Episode Transcript
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(00:02):
Good morning everyone. Welcome to LifeHappens. Are you prepared? This is
our weekly radio program for baby boomersand their families. We address the challenges
we all face as we age.We talk about aging as a lifestyle,
the issues that must be confronted,and the careful planning that's required to avoid
problems in the future. Life Happenswill provide you with tools to educate and
prepare yourself for events like retirement,protecting your income and assets, planning to
(00:24):
pay for a nursing home and homecare, special needs, wills and trusts,
and resolving disputes in and out ofcourt. Good morning everybody. I'm
Aaron Connor from Pure O'Connor and Strauss. Little little switch up today because almost
always when I do the radio,it's Frank Hemming, Oh you got en
up to you. Today today wehave Kristen Peck and clearly you should be
(00:49):
able to tell by voice that thatwas not Frank. Kemmy. So,
I know everyone's disappointed, but nothear Frank. They hear him enough on
the Medicaid mondays, I think so, I think so. So we're here.
We're going to talk about spring cleaningyour estate plan maybe maybe that's like
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not crystal clear what we really meanby that. But that's okay. We're
lawyers. We tend to obscure thingssometimes, but what we really mean is
when was the last time you thoughtabout it? When was the last time
you looked at it. It's verycommon for us to have people come in,
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usually with wills they've done. Idon't know this week. I saw
one from two thousand and eight.I had a couple this week. They
came in to update their planning.They wanted us to review it, and
their documents were from two thousand andfive. Yes, so definitely spring is
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small, and you know, weare encouraging people to review their estate planning,
especially if you haven't looked at it. And you know, Lou has
told the tale of people. Youknow, when we do a trust plan,
we put it in a zipper bagand they haven't opened the bag.
That's true since they did their planninglast time. So we're encouraging people,
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you know, spring being springtime toyou know, not only do your spring
cleaning, but to perk up yoursteam planning. Well, I do think
it's a good time to mention that, you know, Lou's been at this
for a long time. I thinksince nineteen eighty four if I'm correct,
but certainly right around then. SoI've seen documents that Will did in nineteen
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ninety or Will Lou did a willin nineteen ninety nine that came back the
guy gentleman unfortunately had passed away.I mean that's twenty five years ago.
So it's it was a good,good way to get out there. We
made updates to it over time.But Lou did get an award this week,
oh, the Life Path Award,and congratulations Lou. He is the
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focus of the award is being productivein what they call your third age.
And I know it pains Lou tobe considered in a third age because it
did make it sound like he wasolder than he is. You know,
he's still he's still viable, stillplanning on working for a while, probably
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forever. But you know, ifyou know Lou, you know he'll probably
work forever. But it was avery nice award. It was there were
some nice words about helping the elderlyand helping people in need, and there
were six other people who were alsorecognized. So we'll give Lou his kudos
for that. But since he's beenat it, for a long time.
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We have a lot of documents outthere, yep, and we do a
lot of documents every year, andpeople often say, well, when when
should I come back and look atthese again? And I think, well,
first of all, if you havedocuments where your kids were children,
right, not adults, it's timeto dust them off, because a lot
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of times, not always, buta lot of times, people are then
more comfortable putting their children in agentspots. They may have their parents who
may have passed on or may not, but maybe elderly and maybe not a
good choice. They may have puta sibling in that spot, or a
friend that they don't see. SoI think it's important then to really rethink
that now. Certainly there are alot of times your children may not be
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ready for that job, or oneof them might be, and one might
not be. But I think it'sa good time to start thinking about that,
because you can't appoint a guardian foryour children once they become an adult
unless they're incapacitated, as much asyou might want to. That's right.
I think we see that quite abit. How can I guide my child?
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Don't? Sorry, you can't.You got nothing, And you may
want to be thinking about when theycould access things. Right, So,
if you don't do a will andyou leave money behind and someone turns eighteen,
they get one hundred percent of whatthey were supposed to get. Right,
then, if you do a will, you can control that. And
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Kristen, how do we do that? So we're in a will? Or
you know, if you do trustplanning, you can leave a share for
beneficiary in a trust until they turna certain age, or you know,
you can dole out money at certainages. They can be a trustee at
a certain age. You can havesomeone else manage their money until they turn
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a certain age, or god,I just lost my train drop. Well
yeah, I mean there's there's alot of things you can do. You
can put a lot of conditions onit. Now, we we don't recommend
that. Right. There was atrust that came in one time, and
for the woman to access the moneyin it, she had to get a
doctorate, become a black belt andsomething else. Well, yeah, I
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do remember this, right, itsounds made up, but I mean just
everything but saying I don't want youto get this one. So I would
not ever draft anything like that.I don't think that's right. It's not
the right way to go about somethingif that's the way you're going to do
it. But that one was kindof wild. But we've had people who
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want to hang the money in trustuntil someone turns fifty or sixty. I
generally try to disavow them of thatidea as well, because that is very
late in life. If you really, I mean, you know, it's
not like they're going to die atthat age. But if you want to
look at will the money make adifference in someone's life, if you've waited
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till sixty, well they may havelost a lot of opportunities. Yeah,
I would agree with that. Ithink that unless you know, sometimes we
see it in high net worth individualsthat they're getting certain distributions at you know,
maybe twenty five thirty, and thenI can see, you know,
maybe that's from a grandparent and thenthe parents like, well, okay,
fifty or sixty. I think it'sokay in that situation given the wealth.
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But I would agree that, youknow, leaving money until someone's fifty year
sixties typically not beneficial to them,and they've beneficiaries can become resentful, Yes,
yeah, yes, absolutely. Andanother thing people can do and We
do this a lot is we allowa child to become a co trustee at
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a certain age to kind of getacclimated, understand what's going on, and
then at thirty five or forty theymight be able to be their soul trustee.
Now they don't have to be right. They can leave the co trustee
on there if that makes them feelbetter, and that's working well. But
it's really a good way to makesure that you know they're involved. I
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can see what's going on, theycan have kind of a voice, but
they can't sign it all out ifyou will, and I think a lot
of parents and other people you know, leaving money to beneficiaries feel better about
something like that as well. Ohthe other thing my train of thought came
back the unit trust allowing a certainpercentage of whatever the trust makes to go
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out to the beneficiary every year sothat you know it's not you know,
it's the money in the trust isbeing invested and the beneficiary is not spending
the principle of the trust right.So this is probably as nerdy as I
get, but really do like aunit trust. It's a good solution because
we litigated over time trusts where onlyincome came out because we just came out
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of an environment where income was limitedto dividends and interest and nobody was getting
interest. Right now, you canmake some money on interest, but that
was very different. One of thehuge benefits of a unit trust is it
can be invested to grow because thefour percent comes out no matter what.
There's no tension right there usually iswhat we call a hem's right in a
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unit trust, a health, education, maintenance, and support, where you
can make a request based on thosefactors if you need more money. So
it really allows for less tension betweenthe trustee and the beneficiary because the four
percent is coming or five percent.I think we typically do five, but
it depends. It depends on themoney, it depends on what we're doing.
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But that's coming out and it's comingout no matter what, So you
just invest it. You make goodchoices, you don't have to worry about
whether you're producing enough income, andyou have more harmony that way, which
is important in these scenarios because lotsof times we see it there's friction between
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trustees and beneficiaries because the beneficiary wantsto do whatever they want to do,
and that's definitely something you know worthreviewing from time to time, especially if
you have a beneficiary that you're notsure can handle money right, and you
have someone in the role of trustee, Well, is that is that trustee
that you've named and your will,your trust is are they able to take
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on that responsibility? What kind offamily tension is that going to bring on?
And what's the age of your trustee? You know, now that you
it's spend some time that's past,can they still manage that money if they're
you know, in their eighties,that you might want to reconsider who you've
appointed. And I think that's importanttoo, because we oftentimes seen family structures
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where let's say there's two or threekids, right, and one kid is
not great with money, and theywant to appoint this, you know,
one of the other kids to bethat kid's trustee. That is going to
make for not a pleasant scenario mostof the time. Sometimes we see that
child decline to serve and that becauseit's going to ruin their relationship with their
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siblings. So that is something thatwe counsel people about. It's important really
to talk these things out. Wetry to make sure that we bring up
everything. A lot of people comein they really haven't thought about a lot
of things, like, in particular, if there's a small tree, right,
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yes, one kid, maybe onegrandkid, what happens if all of
you are you know, people predecease. Where is this money going? And
if you don't address that, it'sprobably going somewhere you don't want it to
go. So they are important things. It's a process, so we don't
commit have people come in, sitdown, tell us their people's names,
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and then provide them with a willto side immediately. That's not how we
do this. So it's important tothink through this process to really look at
what your goals are and convey thoseto us, because if you don't convey
your goals to us, we can'thelp you achieve that. So if we
are going to try to draw thosegoals out of you and then and then
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create a document that fills those goals. So we are at our first break.
