twenty five years ago at our firm
(26:15):
and we've been fine tuning it and improving it and
increasing the number of clients that are utilizing it. And
it's called our PALMS program. So what is PALMS and
how does that work?
Speaker 3 (26:28):
Palms is our client maintenance program and they have a
few things that get out of this program. The first
is that they all get their own secure online portals
where you know, we transfer all their documents on there,
we you know, list all their assets on there, you
know their estimated values, we talk about you know, things
(26:51):
regarding their assets, the beneficiary designations. And in addition to
getting this online portal, they have an annual meeting and
you two hours of additional attorney time to ask questions
and get guidance throughout the year. But the annual meeting
is something that I brought up, you know, a few
minutes ago, because we just had an interesting one a
few days ago with some clients who are part of
(27:12):
this program, and you know, at this meeting, we sat
with them, We walked through their portal, we went through
all the different tabs, the different sections that they have
on their website, and then we went through, you know,
specifically the beneficiary designations on some of their accounts, which
is where we realized that they didn't quite exactly do
or you know, set up the beneficiary designations the way
(27:34):
they should have. And so I think that was a good,
you know, a good meeting for them, a good meeting
for us because we were able to kind of identify
that issue and you know, figure out how to resolve
that for them.
Speaker 2 (27:45):
And I went back through my notes and saw, okay,
it's going to the spouse and then we had specific
contingencies within that plan. And that was how it was
originally designed, but that's not how it got carried out.
So the Palms meeting each year we go through it
(28:05):
and we use a program called Inherlink, and it's a
technology platform that allows you to track all of your information.
You have an online virtual document vault, so all of
your documents are available to you twenty four to seven
through the online and herowink vault We track every account,
every asset, every life insurance policy, who are the beneficiaries?
(28:29):
Every retirement account you're four oh one k, who is
the beneficiary? These things are how we thread the needle
and make sure that every asset when the time comes,
and let's face it, I said it earlier, when a
person dies who has created this plan, that's when all
of the good planning comes out and all the bad
(28:50):
planning comes out if you don't have it done properly.
And so this annual program has given our clients an
ability to have pure oconor and strains else. Andre Tayner,
we are their counsel throughout the years. We have clients
that have been in this program for over twenty five years.
I have one of my favorite clients who now lives
(29:12):
out in the state of Oregon, and she and her husband,
who was an attorney locally here, started planning with us
twenty five years ago and they got into the Palms program.
And it's the technology that she has been tracking herself
and goes online and reviews her data and inputs and
updates her data herself in her in her Palms in
(29:34):
heroink site. And when her husband passed away and they
flew back from Oregon. She flew back from Oregon. We
sat down with her. We had every document, we had
every asset, we had every beneficiary designation, and we had
the entire administration of her husband's estate laid out on
(29:57):
the table. And we were able to carry out that
administration in about two days because we had everything done.
And that's the value of having a law firm that
not only says, Okay, your will's done, you know, see
it when you die, but that works with you throughout
your lifetime to make sure, Okay, I have grandkids now,
(30:18):
I want to make sure that I get education accounts
set up. My son's getting a divorce, I want to
make sure that we do asset protection planning for him
because now we have a different set of circumstances. All
of life's changes and life happens. Is not just the
theme of this show, it's the theme of our practice
because we are asking those questions, what if the situation changes.
(30:41):
And one of the things that good documents have that
a lot of other documents don't is contingency planning, looking
at again the experience that we can bring to the table,
and looking at how to put together a plan and
we ask these what if questions, and the clients sit
there and stay blankly at us, since, wow, I never
(31:03):
thought of that. And so one of the things that
we ask for is as many names as we can
get to put on as alternates. And how important is that?
Speaker 4 (31:16):
I mean, I think it's hugely important.
Speaker 3 (31:18):
I mean, I mean, looking at the hack in case,
one of the things that kind of failed in their case,
or actually I guess worked, but so you know, typically
spouse's there, each other's primary you know, executor, primary trustee
on the documents, and you know, we always recommend appointing successors.
In their case, the second successor they appointed apparently had
(31:40):
died as well, so it was the third successor at
that point that had to step in and help manage
manage the wills, which you know, I find kind of
interesting because you know, what if they didn't have that
third person listed, what if they only had you know,
a primary and secondary person listed. Without having that third
person there, you know, they would have had to appoint someone.
