Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is money in motion right here on thirteen ten
WIBA with our retirement planning professionals from Coss Financial, joined
this week by CJ Closs and Eric Schwartz. We're going
to be talking this week about estate planning. A lot
of fantastic information ahead. You're going to want to pay
close attention to this week's program. Not only is it
going to be some great information, we'll have a chance
to win a fantastic prize from a friends at Coss Financial.
(00:21):
I'll tell you a bit later about that in just
a moment. Some other things to keep in mind as
we talk with CJ and Eric. Phone lines here at
the station. They are open for you at six oh
eight three two one thirteen ten. That's six oh eight
three two one thirteen ten. Whether your question is about
this week's topic, which is a state planning, or anything
retirement related, our retirement planning professionals from Coss Financial are
(00:41):
here for you. Speaking of other ways to make connections
with Coss Financial, of course, the website cossfinancial dot com.
That's Coss Klaas Financial dot com. Toph it up for
the office right here in Madison six oh eight four
four two five six three seven. No charge for that
initial gets know your appointment tech costs financial it will
beat complimentary to you and again their number six oh
(01:02):
eight four four two five six three seven as mentioned,
joined this week by CJ and Eric.
Speaker 2 (01:07):
CJ. How you doing this morning? I'm doing great, Sean,
how have you been, I've.
Speaker 1 (01:11):
Been doing really well. Great to talk with you, Eric.
Great to have you back. How are you doing this week?
Speaker 3 (01:16):
I am doing great. I'm glad to be back.
Speaker 1 (01:18):
It is fantastic to have you both the long and
I know Eric, anytime I see a state planning I said,
I bet you're gonna probably hear it from Eric this week,
So I can't wait to hear what you have for
us this morning. And of course Eric and CJ are
retirement planning professionals from Closs Financial. The telephone number for
Class Financial six eight four four two five six three seven.
Get on the air this morning with Eric and CJ.
Six oh eight three two one thirteen ten. That's six
(01:40):
oh eight three two one thirteen ten. Before we get
rolling on this week's conversation about estate planning. One of
the cool features of the program is the Closs Quiz.
Question the week your chance to win a fantastic prize
this week is no exception. Our friends from Class Financial
I provided a twenty five dollars gift card to Food
and Laughs. That's a gift card good for Red Robin
or Cheesecake Factory or Red Lobster, a bunch of other
(02:00):
places for that gift card. It's a fantastic card. And
we'll have to tell you a little bit on the
program how you can win. A little tip though, is
if you listen closely to the program. Oftentimes both the
question and answer to the Class Quiz question week come
up during the program, so it pays for a number
of ways to listen closely. Again, we'll tell you a
little bit later on the show how you can win
(02:21):
this week's prize. And before we get to this week's topic,
let's actually take a look back at last week's program
and get the question and answer there as well.
Speaker 4 (02:29):
Eric, Yeah, Sean, you're giving away our secrets, but yeah,
that's the question and the answer are often in the program.
Thank you as always to everyone for listening. Our winner
last week was Peter from Cambridge and the question was
true or false. According to the Bureau of Labor Statistics,
home Costs represents the largest expense for retirees, accounting for
(02:52):
thirty six percent of their annual expenses.
Speaker 3 (02:54):
And the answer to that is true.
Speaker 1 (02:57):
Wow, And that was that is as we talked. It's
about some of those some of those numbers, and it
was a really really good program and you can always
listen back. Don't forget to this in previous shows. Podcast
at class financial dot com. That's class financial dot com.
They're telp number six O eight four four two five
six three seven to get on the air this morning
as well, which gives call out station six oh eight
(03:17):
three two one thirteen ten. That's six oh eight three
two one thirteen ten. And this week we are going
to be talking about and tackling the topic of estate planning.
But CJ, can you explain a little bit about why
it's important to help clients with financial and retirement planning.
Speaker 5 (03:34):
Yes, we believe here at Klass Financial that a financial
planner should act like a quarterback of your financial team
and perhaps fix some areas where your defense line may
be weak. Now, we like this football analogy, but some
people don't resonate with it. So another way to think
about it is like your family doctor. Right, your family
(03:56):
doctor works with you maybe coordinates care amongst various different specialists.
Your family doctor is very intimately involved with your family
and everything with your health. Well, in this case, a
quarterback is involved with every play on the football field.
So you get the idea your financial planner should be
involved with every play in your financial life. So this
is where sometimes a state planning can come into play.
(04:18):
As many people have perhaps you know, maybe begun this
process or at least have been thinking about it, but
often don't complete the plan. Now, as we start talking
about a state planning today, I would just want a
quick disclaimer. We are not attorneys. However, we do work
with attorneys to help coordinate plans for our clients. So
with that being said, we actually have a network called
(04:41):
the Class Professional Network known as KPN for slang because
we love our acronyms here. But Class Professional Network is
just all about building deep integrated relationships with other financial
professionals in your life. And some of you are saying
what other for financial professionals, Well, think about it. To
have if a comprehensive financial plan, you probably are going
(05:02):
to eventually need an accountant. You're probably going to need
an insurance agent. Maybe that might be life and health
and property and casualty. You're going to probably need a
banker at some point for a mortgage, You're going to
need a money manager, a financial planner, a state planning attorney.
You get the idea, you suddenly go, oh my goodness, gracious,
I need all these people.
Speaker 2 (05:22):
Who's going to build the team.
Speaker 5 (05:24):
And the answer is that is what your coach, quarterback
or aka your financial planners should be doing.
Speaker 2 (05:30):
So one thing we learn.
Speaker 5 (05:31):
As financial planners is to expect the unexpected. So what
we would say is now is an ideal time for
you to review a just or finally complete input into
place your basic estate planning documents. Now, when we say
a state planning this includes typically wills, revocable trusts, powers
of attorney, and healthcare directives known as often living wills.
(05:53):
And this is just to ensure that everything is accurate,
accurately reflected, and that your wishes are carried out upon
a potential life altering situation. Some of those estate planning documents.
Speaker 2 (06:08):
Exist while you are alive.
Speaker 5 (06:10):
Other ones really come into play upon your passing. But
the idea is that we want to minimize the amount
of confusion, and we want to minimize the amount of
taxes or fees that kind of get stripped out of
your estate upon death.
Speaker 2 (06:24):
I mean, listen, a lot.
Speaker 5 (06:25):
Of people try to kind of sell you on the
idea of state planning through fear.
Speaker 2 (06:29):
We don't like that.
Speaker 5 (06:30):
I would say, don't be afraid of it. Don't go
do an estate plan because you're fearful, doing a stay
plan because you want clarity. Right, And let me just
ask you, if you take a life of accumulating stuff
and other human beings through a marriage or birth, do
you care what happens to those things if you're not around,
And do you think it'll just be easy to settle
(06:52):
those things and get them out to the people that
you care about. If you have put nothing into writing,
you get the idea in order to take a life
life time of accumulation or a lifetime of building a family,
And to think that just with a snap of a
fingers is going to be easy when you die or
when something happens to you, it's just not realistic. So
(07:13):
if you want to, you know, do do a big
gift for your family. The biggest gift you could probably
give to your family is getting some basic estate planning
documents in place that that will outline your wishes.
Speaker 1 (07:25):
Talking this morning with CJ. Closs and Eric Schwartz, our
retirement planning professionals from Class Financial. You can learn more
about Class Financial their website Class financial dot com. That's
Class k l aa S financial dot com or telf
what number six oh eight four four two five six
three seven. No charge for that initial get to know
the appointment tech Coss Financial. It will be complimentary to
you and if you have questions, love to get you
(07:46):
on the other morning. Six so eight three two one
thirteen ten. That's six oh eight three two one thirteen
ten and CJ talk about kind of putting that that
basic those basic estate planning documents together. Is it one
of these things where once it's done, it's done or
should you be regularly reviewing these things? What's the guidance there?