When we come back, we're goingto talk about some other things you
may want to think about now thatit's spring. I'm Aaron Connor from Pierre
O Connor and Strouss and this isLife Happens Radio Net. Welcome back,
(12:31):
So Life Happens Radio. Aaron ConnorPiro, Connor Strouss. Hopefully you're flying
like an eagle, although not likethe football team. But we are here,
myself and Kristin Peck, one ofour associates, talking about spring cleaning,
your estate, plan, things tothink about, things to maybe go
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back and look at. And youknow, first first thing really on the
list was have people become adults whoare children. I think another thing on
the list, which we kind ofa little bit touched on, is have
people I've appointed become unsuitable for somereason in a role. Either we've lost
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touch, they've passed on, they'veaged to a point where it's going to
be an issue, or sometimes geographicallygeographics can be a challenge to that.
If you've appointed someone to be theguardian of your children and they've moved across
country, you need to think aboutthat, right And like in my case,
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if I had done a will beforemy parents had spent most or half
the year in Florida, and ifI appoint them the guardian of my children,
how what's the impact on my childrenand my parents going to be?
Right? So that's really a twoway street, and frankly, I don't
think i'd want my parents or mychildren to grow up in Florida. You
know, those are things to thinkabout because you may have appointed your parents,
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they may have retired and they mayhave moved somewhere else, or they
may be spending a significant amount oftime somewhere else. Right, So you
need to think about the age andthe changes or other changes that have gone
on with your agents. I thinkone of the big ones we see all
the time is divorce. Right.It can be divorce of the husband and
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wife who did the documents, whichthat legally revokes all of those appointments,
okay, power of attorney, healthcare proxy, it revokes the appointment of
the spouse. Now, we've hada few times where people have gotten divorced
and then they came back to reappointeach other. That is something, right,
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a little wild. I mean I'vehad people who you know, they've
gotten divorced, gotten remarried, andgotten divorced again. Yes, so it's
actually more common then you would think. Yes, I think I had a
woman who had married, was marriedseven times, but four of them to
the same gentlemen four times, gotdivorced three times, got married four times
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them. Oh gosh, I gothrough that. I think the most common
thing as people come in and they'relike, this must be awful for you
to hear, and you know youdon't hear anything like this, And I'm
like, no, this, Wehear this every day. Now, I
get it a lot. You musthave heard it all and we have.
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Yeah, So there's no need tobe bashful about those types of things.
Frankly, we need to know themand we need to plan around them sometimes.
So it's important to have an honestdiscourse with us. And I also
want to say this, sometimes peoplebring their children with them, which is
okay, but it comes with alayer of problem because if this is your
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initial meeting and your child is goingto be telling us how you want to
leave things, we can't have that. Okay. That is an undue influenced
situation. It's brought with lots ofproblems, even if it isn't meant to
be undue. Right, we needto hear all of these things from you.
And certainly, if everything is goingevenly, fine, so be it
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right. But if anything is notgoing evenly, child's getting a house,
things are being distributed differently, youreally more likely to not should come out
without your children, and or youknow not to be rude, but sometimes
we have to ask your child toleave because we have to take direction from
you. And I think people oftenget a little confused by that, but
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it is a problem. Yeah,it definitely is, because you know,
we don't want to alter maybe aplan that's already leaving everything equally and now
you're leaving things disproportionately. We wantto make sure that that's your in and
you know, we have one rightnow that's happening. You know, woman
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has five kids, she's disinheriting oneperson, and this person doesn't happen to
speak food in English, and soyou know, in that situation, it's
going to be a translator involved.But if in other situations we've had loved
ones leave the room now, Ido want to add something to what you've
said, is that you know,while we want to hear it from you,
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we don't discourage having the family involvement. I think we encourage that,
you know, knowing what's going tohappen up front and having the family members
know about that to no one's surprisedwhen something happens. Well, there's a
little bit of that and a littlebit not of that. So my ideal
scenario would be to have the childreninvolved at the signing right right, not
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at the beginning right. That doesn'tmean look, if everything's going even like,
go ahead, bring your children right. But if it's not, then
as the litigator, you've created afact that is negative to your what you
want to do, if that's infact what you want to do. So
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that's where I think we want childrento know that there's a trust. We
want children to know that there aredocuments. There are some people who are
disinheriting somebody who are not going totell them, and that's really their choice
because if it's going to make yourlife worse while you're alive, and I
don't think you should tell them,right, Well, I think you know,
as far as you know, maybeit's a family camp and someone you
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know, two kids are really involvedin the family camp, and they're going
to get they're going to get thefamily camp where someone's going to get liquid
assets in equal value, You knowthat that discussion should should be upfront.
Probably you know, in my experience, the people get the most upset about
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something like that are people who actuallycould not afford to maintain it right,
And we see that because we lovevacation properties. Right, everybody loves the
vacation. Yeah, but the fartherdown the chain you go, the more
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people are involved. Right. Ifif my grandparents had had a vacation property,
it then would have been divided fiveways, with one, you know,
one of the five living out ofstate, so it probably wouldn't have
been that great for them. Butthen there'd be thirteen of us and then
and that doesn't all happen at once, right, Right, So you'd have
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currently you'd have three and then sevenfor two shares. Right, So that
math gets pretty complicated and pretty diceyabout who's going to put in what and
what they owe and we'll think aboutthat. Right. If you own a
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place on Lake Georgia, you havethirteen people who own a share. That's
essentially the entire summer season. Everybodygets one week, wow, right,
yeah, and people are going toget upset about not getting July fourth or
whatever. So those things need tobe done very carefully. We often recommend
that people leave money in the vacationproperty, right, So we usually do
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an LLC for that with a prettydetailed operating agreement about who owes what,
how weeks are determined Because you know, let's say this property is worth a
couple million dollars or a million dollars. If you have thirteen beneficiaries, I
bet one or two of them aregoing to want to cash out, yep.
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And then what happens? Who buysthem out? Where does the money
for that come from? Right?Because it's not an insignificant amount of money.
A tenth share in two million dollarsis two hundred thousand dollars, So
most people don't have that hanging around. Some people do, but most people
do not, so and it becomesan issue. So you need to think
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of those things carefully. And obviouslythe less voices in a room a little
bit easier, that is. Butyou know, I think over time families
have gotten smaller generally speaking. Idon't. I don't think, you know.
I still see still know a fewpeople who have a bunch of siblings,
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but I don't see that as much. Actually, I hear just an
in it from clients. I alwayshear parents come in and you know,
they talk about their kids. I'mlike, do you have any grandkids?
And they're like, nope, andwe don't. We don't anticipate any.
Yeah, A lot of times wehear we have grand dogs. Oh that
was the next thing, rand dogs. Yep, that's what I hear a
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lot. So that does seem tobe becoming more common. I think my
daughter, one of my daughters,uh goes to school with someone who has
five or six siblings, which islike very unusual today. Yeah, I
don't see I do not see thata lot. No, most people I
feel like have that we know eitherhave one, two or three. In
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fact, I don't think I knowanybody who has four or five, which
is you know, but it's one, two or three. So so,
but that's actually another obstacle we have, right is if their kids don't have
kids, where does the money go? Right? Where do you want it
to go? Right? Do youwant it to go to their spouse?
Sometimes they do, sometimes they reallydon't. And especially today, you know,
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we hear a lot about you know, we talked about divorce, and
I think that's a big concern forparents leaving kids money. So and you
know, we've done trust planning toprotect against someone leaving inherited money to a
spouse, but some people do wantto include the spouse. I have revised
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trusts. Actually, you know,when we do planning. A lot of
the time the alternate beneficiaries family members, and I've had actually a lot lately
people have edited the line of successionso it does go to a spouse.
I see that more often where verylong term marriage, yep, right and
pretend usually no children, right.So the one I just did actually this
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week she asked me to change itduring well, while she was signing her
documents. It's not ideal, butshe was leaving everything to her son in
a trust, but she if herson was deceased, she wanted it all
to go to her daughter in law. And they had been married for forty
years, right, So yeah,and so I look at that. It's
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that person's put their time in,they've shown their character, right, and
the person leaving them the money hasmade the judgment that they are like a
good choice, right, right,And ultimately it was going to go to
her granddaughter after the dog in law. But just this Yeah, I recently
had a discussion where a gentleman hadit going to spouse's and I said,
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that's totally fine, but that's notactually typical, right, So we'll do
whatever you want at the end ofthe day, but we have to advise
so we are coming up on thenews. When we come back after the
break, we will continue talking aboutspring cleaning your estate plan. You want
to give us a call you havea question, We'll call us at one
eight hundred talk to bug Y.That's one eight hundred eighty two five nine
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four nine. Life Happens Radio,Buera, Counter and Strauss. We'll be
back after this Hotel, California.Welcome back to Life Happens Radio. I
(25:12):
maybe we should play that one loseon because he likes the Jets, and
I feel like the Jets are trappedin last place, so we'll see they
can't ever leave. But Aaron ConnorLife Happens also Kristin Peck, one of
our trusted associates, then with this, I guess almost three years now,
(25:32):
yep, almost three years? Wow? Yeah, where does the time go?
I don't know. I'm finally anadult though, right, I'd say
that's that's probably true. Yes,I don't know. So for all of
you who didn't get my little funnyreference, it's just Aaron likes poke fun
at me that I'm a young person, So it's true. So but making
(25:57):
making better decisions, not having toomany sour patch kids, in the office.