(32:01):
You know, the court would have had to point someone
to take that over.
Speaker 2 (32:04):
Yeah, and I'm serving as trustee in a file right now, clients,
I drafted a trust for twenty some years ago, and
I got this letter in the mail from another attorney
saying that this person had passed away and I hadn't
heard from the client in twenty years that they had
passed away. And here's the trust document and there were
(32:25):
four trustees named. You were the fourth. The other three
are now deceased.
Speaker 5 (32:30):
Wow.
Speaker 2 (32:31):
So I'm now administering that trust and they put us
in as kind of the backstop if all else fails,
and all their other individual trustees had passed in that
twenty year time period, and now I'm serving as trustee
to make sure that the trust gets administered properly. And
so planning is going that extra step making sure that
(32:53):
you have in your will the right number of executors
and as many as we can string on there who
would be now in line. What if this person is
unavailable and it isn't always death that takes them out
of the picture. Somebody could have a disability and incapacitating
event that they can't serve as executor. Somebody could have
(33:13):
just a change in life circumstances where they don't want
to do it and they pass it on to the
next person in line. So there are a lot of
contingencies that you may not think about that we do
to make sure that you have enough people. And then
when it comes to beneficiaries, we want to do the
same thing to make sure that there are enough contingent
beneficiaries that if what if happens, we're.
Speaker 4 (33:35):
Covered, yep, yep.
Speaker 3 (33:37):
And I think that's one of the hardest conversations sometimes
we have to have with clients. Some clients may not
be married, some clarents, you know, may not have children,
they may not have close friends or you know, other
family that might be able to fit some of these
roles for them. You know, we had a conversation with
someone recently who came to see us for some estate planning,
and you know, some of the harder questions we had
(33:58):
to address with him, or who would you want your
trustee to be if you couldn't who would you want
your ultimate beneficiaries, you know, to be? And he really
really didn't have any straightforward answers with us, and he,
you know, wasn't sure who he wanted to put in
those in those spaces.
Speaker 2 (34:13):
And depending upon the circumstances, we sometimes use professionals as trustees, executors,
agents under the power of attorney and that's a situation
where you have to think about it carefully, but you
may want to have a professional trustee. We work with
a lot of local banks that have trust companies and
they do a great job administering trusts for clients. We
(34:34):
have a trust situation right now that we're dealing with NYSARC,
which is a group that runs a pool trust and
they're taking over a trust for a couple of beneficiaries
and we think, you know, that became a great solution
for them. So as you're contemplating your documents and you're
looking at your estate plan, look at your assets, look
(34:57):
at your income, look at your financial planning, but then
start looking at the people. Who am I going to
name as my healthcare agent, who's going to make the
best healthcare decisions for me? Who am I going to
name as my executor to take care of the estate
if I have to go through probate? Who could handle
a probate proceeding? Hire a law firm, work with a
law firm. In a trust administration, you have to have
a trustee that can act independently with a law firm
(35:20):
and administer a trust and make sure that the assets
get to the appropriate beneficiaries at the appropriate time. So
having the right people, having the right plan, having the
right provisions is all well and good, but making sure
that plan works year over year, Patty, is so important
because things change over time. And when we revisit these
(35:43):
documents at our annual Palms meetings, you see the light
bulb go off. Aha, Oh, oh my goodness, I can't.
I forgot we had that. I forgot we put that
provision in. We need to change that. And meeting with
clients year over year, you got to get to know them,
to know their lives, get to know their kids. And
there's a continuity to it. So we're going to be
(36:07):
continuous and take a short break and be back. So
when we come back, we're going to talk about how
to construct the plan, how to make it right. We're
gonna take a question if you have it. I'll give
the number out one more time. If you're out there
thinking about this eight hundred eight two five five nine
four nine eight hundred talk. WGY would love to hear
from you, and we're going to be right back for
(36:30):
this short break. Welcome back the Life Happens Radio. I
want to tell you about some upcoming workshops we do
a lot of education and we do workshops on a
number of different topics. We have a trust administration workshop
(36:50):
that we do every quarter for clients and others interested
in trusts that looks at how trusts get administered, tax filings,
income tax, looking at the different provisions and a trust
as a trustee which you have to be aware of,
how do you fulfill your duties as a trustee, how
do you make sure that trust days current. We talk
about our Palms program at that and it's going to
(37:12):
be the next one is going to be in September
September thirtieth, I believe, and upcoming. However, we have two
new seminars, your home or the nursing Home. So we
do a lot of work as you know in aging
elder law, and we look at two different aspects of aging.