Speaker 5 (08:02):
Yeah, you know, obviously I'm speaking to an area that
I have a lot of competency, and so a lot
of people are gonna roll with their eyes as I
as I say this, But I've learned that competency matters,
special team matters, especially as you accumulate more assets.
Speaker 2 (08:17):
And so what I'd say.
Speaker 5 (08:18):
To you is we believe that most people over time,
especially as you get later on in life, should end
up hiring a financial advisor, right, surprise, surprise. But the
reason we believe that is because, listen, building a financial team,
who's going to you know, be a good professional in
a state, tax in insurance and taxes and investments. The
(08:39):
list goes on, it's really difficult to do. And then
will they even talk to one another? Will they actually
coordinate with one another to make sure that one doesn't
hurt the other?
Speaker 2 (08:47):
YadA, YadA.
Speaker 5 (08:48):
Well, this is what an advisor quarterback should be doing.
Is they should be not only helping you to assemble
your team, but then saying, you know, hey, Jim, Hey Susie,
we got to meet again because you know, it looks
like some things have changed in your life, and I
really need you to talk to Rob your attorney to
update your documents because you have another kid.
Speaker 2 (09:05):
Now, right, you get the idea, like your.
Speaker 5 (09:07):
Advisor is not only helping you to assemble the team,
but then reminding you when you need to go make
updates to certain documents. Now, Interestingly enough, as we think
about this topic, there's some data that sticks out. So
according to a recent survey, as of March twenty twenty four,
so very recently, and this is from Financial Advisor magazine,
(09:28):
only about twenty six percent of American adults have established
estate plans. That percentage does rise to fifty percent for
those with assets greater than five hundred thousand. But here,
interestingly enough, thirty two percent of men have estate plans
and only twenty three percent of women. So listen, by
(09:49):
the way this data. I've seen a lot of different
surveys on this, and some of you are going, wait,
I think a year ago you told me slightly different data.
Speaker 2 (09:55):
It's true, different reports.
Speaker 5 (09:57):
In different data gathering does slightly different outcomes of this,
but all of them say that right around thirty to
fifty percent of Americans have estate plans and the rest
do not.
Speaker 2 (10:11):
So if you are one of the people.
Speaker 5 (10:12):
Listening on this right now, who do not please every
American adult, in our humble opinion, every American adult with
a couple bucks to their name should be should be
considering the basics of estate planning. Now again, how complex
is that a state plan? How much are you paying
for it? Those are all different questions, and by all means,
talk to us if you have questions about that, because
(10:34):
we can help you get in touch with very simple
and expensive solutions or more comprehensive solutions with a high
end lawyer. But every American adult should be thinking about this.
Speaker 2 (10:44):
And here's the key. Here's why this matters.
Speaker 5 (10:47):
The biggest wave of wealth transfer in the history of
the world is beginning to pass from baby boomers to
the next generation. This is known as a great wealth
transfer and it's eighty four trillion dollars is poised to
move to younger generations and charitable organizations. Listen, y'all, I
(11:07):
have actually lived this in my career. We're early on
in my career. The number of clients that I worked
with whose parents passed and gave a sizeable sum to
them was pretty small early in my career. Now it's
quite common. We're actually running into hundreds, if not hundreds
of thousands, if not millions, of dollars passing from mom
(11:27):
and dad. Often when kids don't even know it. Often
he goes, gosh, I knew mom and dad did Okay,
I knew they had the farm and everything, but I
didn't know they had that much money. Well, well, the
farm that used to be where you just went out
and you know, kind of helped dad with with the
crops and with the cows, that land is really really
worth a lot of money now, so you get the
(11:49):
idea we're seeing huge amounts of wealth transfer and as
you can imagine, having a clear estate plan for yourself
so that when you add more money to that infrastructure
is pretty clear. So long story short, you just you
want to get these plans in place because dying without
a will, also known as dying in intestacy or dying
(12:10):
in test eate, can be quite expensive.
Speaker 2 (12:13):
And it's expensive because nobody knows what you wanted to do.
So we've got to hire some people to try to
figure it out.
Speaker 5 (12:19):
Long story short, just just you know, plan to pull
together those basic estate plans.
Speaker 1 (12:23):
Really it's a really a great gift as well to
your loved ones after after you pass on, to have
that plan in place. We talked this morning with CJ.
Closs and Eric Schwartz. They are our retirement planning professionals
from Class Financial. You can learn more online the website
class financial dot com. That's Coss k l Aasfinancial dot
com delph number six oh eight four four two five
six three seven No charge for the initial gets no
(12:45):
you appointment that Coss Financial it will be complimentary to you.
Again their number six so eight four four two five
six three seven. What about dying without a will? Why
do people avoid? Didn't put that off? Will find out
the details next as Money in Motion with COSS Financial
continues right here on thirtyeen Ed Wuibi talking with our
retirement planning professionals CJ. Closs and Eric Schwartz. Of course
(13:05):
they come to us from Class Financial, the website colssfinancial
dot com. That's COSS k l aas Financial dot com.
Telephon number for the office right here in Madison, six
oh eight four four two five six three seven. Don't
forget that first appointment, it will be complementary to you.
They're telephone number six oh eight four four two five
six three seven. Talking about the importance of a state
(13:26):
planning and the importance of having these documents squared away
and taken care of, and regular reviewing of them as well.
And I think there's some questions people have, is like, well,
why don't folks take the time and and Eric, let's
talk about that. What are some of the reasons why
folks may not have a will? And let's also talk
about the importance of those power of attorney documents when
it comes to a state planning.
Speaker 3 (13:48):
Well, Sewn, I'm sure you can imagine that.
Speaker 4 (13:50):
J and I have heard every excuse under the sun
as to why people don't have.
Speaker 3 (13:54):
An estate plan.
Speaker 4 (13:55):
But let's just talk about a few a few reasons
why and kind of look at you know, those are
those actually reasonable approaches here. So number one, and this
is really obvious. Thinking about death makes people uncomfortable. I
think we can all agree with that. However, it does
not change to the inevitable. Everyone will need a plan
at some point, and preparing ahead of time really really
(14:19):
creates a lot. Well, like Sejer said, it's never going
to be an easy process when someone passes away, but
it makes.
Speaker 3 (14:25):
It much more manageable.
Speaker 4 (14:28):
Just general procrastination, you know, they just haven't gotten around
to it.
Speaker 3 (14:33):
I think I look at this as okay.
Speaker 4 (14:35):
When I meet with a client, generally after the meeting,
I have a next meeting reminders list, right, and it's
it's hey, check in if they've taken the advice we've
given them.
Speaker 3 (14:46):
And one of those.
Speaker 4 (14:46):
Things is get your estate plan updated or get an
a state plan in place. And let me tell you
that one lives on that list for a long time.
I'm generally will joke with clients. You know, if I
can get you to do this within the next five years,
I don't know, though I did well.
Speaker 3 (15:03):
So procrastination is a big one.
Speaker 4 (15:06):
Another one is people they just don't know where to start.
And this is this is really really understandable. CIJ mentioned
it earlier. Reach out to someone, even if they're not
an attorney. It's just someone you trust who can connect
you with that, whether that's your financial planner, your insurance agent.
Speaker 3 (15:22):
Your accountant, you know. Working in this industry, we know
a lot of people who do this type of work and.
Speaker 4 (15:28):
We can get you in contact with with someone who
can help you with that. This next one is one
of I think one of the most important ones. People
think they don't have enough asset. They think they're you know, oh,
my situation is not very complicated.
Speaker 3 (15:43):
You know, the kids will figure it out. It'll be fine.
Speaker 4 (15:46):
Let me tell you the one way to make a
simple estate plan or a simple estate not simple, is
to do no preparations.