That's a good thing. We aretalking about your state plan and whether
you've dusted it off and you've lookedat it recently and when you should do
that. And just one last wordabout divorces. So when the divorce happens,
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it triggers the spouse off the documents, but you need to look at
who is next then, because I'veactually had a case where the person next
in line was the the spouse youjust divorced, was their sibling. So
in that case, that's still avalid appointment. It doesn't trigger that person
off. So that ended up beinga pretty litigated case because the guy's family
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wanted to take over, but hehad documents stating otherwise, and he had
appointed not his family for reasons.But just something to keep in mind,
because you know, maybe you hadyour spouse's parents on there because they lived
close or I don't know, right, But just something to think about,
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you know. And another question weoften get is people who are divorced they
want to control who the guardian oftheir children is going to be, and
we have to tell them, well, if your ex spouse is still alive,
they're going to get that. Ninetynine percent of the time, unless
there's some real factor where they wouldnot, But we still name somebody because
you just never know what's going tohappen. This is a tougher one.
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We see this a lot. Deathof a beneficiary. We doing what we
do. We sometimes meet with parentswho have lost a child, and sometimes
it's been an only child. Imean, obviously it's much rougher for them,
but it's a rough conversation for sure, and then we have to talk
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about out what we're going to do, right, Who is going to be
your agent? This just becomes acommon problem. And I guess when I
got into this area of practice,I didn't really think about this, but
it's really more common than I thoughtabout how many single, no children people
there are. I mean, andthis is going to become a really big
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problem for I think, you know, the millennials and the gen Z generation,
just because you know, people arenot getting married and people aren't having
kids, and so then who servesin that role? Right? Well,
I do think that at some pointwe'll see businesses doing that more than we
do now. You see it occasionally, but it's really like a bank and
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it's generally wealthier people, right,But typically there are a lot of just
blue collar people out there are goingto need somebody to be their power of
attorney. And the one that's mostproblematic is a healthcare corrective right, because
nobody gets paid to do that,and it's just the way of the world.
(29:08):
Right, if you appoint someone aspower of attorney, you can pay
them to do that. Health caredecision probably a much bigger decision and much
harder to find somebody to do that, because the statute if your single,
no kids, and your parents aregone, isn't going to leave anybody really
to make a decision for you.So a lot of ways, it's it's
(29:30):
pretty scary, yeah, and it'sunfortunately also a good way to become in
a bad situation without people knowing aboutit too. So certainly something to think
about, you know. Unfortunately,I'm often giving an advice that if they
people have an eetern nephew they're reasonablyclose to, they probably should leave them
(29:52):
some money if they you know,if they want them to be involved.
It's I'd love to say that peoplewill do it because it's the right thing
to do, but I we'll seea lot of that. Yeah, So
death of a beneficiary, death ofan agent. We've had people who only
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had one agent on a document andthey died, and then you have no
agent. So we've done guardianships wheresomeone had a power of attorney but only
a name, only named one person, and then we have a problem.
Yeah. I just had this weeka woman who did not want any success
or agents on her documents. Yeah. And it's crazy about it is this
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this person wanted to hold things reallytight to the vest. And she's appointing
her daughter and then had her twosons a successors and then she said,
I want I want to take themout. I mean, I think we
were able to, you know,work through some of those issues. But
one of the big reasons was becauseshe didn't want them to know anything about
what she was doing, and shedidn't want her daughter to have a copy
(31:04):
of the power of attorney or noreally anything. She's like, my,
you know, my daughter's an attorneytoo, and I'm you know, that
kind of death grip is a badidea. Yeah. So from the medicaid
side of our practice, we seea couple of things. We see the
disaster of not planning m H.But we also see the disaster of no
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information because people don't even know whatthe assets are. They're trying to get
mom or dad care, which isa big, big deal. They need
it. It's a heavy lift,you know with you know when Frank and
Frank being our medicaid attorney, FrankHemming and then Meg his paralegal. When
they ask for information, they're askingfor you know, five years of statements,
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yes, and they're going to wantto know about asset transfers and things
like that. So and that includesaccounts closed in that five years too,
which can be kind of a nightmare. Yeah, So we encourage frank discussion,
right, and that's not a discussionabout Frank, it's an honest discussion,
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but it's it's important, not evenif you don't want to give figures,
it's important to let people know whereaccounts are where. We see a
lot of people who have a binder. Maybe they don't even disclose, but
they keep a binder of this stuff. Well, that's important too. With
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passwords, and you know, itgets gets a little hairy. You know,
someone I know carries their passwords aroundon a clipboard and then leaves their
clipboard various places, no names.But you know, it's not it's not
ideal, really, didn't realize that. Yeah, oh that's not good.
(32:53):
I speaking of one of my clientsthis week. I, you know,
had a mother and son come inand he was he's an only child,
so she he was her only son, and she had retitled things into her
trust. You know, we wereamending it, and I said to him,
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you know, one of the thingsyou really want to check is just
make sure everything has a beneficiary,everything's in her trust, you know,
things like that. And I said, one of the things, you know,
just because this woman happened to bea little bit older and you know
they are very close, I said, you know, go through her mail.
You know, anything, anything shegets in the mail, you know,
(33:35):
that's a good that's a good papertrail. And that used to be
much more common, though too somuch now goes into an email, right,
And if you don't have an emailpassword, I don't think I get
a paper statement for anything anymore.I think you can get paper, you
(33:57):
can. A lot of us optout of that. But I think,
you know, people that are ata certain age they want they want the
paper absolutely. But I couldn't tellyou if my parents get paper statements or
not. No idea. Well,and you know that that is also a
good way to you know, startfiguring things out if you And the reason
(34:19):
I know this is, you know, we see it on the other side
when people pass away. You know, they get a statement or something in
the mail on this one account andthey're like, oh my god, I
didn't know about this account and Ihave no idea if there's a beneficiary or
in trust, and so then itends up being a probate asset. We
just had that actually where it wasa retirement account named mom Mom, never
(34:43):
changed, never added another beneficiary.Yeah, that's you know, and that's
just a disaster. And that's anothertime to really update your state planning is
if you lose a spouse. Andso one of the issues with that too
is that you're spouse is older andyou're older. It's probably not at the
forefront of your things, right,but really that beneficiary designation should be sent
(35:07):
up from the get go with abackup, right, and someone the holder
of that account, your financial advisorshould be pestering you if that's not the
case. Right, So it doeshappen, but it's one hundred percent avoidable,
and that all that IRA money isgoing to probate, right, which
(35:27):
means more than likely all of thetax is going to get paid in one
year, which is not necessarily ideal, depending on obviously lots of other factors,
but it's not generally the way you'dwant to go, and you lose
an opportunity to defer some of thatgrowth for a ten year period. So
yeah, and another piece to that, you know, we kind of touched
on it earlier, is just youknow, if you're doing your seat planning
(35:52):
with your spouse and you're appointing eachother on all of your documents, is
you know, when if you losea spouse, they're the price primary person.
And so especially on the power ofattorney, when when you know if
the successor is one of your children, they're going to have to show why
that primary agent is unable to askyes that is that is a big problem.
(36:14):
Right. So oftentimes when we submita power of attorney to a financial
house, they want a letter orone that it's real and two that the
person named on there is still theacting agent or who the or if they're
not, why they're not. Soa lot of times you may have to
supply a death certificate and you know, when you do this planning if it
(36:40):
goes right, you don't need tomake a lot of changes generally speaking,
but after your spouse dies, wereally do like to update your basic documents,
power of attorney, healthcare proxy,maybe your will, depending on the
scenario, so that you're not havingthis problem. Right, It just makes
it comber some for your agent toact well in a healthcare proxy. If
(37:02):
your spouse to see spouses first,that's they're still going to call that person
probably right, unless you know they'vesomehow otherwise known, and time may be
of the essence in that scenario.Yeah, so that's important. It's just
you need to make sure you havegood successors, that you've updated these documents.
(37:25):
And I think, well, oneof the things we should talk about
is oftentimes people relocate, Like wementioned earlier, if you take your New
York document to Florida, Let's say, maybe they've seen a New York power
of attorney. They have it,but it'd be much easier if you had
(37:47):
a Florida power of attorney. CanI have a New York and a Florida
power of attorney at the same time, you can? You would just say
that it does not revoke this specificprior power of attorney. So I think
some people first get confused about thatbecause this happens more often where I don't
know, you had a Utah powerof attorney, came to New York,
(38:10):
it's not going to look like aNew York power attorney. And banks routinely
reject things that they don't no Iunderstand for reasons that are mystifying a lots
of times, but the out ofstate documents at least I can maybe a
little bit understand where they're coming from. So I think if you're going to
(38:35):
live in another state, you shouldhave the two basic documents for sure for
that state. If you're becoming aresident of that state, you probably should
have a dispositive document, meaning yourwill your trust can go with you wherever
you go. Whether you really needto opt into another state's laws when you
move more than likely not. Ifyou move to Florida, you're going to
(38:59):
want to homestead your house if youhaven't done so already, and that can
be done inside a trust, butit needs to be done carefully. So
that would be another reason to lookat things because Florida is kind of unique
in that way that protects your house. In other ways, Florida they use
revocable trusts much more than an irrevocabletrust. If you're a resident, that's
(39:22):
a difference. So I think we'lltake our last break. We'll come back
talk about some other changes that mayneed to be addressed, and we'll be
back right after this on Facebook.Welcome back to Life Happens Radio. Hopefully
(39:45):
we've given you a peaceful, easyfeeling. If not, you can go
outside and enjoy the sun. That'sright, wonderful sunny day in upstate New
York. Apologies, but they're inthe car, they're going out, they're
enjoying their day. Well, Imean, honestly, if you get your
planning done, you do it right. A lot of people do have a
(40:05):
peaceful, easy feeling. That's that'sone of the rewarding things. That is
true. The amount of times thatpeople have walked out after shining their documents.