If you want to have a plan in place that
if you need to change living arrangements. And I'm working
(37:34):
with some clients right now that have a beautiful home,
but one of the spouses has a diagnosis that's got
them thinking they may not want to maintain that home
forever and they want to make a change now, so
they're looking at different living arrangements met with a client
the other day the same thing, looking at selling her
home and going into a beautiful community. And we've had
(37:57):
people from the Eddyon here, We've had different people that
provide housing, beautiful places like the Beverwick and the Avala
that are here in Albany independent Living Arrangements. We're going
to talk about how to do your legal plan, financial plan,
and a adding on and layering on a care plan.
It's myself, my partner, Frank Hemming, and Diane Mikkel Gottabiowski
(38:18):
of ever Home Care Advisors and these are going to
be coming up. One in East Greenbush and that's Wednesday,
August sixth at twelve noon, and that's at the East
Greenbush Community Library, So again East Greenbush, August sixth at noon.
The other is at the Guilderland Y and that's Wednesday,
August thirteenth, twelve thirty to two pm in Guilderland. Again
(38:41):
August thirteenth in Guilderland. And as always you can find
out about our educational programs and these two seminars coming
up August sixth and thirteenth at Pierro Law dot com.
Go to our website. It's p I E. R r
L a W. Go to the events tab and you'll
see all of the upcoming program with regard to webinar
(39:01):
seminars and the education that we are very happy to
provide to our clients and perspective clients. So, Patty back
to the Gene Hackman case. One of the issues that
I see written about here is that his will did
not even mention the three kids from his first marriage.
Speaker 4 (39:20):
Oh really, not in any sort of capacity.
Speaker 2 (39:23):
In any form. And so if that will had no
spouse as a beneficiary, and there was no contingent beneficiary,
then we would end up in something called intestacy. So
it would have ended up going to those same three
kids that didn't get mentioned, who would have been his
(39:45):
natural heirs. So we talked a lot about naming contingent trustees,
contingent agents under a power attorney, contingent healthcare agents, but
naming contingent beneficiaries is equally as important. So when you're
looking at contingent beneficiaries in the in the documents that
(40:07):
we create, just go through the structure. How property passes.
You have tangible property, you have real property, you have
financial assets. How do they pass? And how does that
we call it a cascading beneficiary scheme. How does that work?
Speaker 4 (40:22):
So you know, that happens in a couple of ways.
Speaker 3 (40:24):
So usually what our language says is that if a
beneficiary is deceased, it would pass per sturpees to their children,
and so that you know, looks to see if you know,
the person the beneficiary, if they have any children, and
it would you know, kind of include them in the
planning if.
Speaker 4 (40:43):
Something were to happen to them.
Speaker 3 (40:45):
So this is pretty common when we have you know,
a husband and wife who have children and then they
have children, so it you know, it looks out for
their grandchildren. Some people sometimes don't want that language in there.
Sometimes they would prefer, you know, just to go to
the other beneficiary if they're surviving. And that's usually what
we call pro rata distribution. And so instead of it
(41:05):
going down to any children that might be existing of
the primary beneficiary, it would go back to the other
named beneficiary if they were living. But then you know,
in the circumstances that you know, no one else is around,
no other eligible beneficiaries are then living, we fall back
into you know, our remote contingent clause, and this article,
(41:27):
you know, outlines what would happen if there were no
other living name beneficiaries who could receive.
Speaker 2 (41:33):
And it's again drilling down to the what ifs. What
if this name beneficiary isn't there, who then takes? What
if they have kids? Do their kids take? If they
don't have kids, who's the next beneficiary in line? And
in some cases they the people don't like our remote
(41:54):
contingency claws yep, And so we get down to that.