Speaker 3 (15:55):
You will very quickly make it a complicated estate.
Speaker 4 (16:00):
The other another one here is you know, they don't
know how to make a will or living trust on
their own and I think I think most of us
would say we don't know how to do that, and
that is why there are professionals in this space. So again,
reach out to someone that you trust and they can
refer you to someone who who specialized in it, specializes
in this area and can can help you out.
Speaker 1 (16:21):
Talking this morning with.
Speaker 4 (16:23):
No I was going to say the last one here
is people often think it's too expensive to set up
in a state plan. Okay, and there's no doubt there's
a there's definitely a cost on the front end, and
we'll we'll talk about that here in a moment. But
TJ was just talking about the the unnecessary you know,
uh fees and and and costs related with not preparing
(16:46):
for your estate plan. And those costs can very very
quickly outweigh the front end costs of putting together in
a state plan. You know right now it varies a lot,
but a simple will can cost somewhere betwe I mean,
you know, three inner bucks and a thousand bucks not
being a more comprehensive plan maybe need of trust, that
(17:06):
can cost more like two thousand to five thousand dollars,
But very very quickly, the unnecessary costeed fase for dying
without an estate plan will outweigh these these numbers.
Speaker 1 (17:17):
Talking this morning with Eric Schwartz and CJ. Coss. They
are our retirement finding professionals from Class Financial the website
class financial dot com. That's Coss k l a A
s Financial dot com. Great website to learn more about
Class Financial the team their separate divisions. Also sign up
for the weekly market Pulse newsletter that available to you
at classfinancial dot com. They're tough number six o eight
four four two five six three seven. No charge for
(17:39):
that initial get to know your appointment at co loss Financial.
It will be complimentary to you again their number six
oh eight four four two five six three seven. So Eric,
what about that that other part that that power of
attorney documents and the importance of those.
Speaker 4 (17:53):
Yeah, these are these are I think lesser discussed in society,
but generally, as part of a comprehensive estate plan, you're
going to have things beyond just a will or a trust,
you know, the things that direct how your assets and your.
Speaker 3 (18:08):
Instruction should be carried out after your death.
Speaker 4 (18:11):
But you're also, as part of that plan, going to
have what are called power of attorney documents, and these
documents really are coming into play not after you've passed away,
but while you're still alive. The power of attorney documents
allow a person, sometimes called a principle, to decide in
advance who they trust and who they want to act
(18:31):
on their behalf if they become incapable of making decisions
for themselves. A person who acts on your behalf is
often called the agent. So we have the principle, the
person who's who is giving power to the agent to
then make decisions for them.
Speaker 3 (18:47):
Now we have two general types of powers of attorney.
We have a.
Speaker 4 (18:51):
Medical power of attorney and a financial power of attorney.
The medical poa also known as a healthcare POA that
gives some on the ability to make decisions about the
care that the principle receives if they're incapacitated. So if
you're in a car accident, or you you know you
have some long term illness that makes you unable to
(19:13):
make decisions, these are.
Speaker 3 (19:15):
The people who are working with your medical.
Speaker 4 (19:18):
Care team to determine what care you actually actually get. Now,
a financial power of attorney that gives an agent the
ability to make financial decisions on behalf of the principle.
So If we think about that same situation with someone's
in a car accident and they're they're not able to
make their own medical decisions, they're likely also not able
(19:39):
to make their own financial decisions. People don't often think
about this, but just because someone is in the hospital,
that doesn't mean their.
Speaker 3 (19:47):
Mortgage doesn't need to be paid.
Speaker 4 (19:49):
That doesn't mean that the credit card bill doesn't have
to be paid, doesn't mean that the utilities are no
longer no longer cost money.
Speaker 3 (19:57):
Right, someone needs to make these decisions.
Speaker 4 (20:00):
Make sure that your your life is continuing on even
if you.
Speaker 3 (20:04):
Can't make decisions.
Speaker 4 (20:06):
It's often common to to appoint one person to be
both a financial financial POA and a medical POA, but
that doesn't necessarily have to be the case, and it
may actually be it may actually be a good idea
to separate those two because if you think about either
of these medical power of attorney or a financial power
of attorney, that is a lot of responsibility on one person,
(20:29):
and to put both of those together, your you know,
double the double the responsibility. So it's really it's really
not a bad idea to think about, Hey, you know,
who in my life is really financially savvy or understands
kind of what I value and who in my life
is you know, maybe has a stronger medical background.
Speaker 3 (20:49):
So really think about who who you.
Speaker 4 (20:51):
Want to be making these decisions for you, and just
remember it doesn't have to be the same person. The
last thing I want to pause on here that again
the state planning is sometimes not the most fun thing
to talk about, and probably the least fun part of
it is something we call advanced directives or healthcare directives.
So these are basically your directions regarding end of life care.
(21:16):
So this is something that you're basically what you would
want to happen if you become mentally incapacitated or unable
to communicate later in life. They're very important to have
in place as they're designed to take effect during a
person's life, not after you pass. And this directive takes
the pressure of making difficult decisions away from your family members,
(21:37):
away from your medical POA. Because you have said, you know,
if I am in this you know, persistent state, I
don't want to be kept alive or I don't want
to be you know, on a feeding tube or.
Speaker 3 (21:48):
Whatever it might be.
Speaker 4 (21:49):
Right, you're taking that really really difficult decision away from
the medical POA and just saying, hey, follow my instructions
that I put in place when I could make decisions.
Speaker 1 (21:58):
Really fascinating stuff this morning, as we talk with Eric
Schwartz and CJ. Closs, they are our retirement planning professionals
from Class Financial the website coss financial dot com. That's
Class k l a A s Financial dot com. Great
website and resource. Also an opportunity there to subscribe and
listen back to this week's podcast and previous shows podcasts
as well, that all available to you at class financial
(22:19):
dot com. They're telephon number six so eight four four
two five six three seven, No charge for the ininanitial
gets to know you apployment at Coss Financial. It will
be complementary to you again their number six oh eight
four four two five six three seven. You may be
saying I don't think I need it will You may
be wrong. We'll find out the details next as Money
in Motion with Coss Financial continues right here at thirteen
(22:39):
ten wib I talking with our retirement planning professionals CJ.
Closs at Eric Swartz. Of course they do come to
us from COSS Financial online Cossfinancial dot com. That's coss
k l A A S Financial dot com teleph number
six oh eight four four two five six three seven
talking this week about estate planning and uh, you know,
people hear this stuff. I don't know, do I really
(23:01):
need a will? Let's talk about will CJ and also probate?
What exactly is probate?
Speaker 2 (23:08):
Yeah, you're right, Sean.
Speaker 5 (23:09):
I mean people often say a state that I mean,
I've seen pictures online of an a state that's like
a big property and you know, people are.
Speaker 2 (23:18):
Drinking wine out on the lawn. I don't have a state.
Speaker 5 (23:21):
Well, unfortunately that word has been misedused so often people
miscategorize that so and a state plan is just basically
this idea of advanced directives of what should happen if
you become incapacitated, and then what should happen to your
stuff when you die. Just keep it simple, right, That's
really what this is.
Speaker 2 (23:40):
Now.
Speaker 5 (23:40):
Any good lawyer will tell you, well, it's a little
bit more than that. That's true, there's more things that
can come into play, but keeping it simple at a
high level is just the settlement of your stuff or
the things or people you care about are in charge
of whether you're alive or dead. So estate planning is
only for for well. People often think it's only for
people of the sizeable amounts, and then they often think
(24:03):
estate planning is only about wills and trusts, And as
Eric just talked about there in terms of powers of attorney,
it can include other things besides just wills and trust
Now we already mentioned previously, but almost everyone upon their
death who's an American adult will have something to pass on,
whether that be a minor child who needs care, or
(24:25):
whether that whether that be investments, real estate, or other
real property. Other real property we're talking about, by the way,
be a car, jewelry, clothes, furniture, whatever it might be.