They're like, oh, a weightis lifted off my shoulder, or
yeah, I can go on vacationin peace. That is comical to me
a little bit, because that isa thing. Right, People are like,
(40:28):
I'm getting on a plane. Ohmy god, that's safer than getting
in a car. Yeah, right, but look, hey, that's what
motivates you all for it, right, But that one does kind of make
me laugh a little bit. ButI get it because I'm the type of
person before I take a trip,you know, I get new clothes,
I clean my apartment. Oh yeah, one d per, I'm coming back
(40:51):
to a clean house. I doeverything before I go on vacation, and
so I can kind of see thesc planning. That's just the one more
thing you know on the list,right, everything has to be done before
you go on vacation. I certainlythink it's much better to do it that
way. I mean, yeah,I'm kind of maniacal about that. I
make sure there's no dirty dish,that garden is just completely empty, all
(41:15):
of that stuff, because when youcome home, you usually have a mountain
of laundry to do, right,So and I get that, and I
look, I understand that people wantthe peace of mind that they're traveling,
and they want the documents. Ican just say one hundred percent never had
(41:35):
anyone, well, I've never hadanyone do their will and then have that
problem. We did have one wildscenario, yeah, I'm sure where a
woman was going on vacation with herhusband and it somewhere tropical, little bit
complicated plan, and we weren't goingto get the trust portion of that done
(42:05):
ahead of time, and so shewanted to make sure she got her will
done. And on vacation there wasa scuba accident and she died. That
not an old person, it's justkind of a but it was like like
(42:27):
she had a premonition. Yes,I don't like to get into that like
weirdness, but because the way,because I was not here when this happened,
that's right, this was seven oreight years ago. I think the
way it's been you know, toldto me is that she she was asked
whether or not she wanted to getit, but then before she went on
vacation she said, oh no,and then the next day she was like,
(42:49):
no, no, I want to, like I have a feeling,
and then and then and then somethinghappened. So I don't know, it
must give people, you know,some people a piece of mind, right,
but it was I don't even knowreally how to put that into any
kind of hierarchy other than to saythat was a complete outlier mm hmm.
(43:19):
Only only time that that has everhappened. I think that's something that stops
people from doing their estate planning.So some people, you know, the
type A people, it motivates them. The other people it gives them fear
over their own mortality. So yougive those two groups of people. There
are people who won't do it becausethey think that they will die when they
(43:44):
do do it. It's like you'respring cleaning. You know, you have
those people that are going to youknow, purge everything every spring, and
then you have those people who they'regoing to hold on to everything and hoard
everything until the day they die.And it's kind of the same way with
your estate planning. You know,you're either going to you know, keep
it up to date and look atit every now and again and make tweaks
(44:05):
when you need tweaks, or thereare going to be those people who don't
do it and the people who don'tdo it. You know, we've kind
of talked about some of the ramifications. You know, you might have someone
who's serving as your agent that youmight not want serving as your agent.
You may have someone you know who'spassed away like a beneficiary, right,
and then you don't have the personthat you actually want to inherit inheriting correct
(44:28):
or you know, maybe you didyou know, you were on the younger
side and you did your will,you know, early in life and the
situations significantly changed, maybe you wantto, you know, avoid probate.
You know, something we didn't talkabout is that, you know, your
plan kind of evolves with you,you know, with I just met with
(44:50):
a younger couple this week, andI'm doing a will plan for them.
But is that going to be theirplan forever? No, it shouldn't be,
right right, you know, theyit's a great start, right you
know, they might want a revocabletrust later on, or maybe they want
to you know, when they getto their you know, sixties or seventies,
they want to protect assets if theyneed long term care. You know,
(45:13):
it's a fluid thing, depending onyour age, your asset level.
And that's why it's really important whenwe're talking about this spring cleaning, is
that you go and you review itevery now and again. Absolutely, it's
not a it's not a static thing. Right now. If you do your
plane at eighty, it's a littlelate in the game. Might not need
as many changes, right But andwe have people who come in when they're
(45:35):
eighty and they're like, oh,well, we should have done this sooner.
But it's just good that you're,you know, getting your foot in
the door and you're doing it.Still got a guy who's ninety nine sitting
on a retainer. You no,no, it's not if it's when,
that's right. So I mean thatone just blows my mind. The best
part of that is one of hischildren is like, you know, what's
time for me to plan and howhow old as a child? Seventy ish
(46:01):
exactly. So can't wait forever,can't wait forever, but it is important,
and we see this. A lotof people come in in their fifties
or sixties. They did a willwhen they had kids, a lot of
times they did a power of attorneyin a healthcare proxy. Then sometimes they
didn't. And generally speaking, theseare two and three page wills that didn't
(46:27):
really encompass a lot of things thatcould have happened. The good news is
they didn't need them during that periodof time. But that breath is not
going to serve you well. There'sso many things that can, unfortunately go
wrong. Our job is to makesure that we've encompassed just about every scenario
out there, so you're covered,your beneficiaries are covered. Lots of these
(46:51):
simple wills don't have a special needstrust under the will. So if your
beneficiary is in a nursing home,which has happened, they get the money
and it's basically gone. If you'rebeneficiary is you know, getting assistance from
the government in the form of medicaidor housing or whatever it may be because
(47:12):
of a disability, you have tohave that. You know, we have
trust for anyone who's under the ageof you know, we said it at
twenty five, but this is thisis you know, influenced by the clients.
You know, it might not beyour son or daughter who inherits.
It could be a grand grandchild andyour grandchild right now could be you know
six and nine. Correct. That'sa big problem. And also we see
(47:37):
a lot of drug abuse being anissue for a beneficiary. Yeah, that
has been common, you know,drug use or you know people who are
spend thrifts. Right. Well,want to explain that a little bit,
because I don't think that like that'slike eighteen eighties language. I know,
we use it all the time.But so someone who's not good at managing
(47:57):
their own money, right, someonewho you know is going to go out
and just blow it and and sowhat we'll do trust to protect you know,
protect the beneficiary from themselves and havesomeone else manage manage their money,
right, And so that really isa lot of people, honestly. I
mean, you know, I'm inthe process of drafting a plan now where
(48:22):
we know that the spouse has spendingissues, and the spouse is aware of
the spending issues, so we're tryingto come up with ways to address that
and make sure that the spouse isa good life but not you know,
and that gets tricky too, youknow. Now with the Secure Act and
retirement accounts, yes, you know, naming trusts for spouses is the beneficiary
(48:46):
and so that that also requires carefulplanning, correct, And that's one of
the areas that you have the smallestreally amount of control, because some money
has to come out m m.Yeah, And we see I think more
and more people with large iras orlarge retirement accounts. Yeah, and if
(49:07):
you have a two million dollar retirementaccount and you're seventy five and money hasn't
come out, it's going to bea pretty good chunk of change, probably
close to one hundred thousand dollars ayear. Yeah, which again doesn't really
usually affect the value of the accountbecause that's five percent and you really should
(49:28):
be able to get five percent inthe market most times. So and you
know, you know that brings anotherpoint, you know, cleaning up your
estate planning is you know, youmight have done this when you were only
worth you know, a couple hundredthousand dollars, and now maybe you're you've
done very well for yourself and you'reworth several million dollars. And you know,
(49:49):
in New York State, you know, the threshold is you know,
six point nine to four million.And if you're over that and you think
a will is gonna you know suityou well, I think you'd be mistaken
because you're gonna you're gonna be you'regonna have a New York estate tax problem.
And that's another reason to kind of, you know, dust off your
(50:09):
state planning and reevaluate things. Isyou know, if you are in that,
you know, lucky, I youknow, more money, more problems,
but you're lucky to have you know, seven million dollars in assets.
You really need to start considering yourplan and whether you know a will may
not be sufficient in that circumstance.Yeah, I wasn't sure that we were
(50:30):
going to quote Biggy today, butthat's good. I'm glad that we did
that. So we are coming upto the end. We UH, as
usual have our Medicaid Monday, sojust give you a reminder about that.
If you're interested in topical medicaid information, Frank does the Medicaid Mondays UH second
(50:52):
Monday of every month from twelve totwelve thirty. You can sign up for
that at info at perro law dotcom. That's p I e r r
Law dot com. We will beback next week with another episode of Life
Happens Radio. Please dust off thatplan, get a good look at it,
and get out there and enjoy thisgreat weather, because God knows we've
(51:14):
waited long enough. Thanks Kristen,all great. Thanks Aaron. Have a
good day everyone,
Good morning everyone. Welcome to LifeHappens. Are you prepared? This is
our weekly radio program for baby boomersand their families. We address the challenges
we all face as we age.We talk about aging as a lifestyle,
the issues that must be confronted,and the careful planning that's required to avoid
problems in the future. Life Happenswill provide you with tools to educate and
prepare yourself for events like retirement,protecting your income and assets, planning to
(00:24):
pay for a nursing home and homecare, special needs, wills and trusts,
and resolving disputes in and out ofcourt. Good morning everybody. I'm
Aaron Connor from Pure O'Connor and Strauss. Little little switch up today because almost
always when I do the radio,it's Frank Hemming, Oh you got en
up to you. Today today wehave Kristen Peck and clearly you should be
(00:49):
able to tell by voice that thatwas not Frank. Kemmy. So,
I know everyone's disappointed, but nothear Frank. They hear him enough on
the Medicaid mondays, I think so, I think so. So we're here.