And so you have, Okay, all of my stuff goes
to different people, you know, my jewelry, my household contents,
my art collection, that painting that I love so much
I want to go to X. We can take care
of that and a trust very easily by naming people
(42:15):
in a document that we call a tangible property memorandum,
so you can list and this doesn't have to be
done with us, even it can be done over time
your own memo. When we give you the document, fill
it in what item do I want to go to,
whom and when? And so that's a way to handle
your personal property. And then your financial assets. We want
(42:37):
to make sure again we thread the needle, get those
assets into the appropriate documents and trusts. And then if
the beneficiaries that we have that are primary, secondary, tertiary,
they don't exist at the time. We have what we
call a remote contingency article, and that's at the end
of the scheme, the beneficiary scheme, and and that typically
(43:01):
how do we how do you plan for that?
Speaker 3 (43:04):
So it takes a couple of different forms, but you know,
the default language that we use and I think works
for probably like sixty percent of the clients, you know,
the people that we work with, it says that if
you know there's no one else around, no one else
living to receive, then it would go you know, to
their errors at law and accordance to you know, whatever
the state law is. And so it looks to see,
(43:26):
you know, the closest living relatives that are still alive.
So if there's no children or grandchildren to take, you know,
would look up to see if you have any living
parents who have no living parents, it would go out
to siblings, and then if no siblings, then it would
look to theces and nephews until it finds someone that's
you know, someone who's still living that's close to you.
Underneath that statutory scheme.
Speaker 2 (43:49):
And it's important to think about this. We had one
case where it ended up going to heirs at law,
and there were like ten people in Czechoslovakia that were
the next akin who we had to track down and
serve with process and find and get distributions to them,
and it was terribly cumbersome. It took years and was
very very expensive. So when you look at the fact that, okay,
(44:13):
I don't want things to go to these relatives, and
a lot of times we put something called a negative
bequestion or an interarum clause which says I'm disinheriting these people,
and we say that right up front. Then you say, well,
it goes to my heirs at law, and they may
be your heirs at law. So you want to make
sure that you have a provision that says, okay, if
(44:34):
I don't, if nothing is the same and I don't
have beneficiaries that I've named, I want it to go
to charities. And a lot of times people will say, well,
I'd rather have it to go to what we call
laughing airs, relatives that I don't even know. I'd rather
see it benefit my community. And in some cases we
(44:55):
will substitute in the charities there for the remote contingent
beneficiary in the event that the family isn't there at
the time that these assets are due to pass on,
and so I just want to touch base. We have
a couple of minutes left on one more topic, and
that is when we get through with all this planning,
we thread the needle. We have the second marriage clauses,
(45:17):
we have all the things that we need. Getting assets
to the beneficiaries in the right way. To me is
very important and we do a lot of planning for
next generations. I'm going to set this up for my children,
my grandchildren. We have something at the tail end of
that beneficiary scheme called a beneficiary control trust. And see
if you can do this in one minute.
Speaker 3 (45:37):
All right, So, a beneficiary control trust is a type
of trust that we set up, typically under a living
trust or a will, that you know, allows the beneficiary
to receive their inheritance, you know, anything you leave to
them in this trust that's completely asset protected. So if
they you know, get divorced, so they go bankrupt, or
they get sued, everything that go to them in this
(45:59):
trust is protected for those purposes and more. It's also
a special type of trust because it allows them to
be their own trustee, so you know, It's a type
of trust that you can't create for yourself, but you
could create for others.
Speaker 2 (46:11):
And the BCT is something that I'm a big believer in.
My kids are getting their inheritance in a PCT because
it gives them the ability to own it, control it,
use it, but not have it threatened by creditors, predators,
or anyone else. So we think that is the greatest
capstone to a plan to take care of your next generations.
(46:33):
We are out of time. Thank you for joining us
on this beautiful, bright sunny Saturday morning. We'll be back
next week on Life Happens Radio.
Speaker 5 (46:42):
You've been listening to Life Happens Radio, brought to you
by the law firm of Piro Connor and Stress. For
more information or it's a contact and attorney at the firm,
visit Piro Law dot com or call five eight one hundred.
Please join us again next Saturday at nine am for
Life Happens Radio on News Radio eight ten and one
(47:02):
oh three point one WGY, and you will be prepared
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