So it's important that upon your death you leave detailed
instructions as to how you wish the remaining assets be distributed,
and of course to whom those instructions ideally will be
(24:46):
specified in either a will or a trust. Hence, the
state planning is for just about everyone, everyone who owns
something or has somebody they care for. And remember, if
you don't have instructions, the state does. The state that
you live in, and as I mentioned earlier, it's called
dying intest state, which means that you have died without directions.
(25:08):
Hence the state will dictate how your property will be
divided and distributed, which may not be how you wish
it to be done. You notice I emphasize some words there,
dictate and may not. I actually don't like the term
may not, will not. It's probably a better term, because listen,
no judge, no like. Default provisions in the state are
(25:30):
going to actually line up with everything you would want
to have. I mean, please, don't misunderstand me. It's not
like you've got some you know governor saying oh, when
these people die without in a state, I'm going to
take all their money.
Speaker 2 (25:40):
I promise you.
Speaker 5 (25:41):
That is not what governors are doing these days, nor
anybody in the state. What they're trying to do is say, well,
since Johnny didn't have a plan for himself, and like
fifty percent of the people who die in our state
have no plans for themselves, we need to create a
set of default provisions. Which is very nice of the
(26:02):
state to do this, but you get the point. What
a terrible, terrible way to take care of your minor children,
or to take care of the stuff that you've accumulated
over time. Now, some differences here basic differences between trusts
and wills. Both of these are useful estate planning devices
that will serve different purposes and can work together or
(26:22):
separately to create a complete estate plan. A will goes
into effect only after you die, whereas a trust takes
effect as soon as you create it. This is one
of the reasons why when people create trust there's also
funding instructions because you often have to put stuff into
the trust because it takes effect when you're alive. So
(26:42):
it directs who your property, who you know where your
property will go at death, and it points a legal
representative to carry out your wishes. A trust can be
used to begin distributing distributing property before death, at death,
or afterwards. A trust is a legal arrangement through it
to one person or an institution such as a banker
(27:02):
law firm called a trustee, holds legal title to property
for another person called a beneficiary. And trust often one
of the main reasons people get them is to avoid probate. So,
and you have assets that will go through your will.
So just think of I die, you know what's going
to go through a will. Your home, you're checking account,
your savings account, your furniture, your jewelry, all the stuff
(27:25):
that doesn't have a beneficiary designation on it.
Speaker 2 (27:27):
Just think of it that way.
Speaker 5 (27:28):
So a lot of stuff, right that will go through
a will, and that will has to go through probate.
Probate is just the court ordered legal process for settling
your estate. There's nothing wrong with it, but it just
can be lengthy, and there's filing fees, and there's filing
notice requirements and all this stuff that goes into it,
and it can just take a little while. Well, a
(27:48):
trust avoids probate. So if I create a trust and
I put all of my non beneficiary designation assets into
that trust. So think I own a home and I
actually have the home owned by my revocable trust. Well
upon my death, now think about that, what goes through probate?
(28:09):
And the answer is hopefully nothing. Hopefully just my successor
trustee steps up and just starts settling things. You get
the idea. So one of the big reasons that people
go the trust route is to avoid probate. Now, I
want to make a shout out here though the State
of Wisconsin does a pretty good job with us. They
try to make the process smooth when you do go
(28:31):
through probate. It's not a terrible process. In some ways,
it forces you to be accountable to the process, whereas
a trust can. Sometimes trust can take longer because there's
nobody pushing the trustee to actually get stuff done. So
there's nothing wrong with probate. It's just if you want
to avoid the filing fees, the notices, everything that goes
into it, you want it to be more of a
private process, then a trust can help to facilitate that.
(28:55):
And this becomes really important when you have property in
multiple states because remember if you have no non beneficiary
designation assets in multiple states, well now you have to
open up probate in every single state where you have property.
So just something to be aware of and final thought
on this. Remember this, just because you go get a
(29:16):
will done or a trust done with a lawyer, it
doesn't do anything to your beneficiary designation assets. Think four
to oh one k ira, you know taxable investment account
It does nothing to those, So you know, I'll take
an example, say a family has a million dollar estate
and their home is worth three hundred grand, and let's
(29:38):
say everything else the other seven hundred thousand dollars is
in a four toh one k ira and some investment accounts. Well,
when you go get your will done with your local attorney,
you have built a plan for three hundred thousand dollars.
The other seven hundred thousand dollars have not been changed
at all. You would need to go change your beneficiary
designations to coordinate with your will. That it doesn't happen automatically.
(30:03):
So we have this term where we say beneficiary designations
trump or supersede whatever your will or trust says. So
just make sure you're you're accounting for both vital information.
Speaker 1 (30:14):
They're great stuff. As always. In one final thing before
we get to the class quiz question week, Eric, bring
you in on this real quick. How often should you
be updating these changes and how often is that necessary?
Speaker 4 (30:26):
Yeah, it's a good question, and I tend to approach
this with folks saying, you know, think about big events
in your life, birth of a child, death of a
spouse or parent, or you know, divorce, that's another big one, right,
These are big topics and big impactful times in our
lives that really may actually impact where we want assets
(30:49):
to go. More than once, I've met with clients who
new clients who will take a look at their beneficiary
designations and I'll ask why their former spouse is still
listed on their retirement account. And that's usually a big
surprise for folks and not a happy one. So I mean,
upon big milestones in life, we want to look at
(31:10):
the estate plan and you know, if you're sitting there saying, hey,
we set up a will when when the kids are born,
but the kids are you know, twenty one, now, that
is definitely a eight room or a big scient to
go back and review that.
Speaker 3 (31:24):
We definitely want to be doing it more than.
Speaker 1 (31:26):
Just every twenty Really good guidance and really important stuff
to know us. We talk with Eric Schwartz and Cjkloss,
our retirement planning professionals from Class Financial. Learn more online
cossfinancial dot com to tell for whatever. Six oh eight
four four two five six three seven. Speaking of that number,
hold onto it now because it's time for the class
quiz Question of the week. Works like this, In just
a moment, I'll ask you the class quiz question the week.
We will then have thirty minutes from the today's program
(31:48):
to call the Clause Financial Office right here in Madison
at six oh eight four four to two five six
three seven first squat correct answer. We'll when that's twenty
five dollars gift card to food and laughs, which is
good at Red Robin Cheesecake Factory, Red Life, Robster and
a bunch of fantastic places. This week's class Quiz question
week is this. There are two types of primary powers
of attorney documents. There is one for medical. What is
(32:10):
the second type? Telephone number six oh eight four four
two five, six three seven first goalt correct answer one
that twenty five dollars gift card to food and laughst
for good as well. It's Class Financial's office right here
in Madison. That number six oh eight four four two
five six three seven. Eric CJ. It's always great chatting
with both of you guys. You have a fantastic day.
Speaker 2 (32:29):
Thanks Sean.
Speaker 3 (32:30):
Thanks Sean.
Speaker 2 (32:32):
This is Money in.
Speaker 1 (32:32):
Motion with Coss Financial Asset Advisors, LLC, a registered investment
advisor registered with the SEC. The contents of this show
are for informational purposes only and should not be considered
individual investment advice. Class Financial does not offer tax or
legal advice. Any opinion offered during the course of this
show is the opinion of that particular investment advisor representative
(32:55):
and not necessarily the opinion of COSS. Financial News comes
your way next right here on thirteen ten w I
b A
This is money in motion right here on thirteen ten
WIBA with our retirement planning professionals from Coss Financial, joined
this week by CJ Closs and Eric Schwartz. We're going
to be talking this week about estate planning. A lot
of fantastic information ahead. You're going to want to pay
close attention to this week's program. Not only is it
going to be some great information, we'll have a chance
to win a fantastic prize from a friends at Coss Financial.