We're going to talk about spring cleaningyour estate plan maybe maybe that's like
(01:10):
not crystal clear what we really meanby that. But that's okay. We're
lawyers. We tend to obscure thingssometimes, but what we really mean is
when was the last time you thoughtabout it? When was the last time
you looked at it. It's verycommon for us to have people come in,
(01:32):
usually with wills they've done. Idon't know this week. I saw
one from two thousand and eight.I had a couple this week. They
came in to update their planning.They wanted us to review it, and
their documents were from two thousand andfive. Yes, so definitely spring is
(01:52):
small, and you know, weare encouraging people to review their estate planning,
especially if you haven't looked at it. And you know, Lou has
told the tale of people. Youknow, when we do a trust plan,
we put it in a zipper bagand they haven't opened the bag.
That's true since they did their planninglast time. So we're encouraging people,
(02:14):
you know, spring being springtime toyou know, not only do your spring
cleaning, but to perk up yoursteam planning. Well, I do think
it's a good time to mention that, you know, Lou's been at this
for a long time. I thinksince nineteen eighty four if I'm correct,
but certainly right around then. SoI've seen documents that Will did in nineteen
(02:36):
ninety or Will Lou did a willin nineteen ninety nine that came back the
guy gentleman unfortunately had passed away.I mean that's twenty five years ago.
So it's it was a good,good way to get out there. We
made updates to it over time.But Lou did get an award this week,
oh, the Life Path Award,and congratulations Lou. He is the
(03:04):
focus of the award is being productivein what they call your third age.
And I know it pains Lou tobe considered in a third age because it
did make it sound like he wasolder than he is. You know,
he's still he's still viable, stillplanning on working for a while, probably
(03:28):
forever. But you know, ifyou know Lou, you know he'll probably
work forever. But it was avery nice award. It was there were
some nice words about helping the elderlyand helping people in need, and there
were six other people who were alsorecognized. So we'll give Lou his kudos
for that. But since he's beenat it, for a long time.
(03:51):
We have a lot of documents outthere, yep, and we do a
lot of documents every year, andpeople often say, well, when when
should I come back and look atthese again? And I think, well,
first of all, if you havedocuments where your kids were children,
right, not adults, it's timeto dust them off, because a lot
(04:15):
of times, not always, buta lot of times, people are then
more comfortable putting their children in agentspots. They may have their parents who
may have passed on or may not, but maybe elderly and maybe not a
good choice. They may have puta sibling in that spot, or a
friend that they don't see. SoI think it's important then to really rethink
that now. Certainly there are alot of times your children may not be
(04:38):
ready for that job, or oneof them might be, and one might
not be. But I think it'sa good time to start thinking about that,
because you can't appoint a guardian foryour children once they become an adult
unless they're incapacitated, as much asyou might want to. That's right.
I think we see that quite abit. How can I guide my child?
(05:00):
Don't? Sorry, you can't.You got nothing, And you may
want to be thinking about when theycould access things. Right, So,
if you don't do a will andyou leave money behind and someone turns eighteen,
they get one hundred percent of whatthey were supposed to get. Right,
then, if you do a will, you can control that. And
(05:24):
Kristen, how do we do that? So we're in a will? Or
you know, if you do trustplanning, you can leave a share for
beneficiary in a trust until they turna certain age, or you know,
you can dole out money at certainages. They can be a trustee at
a certain age. You can havesomeone else manage their money until they turn
(05:46):
a certain age, or god,I just lost my train drop. Well
yeah, I mean there's there's alot of things you can do. You
can put a lot of conditions onit. Now, we we don't recommend
that. Right. There was atrust that came in one time, and
for the woman to access the moneyin it, she had to get a
doctorate, become a black belt andsomething else. Well, yeah, I
(06:10):
do remember this, right, itsounds made up, but I mean just
everything but saying I don't want youto get this one. So I would
not ever draft anything like that.I don't think that's right. It's not
the right way to go about somethingif that's the way you're going to do
it. But that one was kindof wild. But we've had people who
(06:31):
want to hang the money in trustuntil someone turns fifty or sixty. I
generally try to disavow them of thatidea as well, because that is very
late in life. If you really, I mean, you know, it's
not like they're going to die atthat age. But if you want to
look at will the money make adifference in someone's life, if you've waited
(06:54):
till sixty, well they may havelost a lot of opportunities. Yeah,
I would agree with that. Ithink that unless you know, sometimes we
see it in high net worth individualsthat they're getting certain distributions at you know,
maybe twenty five thirty, and thenI can see, you know,
maybe that's from a grandparent and thenthe parents like, well, okay,
fifty or sixty. I think it'sokay in that situation given the wealth.
(07:16):
But I would agree that, youknow, leaving money until someone's fifty year
sixties typically not beneficial to them,and they've beneficiaries can become resentful, Yes,
yeah, yes, absolutely. Andanother thing people can do and We
do this a lot is we allowa child to become a co trustee at
(07:39):
a certain age to kind of getacclimated, understand what's going on, and
then at thirty five or forty theymight be able to be their soul trustee.
Now they don't have to be right. They can leave the co trustee
on there if that makes them feelbetter, and that's working well. But
it's really a good way to makesure that you know they're involved. I
(08:00):
can see what's going on, theycan have kind of a voice, but
they can't sign it all out ifyou will, and I think a lot
of parents and other people you know, leaving money to beneficiaries feel better about
something like that as well. Ohthe other thing my train of thought came
back the unit trust allowing a certainpercentage of whatever the trust makes to go
(08:24):
out to the beneficiary every year sothat you know it's not you know,
it's the money in the trust isbeing invested and the beneficiary is not spending
the principle of the trust right.So this is probably as nerdy as I
get, but really do like aunit trust. It's a good solution because
we litigated over time trusts where onlyincome came out because we just came out
(08:50):
of an environment where income was limitedto dividends and interest and nobody was getting
interest. Right now, you canmake some money on interest, but that
was very different. One of thehuge benefits of a unit trust is it
can be invested to grow because thefour percent comes out no matter what.
There's no tension right there usually iswhat we call a hem's right in a
(09:13):
unit trust, a health, education, maintenance, and support, where you
can make a request based on thosefactors if you need more money. So
it really allows for less tension betweenthe trustee and the beneficiary because the four
percent is coming or five percent.I think we typically do five, but
it depends. It depends on themoney, it depends on what we're doing.
(09:33):
But that's coming out and it's comingout no matter what, So you
just invest it. You make goodchoices, you don't have to worry about
whether you're producing enough income, andyou have more harmony that way, which
is important in these scenarios because lotsof times we see it there's friction between
(09:54):
trustees and beneficiaries because the beneficiary wantsto do whatever they want to do,
and that's definitely something you know worthreviewing from time to time, especially if
you have a beneficiary that you're notsure can handle money right, and you
have someone in the role of trustee, Well, is that is that trustee
that you've named and your will,your trust is are they able to take
(10:16):
on that responsibility? What kind offamily tension is that going to bring on?
And what's the age of your trustee? You know, now that you
it's spend some time that's past,can they still manage that money if they're
you know, in their eighties,that you might want to reconsider who you've
appointed. And I think that's importanttoo, because we oftentimes seen family structures
(10:37):
where let's say there's two or threekids, right, and one kid is
not great with money, and theywant to appoint this, you know,
one of the other kids to bethat kid's trustee. That is going to
make for not a pleasant scenario mostof the time. Sometimes we see that
child decline to serve and that becauseit's going to ruin their relationship with their
(10:58):
siblings. So that is something thatwe counsel people about. It's important really
to talk these things out. Wetry to make sure that we bring up
everything. A lot of people comein they really haven't thought about a lot
of things, like, in particular, if there's a small tree, right,
(11:18):
yes, one kid, maybe onegrandkid, what happens if all of
you are you know, people predecease. Where is this money going? And
if you don't address that, it'sprobably going somewhere you don't want it to
go. So they are important things. It's a process, so we don't
commit have people come in, sitdown, tell us their people's names,
(11:41):
and then provide them with a willto side immediately. That's not how we
do this. So it's important tothink through this process to really look at
what your goals are and convey thoseto us, because if you don't convey
your goals to us, we can'thelp you achieve that. So if we
are going to try to draw thosegoals out of you and then and then
(12:05):
create a document that fills those goals. So we are at our first break.
When we come back, we're goingto talk about some other things you
may want to think about now thatit's spring. I'm Aaron Connor from Pierre
O Connor and Strouss and this isLife Happens Radio Net. Welcome back,
(12:31):
So Life Happens Radio. Aaron ConnorPiro, Connor Strouss. Hopefully you're flying
like an eagle, although not likethe football team. But we are here,
myself and Kristin Peck, one ofour associates, talking about spring cleaning,
your estate, plan, things tothink about, things to maybe go
(12:54):
back and look at. And youknow, first first thing really on the
list was have people become adults whoare children. I think another thing on
the list, which we kind ofa little bit touched on, is have
people I've appointed become unsuitable for somereason in a role. Either we've lost
(13:16):
touch, they've passed on, they'veaged to a point where it's going to
be an issue, or sometimes geographicallygeographics can be a challenge to that.