(00:21):
I'll tell you a bit later about that in just
a moment. Some other things to keep in mind as
we talk with CJ and Eric. Phone lines here at
the station. They are open for you at six oh
eight three two one thirteen ten. That's six oh eight
three two one thirteen ten. Whether your question is about
this week's topic, which is a state planning, or anything
retirement related, our retirement planning professionals from Coss Financial are
(00:41):
here for you. Speaking of other ways to make connections
with Coss Financial, of course, the website cossfinancial dot com.
That's Coss Klaas Financial dot com. Toph it up for
the office right here in Madison six oh eight four
four two five six three seven. No charge for that
initial gets know your appointment tech costs financial it will
beat complimentary to you and again their number six oh
(01:02):
eight four four two five six three seven as mentioned,
joined this week by CJ and Eric.
Speaker 2 (01:07):
CJ. How you doing this morning? I'm doing great, Sean,
how have you been, I've.
Speaker 1 (01:11):
Been doing really well. Great to talk with you, Eric.
Great to have you back. How are you doing this week?
Speaker 3 (01:16):
I am doing great. I'm glad to be back.
Speaker 1 (01:18):
It is fantastic to have you both the long and
I know Eric, anytime I see a state planning I said,
I bet you're gonna probably hear it from Eric this week,
So I can't wait to hear what you have for
us this morning. And of course Eric and CJ are
retirement planning professionals from Closs Financial. The telephone number for
Class Financial six eight four four two five six three seven.
Get on the air this morning with Eric and CJ.
Six oh eight three two one thirteen ten. That's six
(01:40):
oh eight three two one thirteen ten. Before we get
rolling on this week's conversation about estate planning. One of
the cool features of the program is the Closs Quiz.
Question the week your chance to win a fantastic prize
this week is no exception. Our friends from Class Financial
I provided a twenty five dollars gift card to Food
and Laughs. That's a gift card good for Red Robin
or Cheesecake Factory or Red Lobster, a bunch of other
(02:00):
places for that gift card. It's a fantastic card. And
we'll have to tell you a little bit on the
program how you can win. A little tip though, is
if you listen closely to the program. Oftentimes both the
question and answer to the Class Quiz question week come
up during the program, so it pays for a number
of ways to listen closely. Again, we'll tell you a
little bit later on the show how you can win
(02:21):
this week's prize. And before we get to this week's topic,
let's actually take a look back at last week's program
and get the question and answer there as well.
Speaker 4 (02:29):
Eric, Yeah, Sean, you're giving away our secrets, but yeah,
that's the question and the answer are often in the program.
Thank you as always to everyone for listening. Our winner
last week was Peter from Cambridge and the question was
true or false. According to the Bureau of Labor Statistics,
home Costs represents the largest expense for retirees, accounting for
(02:52):
thirty six percent of their annual expenses.
Speaker 3 (02:54):
And the answer to that is true.
Speaker 1 (02:57):
Wow, And that was that is as we talked. It's
about some of those some of those numbers, and it
was a really really good program and you can always
listen back. Don't forget to this in previous shows. Podcast
at class financial dot com. That's class financial dot com.
They're telp number six O eight four four two five
six three seven to get on the air this morning
as well, which gives call out station six oh eight
(03:17):
three two one thirteen ten. That's six oh eight three
two one thirteen ten. And this week we are going
to be talking about and tackling the topic of estate planning.
But CJ, can you explain a little bit about why
it's important to help clients with financial and retirement planning.
Speaker 5 (03:34):
Yes, we believe here at Klass Financial that a financial
planner should act like a quarterback of your financial team
and perhaps fix some areas where your defense line may
be weak. Now, we like this football analogy, but some
people don't resonate with it. So another way to think
about it is like your family doctor. Right, your family
(03:56):
doctor works with you maybe coordinates care amongst various different specialists.
Your family doctor is very intimately involved with your family
and everything with your health. Well, in this case, a
quarterback is involved with every play on the football field.
So you get the idea your financial planner should be
involved with every play in your financial life. So this
is where sometimes a state planning can come into play.
(04:18):
As many people have perhaps you know, maybe begun this
process or at least have been thinking about it, but
often don't complete the plan. Now, as we start talking
about a state planning today, I would just want a
quick disclaimer. We are not attorneys. However, we do work
with attorneys to help coordinate plans for our clients. So
with that being said, we actually have a network called
(04:41):
the Class Professional Network known as KPN for slang because
we love our acronyms here. But Class Professional Network is
just all about building deep integrated relationships with other financial
professionals in your life. And some of you are saying
what other for financial professionals, Well, think about it. To
have if a comprehensive financial plan, you probably are going
(05:02):
to eventually need an accountant. You're probably going to need
an insurance agent. Maybe that might be life and health
and property and casualty. You're going to probably need a
banker at some point for a mortgage, You're going to
need a money manager, a financial planner, a state planning attorney.
You get the idea, you suddenly go, oh my goodness, gracious,
I need all these people.
Speaker 2 (05:22):
Who's going to build the team.
Speaker 5 (05:24):
And the answer is that is what your coach, quarterback
or aka your financial planners should be doing.
Speaker 2 (05:30):
So one thing we learn.
Speaker 5 (05:31):
As financial planners is to expect the unexpected. So what
we would say is now is an ideal time for
you to review a just or finally complete input into
place your basic estate planning documents. Now, when we say
a state planning this includes typically wills, revocable trusts, powers
of attorney, and healthcare directives known as often living wills.
(05:53):
And this is just to ensure that everything is accurate,
accurately reflected, and that your wishes are carried out upon
a potential life altering situation. Some of those estate planning documents.
Speaker 2 (06:08):
Exist while you are alive.
Speaker 5 (06:10):
Other ones really come into play upon your passing. But
the idea is that we want to minimize the amount
of confusion, and we want to minimize the amount of
taxes or fees that kind of get stripped out of
your estate upon death.
Speaker 2 (06:24):
I mean, listen, a lot.
Speaker 5 (06:25):
Of people try to kind of sell you on the
idea of state planning through fear.
Speaker 2 (06:29):
We don't like that.
Speaker 5 (06:30):
I would say, don't be afraid of it. Don't go
do an estate plan because you're fearful, doing a stay
plan because you want clarity. Right, And let me just
ask you, if you take a life of accumulating stuff
and other human beings through a marriage or birth, do
you care what happens to those things if you're not around,
And do you think it'll just be easy to settle
(06:52):
those things and get them out to the people that
you care about. If you have put nothing into writing,
you get the idea in order to take a life
life time of accumulation or a lifetime of building a family,
And to think that just with a snap of a
fingers is going to be easy when you die or
when something happens to you, it's just not realistic. So
(07:13):
if you want to, you know, do do a big
gift for your family. The biggest gift you could probably
give to your family is getting some basic estate planning
documents in place that that will outline your wishes.
Speaker 1 (07:25):
Talking this morning with CJ. Closs and Eric Schwartz, our
retirement planning professionals from Class Financial. You can learn more
about Class Financial their website Class financial dot com. That's
Class k l aa S financial dot com or telf
what number six oh eight four four two five six
three seven. No charge for that initial get to know
the appointment tech Coss Financial. It will be complimentary to
you and if you have questions, love to get you
(07:46):
on the other morning. Six so eight three two one
thirteen ten. That's six oh eight three two one thirteen
ten and CJ talk about kind of putting that that
basic those basic estate planning documents together. Is it one
of these things where once it's done, it's done or
should you be regularly reviewing these things? What's the guidance there?
Speaker 5 (08:02):
Yeah, you know, obviously I'm speaking to an area that
I have a lot of competency, and so a lot
of people are gonna roll with their eyes as I
as I say this, But I've learned that competency matters,
special team matters, especially as you accumulate more assets.
Speaker 2 (08:17):
And so what I'd say.
Speaker 5 (08:18):
To you is we believe that most people over time,
especially as you get later on in life, should end
up hiring a financial advisor, right, surprise, surprise. But the
reason we believe that is because, listen, building a financial team,
who's going to you know, be a good professional in
a state, tax in insurance and taxes and investments. The
(08:39):
list goes on, it's really difficult to do. And then
will they even talk to one another? Will they actually
coordinate with one another to make sure that one doesn't
hurt the other?
Speaker 2 (08:47):
YadA, YadA.
Speaker 5 (08:48):
Well, this is what an advisor quarterback should be doing.
Is they should be not only helping you to assemble
your team, but then saying, you know, hey, Jim, Hey Susie,
we got to meet again because you know, it looks
like some things have changed in your life, and I
really need you to talk to Rob your attorney to
update your documents because you have another kid.
Speaker 2 (09:05):
Now, right, you get the idea, like your.
Speaker 5 (09:07):
Advisor is not only helping you to assemble the team,
but then reminding you when you need to go make
updates to certain documents. Now, Interestingly enough, as we think
about this topic, there's some data that sticks out. So
according to a recent survey, as of March twenty twenty four,
so very recently, and this is from Financial Advisor magazine,
(09:28):
only about twenty six percent of American adults have established
estate plans. That percentage does rise to fifty percent for
those with assets greater than five hundred thousand. But here,
interestingly enough, thirty two percent of men have estate plans
and only twenty three percent of women. So listen, by
(09:49):
the way this data. I've seen a lot of different
surveys on this, and some of you are going, wait,
I think a year ago you told me slightly different data.
Speaker 2 (09:55):
It's true, different reports.
Speaker 5 (09:57):
In different data gathering does slightly different outcomes of this,
but all of them say that right around thirty to
fifty percent of Americans have estate plans and the rest
do not.
Speaker 2 (10:11):
So if you are one of the people.
Speaker 5 (10:12):
Listening on this right now, who do not please every
American adult, in our humble opinion, every American adult with
a couple bucks to their name should be should be
considering the basics of estate planning. Now again, how complex
is that a state plan? How much are you paying
for it? Those are all different questions, and by all means,
talk to us if you have questions about that, because
(10:34):
we can help you get in touch with very simple
and expensive solutions or more comprehensive solutions with a high
end lawyer. But every American adult should be thinking about this.
Speaker 2 (10:44):
And here's the key. Here's why this matters.
Speaker 5 (10:47):
The biggest wave of wealth transfer in the history of
the world is beginning to pass from baby boomers to
the next generation. This is known as a great wealth
transfer and it's eighty four trillion dollars is poised to
move to younger generations and charitable organizations. Listen, y'all, I
(11:07):
have actually lived this in my career. We're early on
in my career. The number of clients that I worked
with whose parents passed and gave a sizeable sum to
them was pretty small early in my career. Now it's
quite common. We're actually running into hundreds, if not hundreds
of thousands, if not millions, of dollars passing from mom
(11:27):
and dad. Often when kids don't even know it. Often
he goes, gosh, I knew mom and dad did Okay,
I knew they had the farm and everything, but I
didn't know they had that much money. Well, well, the
farm that used to be where you just went out
and you know, kind of helped dad with with the
crops and with the cows, that land is really really
worth a lot of money now, so you get the
(11:49):
idea we're seeing huge amounts of wealth transfer and as
you can imagine, having a clear estate plan for yourself
so that when you add more money to that infrastructure
is pretty clear. So long story short, you just you
want to get these plans in place because dying without
a will, also known as dying in intestacy or dying
(12:10):
in test eate, can be quite expensive.
Speaker 2 (12:13):
And it's expensive because nobody knows what you wanted to do.
So we've got to hire some people to try to
figure it out.
Speaker 5 (12:19):
Long story short, just just you know, plan to pull
together those basic estate plans.
Speaker 1 (12:23):
Really it's a really a great gift as well to
your loved ones after after you pass on, to have
that plan in place. We talked this morning with CJ.
Closs and Eric Schwartz. They are our retirement planning professionals
from Class Financial. You can learn more online the website
class financial dot com. That's Coss k l Aasfinancial dot
com delph number six oh eight four four two five
six three seven No charge for the initial gets no
(12:45):
you appointment that Coss Financial it will be complimentary to you.
Again their number six so eight four four two five
six three seven. What about dying without a will? Why
do people avoid? Didn't put that off? Will find out
the details next as Money in Motion with COSS Financial
continues right here on thirtyeen Ed Wuibi talking with our
retirement planning professionals CJ. Closs and Eric Schwartz. Of course
(13:05):
they come to us from Class Financial, the website colssfinancial
dot com. That's COSS k l aas Financial dot com.
Telephon number for the office right here in Madison, six
oh eight four four two five six three seven. Don't
forget that first appointment, it will be complementary to you.
They're telephone number six oh eight four four two five
six three seven. Talking about the importance of a state
(13:26):
planning and the importance of having these documents squared away
and taken care of, and regular reviewing of them as well.
And I think there's some questions people have, is like, well,
why don't folks take the time and and Eric, let's
talk about that. What are some of the reasons why
folks may not have a will? And let's also talk
about the importance of those power of attorney documents when
it comes to a state planning.
Speaker 3 (13:48):
Well, Sewn, I'm sure you can imagine that.
Speaker 4 (13:50):
J and I have heard every excuse under the sun
as to why people don't have.
Speaker 3 (13:54):
An estate plan.
Speaker 4 (13:55):
But let's just talk about a few a few reasons
why and kind of look at you know, those are
those actually reasonable approaches here. So number one, and this
is really obvious. Thinking about death makes people uncomfortable. I
think we can all agree with that. However, it does
not change to the inevitable. Everyone will need a plan
at some point, and preparing ahead of time really really
(14:19):
creates a lot. Well, like Sejer said, it's never going
to be an easy process when someone passes away, but
it makes.
Speaker 3 (14:25):
It much more manageable.
Speaker 4 (14:28):
Just general procrastination, you know, they just haven't gotten around
to it.
Speaker 3 (14:33):
I think I look at this as okay.
Speaker 4 (14:35):
When I meet with a client, generally after the meeting,
I have a next meeting reminders list, right, and it's
it's hey, check in if they've taken the advice we've
given them.
Speaker 3 (14:46):
And one of those.
Speaker 4 (14:46):
Things is get your estate plan updated or get an
a state plan in place. And let me tell you
that one lives on that list for a long time.
I'm generally will joke with clients. You know, if I
can get you to do this within the next five years,
I don't know, though I did well.
Speaker 3 (15:03):
So procrastination is a big one.
Speaker 4 (15:06):
Another one is people they just don't know where to start.
And this is this is really really understandable. CIJ mentioned
it earlier. Reach out to someone, even if they're not
an attorney. It's just someone you trust who can connect
you with that, whether that's your financial planner, your insurance agent.
Speaker 3 (15:22):
Your accountant, you know. Working in this industry, we know
a lot of people who do this type of work and.
Speaker 4 (15:28):
We can get you in contact with with someone who
can help you with that. This next one is one
of I think one of the most important ones. People
think they don't have enough asset. They think they're you know, oh,
my situation is not very complicated.
Speaker 3 (15:43):
You know, the kids will figure it out. It'll be fine.
Speaker 4 (15:46):
Let me tell you the one way to make a
simple estate plan or a simple estate not simple, is
to do no preparations.
Speaker 3 (15:55):
You will very quickly make it a complicated estate.