If you've appointed someone to be theguardian of your children and they've moved across
country, you need to think aboutthat, right And like in my case,
(13:39):
if I had done a will beforemy parents had spent most or half
the year in Florida, and ifI appoint them the guardian of my children,
how what's the impact on my childrenand my parents going to be?
Right? So that's really a twoway street, and frankly, I don't
think i'd want my parents or mychildren to grow up in Florida. You
know, those are things to thinkabout because you may have appointed your parents,
(14:01):
they may have retired and they mayhave moved somewhere else, or they
may be spending a significant amount oftime somewhere else. Right, So you
need to think about the age andthe changes or other changes that have gone
on with your agents. I thinkone of the big ones we see all
the time is divorce. Right.It can be divorce of the husband and
(14:26):
wife who did the documents, whichthat legally revokes all of those appointments,
okay, power of attorney, healthcare proxy, it revokes the appointment of
the spouse. Now, we've hada few times where people have gotten divorced
and then they came back to reappointeach other. That is something, right,
(14:48):
a little wild. I mean I'vehad people who you know, they've
gotten divorced, gotten remarried, andgotten divorced again. Yes, so it's
actually more common then you would think. Yes, I think I had a
woman who had married, was marriedseven times, but four of them to
the same gentlemen four times, gotdivorced three times, got married four times
(15:09):
them. Oh gosh, I gothrough that. I think the most common
thing as people come in and they'relike, this must be awful for you
to hear, and you know youdon't hear anything like this, And I'm
like, no, this, Wehear this every day. Now, I
get it a lot. You musthave heard it all and we have.
(15:31):
Yeah, So there's no need tobe bashful about those types of things.
Frankly, we need to know themand we need to plan around them sometimes.
So it's important to have an honestdiscourse with us. And I also
want to say this, sometimes peoplebring their children with them, which is
okay, but it comes with alayer of problem because if this is your
(15:54):
initial meeting and your child is goingto be telling us how you want to
leave things, we can't have that. Okay. That is an undue influenced
situation. It's brought with lots ofproblems, even if it isn't meant to
be undue. Right, we needto hear all of these things from you.
And certainly, if everything is goingevenly, fine, so be it
(16:17):
right. But if anything is notgoing evenly, child's getting a house,
things are being distributed differently, youreally more likely to not should come out
without your children, and or youknow not to be rude, but sometimes
we have to ask your child toleave because we have to take direction from
you. And I think people oftenget a little confused by that, but
(16:41):
it is a problem. Yeah,it definitely is, because you know,
we don't want to alter maybe aplan that's already leaving everything equally and now
you're leaving things disproportionately. We wantto make sure that that's your in and
you know, we have one rightnow that's happening. You know, woman
(17:03):
has five kids, she's disinheriting oneperson, and this person doesn't happen to
speak food in English, and soyou know, in that situation, it's
going to be a translator involved.But if in other situations we've had loved
ones leave the room now, Ido want to add something to what you've
said, is that you know,while we want to hear it from you,
(17:27):
we don't discourage having the family involvement. I think we encourage that,
you know, knowing what's going tohappen up front and having the family members
know about that to no one's surprisedwhen something happens. Well, there's a
little bit of that and a littlebit not of that. So my ideal
scenario would be to have the childreninvolved at the signing right right, not
(17:52):
at the beginning right. That doesn'tmean look, if everything's going even like,
go ahead, bring your children right. But if it's not, then
as the litigator, you've created afact that is negative to your what you
want to do, if that's infact what you want to do. So
(18:14):
that's where I think we want childrento know that there's a trust. We
want children to know that there aredocuments. There are some people who are
disinheriting somebody who are not going totell them, and that's really their choice
because if it's going to make yourlife worse while you're alive, and I
don't think you should tell them,right, Well, I think you know,
as far as you know, maybeit's a family camp and someone you
(18:37):
know, two kids are really involvedin the family camp, and they're going
to get they're going to get thefamily camp where someone's going to get liquid
assets in equal value, You knowthat that discussion should should be upfront.
Probably you know, in my experience, the people get the most upset about
(19:00):
something like that are people who actuallycould not afford to maintain it right,
And we see that because we lovevacation properties. Right, everybody loves the
vacation. Yeah, but the fartherdown the chain you go, the more
(19:22):
people are involved. Right. Ifif my grandparents had had a vacation property,
it then would have been divided fiveways, with one, you know,
one of the five living out ofstate, so it probably wouldn't have
been that great for them. Butthen there'd be thirteen of us and then
and that doesn't all happen at once, right, Right, So you'd have
(19:51):
currently you'd have three and then sevenfor two shares. Right, So that
math gets pretty complicated and pretty diceyabout who's going to put in what and
what they owe and we'll think aboutthat. Right. If you own a
(20:12):
place on Lake Georgia, you havethirteen people who own a share. That's
essentially the entire summer season. Everybodygets one week, wow, right,
yeah, and people are going toget upset about not getting July fourth or
whatever. So those things need tobe done very carefully. We often recommend
that people leave money in the vacationproperty, right, So we usually do
(20:38):
an LLC for that with a prettydetailed operating agreement about who owes what,
how weeks are determined Because you know, let's say this property is worth a
couple million dollars or a million dollars. If you have thirteen beneficiaries, I
bet one or two of them aregoing to want to cash out, yep.
(21:00):
And then what happens? Who buysthem out? Where does the money
for that come from? Right?Because it's not an insignificant amount of money.
A tenth share in two million dollarsis two hundred thousand dollars, So
most people don't have that hanging around. Some people do, but most people
do not, so and it becomesan issue. So you need to think
(21:23):
of those things carefully. And obviouslythe less voices in a room a little
bit easier, that is. Butyou know, I think over time families
have gotten smaller generally speaking. Idon't. I don't think, you know.
I still see still know a fewpeople who have a bunch of siblings,
(21:45):
but I don't see that as much. Actually, I hear just an
in it from clients. I alwayshear parents come in and you know,
they talk about their kids. I'mlike, do you have any grandkids?
And they're like, nope, andwe don't. We don't anticipate any.
Yeah, A lot of times wehear we have grand dogs. Oh that
was the next thing, rand dogs. Yep, that's what I hear a
(22:07):
lot. So that does seem tobe becoming more common. I think my
daughter, one of my daughters,uh goes to school with someone who has
five or six siblings, which islike very unusual today. Yeah, I
don't see I do not see thata lot. No, most people I
feel like have that we know eitherhave one, two or three. In
(22:30):
fact, I don't think I knowanybody who has four or five, which
is you know, but it's one, two or three. So so,
but that's actually another obstacle we have, right is if their kids don't have
kids, where does the money go? Right? Where do you want it
to go? Right? Do youwant it to go to their spouse?
Sometimes they do, sometimes they reallydon't. And especially today, you know,
(22:56):
we hear a lot about you know, we talked about divorce, and
I think that's a big concern forparents leaving kids money. So and you
know, we've done trust planning toprotect against someone leaving inherited money to a
spouse, but some people do wantto include the spouse. I have revised
(23:17):
trusts. Actually, you know,when we do planning. A lot of
the time the alternate beneficiaries family members, and I've had actually a lot lately
people have edited the line of successionso it does go to a spouse.
I see that more often where verylong term marriage, yep, right and
pretend usually no children, right.So the one I just did actually this
(23:42):
week she asked me to change itduring well, while she was signing her
documents. It's not ideal, butshe was leaving everything to her son in
a trust, but she if herson was deceased, she wanted it all
to go to her daughter in law. And they had been married for forty
years, right, So yeah,and so I look at that. It's
(24:04):
that person's put their time in,they've shown their character, right, and
the person leaving them the money hasmade the judgment that they are like a
good choice, right, right,And ultimately it was going to go to
her granddaughter after the dog in law. But just this Yeah, I recently
had a discussion where a gentleman hadit going to spouse's and I said,
(24:26):
that's totally fine, but that's notactually typical, right, So we'll do
whatever you want at the end ofthe day, but we have to advise
so we are coming up on thenews. When we come back after the
break, we will continue talking aboutspring cleaning your estate plan. You want
to give us a call you havea question, We'll call us at one
eight hundred talk to bug Y.That's one eight hundred eighty two five nine
(24:48):
four nine. Life Happens Radio,Buera, Counter and Strauss. We'll be
back after this Hotel, California.Welcome back to Life Happens Radio. I
(25:12):
maybe we should play that one loseon because he likes the Jets, and
I feel like the Jets are trappedin last place, so we'll see they
can't ever leave. But Aaron ConnorLife Happens also Kristin Peck, one of
our trusted associates, then with this, I guess almost three years now,
(25:32):
yep, almost three years? Wow? Yeah, where does the time go?
I don't know. I'm finally anadult though, right, I'd say
that's that's probably true. Yes,I don't know. So for all of
you who didn't get my little funnyreference, it's just Aaron likes poke fun
at me that I'm a young person, So it's true. So but making
(25:57):
making better decisions, not having toomany sour patch kids, in the office.