Speaker 4 (16:00):
The other another one here is you know, they don't
know how to make a will or living trust on
their own and I think I think most of us
would say we don't know how to do that, and
that is why there are professionals in this space. So again,
reach out to someone that you trust and they can
refer you to someone who who specialized in it, specializes
in this area and can can help you out.
Speaker 1 (16:21):
Talking this morning with.
Speaker 4 (16:23):
No I was going to say the last one here
is people often think it's too expensive to set up
in a state plan. Okay, and there's no doubt there's
a there's definitely a cost on the front end, and
we'll we'll talk about that here in a moment. But
TJ was just talking about the the unnecessary you know,
uh fees and and and costs related with not preparing
(16:46):
for your estate plan. And those costs can very very
quickly outweigh the front end costs of putting together in
a state plan. You know right now it varies a lot,
but a simple will can cost somewhere betwe I mean,
you know, three inner bucks and a thousand bucks not
being a more comprehensive plan maybe need of trust, that
(17:06):
can cost more like two thousand to five thousand dollars,
But very very quickly, the unnecessary costeed fase for dying
without an estate plan will outweigh these these numbers.
Speaker 1 (17:17):
Talking this morning with Eric Schwartz and CJ. Coss. They
are our retirement finding professionals from Class Financial the website
class financial dot com. That's Coss k l a A
s Financial dot com. Great website to learn more about
Class Financial the team their separate divisions. Also sign up
for the weekly market Pulse newsletter that available to you
at classfinancial dot com. They're tough number six o eight
four four two five six three seven. No charge for
(17:39):
that initial get to know your appointment at co loss Financial.
It will be complimentary to you again their number six
oh eight four four two five six three seven. So Eric,
what about that that other part that that power of
attorney documents and the importance of those.
Speaker 4 (17:53):
Yeah, these are these are I think lesser discussed in society,
but generally, as part of a comprehensive estate plan, you're
going to have things beyond just a will or a trust,
you know, the things that direct how your assets and your.
Speaker 3 (18:08):
Instruction should be carried out after your death.
Speaker 4 (18:11):
But you're also, as part of that plan, going to
have what are called power of attorney documents, and these
documents really are coming into play not after you've passed away,
but while you're still alive. The power of attorney documents
allow a person, sometimes called a principle, to decide in
advance who they trust and who they want to act
(18:31):
on their behalf if they become incapable of making decisions
for themselves. A person who acts on your behalf is
often called the agent. So we have the principle, the
person who's who is giving power to the agent to
then make decisions for them.
Speaker 3 (18:47):
Now we have two general types of powers of attorney.
We have a.
Speaker 4 (18:51):
Medical power of attorney and a financial power of attorney.
The medical poa also known as a healthcare POA that
gives some on the ability to make decisions about the
care that the principle receives if they're incapacitated. So if
you're in a car accident, or you you know you
have some long term illness that makes you unable to
(19:13):
make decisions, these are.
Speaker 3 (19:15):
The people who are working with your medical.
Speaker 4 (19:18):
Care team to determine what care you actually actually get. Now,
a financial power of attorney that gives an agent the
ability to make financial decisions on behalf of the principle.
So If we think about that same situation with someone's
in a car accident and they're they're not able to
make their own medical decisions, they're likely also not able
(19:39):
to make their own financial decisions. People don't often think
about this, but just because someone is in the hospital,
that doesn't mean their.
Speaker 3 (19:47):
Mortgage doesn't need to be paid.
Speaker 4 (19:49):
That doesn't mean that the credit card bill doesn't have
to be paid, doesn't mean that the utilities are no
longer no longer cost money.
Speaker 3 (19:57):
Right, someone needs to make these decisions.
Speaker 4 (20:00):
Make sure that your your life is continuing on even
if you.
Speaker 3 (20:04):
Can't make decisions.
Speaker 4 (20:06):
It's often common to to appoint one person to be
both a financial financial POA and a medical POA, but
that doesn't necessarily have to be the case, and it
may actually be it may actually be a good idea
to separate those two because if you think about either
of these medical power of attorney or a financial power
of attorney, that is a lot of responsibility on one person,
(20:29):
and to put both of those together, your you know,
double the double the responsibility. So it's really it's really
not a bad idea to think about, Hey, you know,
who in my life is really financially savvy or understands
kind of what I value and who in my life
is you know, maybe has a stronger medical background.
Speaker 3 (20:49):
So really think about who who you.
Speaker 4 (20:51):
Want to be making these decisions for you, and just
remember it doesn't have to be the same person. The
last thing I want to pause on here that again
the state planning is sometimes not the most fun thing
to talk about, and probably the least fun part of
it is something we call advanced directives or healthcare directives.
So these are basically your directions regarding end of life care.
(21:16):
So this is something that you're basically what you would
want to happen if you become mentally incapacitated or unable
to communicate later in life. They're very important to have
in place as they're designed to take effect during a
person's life, not after you pass. And this directive takes
the pressure of making difficult decisions away from your family members,
(21:37):
away from your medical POA. Because you have said, you know,
if I am in this you know, persistent state, I
don't want to be kept alive or I don't want
to be you know, on a feeding tube or.
Speaker 3 (21:48):
Whatever it might be.
Speaker 4 (21:49):
Right, you're taking that really really difficult decision away from
the medical POA and just saying, hey, follow my instructions
that I put in place when I could make decisions.
Speaker 1 (21:58):
Really fascinating stuff this morning, as we talk with Eric
Schwartz and CJ. Closs, they are our retirement planning professionals
from Class Financial the website coss financial dot com. That's
Class k l a A s Financial dot com. Great
website and resource. Also an opportunity there to subscribe and
listen back to this week's podcast and previous shows podcasts
as well, that all available to you at class financial
(22:19):
dot com. They're telephon number six so eight four four
two five six three seven, No charge for the ininanitial
gets to know you apployment at Coss Financial. It will
be complementary to you again their number six oh eight
four four two five six three seven. You may be
saying I don't think I need it will You may
be wrong. We'll find out the details next as Money
in Motion with Coss Financial continues right here at thirteen
(22:39):
ten wib I talking with our retirement planning professionals CJ.
Closs at Eric Swartz. Of course they do come to
us from COSS Financial online Cossfinancial dot com. That's coss
k l A A S Financial dot com teleph number
six oh eight four four two five six three seven
talking this week about estate planning and uh, you know,
people hear this stuff. I don't know, do I really
(23:01):
need a will? Let's talk about will CJ and also probate?
What exactly is probate?
Speaker 2 (23:08):
Yeah, you're right, Sean.
Speaker 5 (23:09):
I mean people often say a state that I mean,
I've seen pictures online of an a state that's like
a big property and you know, people are.
Speaker 2 (23:18):
Drinking wine out on the lawn. I don't have a state.
Speaker 5 (23:21):
Well, unfortunately that word has been misedused so often people
miscategorize that so and a state plan is just basically
this idea of advanced directives of what should happen if
you become incapacitated, and then what should happen to your
stuff when you die. Just keep it simple, right, That's
really what this is.
Speaker 2 (23:40):
Now.
Speaker 5 (23:40):
Any good lawyer will tell you, well, it's a little
bit more than that. That's true, there's more things that
can come into play, but keeping it simple at a
high level is just the settlement of your stuff or
the things or people you care about are in charge
of whether you're alive or dead. So estate planning is
only for for well. People often think it's only for
people of the sizeable amounts, and then they often think
(24:03):
estate planning is only about wills and trusts, And as
Eric just talked about there in terms of powers of attorney,
it can include other things besides just wills and trust
Now we already mentioned previously, but almost everyone upon their
death who's an American adult will have something to pass on,
whether that be a minor child who needs care, or
(24:25):
whether that whether that be investments, real estate, or other
real property. Other real property we're talking about, by the way,
be a car, jewelry, clothes, furniture, whatever it might be.