That's a good thing. We aretalking about your state plan and whether
you've dusted it off and you've lookedat it recently and when you should do
that. And just one last wordabout divorces. So when the divorce happens,
(26:21):
it triggers the spouse off the documents, but you need to look at
who is next then, because I'veactually had a case where the person next
in line was the the spouse youjust divorced, was their sibling. So
in that case, that's still avalid appointment. It doesn't trigger that person
off. So that ended up beinga pretty litigated case because the guy's family
(26:48):
wanted to take over, but hehad documents stating otherwise, and he had
appointed not his family for reasons.But just something to keep in mind,
because you know, maybe you hadyour spouse's parents on there because they lived
close or I don't know, right, But just something to think about,
(27:10):
you know. And another question weoften get is people who are divorced they
want to control who the guardian oftheir children is going to be, and
we have to tell them, well, if your ex spouse is still alive,
they're going to get that. Ninetynine percent of the time, unless
there's some real factor where they wouldnot, But we still name somebody because
you just never know what's going tohappen. This is a tougher one.
(27:37):
We see this a lot. Deathof a beneficiary. We doing what we
do. We sometimes meet with parentswho have lost a child, and sometimes
it's been an only child. Imean, obviously it's much rougher for them,
but it's a rough conversation for sure, and then we have to talk
(27:59):
about out what we're going to do, right, Who is going to be
your agent? This just becomes acommon problem. And I guess when I
got into this area of practice,I didn't really think about this, but
it's really more common than I thoughtabout how many single, no children people
there are. I mean, andthis is going to become a really big
(28:22):
problem for I think, you know, the millennials and the gen Z generation,
just because you know, people arenot getting married and people aren't having
kids, and so then who servesin that role? Right? Well,
I do think that at some pointwe'll see businesses doing that more than we
do now. You see it occasionally, but it's really like a bank and
(28:47):
it's generally wealthier people, right,But typically there are a lot of just
blue collar people out there are goingto need somebody to be their power of
attorney. And the one that's mostproblematic is a healthcare corrective right, because
nobody gets paid to do that,and it's just the way of the world.
(29:08):
Right, if you appoint someone aspower of attorney, you can pay
them to do that. Health caredecision probably a much bigger decision and much
harder to find somebody to do that, because the statute if your single,
no kids, and your parents aregone, isn't going to leave anybody really
to make a decision for you.So a lot of ways, it's it's
(29:30):
pretty scary, yeah, and it'sunfortunately also a good way to become in
a bad situation without people knowing aboutit too. So certainly something to think
about, you know. Unfortunately,I'm often giving an advice that if they
people have an eetern nephew they're reasonablyclose to, they probably should leave them
(29:52):
some money if they you know,if they want them to be involved.
It's I'd love to say that peoplewill do it because it's the right thing
to do, but I we'll seea lot of that. Yeah, So
death of a beneficiary, death ofan agent. We've had people who only
(30:14):
had one agent on a document andthey died, and then you have no
agent. So we've done guardianships wheresomeone had a power of attorney but only
a name, only named one person, and then we have a problem.
Yeah. I just had this weeka woman who did not want any success
or agents on her documents. Yeah. And it's crazy about it is this
(30:41):
this person wanted to hold things reallytight to the vest. And she's appointing
her daughter and then had her twosons a successors and then she said,
I want I want to take themout. I mean, I think we
were able to, you know,work through some of those issues. But
one of the big reasons was becauseshe didn't want them to know anything about
what she was doing, and shedidn't want her daughter to have a copy
(31:04):
of the power of attorney or noreally anything. She's like, my,
you know, my daughter's an attorneytoo, and I'm you know, that
kind of death grip is a badidea. Yeah. So from the medicaid
side of our practice, we seea couple of things. We see the
disaster of not planning m H.But we also see the disaster of no
(31:26):
information because people don't even know whatthe assets are. They're trying to get
mom or dad care, which isa big, big deal. They need
it. It's a heavy lift,you know with you know when Frank and
Frank being our medicaid attorney, FrankHemming and then Meg his paralegal. When
they ask for information, they're askingfor you know, five years of statements,
(31:48):
yes, and they're going to wantto know about asset transfers and things
like that. So and that includesaccounts closed in that five years too,
which can be kind of a nightmare. Yeah, So we encourage frank discussion,
right, and that's not a discussionabout Frank, it's an honest discussion,
(32:09):
but it's it's important, not evenif you don't want to give figures,
it's important to let people know whereaccounts are where. We see a
lot of people who have a binder. Maybe they don't even disclose, but
they keep a binder of this stuff. Well, that's important too. With
(32:31):
passwords, and you know, itgets gets a little hairy. You know,
someone I know carries their passwords aroundon a clipboard and then leaves their
clipboard various places, no names.But you know, it's not it's not
ideal, really, didn't realize that. Yeah, oh that's not good.
(32:53):
I speaking of one of my clientsthis week. I, you know,
had a mother and son come inand he was he's an only child,
so she he was her only son, and she had retitled things into her
trust. You know, we wereamending it, and I said to him,
(33:14):
you know, one of the thingsyou really want to check is just
make sure everything has a beneficiary,everything's in her trust, you know,
things like that. And I said, one of the things, you know,
just because this woman happened to bea little bit older and you know
they are very close, I said, you know, go through her mail.
You know, anything, anything shegets in the mail, you know,
(33:35):
that's a good that's a good papertrail. And that used to be
much more common, though too somuch now goes into an email, right,
And if you don't have an emailpassword, I don't think I get
a paper statement for anything anymore.I think you can get paper, you
(33:57):
can. A lot of us optout of that. But I think,
you know, people that are ata certain age they want they want the
paper absolutely. But I couldn't tellyou if my parents get paper statements or
not. No idea. Well,and you know that that is also a
good way to you know, startfiguring things out if you And the reason
(34:19):
I know this is, you know, we see it on the other side
when people pass away. You know, they get a statement or something in
the mail on this one account andthey're like, oh my god, I
didn't know about this account and Ihave no idea if there's a beneficiary or
in trust, and so then itends up being a probate asset. We
just had that actually where it wasa retirement account named mom Mom, never
(34:43):
changed, never added another beneficiary.Yeah, that's you know, and that's
just a disaster. And that's anothertime to really update your state planning is
if you lose a spouse. Andso one of the issues with that too
is that you're spouse is older andyou're older. It's probably not at the
forefront of your things, right,but really that beneficiary designation should be sent
(35:07):
up from the get go with abackup, right, and someone the holder
of that account, your financial advisorshould be pestering you if that's not the
case. Right, So it doeshappen, but it's one hundred percent avoidable,
and that all that IRA money isgoing to probate, right, which
(35:27):
means more than likely all of thetax is going to get paid in one
year, which is not necessarily ideal, depending on obviously lots of other factors,
but it's not generally the way you'dwant to go, and you lose
an opportunity to defer some of thatgrowth for a ten year period. So
yeah, and another piece to that, you know, we kind of touched
on it earlier, is just youknow, if you're doing your seat planning
(35:52):
with your spouse and you're appointing eachother on all of your documents, is
you know, when if you losea spouse, they're the price primary person.
And so especially on the power ofattorney, when when you know if
the successor is one of your children, they're going to have to show why
that primary agent is unable to askyes that is that is a big problem.
(36:14):
Right. So oftentimes when we submita power of attorney to a financial
house, they want a letter orone that it's real and two that the
person named on there is still theacting agent or who the or if they're
not, why they're not. Soa lot of times you may have to
supply a death certificate and you know, when you do this planning if it
(36:40):
goes right, you don't need tomake a lot of changes generally speaking,
but after your spouse dies, wereally do like to update your basic documents,
power of attorney, healthcare proxy,maybe your will, depending on the
scenario, so that you're not havingthis problem. Right, It just makes
it comber some for your agent toact well in a healthcare proxy. If
(37:02):
your spouse to see spouses first,that's they're still going to call that person
probably right, unless you know they'vesomehow otherwise known, and time may be
of the essence in that scenario.Yeah, so that's important. It's just
you need to make sure you havegood successors, that you've updated these documents.
(37:25):
And I think, well, oneof the things we should talk about
is oftentimes people relocate, Like wementioned earlier, if you take your New
York document to Florida, Let's say, maybe they've seen a New York power
of attorney. They have it,but it'd be much easier if you had
(37:47):
a Florida power of attorney. CanI have a New York and a Florida
power of attorney at the same time, you can? You would just say
that it does not revoke this specificprior power of attorney. So I think
some people first get confused about thatbecause this happens more often where I don't
know, you had a Utah powerof attorney, came to New York,
(38:10):
it's not going to look like aNew York power attorney. And banks routinely
reject things that they don't no Iunderstand for reasons that are mystifying a lots
of times, but the out ofstate documents at least I can maybe a
little bit understand where they're coming from. So I think if you're going to
(38:35):
live in another state, you shouldhave the two basic documents for sure for
that state. If you're becoming aresident of that state, you probably should
have a dispositive document, meaning yourwill your trust can go with you wherever
you go. Whether you really needto opt into another state's laws when you
move more than likely not. Ifyou move to Florida, you're going to
(38:59):
want to homestead your house if youhaven't done so already, and that can
be done inside a trust, butit needs to be done carefully. So
that would be another reason to lookat things because Florida is kind of unique
in that way that protects your house. In other ways, Florida they use
revocable trusts much more than an irrevocabletrust. If you're a resident, that's
(39:22):
a difference. So I think we'lltake our last break. We'll come back
talk about some other changes that mayneed to be addressed, and we'll be
back right after this on Facebook.Welcome back to Life Happens Radio. Hopefully
(39:45):
we've given you a peaceful, easyfeeling. If not, you can go
outside and enjoy the sun. That'sright, wonderful sunny day in upstate New
York. Apologies, but they're inthe car, they're going out, they're
enjoying their day. Well, Imean, honestly, if you get your
planning done, you do it right. A lot of people do have a
(40:05):
peaceful, easy feeling. That's that'sone of the rewarding things. That is
true. The amount of times thatpeople have walked out after shining their documents.
They're like, oh, a weightis lifted off my shoulder, or
yeah, I can go on vacationin peace. That is comical to me
a little bit, because that isa thing. Right, People are like,
(40:28):
I'm getting on a plane. Ohmy god, that's safer than getting
in a car. Yeah, right, but look, hey, that's what
motivates you all for it, right, But that one does kind of make
me laugh a little bit. ButI get it because I'm the type of
person before I take a trip,you know, I get new clothes,
I clean my apartment. Oh yeah, one d per, I'm coming back
(40:51):
to a clean house. I doeverything before I go on vacation, and
so I can kind of see thesc planning. That's just the one more
thing you know on the list,right, everything has to be done before
you go on vacation. I certainlythink it's much better to do it that
way. I mean, yeah,I'm kind of maniacal about that. I
make sure there's no dirty dish,that garden is just completely empty, all
(41:15):
of that stuff, because when youcome home, you usually have a mountain
of laundry to do, right,So and I get that, and I
look, I understand that people wantthe peace of mind that they're traveling,
and they want the documents. Ican just say one hundred percent never had
(41:35):
anyone, well, I've never hadanyone do their will and then have that
problem. We did have one wildscenario, yeah, I'm sure where a
woman was going on vacation with herhusband and it somewhere tropical, little bit
complicated plan, and we weren't goingto get the trust portion of that done
(42:05):
ahead of time, and so shewanted to make sure she got her will
done. And on vacation there wasa scuba accident and she died. That
not an old person, it's justkind of a but it was like like
(42:27):
she had a premonition. Yes,I don't like to get into that like
weirdness, but because the way,because I was not here when this happened,
that's right, this was seven oreight years ago. I think the
way it's been you know, toldto me is that she she was asked
whether or not she wanted to getit, but then before she went on
vacation she said, oh no,and then the next day she was like,
(42:49):
no, no, I want to, like I have a feeling,
and then and then and then somethinghappened. So I don't know, it
must give people, you know,some people a piece of mind, right,
but it was I don't even knowreally how to put that into any
kind of hierarchy other than to saythat was a complete outlier mm hmm.
(43:19):
Only only time that that has everhappened. I think that's something that stops
people from doing their estate planning.So some people, you know, the
type A people, it motivates them. The other people it gives them fear
over their own mortality. So yougive those two groups of people. There
are people who won't do it becausethey think that they will die when they
(43:44):
do do it. It's like you'respring cleaning. You know, you have
those people that are going to youknow, purge everything every spring, and
then you have those people who they'regoing to hold on to everything and hoard
everything until the day they die.And it's kind of the same way with
your estate planning. You know,you're either going to you know, keep
it up to date and look atit every now and again and make tweaks
(44:05):
when you need tweaks, or thereare going to be those people who don't
do it and the people who don'tdo it. You know, we've kind
of talked about some of the ramifications. You know, you might have someone
who's serving as your agent that youmight not want serving as your agent.
You may have someone you know who'spassed away like a beneficiary, right,
and then you don't have the personthat you actually want to inherit inheriting correct
(44:28):
or you know, maybe you didyou know, you were on the younger
side and you did your will,you know, early in life and the
situations significantly changed, maybe you wantto, you know, avoid probate.
You know, something we didn't talkabout is that, you know, your
plan kind of evolves with you,you know, with I just met with
(44:50):
a younger couple this week, andI'm doing a will plan for them.
But is that going to be theirplan forever? No, it shouldn't be,
right right, you know, theyit's a great start, right you
know, they might want a revocabletrust later on, or maybe they want
to you know, when they getto their you know, sixties or seventies,
they want to protect assets if theyneed long term care. You know,
(45:13):
it's a fluid thing, depending onyour age, your asset level.
And that's why it's really important whenwe're talking about this spring cleaning, is
that you go and you review itevery now and again. Absolutely, it's
not a it's not a static thing. Right now. If you do your
plane at eighty, it's a littlelate in the game. Might not need
as many changes, right But andwe have people who come in when they're
(45:35):
eighty and they're like, oh,well, we should have done this sooner.
But it's just good that you're,you know, getting your foot in
the door and you're doing it.Still got a guy who's ninety nine sitting
on a retainer. You no,no, it's not if it's when,
that's right. So I mean thatone just blows my mind. The best
part of that is one of hischildren is like, you know, what's
time for me to plan and howhow old as a child? Seventy ish
(46:01):
exactly. So can't wait forever,can't wait forever, but it is important,
and we see this. A lotof people come in in their fifties
or sixties. They did a willwhen they had kids, a lot of
times they did a power of attorneyin a healthcare proxy. Then sometimes they
didn't. And generally speaking, theseare two and three page wills that didn't
(46:27):
really encompass a lot of things thatcould have happened. The good news is
they didn't need them during that periodof time. But that breath is not
going to serve you well. There'sso many things that can, unfortunately go
wrong. Our job is to makesure that we've encompassed just about every scenario
out there, so you're covered,your beneficiaries are covered. Lots of these
(46:51):
simple wills don't have a special needstrust under the will. So if your
beneficiary is in a nursing home,which has happened, they get the money
and it's basically gone. If you'rebeneficiary is you know, getting assistance from
the government in the form of medicaidor housing or whatever it may be because
(47:12):
of a disability, you have tohave that. You know, we have
trust for anyone who's under the ageof you know, we said it at
twenty five, but this is thisis you know, influenced by the clients.
You know, it might not beyour son or daughter who inherits.
It could be a grand grandchild andyour grandchild right now could be you know
six and nine. Correct. That'sa big problem. And also we see
(47:37):
a lot of drug abuse being anissue for a beneficiary. Yeah, that
has been common, you know,drug use or you know people who are
spend thrifts. Right. Well,want to explain that a little bit,
because I don't think that like that'slike eighteen eighties language. I know,
we use it all the time.But so someone who's not good at managing
(47:57):
their own money, right, someonewho you know is going to go out
and just blow it and and sowhat we'll do trust to protect you know,
protect the beneficiary from themselves and havesomeone else manage manage their money,
right, And so that really isa lot of people, honestly. I
mean, you know, I'm inthe process of drafting a plan now where
(48:22):
we know that the spouse has spendingissues, and the spouse is aware of
the spending issues, so we're tryingto come up with ways to address that
and make sure that the spouse isa good life but not you know,
and that gets tricky too, youknow. Now with the Secure Act and
retirement accounts, yes, you know, naming trusts for spouses is the beneficiary
(48:46):
and so that that also requires carefulplanning, correct, And that's one of
the areas that you have the smallestreally amount of control, because some money
has to come out m m.Yeah, And we see I think more
and more people with large iras orlarge retirement accounts. Yeah, and if
(49:07):
you have a two million dollar retirementaccount and you're seventy five and money hasn't
come out, it's going to bea pretty good chunk of change, probably
close to one hundred thousand dollars ayear. Yeah, which again doesn't really
usually affect the value of the accountbecause that's five percent and you really should
(49:28):
be able to get five percent inthe market most times. So and you
know, you know that brings anotherpoint, you know, cleaning up your
estate planning is you know, youmight have done this when you were only
worth you know, a couple hundredthousand dollars, and now maybe you're you've
done very well for yourself and you'reworth several million dollars. And you know,
(49:49):
in New York State, you know, the threshold is you know,
six point nine to four million.And if you're over that and you think
a will is gonna you know suityou well, I think you'd be mistaken
because you're gonna you're gonna be you'regonna have a New York estate tax problem.
And that's another reason to kind of, you know, dust off your
(50:09):
state planning and reevaluate things. Isyou know, if you are in that,
you know, lucky, I youknow, more money, more problems,
but you're lucky to have you know, seven million dollars in assets.
You really need to start considering yourplan and whether you know a will may
not be sufficient in that circumstance.Yeah, I wasn't sure that we were
(50:30):
going to quote Biggy today, butthat's good. I'm glad that we did
that. So we are coming upto the end. We UH, as
usual have our Medicaid Monday, sojust give you a reminder about that.
If you're interested in topical medicaid information, Frank does the Medicaid Mondays UH second
(50:52):
Monday of every month from twelve totwelve thirty. You can sign up for
that at info at perro law dotcom. That's p I e r r
Law dot com. We will beback next week with another episode of Life
Happens Radio. Please dust off thatplan, get a good look at it,
and get out there and enjoy thisgreat weather, because God knows we've
(51:14):
waited long enough. Thanks Kristen,all great. Thanks Aaron. Have a
good day everyone,
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