So it's important that upon your death you leave detailed
instructions as to how you wish the remaining assets be distributed,
and of course to whom those instructions ideally will be
(24:46):
specified in either a will or a trust. Hence, the
state planning is for just about everyone, everyone who owns
something or has somebody they care for. And remember, if
you don't have instructions, the state does. The state that
you live in, and as I mentioned earlier, it's called
dying intest state, which means that you have died without directions.
(25:08):
Hence the state will dictate how your property will be
divided and distributed, which may not be how you wish
it to be done. You notice I emphasize some words there,
dictate and may not. I actually don't like the term
may not, will not. It's probably a better term, because listen,
no judge, no like. Default provisions in the state are
(25:30):
going to actually line up with everything you would want
to have. I mean, please, don't misunderstand me. It's not
like you've got some you know governor saying oh, when
these people die without in a state, I'm going to
take all their money.
Speaker 2 (25:40):
I promise you.
Speaker 5 (25:41):
That is not what governors are doing these days, nor
anybody in the state. What they're trying to do is say, well,
since Johnny didn't have a plan for himself, and like
fifty percent of the people who die in our state
have no plans for themselves, we need to create a
set of default provisions. Which is very nice of the
(26:02):
state to do this, but you get the point. What
a terrible, terrible way to take care of your minor children,
or to take care of the stuff that you've accumulated
over time. Now, some differences here basic differences between trusts
and wills. Both of these are useful estate planning devices
that will serve different purposes and can work together or
(26:22):
separately to create a complete estate plan. A will goes
into effect only after you die, whereas a trust takes
effect as soon as you create it. This is one
of the reasons why when people create trust there's also
funding instructions because you often have to put stuff into
the trust because it takes effect when you're alive. So
(26:42):
it directs who your property, who you know where your
property will go at death, and it points a legal
representative to carry out your wishes. A trust can be
used to begin distributing distributing property before death, at death,
or afterwards. A trust is a legal arrangement through it
to one person or an institution such as a banker
(27:02):
law firm called a trustee, holds legal title to property
for another person called a beneficiary. And trust often one
of the main reasons people get them is to avoid probate. So,
and you have assets that will go through your will.
So just think of I die, you know what's going
to go through a will. Your home, you're checking account,
your savings account, your furniture, your jewelry, all the stuff
(27:25):
that doesn't have a beneficiary designation on it.
Speaker 2 (27:27):
Just think of it that way.
Speaker 5 (27:28):
So a lot of stuff, right that will go through
a will, and that will has to go through probate.
Probate is just the court ordered legal process for settling
your estate. There's nothing wrong with it, but it just
can be lengthy, and there's filing fees, and there's filing
notice requirements and all this stuff that goes into it,
and it can just take a little while. Well, a
(27:48):
trust avoids probate. So if I create a trust and
I put all of my non beneficiary designation assets into
that trust. So think I own a home and I
actually have the home owned by my revocable trust. Well
upon my death, now think about that, what goes through probate?
(28:09):
And the answer is hopefully nothing. Hopefully just my successor
trustee steps up and just starts settling things. You get
the idea. So one of the big reasons that people
go the trust route is to avoid probate. Now, I
want to make a shout out here though the State
of Wisconsin does a pretty good job with us. They
try to make the process smooth when you do go
(28:31):
through probate. It's not a terrible process. In some ways,
it forces you to be accountable to the process, whereas
a trust can. Sometimes trust can take longer because there's
nobody pushing the trustee to actually get stuff done. So
there's nothing wrong with probate. It's just if you want
to avoid the filing fees, the notices, everything that goes
into it, you want it to be more of a
private process, then a trust can help to facilitate that.
(28:55):
And this becomes really important when you have property in
multiple states because remember if you have no non beneficiary
designation assets in multiple states, well now you have to
open up probate in every single state where you have property.
So just something to be aware of and final thought
on this. Remember this, just because you go get a
(29:16):
will done or a trust done with a lawyer, it
doesn't do anything to your beneficiary designation assets. Think four
to oh one k ira, you know taxable investment account
It does nothing to those, So you know, I'll take
an example, say a family has a million dollar estate
and their home is worth three hundred grand, and let's
(29:38):
say everything else the other seven hundred thousand dollars is
in a four toh one k ira and some investment accounts. Well,
when you go get your will done with your local attorney,
you have built a plan for three hundred thousand dollars.
The other seven hundred thousand dollars have not been changed
at all. You would need to go change your beneficiary
designations to coordinate with your will. That it doesn't happen automatically.
(30:03):
So we have this term where we say beneficiary designations
trump or supersede whatever your will or trust says. So
just make sure you're you're accounting for both vital information.
Speaker 1 (30:14):
They're great stuff. As always. In one final thing before
we get to the class quiz question week, Eric, bring
you in on this real quick. How often should you
be updating these changes and how often is that necessary?
Speaker 4 (30:26):
Yeah, it's a good question, and I tend to approach
this with folks saying, you know, think about big events
in your life, birth of a child, death of a
spouse or parent, or you know, divorce, that's another big one, right,
These are big topics and big impactful times in our
lives that really may actually impact where we want assets
(30:49):
to go. More than once, I've met with clients who
new clients who will take a look at their beneficiary
designations and I'll ask why their former spouse is still
listed on their retirement account. And that's usually a big
surprise for folks and not a happy one. So I mean,
upon big milestones in life, we want to look at
(31:10):
the estate plan and you know, if you're sitting there saying, hey,
we set up a will when when the kids are born,
but the kids are you know, twenty one, now, that
is definitely a eight room or a big scient to
go back and review that.
Speaker 3 (31:24):
We definitely want to be doing it more than.
Speaker 1 (31:26):
Just every twenty Really good guidance and really important stuff
to know us. We talk with Eric Schwartz and Cjkloss,
our retirement planning professionals from Class Financial. Learn more online
cossfinancial dot com to tell for whatever. Six oh eight
four four two five six three seven. Speaking of that number,
hold onto it now because it's time for the class
quiz Question of the week. Works like this, In just
a moment, I'll ask you the class quiz question the week.
We will then have thirty minutes from the today's program
(31:48):
to call the Clause Financial Office right here in Madison
at six oh eight four four to two five six
three seven first squat correct answer. We'll when that's twenty
five dollars gift card to food and laughs, which is
good at Red Robin Cheesecake Factory, Red Life, Robster and
a bunch of fantastic places. This week's class Quiz question
week is this. There are two types of primary powers
of attorney documents. There is one for medical. What is
(32:10):
the second type? Telephone number six oh eight four four
two five, six three seven first goalt correct answer one
that twenty five dollars gift card to food and laughst
for good as well. It's Class Financial's office right here
in Madison. That number six oh eight four four two
five six three seven. Eric CJ. It's always great chatting
with both of you guys. You have a fantastic day.
Speaker 2 (32:29):
Thanks Sean.
Speaker 3 (32:30):
Thanks Sean.
Speaker 2 (32:32):
This is Money in.
Speaker 1 (32:32):
Motion with Coss Financial Asset Advisors, LLC, a registered investment
advisor registered with the SEC. The contents of this show
are for informational purposes only and should not be considered
individual investment advice. Class Financial does not offer tax or
legal advice. Any opinion offered during the course of this
show is the opinion of that particular investment advisor representative
(32:55):
and not necessarily the opinion of COSS. Financial News comes
your way next right here on thirteen ten w I
b A
Popular Podcasts
Fudd Around And Find Out
UConn basketball star Azzi Fudd brings her championship swag to iHeart Women’s Sports with Fudd Around and Find Out, a weekly podcast that takes fans along for the ride as Azzi spends her final year of college trying to reclaim the National Championship and prepare to be a first round WNBA draft pick. Ever wonder what it’s like to be a world-class athlete in the public spotlight while still managing schoolwork, friendships and family time? It’s time to Fudd Around and Find Out!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.